Whether a credit union account was an estate asset; MCL 490.82(2); The Credit Union Multiple Party Accounts Act; Michigan State University Federal Credit Union (MSUFCU)
Holding that the probate court did not err in determining that the MSUFCU account at issue was an asset of the estate, the court affirmed. Appellant-Steven Johnson argued that a Beneficiary Designation made “him the sole beneficiary upon the death of the last surviving owner of the MSUFCU account and that the funds in the MSUFCU account therefore passed to Steven as the sole beneficiary upon” the death of account holder Julianne pursuant to MCL 490.82(2). The court began by determining whether the Beneficiary Designation signed only by the other account holder, Spencer Sr., Julianne’s husband, “made Steven the sole beneficiary after both Spencer Sr. and Julianne died or whether Julianne’s signature was also required to effectuate such an outcome.” Steven characterized “the separate Beneficiary Designation signed by Spencer Sr. as part of the same Application document that was signed by both Spencer Sr. and Julianne.” However, they were “clearly separate documents, even if they were executed on the same day. The Application signed by both Spencer Sr. and Julianne contained its own specific section for designating a beneficiary.” This section was left blank. “The separate Beneficiary Designation document purporting to name Steven as the beneficiary does not contain any indication that it is part of the Application completed to add Julianne as a joint party. The Application does not contain any indication that it incorporates this separate Beneficiary Designation, especially considering that the Application contains its own section for designating a beneficiary.” The court found no basis for holding that “these two separate documents are somehow incorporated by reference into a single document such that Julianne can be deemed to have adopted Spencer Sr.’s unilateral designation of Steven as the beneficiary.” Concluding that the joint MSUFCU account was governed by ¶ 4 of the Membership and Account Agreement, the court held that because “the attempt to designate Steven as the beneficiary was not authorized by Julianne’s signature, it was ineffective pursuant to the terms of the contractual agreement between MSUFCU and the Johnsons” Thus, under ¶ 4(c), “the rights and funds in the account passed to Julianne upon Spencer Sr.’s death, and Julianne’s interest passed to her estate upon her death. There was no validly designated beneficiary to whom the funds could have passed under MCL 490.82(2). Moreover, to the extent that any of” the Agreement provisions were inconsistent with the Credit Union Multiple Party Accounts Act, the Agreement controlled, as stated in ¶ 4.
Full Text Opinion
State Bar of Michigan
306 Townsend St
Lansing, MI 48933-2012