Eredics v. Chase Manhattan Bank, N.A.

During the 15-year marriage of Nick Nicholas and Rita Eredics, Nicholas created five Totten trust accounts at three different banks (defendants). As standard for Totten trust accounts, the accounts were in Nicholas’s name, but the deposited funds were marked as being held in trust for Eredics. The spouses separated in 1995 and executed a formal separation agreement before divorcing. The separation agreement stated that (1) except as otherwise stated, neither party had any claim to the other party’s property; (2) any bank accounts not specifically mentioned had been equitably distributed to the parties’ mutual satisfaction; and (3) each party waived any present or future rights by law to share in the other party’s estate. The agreement did not specifically mention the Totten trust accounts. After the divorce, Nicholas executed a will stating that 60 percent of his estate was to pass to his brother and the rest to his sister. Like the separation agreement, the will did not expressly mention the Totten trust accounts. When Nicholas died, Eredics sued the three banks and Nicholas’s estate (defendant), claiming that upon Nicholas’s death, she became entitled to the funds in the accounts. Nicholas’s estate argued that it owned the funds because Eredics waived her right to the funds in the separation agreement. The trial court held in Eredics’s favor, concluding that Nicholas had not complied with the statutory requirements for revoking a Totten trust. The appellate division affirmed, and Nicholas’s estate appealed.