Bank Trusts/Payable on Death Accounts
A bank trust, which is also known as a payable on death account or a totten trust, is created when someone indicates that a bank account should go to a successor. This is usually accomplished by adding someone’s name to a bank account.
Bank trusts often result in litigation and theft. People often add another individual to their account for their own convenience. However, they usually do not intend to give the money in that account to the other individual name on their account upon death. For example, someone who is elderly, sick, or disabled may want a friend or family member to withdraw cash or pay bills. Therefore, the probate court routinely disregards bank trusts when they are challenged. Bank trusts can result in theft when someone is named on a bank account and withdraws money for his or her own purposes without permission.