Revocable Trust Accounts

A revocable trust account is a deposit account that evidences an intention that the funds will belong to one or more named beneficiaries upon the death of the owner (grantor/settlor).

There are both informal and formal revocable trusts. Informal revocable trusts, often called “payable-on-death” (POD), “Totten trust,” or “in trust for” (ITF) accounts are created when the account owner signs an agreement–usually part of the bank’s signature card – stating that the funds are payable to one or more beneficiaries upon the owner’s death.

Formal revocable trusts – known as“living” or “family” trusts – are written trusts created for estate planning purposes. The owner controls the funds in the trust during his or her lifetime. Upon the owner’s death, the trust generally becomes irrevocable.

All deposits that an owner has in both informal and formal revocable trusts are added together for insurance purposes, and the insurance limit is applied to the combined total.