You need to discuss this matter with an attorney. I think what has happened is that the Credit Union has some doubts about your mother's mental capacity to make the changes and that they are going to be sued, either by you or the trustee/ trust beneficiaries. From the Credit Union's point of view, it is better to be sued by you while they still hold the money or let you sue and the trust at the same time. They do not want to be in a situation where they pay out and the funds are gone and they have to dig into the Credit Union's assets to pay up.
Mr. Carroll offers a good answer. Probably due to the proximity of the change to her death they became wary. I know lawyers say this alot - but get a lawyer to write a letter for an explanation as to why they will not honor the change. I just don't think, based on experience, that the bank will respond to you with out a lawyer. I suppose there is a difference between the ultimate beneficiaries if it goes to the trust versus the change?
This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit Steve Zelinger's website: http://www.stevenzelinger.com/
I agree that you should consult with an estate attorney as soon as possible to discuss the issue with the credit union. I regularly practice in this area of law in MD and would be happy to speak with you. I can be reached (301) 850-3387.
Please note that the use of the Internet, including this Avvo forum (this "forum"), for communication does not establish an attorney-client relationship, unless and until a written engagement has been made and signed by both you and the attorney who is answering your question. Any answers by Julie Goodwin Weber or Goodwin Weber LLC on this forum are not intended as legal advice, and may not be relied upon or used as legal advice.