A Michigan appeals court determines that the transfer of bank accounts from an express trust to a Totten trust revokes the express trust with regard to the bank accounts. In re Estate of Juanita Evangeline Kostin (Mich. Ct. App., No. 2004-295211-DE, Feb. 14, 2008).
Juanita Kostin created a will and revocable trust that named her niece, Oleta Williams, as her main heir. Several years later, Ms. Kostin re-titled several bank accounts that had previously been held by the trust, choosing to keep them in her name "In Trust For" her daughter, Camille Kent. (These accounts are commonly called "Totten Trusts" and are recognized under Michigan law.) After Ms. Kostin died, the ownership of the bank accounts was disputed.
After a trial, the probate court determined that the Totten Trusts were part of Ms. Kostin's original revocable trust and did not belong to Ms. Kent. The court reasoned that it was Ms. Kostin's intent to leave the accounts to her niece, Ms. Williams. Ms. Kent appealed.
The Michigan Appeals Court reverses and awards ownership of the disputed bank accounts to Ms. Kent. The court follows the plain language of the Michigan statute, and holds that the Totten Trust is valid. The court holds that the statute "has no regard for whether the property at issue was already in an express trust" and the creation of the Totten Trust was a revocation of the earlier trust.
The full text of this decision can be found at: https://courtofappeals.mijud.net/documents/OPINIONS/FINAL/COA/20080214_C272767_56_272767.OPN.PDF
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