Payable-on-Death Deposit-Account Beneficiary Rules in Michigan

At a glance

Requirements one by one

Accounts and designation

For a bank or trust-company deposit made by a person in trust for another, § 487.702(1) directs payment after the sole trustee, or all trustees, die if no further written notice of a valid trust's terms was given to the institution. Separately, § 700.6101(1) recognizes a written nonprobate transfer provision in an account or deposit agreement. For state or federal credit unions, § 490.81(b)-(e) defines a share or deposit beneficiary account by documents naming one or more owners and one or more beneficiaries; its “person” definition includes individuals and legal entities. The credit-union beneficiary account is expressly distinct from a trustee-for-beneficiary account.

Lifetime rights and joint owners

The credit-union beneficiary has no ownership interest (§ 490.81(a)). During the life of any owner, all rights to its money belong to the owners; if there are several, their rights follow the account contract and applicable multiple-owner law (§ 490.82(1)). Only after the last owner dies do ownership interests pass to the named beneficiaries (§ 490.82(2)). A separate bank deposit expressly payable to either named depositor or the survivor is governed by § 487.703, which permits payment to a surviving depositor.

Beneficiary survival and shares

If no credit-union beneficiary is living when the last owner dies, § 490.82(3) sends the account through that owner's estate. If two or more are living, § 490.82(4) divides the account equally among them as separate shares, with no joint ownership among the beneficiaries. The bank trust-deposit payment rule in § 487.702(1) states who receives payment after the trustees die; it does not supply that credit-union allocation rule.

Changing a designation or using a will

§ 490.82(5) says a will cannot change the passage of a credit-union beneficiary account. The act defines the account through its establishing documents but does not prescribe a separate amendment form (§§ 490.81(b),(d), 490.82). For a general written nonprobate deposit provision, § 700.6101(1)(a),(c) recognizes a person designated in the instrument or a separate writing, including a will, if the provision is written to operate that way. Read the particular deposit agreement before treating a later writing as operative.

Payment and discharge

§ 487.702(1),(4) directs a bank or trust company to pay the trust deposit after all trustees die and makes a payee's or guardian's receipt a sufficient discharge. If the payee is younger than 18, subsections (2)-(3) set different payment routes for balances above and below $5,000. The credit-union act specifies ownership passage (§ 490.82(2)-(4)); these provisions do not prescribe a separate proof-of-death form or credit-union discharge rule.

What trips people up

A credit-union beneficiary account under § 490.81 is not a trustee-for-beneficiary account. Its equal, separate-share rule in § 490.82(4) should not be imported into a bank trust deposit under § 487.702. The general written-transfer statute, § 700.6101, also allows a will as a designated separate writing in some instruments, whereas the credit-union act expressly bars changing its title passage by will.

Common questions

Can a legal entity be named on a credit-union beneficiary account? Yes. The definition of “person” in § 490.81(e) includes a corporation, partnership, association, governmental entity, or other legal entity.

What happens if no credit-union beneficiary survives? § 490.82(3) puts the account in the last surviving owner's estate.

Statutes and sources

The verbatim statutory passages and official section URLs are in the statutes entries above; each was accessed October 8, 2026.