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How to Change the Terms of a Totten Trust

    In September of 2010, the California Appellate Court determined whether a decedent had successfully changed the beneficiary of her Totten Trust. A Totten Trust is a bank account where the depositor is trustee for a beneficiary but retains the power to make withdrawals during their lifetime. The beneficiary inherits the remaining amount in the bank account after the depositor dies. 

    A Totten Trust is considered a multiple party account in California and as such is goverened by the California Multiple-Party Accounts Law. (California Probate Code sections 5100-5407).  Therefore, the only way to change the terms of such a multiple-party account is by one of the following means:
    1.  Closing the account and reopening it under a different name.
    2.  Presenting the bank with a modification agreement signed by all parties with a present right of withdrawal.
    3.  If the provisions of the terms of the account or deposit agreement provide a method of modification of the terms of the account, complying with those provisions. 
    4. Providing the bank with written notice that withdrawals from the account are not permitted except by signature of more than one party, or more than one survivor.

   However, what happens if you don't follow the rules and chose a different option than the above-mentioned methods to change a Totten Trust? Read tomorrow's blog to learn more. In the meanwhile, if you live in California and have questions about a Totten Trust, you should consult with a Los Angeles estate litigation lawyer.