An informal trust created when money is deposited into a bank account and designated that upon the grantor's death the monies pass to a named beneficiary by way of a POD designation is called what?

An informal trust created when money is deposited into a bank account and designated that upon the grantor's death the monies pass to a named beneficiary by way of a POD designation is called what?

• A. Totten trust
• B. Primary beneficiary
• C. Contingent beneficiaries
• D. POD (payable on death)

Answer: (A)

Totten trust. This is an informal trust that arises when funds are deposited into a bank account with a named beneficiary who is to receive the balance upon the grantor’s death. The grantor retains control over the funds during life and can withdraw or revoke at any time; the beneficiary has no current interest. Upon death, the named beneficiary takes the money, typically outside the probate process. The other terms describe beneficiary roles or the mechanism (POD) but do not name the trust form itself.

Totten trust. This is an informal trust that arises when funds are deposited into a bank account with a named beneficiary who is to receive the balance upon the grantor’s death. The grantor retains control over the funds during life and can withdraw or revoke at any time; the beneficiary has no current interest. Upon death, the named beneficiary takes the money, typically outside the probate process. The other terms describe beneficiary roles or the mechanism (POD) but do not name the trust form itself.