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"In Trust For" Accounts

When there is an account in two people's name and one is "in trust for," who can withdraw money?


The short answer to your question is that the owner of the account, sometimes called the trustee, is the person with authority to access funds. By the way, accounts set up "in trust for" other named individuals are often called "Totten trust accounts," after a tax law case involving an individual named -- you guessed it -- Totten. The trustee owns the account and the funds in it. By naming a beneficiary of the Totten trust, the owner is declaring that the account will become the property of the beneficiary when the owner dies. Many states recognize accounts set up in this way. Other states allow account owners to accomplish the same goal by designating an account to be "payable on death" to a named beneficiary (often using the abbreviation "POD"). Whether the account is set up as a Totten trust or a "pay on death" account, the beneficiary or beneficiaries have no legal interest in the account until the owner dies, and the owner can cancel or change the designation at any time before he or she dies.

Accounts like this can be set up ("styled") in a couple of ways.

MARY BETH GUARD TTEE FOR
JOHN S BURNETT
123 ANYSTREET, ETC.

-or-

MARY BETH GUARD ITF
JOHN S. BURNETT
ADDRESS

In the first example, TTEE is just shorthand for Trustee, and it shows that Mary Beth is the trustee. She owns the account. In the second example, ITF stands for "in trust for." It, too, shows that Mary Beth owns the account. In either case, John has no ownership interest and cannot access the account.

The "styling" of the account isn't always the best way to determine the actual legal control of the account, though. In many cases, the bank is hampered in its attempts to style the account by the length of individuals' names, for example. What counts is the actual deposit contract, usually reflected on a signature card. That contract should show exactly who has what rights with respect to account access. For the definitive answer to your question about a specific account, you'll need to contact the bank that holds the account to determine who can do what.

Published on BankingQuestions.com 8/30/06