## Facts

- During a 15-year marriage, Nick G. Nicholas opened five “in trust for” (Totten trust) bank accounts naming his wife, Rita Eredics (also known as Rita Nicholas), as beneficiary.
- The couple separated around 1990 and executed a written separation agreement on June 26, 1995; they divorced later in 1995.
- The separation agreement broadly provided that each party would own property in their own name free of the other’s claims, stated unspecified bank accounts had been equitably distributed, and mutually waived rights to “share in the estate” of the other and to take against each other’s wills.
- The agreement did not specifically identify the Totten trust accounts or address “in trust for” designations.
- After the divorce, Nicholas left the Totten trust accounts unchanged, continued receiving statements, and paid taxes on the interest.
- Nicholas executed a will in 1998 leaving most of his probate estate to his siblings; the will did not expressly mention the Totten trust accounts or direct their revocation.
- Nicholas died in 1998; Eredics claimed the Totten trust funds, while the estate contended she had waived any interest and that the funds belonged to the estate.
- The trial court and Appellate Division ruled for Eredics; the estate and one bank appealed.

## Issues

1. Whether a separation agreement, together with a later will that does not expressly address the accounts, can revoke Totten trust accounts under EPTL § 7-5.2.
2. Whether general separation-agreement provisions concerning property, bank accounts, and waiver of estate rights constitute a contractual waiver of a named beneficiary’s Totten trust interest.

## Decision

- The Court of Appeals affirmed judgment for Eredics.
- The Totten trusts were not revoked because the depositor did not use any method authorized by EPTL § 7-5.2.
- The separation agreement’s general waivers did not clearly and specifically waive Eredics’s rights as named Totten trust beneficiary.
- The funds passed to Eredics outside the probate estate upon the depositor’s death.

## Legal Principles

- A Totten trust may be revoked only by methods specified in EPTL § 7-5.2: (1) withdrawal of the funds during life, (2) an express direction in a will, or (3) a qualifying writing filed with the bank.
- General language in a separation agreement regarding property division or “any and all bank accounts” does not revoke a Totten trust absent statutory compliance.
- A waiver of rights to “share in the estate” or to take against a will ordinarily does not reach non-probate transfers like Totten trusts, which pass outside the probate estate.
- To relinquish a named beneficiary’s Totten trust interest via contract, the waiver must be clear and specific; broad, nonspecific waivers are insufficient.

## Conclusion

The court held that the depositor’s failure to revoke the Totten trusts using EPTL § 7-5.2’s exclusive methods, and the absence of a clear, specific contractual waiver, left the Totten trust beneficiary entitled to the account funds at death.


Eredics v. Chase Manhattan Bank, N.A., 100 N.Y.2d 106 (N.Y. 2003)