ITF Bank Accounts and Creditor Protection in Florida

An ITF bank account is an account titled “in trust for” a named beneficiary at a financial institution. The designation creates an informal trust relationship between the account holder and the beneficiary, and its effect on creditor protection depends on whether the account operates as a completed gift or merely as a revocable death beneficiary arrangement.

Florida law treats a properly structured ITF account as an irrevocable transfer of equitable ownership to the beneficiary. Because the funds belong to the beneficiary from the moment the account is funded, a creditor of the account holder generally cannot reach the balance to satisfy a judgment. This treatment differs significantly from pay-on-death and transfer-on-death accounts, where the account holder retains full ownership during their lifetime and the beneficiary acquires no interest until the holder’s death.

What ITF Means in Banking

ITF stands for “in trust for.” When an account is titled in this format, the account holder’s name appears first, followed by the ITF designation and the beneficiary’s name. A typical account title reads “John Smith ITF Mary Smith” or “John Smith In Trust For Mary Smith.”

The designation signals to the bank that the account holder is acting in a fiduciary capacity on behalf of the beneficiary. Unlike a standard individual account, an ITF account implies that the funds are held for someone else’s benefit rather than for the account holder’s personal use. Banks and credit unions that offer ITF titling treat these accounts as informal trust arrangements governed by the institution’s depository agreement and applicable state law.

Financial institutions may also use variations such as “ATF” (as trustee for) or “FBO” (for benefit of), which serve a similar function. The FDIC treats all of these designations as informal revocable trust accounts for deposit insurance purposes, providing coverage of up to $250,000 per eligible beneficiary.

How ITF Accounts Differ from POD and TOD Accounts

The distinction between ITF, POD, and TOD accounts is central to their creditor protection analysis. Although banks sometimes use these terms interchangeably, the legal consequences differ under Florida law.

An ITF designation implies the existence of a trust relationship from the date the account is funded. The beneficiary holds equitable ownership of the funds immediately, and the account holder serves as trustee with a fiduciary duty to the beneficiary. Funding an ITF account is an irrevocable gift in trust, meaning the account holder has transferred beneficial ownership even though they retain legal title and the ability to manage the funds.

A POD account operates differently. The account holder retains complete ownership of the funds during their lifetime, including the unrestricted right to withdraw, spend, or close the account. The beneficiary acquires no interest whatsoever until the account holder dies, at which point the remaining balance passes directly to the beneficiary outside of probate. Because the account holder maintains full access and control, a creditor of the account holder can reach POD funds during the holder’s lifetime just as they could reach any other bank account.

TOD accounts function the same way as POD accounts in practice. The beneficiary designation takes effect only at death, and the account holder’s creditors can access the funds during the holder’s lifetime without limitation.

Feature	ITF Account	POD Account	TOD Account
Beneficiary’s ownership during holder’s lifetime	Equitable ownership from funding	None	None
Account holder’s access to funds	As trustee only	Unrestricted	Unrestricted
Creditor protection from holder’s creditors	Yes, if properly structured	No	No
Probate avoidance	Yes	Yes	Yes
Revocability	Irrevocable gift	Revocable	Revocable

Creditor Protection Analysis

The asset protection advantage of an ITF account rests on a single principle: money that belongs to the beneficiary is not the property of the account holder and therefore cannot be seized to satisfy the account holder’s debts. A judgment creditor who serves a writ of garnishment on a bank holding ITF funds should not be able to collect those funds because the account holder has no equitable ownership interest for the creditor to reach.

This protection applies specifically to creditors of the account holder. A creditor of the beneficiary may have a claim to the funds, because the beneficiary is the equitable owner. However, if the beneficiary is a minor child, the creditor exposure is typically minimal.

The analysis changes entirely for POD and TOD accounts. Because the account holder retains unrestricted ownership and control during their lifetime, creditors of the account holder can garnish or levy those funds without limitation. The death beneficiary designation has no effect on the creditor rights analysis during the account holder’s lifetime. Florida courts applying the general principle that a creditor steps into the shoes of the debtor would allow collection from any account the debtor can access for their own benefit.

Parents who wish to protect bank account funds from creditors while maintaining an account for a child’s benefit should understand that the choice between ITF and POD titling has direct consequences for whether those funds remain beyond a judgment creditor’s reach.

Fraudulent Transfer Risk

Funding an ITF account constitutes a transfer of property under Florida’s Uniform Voidable Transactions Act, Chapter 726. If the account holder creates and funds an ITF account while facing existing creditor claims or with the intent to hinder creditor collection, the transfer may be challenged as fraudulent.

A creditor who can establish that the ITF funding was a fraudulent transfer can petition the court to void the transfer and bring the funds back into the account holder’s estate for collection purposes. The analysis considers factors such as whether the transfer was made to an insider, whether the account holder retained control over the funds, whether the account holder was insolvent at the time of the transfer, and whether the transfer occurred after the account holder was sued or threatened with suit.

The timing of an ITF account’s creation matters significantly. An account funded well before any creditor claim arises is far less vulnerable to fraudulent transfer challenge than one funded after a lawsuit is filed or a debt becomes due. Florida’s statute of limitations for fraudulent transfers is four years from the date of transfer for actual fraud and one year from the date the transfer was or could have been discovered for constructive fraud.

Totten Trusts and the Confusion with ITF Accounts

Florida law recognizes Totten trusts as a distinct legal concept, though banks and account holders frequently conflate them with ITF accounts. A Totten trust is a tentative, revocable trust created when a depositor opens a bank account in their own name as trustee for a named beneficiary. The Florida Supreme Court defined a Totten trust as a “tentative trust merely, revocable at will, until the depositor dies” in Seymour v. Seymour, 85 So.2d 726 (Fla. 1956).

The critical distinction is revocability. A Totten trust depositor retains full control over the account, can withdraw funds at any time without restriction, and can revoke the trust simply by emptying the account or changing the beneficiary. Because the depositor maintains complete dominion over the funds, a Totten trust offers no creditor protection during the depositor’s lifetime. Creditors of the depositor can reach Totten trust funds just as they can reach POD account funds.

A true ITF account, by contrast, is structured as an irrevocable gift in trust where the account holder has surrendered beneficial ownership to the beneficiary. The practical difficulty is that many banks do not distinguish between these two arrangements in their account documentation. An account titled “ITF” at one bank may function as a Totten trust if the depositor retains full withdrawal rights, while the same titling at another bank may reflect a genuine irrevocable trust relationship.

Whether an ITF account provides creditor protection in any given case depends on the substance of the arrangement rather than the label the bank applies. Courts examining the issue will look at whether the account holder treated the funds as their own, whether withdrawals were made for the account holder’s personal benefit, and whether the account documentation reflects a genuine intent to make an irrevocable gift.

Tax Implications of ITF Accounts

Funding an ITF account triggers gift tax considerations because the transfer constitutes a completed gift to the beneficiary. Under federal tax law, each individual can gift up to the annual exclusion amount without filing a gift tax return. Transfers exceeding the annual exclusion require filing IRS Form 709 and reduce the donor’s lifetime gift and estate tax exemption.

Income earned on ITF account funds is generally taxable to the beneficiary as the equitable owner. However, the “kiddie tax” rules under Internal Revenue Code Section 1(g) apply when the beneficiary is a minor child. Unearned income above a threshold amount ($2,700 in 2025) is taxed at the parent’s marginal rate rather than the child’s lower rate, which reduces the income-shifting benefit of ITF accounts for families in higher tax brackets.

Florida does not impose a state income tax, so the federal treatment governs entirely. The estate tax benefit of an ITF account is straightforward: because the funds belong to the beneficiary, they are not included in the account holder’s taxable estate at death, provided the transfer was completed and irrevocable.

Practical Considerations for Structuring ITF Accounts

The creditor protection benefit of an ITF account depends on proper structuring and consistent treatment over time. An account that is titled ITF but treated as the account holder’s personal funds will not withstand creditor scrutiny.

The account documentation should clearly reflect that the deposit is an irrevocable gift in trust for the beneficiary. The account holder should not make withdrawals for personal use, and any distributions should be for the beneficiary’s benefit. Commingling the account holder’s personal funds with ITF funds undermines the trust relationship and may give creditors a basis to argue that the ITF designation is a sham.

Florida’s Uniform Transfers to Minors Act provides an alternative structure through UTMA custodial accounts that offers statutory creditor protection without the ambiguity inherent in ITF titling. UTMA accounts are expressly recognized under Florida law as property of the minor child, and the statutory framework provides clearer protection than the informal trust relationship implied by an ITF designation.

For families with significant assets, the choice between ITF accounts, UTMA accounts, and formal irrevocable trusts involves trade-offs between simplicity, control, creditor protection, and tax planning flexibility. Each structure carries different implications for how creditors, courts, and tax authorities will treat the funds.