‘ITF bank accounts’ refer to accounts that are set up in such a way that the account owner is able to designate a beneficiary when he/she dies. The ‘ITF’ term in the bank account stands for “in trust for,” and this literally pertains to the authority given by the account owner to the named person in the account who will become the beneficiary upon the account owner’s death.
In the case of a bank account named “John Doe ITF Jane Doe”, John Doe is considered the actual owner of the account. For some experts, John Doe here is classified as the account “trustee,” and he is entrusting his bank account to a person named Jane Doe when he dies. So Jane Doe is the beneficiary of John Doe’s account, and she will become the rightful owner of the said account when he dies. By the time Jane Doe owns the account, she may now have rightful access to the bank account and do transactions as the new owner. The account endorsement to Jane Doe may be subject to different taxes, though, depending on the bank, country, or area of jurisdiction. With the ITF label, though, it would be easier for Jane Doe to get access to the bank account simply because of the account setup. Unlike generic accounts, there may be a lot paperwork involved when the account owner like John Doe dies. In this latter case, beneficiaries may need to pay estate taxes and perhaps go to court just to get rightful ownership of John’s account. Through the ITF bank account setup, beneficiaries of accounts will automatically become rightful owners of the same account when the account owner dies.
For people who wish to plan for their future, many of them open ITF bank accounts. Some people choose their spouses as beneficiaries while others name their children in the accounts. In this simple way, the beneficiaries will have rightful access to the accounts upon the death of the account owner.