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Trusts: Totten Trusts

Test your knowledge on Totten Trusts, a specific type of trust created by depositing funds into a bank account in the name of the depositor as trustee for another person as beneficiary.

15 Questions Published
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Questions

Question 1 Multiple Choice (Single Answer)

What is the primary purpose of a Totten Trust?

  1. To avoid probate
  2. To provide for the financial security of a minor child
  3. To reduce estate taxes
  4. To create a charitable foundation
Question 2 Multiple Choice (Single Answer)

Who can create a Totten Trust?

  1. Anyone over the age of 18
  2. Only married couples
  3. Only parents of minor children
  4. Only individuals with a will
Question 3 Multiple Choice (Single Answer)

What is the role of the trustee in a Totten Trust?

  1. To manage and invest the trust assets
  2. To distribute the trust income and principal to the beneficiary
  3. To file tax returns for the trust
  4. All of the above
Question 4 Multiple Choice (Single Answer)

What is the role of the beneficiary in a Totten Trust?

  1. To receive the income and principal from the trust
  2. To provide investment advice to the trustee
  3. To file tax returns for the trust
  4. To manage and invest the trust assets
Question 5 Multiple Choice (Single Answer)

Is a Totten Trust revocable?

  1. Yes
  2. No
  3. It depends on the terms of the trust
  4. It depends on the state law
Question 6 Multiple Choice (Single Answer)

What happens to the assets in a Totten Trust upon the death of the depositor?

  1. They pass to the beneficiary
  2. They pass to the depositor's estate
  3. They are distributed to the depositor's creditors
  4. They escheat to the state
Question 7 Multiple Choice (Single Answer)

What are the advantages of a Totten Trust?

  1. They are easy to create
  2. They avoid probate
  3. They provide for the financial security of a minor child
  4. All of the above
Question 8 Multiple Choice (Single Answer)

What are the disadvantages of a Totten Trust?

  1. They are not revocable
  2. They can be challenged by the depositor's creditors
  3. They do not provide for any tax benefits
  4. All of the above
Question 9 Multiple Choice (Single Answer)

In which state were Totten Trusts first recognized?

  1. New York
  2. California
  3. Florida
  4. Texas
Question 10 Multiple Choice (Single Answer)

What is the maximum amount that can be deposited into a Totten Trust?

  1. $5,000
  2. $10,000
  3. $25,000
  4. There is no limit
Question 11 Multiple Choice (Single Answer)

Can a Totten Trust be used to hold real estate?

  1. Yes
  2. No
  3. It depends on the state law
  4. It depends on the terms of the trust
Question 12 Multiple Choice (Single Answer)

Is a Totten Trust considered a valid will substitute?

  1. Yes
  2. No
  3. It depends on the state law
  4. It depends on the terms of the trust
Question 13 Multiple Choice (Single Answer)

What is the difference between a Totten Trust and a joint tenancy?

  1. In a Totten Trust, the depositor retains ownership of the account
  2. In a joint tenancy, the joint tenants own the account equally
  3. In a Totten Trust, the beneficiary has a right to the account upon the depositor's death
  4. All of the above
Question 14 Multiple Choice (Single Answer)

What is the difference between a Totten Trust and a payable-on-death (POD) account?

  1. In a Totten Trust, the depositor retains ownership of the account
  2. In a POD account, the beneficiary has a right to the account upon the depositor's death
  3. In a Totten Trust, the beneficiary is entitled to the income from the account during the depositor's lifetime
  4. All of the above
Question 15 Multiple Choice (Single Answer)

What is the best way to ensure that a Totten Trust is valid?

  1. Have the trust agreement reviewed by an attorney
  2. Deposit the funds into a bank account in the name of the depositor as trustee for the beneficiary
  3. Deliver a copy of the trust agreement to the beneficiary
  4. All of the above
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