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PROBATE 51: Trust filed a petition to determine title to credit union account.

In 2008, S and his wife J executed a document titled, MEMBERSHIP AND ACCOUNT APPLICATION, with a credit union. It appears that the purpose of the Application was to add J as a joint party to an existing account.  S and J both signed the Application.

Beneficiary Designation

The reverse side of the Application contains additional sections, which is titled, DESIGNATION OR CHANGE OF BENEFICIARY.  Upon the death of the owner, or the last surviving owner if there is more than one, the funds owned by this agreement shall become the property of the beneficiary(ies) listed below who are alive at that time. This Section of the Application was left blank; no beneficiaries were listed.

However, the record also contains a separate purported, Beneficiary Designation, document bearing the same account number and was also executed in 2008. S’s name is the only name printed at the top of the Beneficiary Designation, and only S signed. The Beneficiary Designation provides, the name SJ and the relationship son are printed with 100% next to it.

Estate Planning Documents

S died in 2019. Later that month, J executed a variety of estate planning documents, including a will, a trust, a comprehensive transfer document (CTD), and instructions to banks and credit unions. J’s will was executed November 21, 2019, and designated H Trust as personal representative. J’s will also stated in relevant part: I give, devise and bequeath all of the rest, residue and remainder of my estate and property, of whatever kind and wherever situated, owned by me at the time of my death to the trustee(s) of the J TRUST NO. l, AS AMENDED AND RESTATED ON NOVEMBER 21, 2019, to be added to the assets held in trust and administered by its terms, including any amendments made during my lifetime.

The trust, in turn, contained a plan of distribution of its assets upon J’s death. The trust also indicated that J’s children were SJ, JJ, and ST.

Informal Probate

A January 2020 account statement for the credit union account reflects a payment of $477,177.95 from S’s life insurance policy. The statement is still addressed to both S and J. Subsequently, J wrote three checks, each for $50,000 and dated February 10 or 11, 2020, with one check payable to each of her three sons. On February 12, 2020, J died.

On May 20, 2020, H Trust filed an application in the probate court for informal probate of the will and informal appointment of the nominated personal representative. Letters of authority were issued to H Trust two days later, appointing it as personal representative of J’s estate. On July 13, 2020, H Trust filed a petition to determine title to credit union account. H Trust argued that because the account was a joint account with rights of survivorship, the account passed to J upon the death of S free of any debts or obligations of S. H Trust further argued that because the beneficiary designation was signed only by S, who died first, the beneficiary designation had no effect.

The probate court explained that the owners of the account are S and J. When S passes, J becomes the owner of the account. J is the one who had the authority to make the designation. Nowhere in any documents is there a designation by J that SJ be the owner -- or the beneficiary of the account. The designation made by his father was no longer binding because he was no longer the owner at the time J passed away.

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Aldrich Legal Services represents clients in a wide range of probate litigation matters. Given the emotional nature of these disputes and their financial impact on all involved, it is critical that anyone involved in such a dispute retain highly qualified legal counsel.

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FAMILY LAW 88: The trial court found that the children did not have an established custodial environment with defendant because, before the separation, he did not have a large role in the children’s lives.

The trial court credited plaintiff’s testimony that, before the parties’ separation, defendant spent minimal time helping to care for the children, so its finding that the children would not have looked to defendant for guidance, discipline, the necessities of life, and parental comfort during that time was not against the great weight of the evidence.

REAL ESTATE 89: RM had not included any language in the deed providing that the property was a joint tenancy with full rights of survivorship, the property instead became a tenancy in common.

RM drafted the deed without seeking counsel and mistakenly believed that, if either she or FK died, the property would fully pass to the surviving tenant. FK’s will provided that if his wife predeceased him—which she did—the personal representative of his estate should sell any residual property that he owned and divide the cash proceeds equally among his surviving children.

FAMILY LAW 83: A trial court can terminate a parent’s rights and permit a stepparent to adopt a child.

A trial court has discretion to terminate a parent’s rights and permit a stepparent to adopt a child when the conditions of MCL 710.51(6) are met. MCL 710.51(6)(b) requires the petitioner to establish that the other parent had the ability to visit, contact, or communicate with the children, and substantially failed or neglected to do so for a period of two years.

PROBATE 53: The trust agreement included an Incontestability Provision.

A settlor’s intent is to be carried out as nearly as possible. Generally, in terrorem clauses are valid and enforceable. However, a provision in a trust that purports to penalize an interested person for contesting the trust or instituting another proceeding relating to the trust shall not be given effect if probable cause exists for instituting a proceeding contesting the trust or another proceeding relating to the trust.

FAMILY LAW 82: Court stated it would terminate the personal protection order (PPO) after the parties present documentation of the initiation of the divorce proceedings.

However, the trial court concluded that these matters should, in fact, be in the province and the jurisdiction of the Family Division and in that respect, having issued a personal protection order, the Court stated it would terminate the personal protection order after the parties present documentation of the initiation of the divorce proceedings.

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