California Weighs in on Totten Trusts
In September of 2010, the California Court of Appeals considered a case that involved determining whether the beneficiary of a Totten Trust had been effectively changed by designating a different beneficiary through a trust. (Araiza v. Younkin, (2010) 2d Civil No. B221815).
Lucia Howery created a Totten trust naming her step-daughter Lori Younkin as beneficiary. A Totten trust describes a bank account opened by a depositor in his or her name as trustee for another person where the depositor may withdraw funds during their lifetime. The balance in the account is payable to the beneficiary upon the depositor's death. (Estate of Fisher (1988) 198 Cal.App.3d 418, 424).
However, in August of 2005 Ms. Howery established the Lucia Howery Living Trust and named Gabriella Reeves as the beneficiary to the same account as Howery. Reeve's son drafted the trust. After Howrey's death Reeve's son petitioned the court for an order allowing him to convey the bank account to Reeves. Younkin contested based on the fact that she was the named beneficiary in the Totten trust. If you would like more information about a Totten Trust or estate planning you should meet with an experienced Los Angeles estate planning lawyer.