Legal Definitions - tentative trust

A tentative trust, also commonly known as a Totten trust, is a specific type of bank account designed to transfer its contents directly to a named beneficiary upon the death of the account holder (the depositor). It functions as a simple and efficient way to pass assets outside of the traditional probate court process, which can often be time-consuming and costly.

The key features of a tentative trust are:

• Direct Transfer: The funds in the account pass directly to the beneficiary upon the depositor's death, bypassing the probate court.
• Depositor Control: During their lifetime, the depositor retains complete control over the account. They can deposit more money, withdraw funds, change the beneficiary, or even close the account entirely without needing anyone else's permission.
• Flexibility: Because the depositor maintains full control, the trust is "tentative" until their death. This makes it easy to modify or revoke if the depositor's wishes or circumstances change.

Here are some examples illustrating how a tentative trust works:

• Example 1: College Fund for a Grandchild

  Maria wants to leave a specific sum of money to her grandson, David, to help with his future college expenses. Instead of including this in her will, which would go through probate, she opens a bank account as a tentative trust, naming David as the beneficiary. During her lifetime, Maria can continue to add funds to the account or withdraw money if she needs it. If Maria passes away, the funds in that specific account will be immediately transferred to David, providing him with quick access to the inheritance without waiting for the probate court to finalize her estate.

• Example 2: Emergency Funds for a Child

  Mark, a single parent, wants to ensure his young daughter, Emily, has immediate access to some funds for living expenses if something unexpected happens to him. He sets up a tentative trust account with Emily as the beneficiary. This arrangement guarantees that the money in this particular account will be available to Emily promptly after his death, providing a financial safety net during a difficult time. Mark appreciates that he can still manage the funds and change the beneficiary if his family situation evolves.

• Example 3: Specific Bequest to a Charity with Flexibility

  Sarah wishes to donate a certain amount to her favorite local animal shelter upon her passing, but she also wants the flexibility to change her mind or use the funds herself if her financial situation changes. She establishes a tentative trust account, designating the animal shelter as the beneficiary. If, a few years later, she decides to support a different cause, or if she experiences an unexpected financial hardship and needs the money, she can easily modify the beneficiary or withdraw the funds from the account without needing to amend her entire will or consult with legal professionals.