Assignment of Trust Account to Inter Vivos Trust Revokes Beneficiary Designation

The decedent created a trust account naming his step-daughter as the beneficiary. The decedent later created an inter vivos trust and listed the account on the schedule of property delivered to the trustee. In addition, the trust made a specific disposition of the account on the decedent’s death to someone other than the step-daughter.

The California intermediate appellate court affirmed the trial court’s finding that the trust beneficiary was the owner of the account. The court held that the establishment of the trust was “clear and convincing evidence” of the decedent’s intent to change the terms of the account. Because the change was made by an inter vivos trust, the prohibition on changing the beneficiary by will did not apply.

Araiza v. Younkin, 116 Cal. Rptr. 3d 315 (Cal. Ct. App. 2010).

Special thanks to William P. LaPiana (Rita and Joseph Solomon Professor of Wills, Trusts,and Estates, New York Law School) for bringing this to my attention.