One of the concerns people grapple with in their estate planning is the ability to change their estate plans when circumstances warrant. Sometimes people want to change their wills to reflect new priorities. Similarly, people may set up a Totten trust but after some time has passed, they want to make some changes. Fortunately, people may modify a Totten even after creating it.
Kiplinger explains that a Totten trust functions like a burial trust fund. A Totten trust is not actually a trust, but an account you set up at your bank. People create Totten trusts to pay for their funerals after they pass away. A Totten trust has a pay on death provision to a beneficiary. If you set up a Totten, you would name someone as a beneficiary, who will later receive the money in the account after your death to pay for your funeral.
Totten beneficiaries can vary. You may want a relative, like an adult child, to receive the money in the account. Some people do not have relatives, or at least do not have relatives who can handle the responsibility of receiving the money and paying for the funeral. Instead, these individuals might name a friend. You also have the option of designating a funeral home as the beneficiary.
Sometimes people will need to change a Totten beneficiary. The person slated to receive the Totten money may die before the Totten owner does. Other complications may necessitate a change in beneficiary, such as a divorce, the closing of a funeral home, or a beneficiary moving out of town. Fortunately, you can alter the beneficiary to someone else or to another funeral home if you wish.
Totten owners have other options. You might not want to continue your Totten at the current bank. In such a case, you could close the account. In fact, you may close the Totten at any time. If you set up a new Totten account elsewhere, you could transfer the money from your old bank to your new bank. Since Totten trusts are not complicated, these actions should not be difficult to accomplish.