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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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