Opening financial accounts, such as checking and savings accounts, involves filling out certain forms. One of the forms you’ll complete tells the financial institution who should get the money in your account when you die. That form establishes what’s known as a Totten trust, but it is more commonly called a payable-on-death designation.
The person you name will need to provide a copy of your death certificate to access the accounts. They can’t get into the account while you’re living so there’s no concern about them being able to get money out of it.
Should you include these accounts in your will?
Accounts with this designation don’t need to be included in the will. If you do include these accounts in your will, the information in the will would have to match the financial account information precisely. Even something as simple as a changed account number could lead to trouble with the distribution of the estate.
It’s a better option to simply notify the person who’s named on the account that they get the funds when you die. They’ll be able to access the money much faster if the account doesn’t have to go through the probate process.
Making sure you have a comprehensive estate plan is one of the only ways you can protect your loved ones when you die. Once you have the plan created, review it periodically to ensure it still meets your needs. Go over your payable on-death designations when you do that to ensure your financial accounts are still going where you want them to go.