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My Experience as a Beneficiary Claiming POD Bank CDs

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Most banks and credit unions allow you to name payable-on-death beneficiaries on your accounts. I reviewed many times how this can be used to increase your deposit insurance coverage. If you don't need to worry about increasing your deposit insurance coverage, you may still want to specify beneficiaries on your accounts. It can make it much easier on your heirs. When the owner dies, the account doesn't have to go through the probate process. This can save your heirs time and legal expenses. The beneficiary can claim the account directly at the bank or credit union.

I was the beneficiary on several small bank accounts that my dad owned. He passed away in March, and this year I had my first experience of claiming accounts as a beneficiary. Except for my problems at Wells Fargo, the process of claiming the accounts was simple. However, there were a few issues that I had to consider. I thought it would be useful for me to review these in a blog post.

In the last 20 years of my dad's life, almost all of his savings were in CDs. He had several small CDs at a few banks and credit unions. In addition to the safety and simplicity of the CDs, he also liked the ability to designate beneficiaries. He didn't have enough to worry about higher deposit insurance coverage. His main concern was to make it easy for me and my two brothers to inherit his savings without having to go through probate.

Specifying beneficiaries on bank accounts is indeed an easy way to keep money out of probate. Most banks allow you to add one or more beneficiaries to an account. They typically label beneficiaries as "payable on death" (POD) or "in trust for" (ITF).

One downside to specifying a beneficiary is that many banks and credit unions require the beneficiary's social security number. One of my credit unions refused to add a beneficiary without the beneficiary's social security number. I know readers have also reported this problem at some banks. I was wanting to add my brothers as the beneficiaries, but I didn't want to carry their social security numbers. Also, I didn't want to provide this number. I trust the credit union, but nothing is 100% secure. The more you give out these numbers, the more likely it could be found by hackers.

While you are alive, the beneficiaries have no access to the bank accounts. Access is only available after you die. In my experience, I just had to bring the certified copy of the death certificate and my ID. I also brought the copies of the account documentation with the account number and the beneficiary designation. This made it easier for the banks to look up the accounts in their system, but I don't think this was necessary for all cases except for that one Wells Fargo CD in which they had used the wrong beneficiary form.

Keeping the CD Rates and Terms

If a beneficiary is claiming a certificate of deposit, he or she can typically close the CD without an early withdrawal penalty. That was the case for all of my dad's CDs. However, there was an interesting issue with this. Many of my dad's CDs were 5-year CDs that were opened a few years ago when the rates were much higher. If I closed those CDs early, I would lose out on the high rates.

I was hoping that the banks and credit unions would allow me to take ownership of the CDs with the original rates and maturity dates. However, only two banks allowed this. The credit unions and the other banks required that the CDs be closed before I could take ownership of the funds.

The two banks that changed ownership without closing the CDs were SunTrust and PNC.

SunTrust Bank had the best process. They quickly gave me this choice at the branch, and converted the CDs with my name as the owner. They also allowed me to add new beneficiaries. The CD rates and maturity dates remained the same.

PNC also converted the CDs, but it did one surprising thing. It converted the CDs that listed me as the beneficiary without my permission. My brother was also a beneficiary on some PNC CDs, and he went to a PNC branch before I did. For some reason, PNC not only converted my brother's CDs, but it also converted my CDs. When I visited PNC, I learned that I was already the owners of these CDs. The main problem was that I could no longer close the CDs without an early withdrawal penalty. Fortunately, I had wanted to keep the CDs opened with the original rates and maturity dates. So I didn't protest what they did.

For all the other banks and credit unions, I was not allowed to keep ownership of the CDs with the original rates and maturity dates. The CDs had to be closed before I could take ownership of the funds. However, I still had a choice to make. Most would allow me to wait before closing the CDs. My dad had set up all of the CDs so interest would accrue in the CDs. I could just let the CDs mature and close them at maturity. There were two issues with this approach. First, all of the CDs would mature after 2011. My brothers and I felt that it would simplify tax reporting to have the CDs closed before 2012. Second, there's an issue of FDIC coverage. According to the FDIC:

The FDIC insures a deceased person’s accounts as if the person were still alive for six months after the death of the account holder. During this grace period, the insurance coverage of the owner’s accounts will not change unless the accounts are restructured by those authorized to do so.

Thus, for reasons of safety and simplicity, my brothers and I decided to close the CDs at the end of this year.

Not all of the banks were as willing to let me wait. Bank of America and Wells Fargo did not give me the choice to wait. I had two Wells Fargo CDs that had me as the beneficiary. Only one was done wrong. When I learned of the problem with that CD, I asked if I could wait to close the other CD. The banker insisted that the CD had to be closed immediately. I had a similar issue with Bank of America. Since the rates of these two CDs weren't that high, I didn't protest. It does show that you need to be careful when you decide to claim the account if you want to maximize the interest.


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Comments
139 Comments.
Comment #1 by me1004 posted on
me1004
Very interesting to note the loss of FDIC coverage 6 months after the death.

I note, when I did this a few years ago after my father died, I learned that I, as beneficiary, was the trust executor. I had always thought the banks were the executor, and I was merely the receiving beneficiary. But as such, I am VERY alarmed that PNC converted your CDs without ever even hearing from you. Yes, your brother had informed them of the death. Still, as I understand it, they had no legal authority to do anything with the accounts on which you were beneficiary -- I believe only the executor has power to do that -- unless perhaps it was part of the terms of the CD that it would automatically close upon death, but I've never seen such terms.

Come to  think of it, I'm not sure I've seen anything of disclosures about what happens to a POD upon death. If the bank wants to apply rules, such as whether you MUST close it, I would think that would have to be specified in disclosures up front upon opening the POD.

In my case, I was dealing with a CD at Hudson City Bank in New Jersey. I was there, and just wanted to close it while there. But I learned that if I closed the CD before the interest was posted, I would lose all accrued interest that had not yet been posted. It was posted quarterly, so I waited until the end of the quarter and then closed immediately, and they mailed me the check. If they had had a rule that it must close upon death, that I had no choice to let it ride, then I would have lost all accrued interest! Even worse if they had taken it upon themselves to close it before I even had a chance to get in touch wiht them (my brother had given them a copy of the death certificate before I was even informed of the CD, so there are always circumstances why they might know of a death yet the beneficiary could not yet have been in touch with them).

13
Comment #2 by Anonymous posted on
Anonymous
I think me1004 (comment #1) is misinterpreting the FDIC provision: "The FDIC insures a deceased person’s accounts as if the person were still alive for six months after the death of the account holder."

This does not mean that FDIC coverage ends 6 months after death - the only thing that changes after 6 months is the method of calculating the total amount of FDIC coverage available.  So if the beneficiary had other accounts (in the same ownership class) at the same bank, then the FDIC would only provide insurance up to the limit for that beneficiary alone after 6 months had passed; for the first 6 months, there would be an increased insurance limit, calculated as if the account holder were still alive.

If the beneficiary had no other accounts (in the same ownership class) at the same bank, or if the combined total of existing accounts and inherited accounts were below the FDIC coverage limit, then all funds would continue to be insured by the FDIC regardless of whether the account has been claimed.

 

10
Comment #3 by me1004 posted on
me1004
Oh, is that what they were saying? Wasn't clear immediately without more specific language. They should say it as clearly as you did. 

BTW, I wasn't misrepresenting. I merely misunderstood.

4
Comment #5 by Living Trustee (anonymous) posted on
Living Trustee
Excellent column!  Passing this around to all my friends.  Thanks! 

A related note: My folks put all their accounts (a big bunch of CD's) and other assets into a family trust, and I was the Managing Trustee.  Hence, all of their bank accounts were titled under their trust, so no POD's (the trust was filed with each account and showed the beneficiaries, and the FDIC treats that beneficiary page like a POD page). Upon my second parent's death I set up a special liquidation account and, upon presentation of the death certificates and my trustee certificate to each bank, I received checks payable to the temporary liquidation trust acccount that I set up (I then paid the pooled cash out to the trust's beneficiaries from that one account). 

In that regard, I delayed a 5-year, 6.00% APY CD's liquidation until the very end of my trust-liquidation duty.  All went smooth with all banks, and the FDIC coverage during the acccounts' existence was tied to the number of beneficiaries in the trust.  BUT, this was an "A-B" trust, so if one parent dies first his share becomes "A-trust" and "irrevocable,"  while the surviving parent's share (B trust) remained revocable.  The pitfall: FDIC coverage on an irrevocable trust was reduced to just one-beneficiary level (i.e., as if there was only one beneficiary on the account, even if there were multiple trust beneficiaries shown on the trust document filed with every bank). 

Still, when IndyMac failed (I managed the cash by CD-investing in weak, high-pay banks), the FDIC didn't seem to notice that it was an irrevocable trust account and my marginal, over-limit portion was safe (I got 100% of the account paid out).

POD's are wonderful; I have them on all my accounts.  They are obviated, however, by the use of a living trust. So when you see a POD, that often means that the owner is using a will, rather than a trust.  A will is more expensive to administer at death than a living trust.  But simple estates like mine (CD's with POD's, a few assets, no spouse or child support) can get away with POD's and a will.  Those with more complex estates -- look into a living trust, and remember that POD's won't work if the CD's and other bank accounts are placed in the trust (because the trust's beneficiary page controls).

8
Comment #6 by Anonymous posted on
Anonymous
Very interesting information. I just have been looking into the best way to set up CD's when my relatives live overseas and will not be able (or willing) to come to claim the CD personally at the bank if I use POD designation. Can anyone give me any advice. I would greatly appreciate it.

5
Comment #7 by lou posted on
lou
Poster #2  I am confused by your explanation. I think you are saying the $250,000 insurance for a beneficiary would continue beyond the 6 months even if the account owner has died. However, if you were a beneficiary for another account owner at the same bank, the $500,000 of insurance you had as a beneficiary for both accounts would now be reduced to $250,000 after 6 months of the death of one of the account owners. Is this correct? Assuming I am understanding this correctly, this could be a problem if there is $500,000 in both accounts. After 6 months, $250,000 of the funds  would be uninsured if I  did not close the accounts.

2
Comment #8 by Future Living Trustee (anonymous) posted on
Future Living Trustee
Question to "Living Trustee" (post #5) and others:  

I am pondering setting up a living trust.

My understanding is that it will eventually be up to any candidate financial institution to review my trust document to decide whether it will be bound by its conditions before it will agree to open a trust account and re-title my assets into the trust.

One key condition for me would be that my trust document stipulates that any term deposits can only be held in institutions that allow redemption and/or transfer of title prior to maturity upon the triggering event of my death.  The idea here is to explitcitly ensure that my trust is only involved with financial institutions that agree to allow my trust to be wound up promptly.  (Otherwise there is a worst case scenario:  suppose trust termination is delayed for years pending maturation of locked-in CDs, then consider the annual fees if a backup corporate trustee comes into play.)  

My question is:  how specific can my trust document be without spooking the candidate financial institutions?

E.g. can I safely elaborate in the following manner? :

“… for term deposit assets, the trustee can only use institutions that allow term deposits to be converted prior to maturity upon the triggering event of the settlor's death in at least one of the following manners (A) redemption for cash prior to maturity penalty-free for par value, plus any unpaid accrued interest earned to date of withdrawal, (B) transfer of ownership prior to maturity to one or more individual beneficiaries specified by the successor trustee without change of terms …”

The idea here is of course that my trust can be wound up not only promptly, but also for fair value and possibly considering preferences across the beneficiaries.

I would appreciate any expert comments on this matter.

1
Comment #9 by Anonymous posted on
Anonymous
There are no real advantages to a living trust over POD's. In fact there can be several disadvantages. Do your own due diligence to determine whether your estate actually requires an LT.Do not automatically take a lawyers  advice that you need one.

3
Comment #10 by Ed (anonymous) posted on
Ed
I was told i may be benificiery to a c/d. how can i find out if this is true, the person has passed away.  should i contact the bank . im not sure how to go about it.thank you Ed.

5
Comment #11 by KenBDG posted on
KenBDG
Ed, If you contact the bank and tell them your name and the name of the person who passed away, they may be able to confirm if you're a beneficiary of an account. The bank may need a certified copy of the death certificate before they disclose any information. You'll definitely need the death certificate to claim the account.

4
Comment #12 by KLN (anonymous) posted on
KLN
My father had 2 cd's with BofA totalling slightly more than the 100k required for probate in the state of California.  He had a trust and a will specifying my sister and I as executors/trustees.  BofA would not release the funds from the cd because the title on the cd was in my dad's name -not the trusts.

I went into the branch where the cd's were opened yesterday.  They said they DID NOT HAVE the original terms or info on the cds to determine if a beneficiary or death 'put' or POD was on either of the cds.  This seems unbelievable to me that they don't have this information at the branch where they were initiated.  They said I needed to go to court to get the 'letters testimentary' to access the funds - costing me court and attorney fees.

Meanwhile all his funds are in those cds and I have no way to pay his bills.  I felt like they were stalling and that by some type of fed law they should HAVE to have this information.

Any help is appreciated.

KN

1
Comment #13 by Apache posted on
Apache
Do you have a copy of your dad's original CDs and do they have the POD or beneficiary listed anywheres on them?  If not, you may have a problem proving these CDs belong to you.  This is why I do not deal with any bank or CU which will not give me a copy of the CD with the POD or beneficiary listed on the CD even if it is on the back.  No matter how computerized we are, I still rely heavily on my "paper" copies of everything!  One credit union I just went with does not seem to send out copies of CDs and told me to print the info off the computer.  I did this and keep it in my folder with my other CDs for "just in case" there is ever a misunderstanding about what I purchased.

2
Comment #14 by FinerTheBetter posted on
FinerTheBetter
So it seems like to most reliable way to prevent unwanted early closure is to not notify the bank about the until after the maturity date,

but what to do with the 1099s in the meantime? 

1
Comment #15 by FinerTheBetter posted on
FinerTheBetter
Sorry the above post should read:

"about the death"

3
Comment #16 by Anonymous posted on
Anonymous
What is the problem with keeping the cd as is and hoping that the bank does not find out ?

1
Comment #17 by Anonymous/Paoli (anonymous) posted on
Anonymous/Paoli
#16:  I would not advise that!  What if the original owner had monthly checks being sent to his/her home? Who is going to sign them?  When the CDs mature, it would be very odd to show up at that time and tell the bank the original owner is deceased and you would then have to still come up with what is necessary to prove you are the owner.  I would do it as soon as possible because if the bank fails then you have to prove you are the one who is supposed to be paid for the CDs.  Too many problems involved in your theory, imo.

1
Comment #18 by Anonymous posted on
Anonymous
Hello, can anyone here help me? My grandmom in floridad passed away last 2010 and the executor informed me that I was named as a beneficiary of my grandmom's bank account but she refused to tell me the complete information but instead she asked me to write an authorization letter for her so she can access the account but I refused to do so and we never talked again. I was able to ask another relative to get me a copy of the probate document regarding my grandmom's estate and I saw a letter there coming from Bank of America stating that the previous account number of my grandmom's account was changed to a new account number due to her death and it should be filed with her estate but I wonder how come it was not stated as one of her assets in the probate document and her only asset that was reflected in probate is her life insurance bond. I already sent a letter with her death cert and my ID inquiring about a POD account to BOA branch near my grandmom's house but up until now there is no reply...any other suggestions?

2
Comment #23 by Anonymous posted on
Anonymous
#18:  I agree with #19.  I think you need to find a way to go to the bank in question and insist on seeing the account you were named beneficiary of.  I would think it is the Executor's responsibility to provide you with the information you need to access the account.  As in my post to the other poster about Wells Fargo, if you are a minor, you might do well to get a family member to go with you to the bank to make sure you get what your grandmother wanted you to have.  Something seems wrong that anyone could change the account number after your grandmother's death unless they took control of the account.  You should insist on knowing just who did that since the account was supposed to pass on to you.  From everything I know from having PODs on CDs for years, all that is necessary for the POD person to do is to present a copy of the death certificate of the original owner of the CD and their ID to show they are the person named on the account as beneficiary.  What is very important here is that your grandmother did know to put your name on the account as beneficiary.  I think once you find out who changed the account number and why, you will then get to the bottom of what is going on here.  Best of luck to you!

1
Comment #19 by Anonymous posted on
Anonymous
I would suggest that you physically go to a Bank Of America branch along with the death certificate and your ID information.  Request that they look up the account and see if you are listed as beneficiary.  If you are, then it is your right to get a check for the amount coming to you.  To me, it is a little suspicious that the account number changed prior to distributions to the proper beneficiaries. 

1
Comment #20 by Anonymous posted on
Anonymous
Both my parents are dead.  I found that Wells Fargo was the most greedy of all the banks. It doesn't surprise me at all that they insisted you get the current rates on the rollovers. I'm sure Bank of America follows next in line.  I had some POD stuff from my mother - since my father took care of her.  The biggest deal - as you mention - is that having POD avoids probate.  But that's about all it does...

2
Comment #21 by Anonymous posted on
Anonymous
Our 13 year old son is beneficiary on his Grandmothers accounts at Wells Fargo. They refuse to hand the money over, it's POD. They are requiring my husband and I go to a lawyer and then go to court to "prove" he is our son. After two days of talking to them I requested they write down exactly what it is they want. As no one, not a lawyer nor anyone at the courthouse, ever heard of such a thing. They then said we need to get guardianship or conservatorship over him. They insisted its the same thing (I know it's not). We took in her death certificate, his birth certificate, his SS card, his baptism certificate and our tax returns. None of that is good enough for Wells Fargo. We haven't done anything yet. We a still in shock they expect us to hire a lawyer and go to court when he is our son and we are his legal guardians anyway. Anyone heard of such a thing? It's in the state of Iowa if that matters.

3
Comment #22 by Anonymous posted on
Anonymous
Could there be some problem with Wells Fargo being concerned that a 13 year old is not qualified to handle or make decisions over a large sum of money and since they may figure you and your spouse will be directing him that they need to make sure you show proof you are his parents?  I don't think they would have this concern if your son was not a minor.  This is very interesting to know so that others who put minors on as PODs will ask the bank what is involved when time comes for them to collect.  I don't see why a lawyer needs to get involved as long as you verify he is your son.  This should be a good lesson for others to learn before they put minors on as PODs. 

2
Comment #24 by Anonymous posted on
Anonymous
My father recently passed away and he (and my mother) have a couple of CD's which are titled His name, my mother's name and then "POD my sister's name & my name", my question is - if my mother cashes these and gives them to us, am I responsible for paying any type taxes? Everyone I ask has told me no, since I am listed on there already????

3
Comment #25 by lou posted on
lou
#24, it depends on the size of the CD and whether it exceeds the gift tax exclusion for your mother. Since your mother inherited the CD, you will not have to pay any tax if your mother cashes the the CD and gives you the money. However, your mother may have to pay gift taxes if it exceeds either the annual gift tax exclusion or her lifetime exclusion, which is actually changing on Jan 1 if Congress does nothing to change the law in the meantime. So if you are going to do this, you may want to accomplish it before yearend.

2
Comment #26 by Paoli2 posted on
Paoli2
#24 This, imo, has nothing to do with the fact you "were" listed on your father's CD.  The CD was to go to you and your sister only after the death of both of them since your mom was joint owner.  How you were listed on CD plays no part of this unless mom makes you POD of it with her as owner.  As for taxes, I think Lou is correct about staying within the annual gift tax exclusion for whatever it is now or the lifetime etc.  You should not be hit with taxes and neither will  mom if she stays within the bounds.

1
Comment #27 by Anonymous posted on
Anonymous
I am listed as the beneficiary on my mom's IRA at Wells Fago.  Everything I'm reading sounds pretty cut and dry as far as getting the money, however, do you think because it's an IRA there would be any complications in receiving the money?

1
Comment #28 by lou posted on
lou
Yes, inherited IRA's have restrictions in how you can distribute the money without incurring taxes on the undistributed dollars in the IRA. You should have a company like Fidelity or Vanguard act as the trustee, so you are certain that you are in compliance with IRS rules. If you don't do the transfer correctly, you could have the entire amount subject to federal and state income taxes.

2
Comment #29 by Anonymous posted on
Anonymous
I guess my real question is..Is there a waiting period for Wells Fargo to distribute the funds..even though I'm the POD?

1
Comment #30 by Paoli2 posted on
Paoli2
#29   IRS Pub. 590 page 17 explains what happens when you are beneficiary of an IRA and you are not the spouse.  Rules are different for spouses.  From what I understand, Wells Fargo or whatever institution the funds are in must turn over the account to you but you have certain rules you have to follow with what you can do with these funds if they were in an IRA so that you won't be taxed on them until you do the Required Minimum Distributions.   I don't think you it's a matter of your getting a check from Wells Fargo and just doing what you want with it.  You can read the rules in Pub. 590 on-line.  For 2011 it was page 17.  I don't think the 2012 copy is available yet. 

3
Comment #31 by Paoli2 posted on
Paoli2
#29  That is supposed to be Page 16 for Inherited IRAs in Pub 590 in my above post.  Sorry for the error.

1
Comment #32 by Anonymous posted on
Anonymous
Thank you for your help!:)

1
Comment #33 by Anonymous posted on
Anonymous
I posted question # 18, i have an update with what happened and i wanted to know your ideas guys hope you could help me on this. I was able to get a certified copy of my grandmom's living trust as well as a letter coming from BofA regarding a release and satisfaction of claim statement with previous and new account number being set up on that. I faxed those documents as well as my Ids (passport) to BofA and told them I was one of the heirs of my grandmom (real estate property) and i just want to know if i was named as beneficiary of her POD account because last 2010 when my grandmom died the executor contacted me and informed me of being a beneficiary of a bank account (executor did not specify which bank) and was asking me to make an authorization letter for her (executor) to access the account but i refused to do so and she never talked to me anymore until now. My problem is when I faxed those docs to BofA and introduced myself to them they told me they cannot help me and I should talk to the executor. I also saw a document stating that the only asset declared in probate (formal administration) was my grandmom's life insurance ( no banks accounts,ira,401k declared) but bank accounts,401k, retirement accts were mentioned in her living trust but did not mention specific names of beneficiary. Any ideas why i should talk with the executor if it was a POD account with beneficiary? So far only BofA is the bank i see in the documents that my grandmom banked with when she was still alive that is why i contacted them regarding the situation but unfortunately they dont tell me any information. :(

1
Comment #34 by Paoli2 posted on
Paoli2
#33  I don't understand what is going on with your grandmom's Executor.  From what I know the Executor takes charge of seeing that the people who the deceased left money or property to gets what they are due.  I would think the Executor would have to have knowledge of where the money or property is so they can give this to those who are named.  This is why they are named as Executors so they can take care of this responsibility and see that everyone named becomes aware of what they get and where it is.  Maybe this Executor is not aware of his/her responsibilities towards the inheritors.  If anyone should know where the banks are and how you get your funds, the Executor should.  I can see the bank wanting proof from you that you are the one named to inherit but your ID and a copy of the decease's death certificate is all I was ever told my inheritor would need upon my death. 

Your problem is the reason everyone should tell beneficiarys "ahead of time" that they are being named in a Will or if they are on a CD as a POD, give them the info of the banks ahead of time.  I typed up a booklet for the person as POD on certain of my CDs with names, addresses and phone numbers of any and all banks to contact upon my passing.  I am not leaving this to my Executor to do. In fact, today I updated the info as I always do when any CD matures and/or I change the bank which they are POD on.  I also included in their booklet info on how to handle any IRA accounts they "may" inherit since these must be handled differently from regular CDs.   This may sound nutty to you but if I were in your position especially with this Executor, I would call all banks in my grandmom's city and ask them if they have any open accounts in her name.  It makes no sense she would make you POD and not make her Executor aware of which bank it's with.  I would also call BOFA and ask to speak to someone higher up and ask their help in finding which accounts have or "had" your name listed as POD.  Maybe they matured before she passed and she used the money for something else.  If she had any "nicknames" for you be sure to request that BOFA check for you under any and all names she might have used for you.  Maybe you are giving them a name that is different from what she gave them.  Hope you work this out.

2
Comment #35 by Joey (anonymous) posted on
Joey
My son an I are named on my fathers accounts at Wells Fargo as POD. He is 13, a minor, and we are having trouble with this. We are in NC and I'm not sure on the laws but like someone else posted I was told I had to get a court ordered proof of guardianship for our son. I have no idead what to do.

2
Comment #36 by joey (anonymous) posted on
joey
Also they will not release any of the funds until we are able to do this. I dont understand why they cant release my portion. To become my son estate guardian we have to be bonded for 1.52% of the total amount our son is to receive. Sure would help if they would release my funds.

1
Comment #37 by Anonymous posted on
Anonymous
SENT W9 AND DEATH CERTIFCATE TO J.P MORGAN 401K.AS BENEFICARY WHEN DO I RECIEVED THE MONEY .WHEN DO THEY CUT CHECK AND SENDING IT TO ME

1
Comment #38 by Anonymous posted on
Anonymous
My parents opened a cd listing me as owner several years ago. They have both passed away. I do not recall anyone talking about POD. We all assumed it would just transfer into my name. Does this have to go through probate court?

1
Comment #39 by lou posted on
lou
No, the CD is in your name

1
Comment #40 by Paoli2 posted on
Paoli2
How does he know the CD is in his name?  I think the poster needs to see the actual CD and if his name is on it or not.  If his/her name is on the CD with the parents then it belongs to the poster and is not probatable.  Assuming it would transfer into the poster's name does not mean it actually was done.  This can be resolved by just contacting the bank and finding out whose name/names are on it.

1
Comment #41 by Anonymous posted on
Anonymous
Can anyone help me with this one? My step Mother died Nov. 27th 2012 in Calif. A community state. My Father still living, legally married and 84 years old. 40 days after death anyone can buy a death certificate for $20.00. There were two accounts in wifes name only. No signers, no benificeries, no POD. A hand written will saying at her death everything goes to her husband my Father. So 40 days after death funds are available. I call my dad to instrust him to go get the funds. (I live out of state) He goes to the bank and a grandaughter withdrew $41,500. The bank says the granddaughter came in with a death cert. and a signed notorized affidavit. We are still stunned. Any ideas anybody??

2
Comment #42 by Paoli2 posted on
Paoli2
#41  I used to live in a Community Property state and am sooo glad I am not any longer.  The rules are quite different even if one has a Will.  You might want to google up information on California'a Com.Property laws.  First of all, she was your step-mom and she did leave a Will leaving the funds to your father.  Was this her "Seperate" Property or was it truly Community Property?  Being a step-son you would need to find out if you were in line to inherit any of the funds.  Community Property inheritances are not open and shut like other states where one can have a Will stating exactly who you want your property to go to.  Maybe the granddaughter had more of a right to the funds than a stepson of the deceased.   Your relationship to the deceased is different from the grandaughter and I am wondering why you seem to take it for granted the funds or some part of them belonged to you.

1
Comment #43 by lou posted on
lou
Consult with an estate attorney ASAP. Don't try to figure this out without legal advice!

1
Comment #44 by Anonymous posted on
Anonymous
Ok this is what I've been looking for.  My story has a slightly different twist.  My mother left a number of CD's for my sisters and I.  I'm am the POD/POA on the CD's but my sisters are listed.  After my mother died one of the banks made me close the CD.  The other two banks let me keeps them to maturity (1-3 years).  They never changed the CD ownership and the 1099-INT to my tax i.d., it remained in my Mothers name even though she had died.  They have all been 2 years collecting interest under her ss#.  I am not filing her taxes anymore because the interest is not enough to meet minimum filing requirement.  I also did not claim the interest on my returns in 2011 and soon 2012.  What do I need to do?  Do I need to go back and revise my returns to report the interest?

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Comment #45 by lou posted on
lou
You really are asking two questions: What are the tax consequences and are the CDs property titled? I am no expert but I would think the POD designation is invalid and if anything happened to the bank, you may be ineligible for FDIC insurance. I could be wrong about this. Why don't you call the FDIC office in your region and ask.

As for the tax consequences, since your mother has been dead for two years, I think the following citation from Pub 559 is applicable:

"Interest accrued on savings certificates.   The interest accrued on savings certificates (redeemable after death without forfeiture of interest) for the period from the date of the last interest payment and ending with the date of the decedent's death, but not received as of that date, is income in respect of a decedent. Interest accrued after the decedent's death that becomes payable on the certificates after death is not income in respect of a decedent, but is taxable income includible in the income of the respective recipients."

This seems to suggest that you needed to include the interest income on your own return or prorata with your sisters if they are listed as beneficiaries. Alternatively, you could do nothing and see what happens with the IRS. In that you never received a 1099, I am not sure how they would ever know.

 

 

2
Comment #46 by Anonymous posted on
Anonymous
Thanks much.  As I thought, a conundrum.  I could blame it on the bank but I'm sure the IRS would not care that they mistakenly did not transfer the CD to our names.  Regarding invalid POD, we are about to get dispersed the final 2 CD's maturing next month so no risk there.  I will go see a tax consultant I suppose.  I was just going to let it fly as is but I'm feeling concerned about IRS coming after my dead mother and then after us at a future date.

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Comment #47 by Anonymous posted on
Anonymous
As an addendum to above, would it be ok for me alone to amend my returns to include all of the CD interest from 2011 and now in 2012 and leave my sisters out of it so they don't have to refile themselves?

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Comment #48 by paoli2 posted on
paoli2
#47  Why don't you ask your sisters if they received any 1099Ints for these certificates?  If the interest was $10.00 or less for their portion, they may not have received any 1099Ints.  I would think your sisters are responsible for their own portion of interest from the CDs and you are responsible for yours according to what was reported to the IRS. 

2
Comment #49 by Anonymous posted on
Anonymous
Only my deceased mother has received the 1099-INTs because the CD's were never transferred over to our names and tax i.d.'s.  We have been cashing them out as they mature (as listed POD's) but haven't paid any tax on the interest because the interest and CDs themselves are in my mothers name still.  That was the original point of my post.

1
Comment #50 by lou posted on
lou
Technically speaking, if your sisters received some of the interest from the CDs they should probably amend their returns also.  However, if you decide to amend your return only, then just report 100% of the interest received. I don't think the IRS will pursue it as long as someone paid tax on the interest income.

2
Comment #51 by lou posted on
lou
You could do nothing. If the 1099's are in your mother's name, I don't see how the IRS will ever know. If they found out, you would just pay the tax.

 

2
Comment #52 by Anonymous posted on
Anonymous
Thanks, I would probably do nothing but I assume the IRS will send a letter in my mothers name someday about undeclared 1099's and I would not only have to pay the tax but a penalty as well.  Remember that we are listed on those 1099's as POD's so they know we are the beneficiaries.

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Comment #54 by lou posted on
lou
#52, I understand - the safer route is to pay the taxes now and not to have to worry about the IRS someday. BTW, I have never seen POD beneficiaries listed on 1099's. Are you sure about this?

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Comment #55 by Anonymous posted on
Anonymous
My name and my sisters names are listed as POD under my mothers name on one of the bank's 1099-INT forms but not listed on the other banks.  I think this is because the first bank has titled the account this way and it just shows up whenever printed out on anything.

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Comment #56 by Looking for an answer (anonymous) posted on
Looking for an answer
My father just updated his Will and named my oldest sister as the Executor and also giving her a durable or spring power of attorney should he become ill and unable to manage his personal business matters.  My father has several CD's with differant banks and has all 3 kids listed as POD on each. My question is "should our father become ill and his medical cost requires money from the cd's to pay them can the durable or spring POA cash the cd's or change the POD's in order to cash the cd's?  We live in NC if this helps.

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Comment #57 by Anonymous posted on
Anonymous
#56:  As long as it is a Durable or Spring POA, your oldest sister who is listed on it should have the power to do anything that your father would do if he were able.  I would think using the CDs to pay for his medical expenses would fit in this category.  When we had our POAs done this is the way it was explained to us.  This is why it is very important to trust the person who is named on the POA.  It gives them a lot of power which we have to trust will be used in the way we would if we were able.  I asked our banks what we would have to do if a CD were maturing etc and we were incapacitated and was told the person named on the POA must bring it in as proof of their right to take control at that time. 

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Comment #58 by Anonymous posted on
Anonymous
My estate attorney recently told me that the Power Of Attorney gives you the power to make the POD changes as you describe above.  The only catch was that it depended on the banks that you were doing business.  Some will honor the power of attorney's authority to make changes to pod and some may not.  So it might be a good idea to discuss this with the banks that you currently have the C.D.  Your father's attorney who updated the will should also be someone you could ask for help on this.

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Comment #59 by Anonymous posted on
Anonymous
When  purchasing CD's is it better to have POD or joint account with the person?  My concern is if someone has exhausted all of their Long Term care money in a Nursing Home, can the home take all of the money in the CD's if it is only POD?  My mother in law is concerned that her grand children will not get the money should this happen.  She has been told, she have enough Insurance  along with her pension for seven years.   Any ideas?

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Comment #60 by Anonymous posted on
Anonymous
This is great information. I have a similar issue to someone above. My Aunt passed away last January and her CD's all had POD's on them. Most all were cashed out and given to the beneficiaries. Please note that I am the executrix for her estate; and the estate did not need to be probated. I didn't think another thing about it until I just recieved a 1099-INT from one of the banks and all of the interest that was paid out with the cd's to the bene's is now charged to her. The bank is telling me that it's because she was the tax reportable name on the account. I'm fine to pay taxes on any money received into her accounts, however why is she being charged for interest paid out to someone else? Also why bother getting the SS#'s for bene's if there's no reason. Thoughts anyone? Thanks.

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Comment #61 by Anonymous posted on
Anonymous
My father recentley died and he always spoke of a CD he had for me as a beneficiary, The executor will not give me any information to say the least, and had the will changed fraudently,   How can I find out which bank it would be at, if I do not know at this time, Please help, Thanks much.

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Comment #62 by Anonymous posted on
Anonymous
I don't understand why there is so much confusion over what is going on with CDs when the owner passes.  Aren't there any attorneys involved with these Wills?  If there is an Executor named, there must be a Will.  Being an Executor is a very important position and I think there can be legal ramifications if they abuse their responsibilities.  If you are mentioned in the Will, the Executor must notify you.  If it were me,I would try to find the attorney who did the Will and let him know what is going on.  Maybe you are not really in the Will.  People do change their mines before they become deceased.

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Comment #63 by patricia dempster (anonymous) posted on
patricia dempster
i had are letter saying i was are beneficiary abut 12 years but i lost the letter i know the letter was from edinburgh i know i was left alot og shares but i dont know who to contact

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Comment #64 by Anonymous posted on
Anonymous
my grand mother passed about 2 months ago. and she had a cd for me at bank of america.. well the issue is that in the state of ny the grandaughter cannot obtain the death cerifacte.. for only certain reasons (as for me being the beneficiary) i would need proof. well i dont have any proof. i only seen paperwork with my name account# amount etc. the big issue is my mother cleaned out my gma house and took all her paper work before i had a chance to get anything and me and my mom has NO relationship what so ever . So i believe my mother was able to provide the death certicate to all my grandmother banks she had. so they made her something of state.. meaning she has access to everything my grandmother has. i dont how i would be able to get proof to get the death certicate. and also to find out if my grandmother and anything else left for me.

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Comment #65 by lou posted on
lou
#64, talk to a lawyer.

1
Comment #66 by C.G. (anonymous) posted on
C.G.
This is is a great site!  I wish they could add a "printer friendly" icon for the articles next to the Facebook and Twitter icons.

Also, my father recently passed, making me the last member of our family line.  Does anyone know about making non-profit and charitable organizations beneficiary to bank accounts, savings bonds and insurance policies?  Are social security numbers needed?  Does some representative have to sign? 

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Comment #67 by TJ (anonymous) posted on
TJ
I live in Wisconsin.  My mother just passed on and left a will. The personal administrators we agreed upon in probate. Just today we found out my mother left a CD of 115,000.00. The personal administrator said she had to issue checks to two people..one her mother and the other half went to the other personal administrators because she said they had P.O.D. accounts. Now the att. they hired told the family this matter would have to be separate from Probate. We are also excluded from all information in reference to this because of probate..so were told.  We do not believe our mother left this money to these two people. How can we get the paperwork for this CD?  We are disabled and can't afford an attorney.  

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Comment #68 by Anonymous posted on
Anonymous
If the CD had designated POD beneficiaries, then the bank  has the sole responsibility to issue the money in the correct amounts to the designated beneficiaries.  The bank should not and is not allowed to distribute the money to anyone else  other than to the beneficiaries.  If someone other than the bank is distributing this POD money, then I would suspect something is not right about this and I would head straight to a lawyer to get advice on this.

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Comment #69 by paoli2 posted on
paoli2
If a spouse has several bank CDs in her name only POD to an adult child and her spouse has to go into a nursing home, does Medicaid have the right to claim those CDs even if the other institutional spouse's name is not on them and has no access to them?  Thanks for any info you can provide.

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Comment #70 by lou posted on
lou
Yes, up to a certain limit. The spouse is allowed some money, but the limit, if I remember correctly, is quite low. This is the principal reason why I bought long term care insurance.

1
Comment #71 by paoli2 posted on
paoli2
Thanks Lou.  I misunderstood and thought they could only go after the resources, income and assets of the Spouse who is institutionalized.  I guess they add up all accounts if you are married no matter which one needs the nursing home.  I knew the Community spouse gets to keep "something" but that must be after they take over all accounts for both of them.

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Comment #72 by Anonymous posted on
Anonymous
Can anyone help me? My Grandmother set up a CD Account, with me as her POD. And it Specifically says that only she in person can make any changes to the CD, not unless she is proven mental incompatent in a court of law. So how did the POA get my money. Is this legal, because I know that she was not taken to court.

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Comment #74 by paoli2 posted on
paoli2
#72:  Sounds like your grandmother did not realize what power she was giving to the person who is her POA.  Frankly, I did not realize they could change titles on a CD but I guess #73 is right.  You would have only gotten the CD after her death so if she is still alive and competent, maybe you can tell her what the POA did with the CD and find out if she is aware of it.  She may not have any idea what is going on.  I am the POA for someone but I would not consider changing titles on any CDs or bank accounts they had unless they specifically asked me to do it for them.   Before you do anything else, I would speak to grandma and maybe she can change the CD back to you being POD if she is well enough to still do this.  You did not make it clear if grandma is still alive and competent.  If she is, I don't see why you need to get a lawyer. 

If she is deceased, you can get a free consultation with an elder attorney and find out how much they will charge to handle this for you.  They are not all as expensive as you might think. If the CD is a goodly amount, their charge might be worth it for you.  Best of luck!

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Comment #75 by Anonymous posted on
Anonymous
#74/Paoli2

Suppose in the future that the person you are representing as POA becomes incompetent and one of their CD's matures.  As acting POA, do you have the authority to reinvest in a new CD, perhaps at another institution that has the highest interest rate and do you have the authority to designate the POD beneficiaries to the CD that is in best interest to the one you are representing?

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Comment #76 by paoli2 posted on
paoli2
#75:  Yes.  There are two types of POAs and I made sure to get the type which does give me this power. What good would a POA do if it did not cover all problems that might cause someone to need someone else to make decisions for them?  This is why I feel one does not give this authority to just anyone.  You must trust the person you are allowing to basically do what you would want done. 

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Comment #73 by Anonymous posted on
Anonymous
Re: #72: I had the same thing happen to me.  The POA becomes 'your grandmother' legally by becoming POA.  Then he can raid your grandma's assets freely, including changing CD titles/closing her CD.  There are elder law attorneys who specialize in fighting thbis, but they are very expensive.  Basically, they attack her competence when she granted the POA or attack the implementation of the POA, saying he can't become POA since grandma is competent and grandma now wants the POA to cease being POA.

1
Comment #77 by Anonymous posted on
Anonymous
paoli2, are you licensed to give legal advise in all the states?

1
Comment #78 by paoli2 posted on
paoli2
#77  Are you licensed to act like an idiot, imo, on all discussion groups or just the ones I am on?  BTW, what I am doing is interchanging information with fellow posters just like others are.  Is there anything wrong with that?  If you want to check out more on POAs here is a link you can use:

http://www.ehow.com/facts_6790259_difference-general-durable-power-attorney.html

One does not have to be an attorney to know what POAs are especially if you use them. 

 

2
Comment #79 by Anonymous posted on
Anonymous
paoli2, You're acting like the idiot.  #75 asked a legal question and you gave a Legal answer.  All I did was inquire if you are licensed to give legal advise!

1
Comment #80 by paoli2 posted on
paoli2
#79 We have a regular poster in our group who kindly responded earlier with answers to questions I would think would be of the same nature as the question I answered and yet not once did you ask him about being "licensed" etc.  I did not see a "smiley" face by your question to me so I considered you to be serious about the issue.  I can take a joke but I have to know it's a joke.  Why am I an idiot because I did show proof for my response?  Frankly I don't think either one of us is an idiot or we would not be interested in this group.  Have a nice day, anyway.

1
Comment #81 by Anonymous posted on
Anonymous
Do you always have to get the last word?

1
Comment #82 by paoli2 posted on
paoli2
Yes.  Maybe I was a lawyer in another life.  Do you always have to have the last post especially to idiots??

1
Comment #83 by Anonymous posted on
Anonymous
Paoli 2,

Here is the kicker and what my lawyer told me when I was designated as durable power of attorney on my mother's will.  "Some banks may not permit or authorize the POA to make changes as described in#75's comment."

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Comment #84 by paoli2 posted on
paoli2
#83:  A Power of Attorney is only supposed to be effective during the lifetime of your mother.  Why would you need it after her death?  Once she dies, her Executor takes over.  The banks would not permit you to make any changes you speak about because the POA would no longer be valid.  Your lawyer is correct, imo.  If your mother is still alive, she should designate what changes she wants on any CDs now or put it in her Will what she wants.  Any POAs I have are only effective during the lifetime of the person.  BTW, I am not an attorney.  I am only sharing my personal opinions and experience.

1
Comment #85 by Anonymous posted on
Anonymous
my minor child received a small in trust from an aunt who passed. We went to go get it but they said i have to go to court to get legal guardenship. we called broward county courts and get the run around. If me and my husband have to hire a lwayer it would cost more then the cd is worth. chase bank is very unrealistic we all 3 went to bank me my husband and child. with all sorts of documents including death certificate. but it was no good. what next?

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Comment #86 by paoli2 posted on
paoli2
#85:  Chase Bank??  The PEOPLES Bank?  I had the biggest fight with the District Manager of the Chase I do business with because of a problem so I am not surprised the Peoples Bank is making this as difficult on you as possible.  I think there may be a way around this for you which could be cheaper than getting a lawyer and going through guardianship.   Why don't you just find out if you can get a Power of Attorney over a minor child and if you can, you will be able to handle everything for the child and Chase cannot make you jump through hoops.  I solved all my problems with Chase with just an inexpensive POA on my family members but they are adults.  Try to get a "free" consultation with a lawyer and fine out what your options are and if the child is too young for you to use the POA.  It won't cost you anything unless you decide to allow the lawyer to draw up the POA for you and you can find out any costs before doing anything.    That "free" consultation with a lawyer can answer a lot of your questions and maybe save you money you don't have to spend.  Best of luck to you.

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Comment #87 by Anonymous posted on
Anonymous
#86 - I'm considering opening a checking acct with chase for my SS check.  Everything seems ok.  However, would you share your "bad" experience with Chase ?  Nothing personal, just generalize the problem?  Thanks.

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Comment #88 by paoli2 posted on
paoli2
#87:  I just  returned from Chase.  I have our checking account there too.  The problem in a nutshell as the manager told me this morning is "they have to be compliant with all rules".  My problem was that for years they allowed me to do  certain ransactions one way and recently decided I had to do them another way.  Maybe their corporate office is being stricter on the rules and not allowing the managers as much leeway as they had in the past.  I don't mine following rules that everyone else is following but it seems they are allowed to "stretch" the rules for certain customers.  I guess I am no longer one of their "certain" customers so I am trying to get our other banks to redo our checks to be compliant with Chase's rules.   With Chase it seems to all depend on who is the manager of the bank you are dealing with.  Four other Chase banks I called said they do not make their customers do the transactions the way my bank does.  However "when in Rome etc.".

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Comment #91 by BCVP (anonymous) posted on
BCVP
My father has 2 large CD's which name my sisters and I as beneficiaries.  My step mother has mentioned recently that she feels it is unfair that he is leaving this large sum of money to us.  They do have a will which I believe leaves her all other assests including their home. She also has POA if he is incapacitated.  Simply put, can she get the money from these CD's either directly as POA if he is incpacitated or by suing for at least a portion of them.  This is in Ohio. 

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Comment #92 by Anonymous posted on
Anonymous
To #91 - If Ohio is like Georgia and Mississippi, with a POA, your step mother can change the beneficiaries. If your Father passes away prior to the POA being used, she should have no grounds to sue. A POA is a powerful document and there needs to be complete trust that the one who has the POA is doing what their charge has directed and wanted to happen. Sadly, this is not always the case. Greed is a terrible thing and there is way too much of it now days. The only way I know to prevent this is if you and your sister were joint owners on the account; then even the POA has to get your signature to make changes to the account. Good luck to you, sounds like a bad situation.

1
Comment #93 by Anonymous posted on
Anonymous
Ok I have reason to believe I am a benificiciary on a Pod,since I am a niece,not a daughter,I cannot get a copy if the death certificate,what can I do to go to the bank and claim the funds.....

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Comment #94 by Anonymous posted on
Anonymous
I really need some advice,I am a niece,not an immediate relative,so I'm not entitled to a death certificate..I have reason to believe I am on a pod account,what can a bank tell me with no death certificate..I'm talking,small town Tennessee.there are several banks and numerous accounts,how can I find out if I'm designated on one..

1
Comment #95 by Anonymous posted on
Anonymous
#94  If you are POD on the deceases CD, he/she should have given you some info about where the CD is before they passed.  Since they didn't, you might want to contact the Executor of the Will and see if that person can tell you what you inherited and where it is.  If you find out where the bank is, the Executor should be able to get you a copy of the death certificate so you can claim what belongs to you. 

1
Comment #96 by paoli2 posted on
paoli2
#94  If nothing else pans out for you and you did mention it is a small town, if it were me, I would call every bank in town and give them my name and ask them if they are holding a POD cd with me as beneficiary for the account of  ____________________________ (deceased person's name) and tell them the person is now deceased and this is why you need the info.  I probably make more calls than that to get the best CD rates so it sure would be worth it if I thought there was a POD CD sitting in some bank in my town with my name on it.  Your best bet would be to get the Executor of the Will to help you.  That's why we have Executor's on our Wills to see that everyone gets what the deceased wanted them to get.  Best of luck.

3
Comment #97 by Anonymous posted on
Anonymous
My past experience on this is normally the bank will tell you if you are listed as POD of a deceased account holder.  If you are listed as POD, then you have to present a death certificate to the bank to get the funds transferred into your name.  However; it is wise to stay on good terms with the executor to make it easier for you to get a death certificate to present to the bank. 

3
Comment #98 by Anony626 (anonymous) posted on
Anony626
I have a question and this seems like the right forum to ask it.  My Grandfather passed away last year. Prior to that I was put on as a benificiary to a CD of his by my Father(his son).  My father did this because a bank employee reccommended it because at the time the banks were failing and were only covering so much so the theory was the more benificiaries the more money covered. My Aunt is also on it. It has come to term and we went to the bank today. 

      Here is my problem, when my Dad put me on it I was under the impression that I was only the benificiary if my Father passed away. In other words I would get his half and my aunt would get hers. That was not the case today. We were all issued checks in equal amounts. My question is this... will I be taxed on this? I immediately gave my check to my father for him to split between my Aunt and himself. when I told my husband he flipped saying it will **** up our taxes and we will be investigated by the IRS. HELP. By the way we live in N.Y.  Any info would be greatly appreciated. LB

2
Comment #99 by Anonymous posted on
Anonymous
ANONY626:

I am not a tax expert, but here is my two cents on your questions:

There are a couple of questionable situations here.  You possibly may owe some tax on your part of the interest earned on the cd prior to the maturity of the cd.  Contact the bank and ask them if they are going to be sending you personally a 1099INT on any of the interest earned on the cd.  If so, you probably will owe taxes on the interest.  You possibly will also have to pay some gift tax if you gave more than $14K to your father and more than $14K to your aunt.  $14K is the annual limit that you can give away per person without incurring a gift tax.  I was wondering, if you did indeed owe taxes, maybe your aunt and father can pay for the taxes that you incurred since they ended up with all the money.   

2
Comment #100 by Anonymous posted on
Anonymous
ANONY626:

 

This is previous #99 again.  If you do owe gift tax, I think a way to avoid paying the taxes is to apply it to your lifetime exclusion.  You have a lifetime exclusion total amount of $5.25 million.  So you may want to apply the amount over the yearly allowable gift amount of $28K that you gave to your father and aunt.  If you decide to do this, you will have to file it on your 2013 income tax return.  Sorry but I do not have a clue what you do on New York state income taxes.

1
Comment #101 by Anonymous626 (anonymous) posted on
Anonymous626
Thank you for your help. I have been scouring the internet for a definitive answer and cant find one but this helps. A follow up question if you dont mind. We were each issued checks for 25,000 $  so If my Aunt and father split that it is like 12,500. So I should be clear of the gift tax right? Also do I have to claim that check as income? I was a POD on it and from what I could find it says you do not ...only like you said maybe taxes on the interest.  My father did say he would pay the taxes incurred. Now I just have to worry if I have to claim it as income! thank you again for your time.

1
Comment #102 by Anonymous posted on
Anonymous
For year 2013, there is no limit on how many people that you can gift $14K maximum per person and still be exempt from a gift tax.  So if the check your received was $25K and you gave your father $12.5K and your aunt $12.5K, then no gift taxes have to be paid.  If the check that was issued to you from the bank was in result of you being listed as a beneficiary (POD / Payable on Death) of your grandfather's certificate of deposit then this is considered an inheritance and you do not pay any federal income taxes.  Again I do not know what taxes might apply (if any) in the state of New York. 

1
Comment #103 by FBN (anonymous) posted on
FBN
My father recently died. He had all his accounts in a trust with me as co-trustee. Mom passed away in 2005. They had the A-B trust arrangemnt but I recently found ou that he had not changed the tax id on the trust from his SSN to the trust's tax ID. THis could effect me now having to pay state estate taxes. If I request the bank to change the tax id would that be ok and would they comply to correct the error?

2
Comment #104 by KAY (anonymous) posted on
KAY
I am the recipient of a POD account at TD Bank in New Jersey and I am not a relative of the deceased person who named me on the account.  I went there with a certificate of death and my ID and they said I needed some kind of inheritance tax paper from the Surrogates office.   Surrogates office said it doesn't handle that and I should contact NJ State inheritance tax place.  I called them and they said I need to get in touch with the Executor.   I thought POD's had nothing to do with the estate or Executor.  I called TD bank and told them about the run around and they said I still need to fill out this (tax paper) before they will release funds).  I spoke to Fulton bank in my area and they said all they need to release funds on a POD account is the COD and my ID.  Does anyone know what TD Bank is talking about?  Is this because I am not a relative of the deceased person.

1
Comment #105 by Anonymous posted on
Anonymous
My sister and I have been trying for over a year to have Wells Fargo release money her 2nd husband deposited into a POD  (from another investment she had from when she was married to our father) to pay for her care, she has alzheimers and her second husband walked out on her. The manager at the bank keeps telling us to contact our lawyer and tell him to contact thier lawyer but wouldn's tell us why. I only fully became aware of what a POD was and didn't realize we could only use it after she died. Well she needs it now. But she is unable to tell the bank that.  We both have Durable Power of Attorney which means nothing to them. Last time we were in the bank we took her there hoping she might be able to state she wanted her money but she was unable to do so, the bank manager wanted to interview her by herself and I said no she is ill, and unable to answer his questions. He said there was nothing he could do for us. Both my sister were quite angry in the bank and were asked to leave, and later that day police came by my house and the bank had accused us of drugging our mother and taking her in trying to get a hold of her money. Then the police went and interviewed her at her care home. I am appalled at thier help and worried sick about the funds we are going to need in order to take care of her.

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Comment #106 by Anonymous posted on
Anonymous
My uncle was in a nursing home for over a year.  Nursing home was applying for Medicaid but for unknown reasons, he never received Medicaid.  He passed away and left a small POD account to me.  The nursing home has an attorney who is trying to get the county of social services to pay his bills and appeal Medicaid coverage.  I received a letter from this attorney asserting that the POD funds were to pay for my late uncle care.  There is no will.  Is this money due the nursing home?

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Comment #107 by paoli2 posted on
paoli2
#106  If all his nursing home bills were paid for the year he survived, it sounds like he had run out of money and that is why they were applying for Medicaid.  If he had lived, any funds in his name would belong to the nursing home and that includes the POD funds. However, unless he owed money to the home for care before he passed, I would think the POD money would belong to you.  The nursing home or Medicaid (if he had gotten it before he passed) do have a right to claim pay-back for his care if they found he had money which could have been used for his care.

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Comment #109 by Anonymous posted on
Anonymous
Thank you.  To the best of my knowledge he told them he couldn't pay for his care  and that is when they applied for Medicaid.  Not sure what happened but he was never put on Medicaid.  He did own a piece of property.  My thinking is that this would go through probate and the nursing home can recover their funds through this method and the POD would be mine.  He did not have a will.  Am I thinking correctly?

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Comment #108 by Anonymous posted on
Anonymous
Good luck on this.  What about your Uncle's home or other property?  They may go after that also.

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Comment #110 by Anonymous posted on
Anonymous
They can go after his home since he died without a will and that is fine.  The POD account is not a probate asset.

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Comment #111 by paoli2 posted on
paoli2
From what I have been told is any asset which is in his name and he has control over is available for them to go after.  That CD is still money in his name and doesn't belong to another person until he dies.  Even if it isn't probatable, it is still a source of money he owns and they can go after it.   That is the difficult part about going into a nursing home and ending up on Medicaid especially if you don't have a spouse on the outside who can use some of any money to live on.

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Comment #112 by Anonymous posted on
Anonymous
My Mom is in a Nursing Home.  Prior to here receiving Medicaid, the home asked me to take out 4 CD's for her grandchildren with POD on them.  The home insisted that I do this and not knowing any difference, I did.  Now when Mom passes I will have some explaining to do.  Please comment.

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Comment #113 by paoli2 posted on
paoli2
This is the strangest case I have ever heard of with a nursing home.  Was it the Social Worker who told you to do the PODs? Normally, they would take all CDs with your mom's name on them since they belong to her and are assets until she dies.  I don't see how the grandchildren could ever inherit them unless your mother has so much other funds to pay for her care.  If she did, she would not need Medicaid in the first place.  This is very odd.

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Comment #114 by Anonymous posted on
Anonymous
Read about medicaid clawback provisions. 

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Comment #115 by Anonymous posted on
Anonymous
New question on bank accounts!

If there is somebody that could answer this, please: I am married (13 years).My only daughter is not my husband's daughter. Same with him, since it is our second marriage. Our attorney answered that  if one of us dies, the money in the bank and investiments will go to the surviving spouse, therefore if he dies before, I will make sure his daughter gets half of everything before I die because she is not my heiress. But what happens if I die first? I just have to trust that my husband will do the same?Thank you for any input! Mara.

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Comment #116 by paoli2 posted on
paoli2
Mara:  Personally, I do not like to leave anything to chance when it comes to what a spouse will do concerning my child after I am gone.  Have you considered putting some funds in your name with your daughter as POD?  This avoids probate and makes sure she gets at least a part of her inheritance.  You both should make sure to stipulate i your seperate Wills to make sure the daughters get what you want them to get.  If your husband remarries if you die first, you are rolling the dice on the next wife who may have different ideas about what she wants to do with any money.  Now is the time to take the steps to protect your daughter's interest and the same goes for your husband.  I prefer PODs because there is no doubt who will get the funds when the owner dies.   

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Comment #124 by Anonymous posted on
Anonymous
#116 - paoli2:  Don't count on this POD designation always working as you stated.  The clerk that set up your POD account(s) probably only had 2 weeks training.  She's just a clerk, not a lawyer.
Next time your at the bank, ask a bank officer what "documents" will the bank need to release the funds to the beneficiary.  Have the bank officer put it on official bank paper and sign it.  He will be lost for an answer.
Probate court involvement?  Maybe.  Depends on the bank, state, local, and federal laws.

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Comment #125 by paoli2 posted on
paoli2
#124  I have already done what you suggested.  I called every bank and credit union and asked them exactly what the beneficiary (POD) needs for them to release the funds to them upon death of Owner.  They have a special department which handles this and I was told all the beneficiary has to do is call them and let them know the owner (me) of the CD is deceased and they will give them instructions for what they need to release the funds to the beneficiary.  Usually in all cases, they have to submit a certified copy of the Death Certificate and a copy of their (the beneficiary) driver's license so the institution can verify they are the person on the CD as POD.  Once the verification is processes, the beneficiary can tell them how they want the funds to be handled (basically where to mail the check or checks).  I have typed all the info and put it in the folder I have set up with copies of all CDs the person is the beneficiary of.  I have included all phone numbers to call to make it as easy as possible for the person.  I was surprised to find out that the beneficiary never has to make a personal appearance at the bank or cu.  Just fax or mail the needed documents.

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Comment #126 by Anonymous posted on
Anonymous
Did you get a bank officer to list the required documents on official bank paper and sign it?  If not in writing, all you have is "here say" and easily deniable.

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Comment #127 by paoli2 posted on
paoli2
Sometimes we have to use a little common sense with these things or we can turn into a mass of paranoia.  Think about it.  What else can they do with CDs if the owner dies?  Why would they have a beneficiary listed if they don't intend on releasing the funds to that person with needed documentation of the death?  They would illegally withholding funds to the person it belongs to.  I, of course, will, as the years go by, if I am still able to "hoopla", keep in contact with all my banks and cus to reverify the rules and see if I have to update my info.  Other than that, I will not make myself a nervous wreck and hasten the day of my demise.

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Comment #128 by Anonymous posted on
Anonymous
Paoli2,  I used to live by your theory but that has recently changed by a problem I'm currently having with a bank's titling of an account several years ago.
I have an account problem due to the bank changing (or was wrongly told) how to title the account.  The title on the account is "John Doe or Jane Smith".  I questioned if one of us was to die who would get the funds.  I was told by a bank VP that the banks default title was "Joint with Survivorship" and the funds would go to the survivor outside of probate court.
Now several years later Jane Smith has passed.  Also the VP doesn't remember the conversation and states the account is co ownership (ie: 1/2 mine and 1/2 Jane's estate).  So that means probate court must be involved.  What really pis...s me off is Jane's name was there for convenience only.  All the funds were mine.
From this day forward, I will have everything in writing and signed by a authorized person.

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Comment #129 by paoli2 posted on
paoli2
I'm so sorry to hear about your problems with the signatures.  I don't know how we can get an "authorized" person to sign off on a CD that supposedly is titled correctly.  If it states Joint with survivorship, they have to give it to the second person on the account.  Didn't you show them your original CDs   The VP must have gone to idiot banking school because the "or" in the title made it a  "Joint" account and if it had "with Survivorship" how could he consider it the way you describe?  This is the reason we use these titles to avoid Probate.  If we allow idiots to handle our accounts, we will all be joining them in "idiot institutions"!  I just got off the phone with Navy FCU and the SAME Supervisor.  I am determined they WILL do my CDs correctly if they have to drag me off to the Coo-Coo Institution for my so called "hooplas".  Be nice and you will cry later!

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Comment #117 by Anonymous posted on
Anonymous
I have a question. I am listed as POD on several CD's owned by my dad. The plan is to split the CD's among my brothers and sisters. There are 11 of us. Should I have my dad (if possible) list all of us as beneficiary on the CD's? I don't know much at all about the tax laws. I am thinking that I will get a 1099 when my father passes away and I will have to pay all of the taxes when I will be splitting it evenly among my siblings. I live in PA.

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Comment #118 by lou posted on
lou
Yeah, list them all as beneficiaries. If you don't, you might have to pay gift taxes or use up some of your gift tax exemption.

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Comment #119 by Anonymous posted on
Anonymous
A gift is a gift is a gift....how does listing anyone circumvent potential gift taxes if one is otherwise subject to them?

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Comment #120 by paoli2 posted on
paoli2
How is being a beneficary of CDs the same as a "living" person giving you a certain amount as a "gift"?  If they are dead, it's not in the same category as a gift from what I always understood.  It becomes an inheritance.  Inheritance taxes and gift taxes are two different things.

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Comment #121 by lou posted on
lou
"A gift is a gift is a gift....how does listing anyone circumvent potential gift taxes if one is otherwise subject to them?"

Think about it. If he is the beneficiary of the entire CD and he then splits the money with his siblings, he is, according to the IRS, gifting the money to them.

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Comment #122 by Anonymous posted on
Anonymous
Lou,  pretty straight forward to me, but remember who you are trying to explain this to.  It may be a worthless effort.

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Comment #123 by paoli2 posted on
paoli2
All the poster needs to do is read the IRS rules for gifts and for inheritances.  They are not birds of the same feather.  However, I do agree with Lou.  The "beneficiary" becomes the owner of the CD and if he passes it on after receiving it to his siblings, he does turn it into a "gift" and must follow the rules for "gifts".  Not hard to understand especially with a copy of IRS Pub. 17. 

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Comment #130 by Hoody posted on
Hoody
I decided to go with all "Joint" accounts, the last 3 CD's I made at Navy were all Joint, the other 2 POD's will be moved once they come due to another bank and re done in "Joint" names.

The only reason I used POD was cause I thought that was the only way to go with the ins limits.

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Comment #131 by Pete (anonymous) posted on
Pete
I have a question regarding being a beneficiary (POD) on a bank account. My grandmother is still alive and I am a beneficiary on one account at Wells Fargo (I also have a separate power of attorney, although I'm not sure if that is relevant). I have a hefty student loan debt from graduate school that far exceeds what I may receive upon her death.  

My questions are as follows:

1) Am I required to report the funds as "income?"
2) Would I need to report the income to the government (who now owns my student loans)? I am in good standing with the student loans, but don't want to have to increase my payment amount. Any way around having to give up the money?

Basically, I would like to know how to keep the funds to maybe invest in property. 

Any advice would be greatly appreciated!

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Comment #132 by lou posted on
lou
No, you don't have to report it as income. Since it is not income I don't see why you would have to report it to the govt for your student loans. Not sure, however, about the second answer.

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Comment #133 by lou posted on
lou
You will have to make sure the taxes are paid on any interest income as reported on the 1099.

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Comment #134 by Anonymous posted on
Anonymous
I was left cd in will and beneficiary deed how can i claim it my friend died

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Comment #135 by paoli2 posted on
paoli2
It really depends upon whose name is on the actual CD as beneficiary.  If your name is listed with the bank as beneficiary, you should call them and ask them what is required of you to claim the funds.  When I called our banks about what one has to do, I was told usually a certified copy of death certificate of original CD owner and a copy of the driver's license of the POD/beneficiary must be presented to the bank.  If they need anything else, they will inform you over the phone so first thing is to call the bank and get info you need.

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Comment #136 by MaryJane (anonymous) posted on
MaryJane
Ohio: I was dad's POA.....and POD on 1 savings account.  3 days before his death, he asked that I withdraw all the money from that account (I did not), bring him the check.  Mentally he was fine. I withdrew some of it, showed him the check which satisfied him & never left him again. My question: My sister wants all the savings money & refuses to pay his final bills and any bills before his death such as assisted living rent, utilities, meds etc. She has a will stating she gets everything & filed with court. My understanding is as POA on record, I had a right to withdraw as as I felt needed & as he instructed me but she says my POD cancelled when I withdrew.  I've had 1 attorney say true, another say wrong since I did nothing to show malice & the money would have been mine in 3 days anyway. Which is correct?

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Comment #137 by MaryJane (anonymous) posted on
MaryJane
how do I get this to the top of page?  Sort by date doesn't work.

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Comment #138 by Anonymous posted on
Anonymous
I am not a lawyer, but unfortunately I think you lost your POD status on the money that you withdrew and it now is part of the estate.

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Comment #139 by paoli2 posted on
paoli2
This is new to me.  How could the POD be cancell just because you used your POA on the account?.  That would mean that anyone who is POD on someone else's accounts cannot be the POA for them also.  In your case things got squirrelly when your father passed so soon after you used the POA to take care of the withdrawal for "him" but that certainly should not mean it cancels out your rights under the POD.  The savings account should have to abide by the rules of the POD and give the rest of the funds to that beneficiary who I figure is "you".  You may have to get a 3rd attorney's opinion on this one but if it is a decent amount of money, you would be going against your father's wishes if it ends up in Probate when he really meant for you to have.  Your sister should get whatever is left after the POD is given to beneficiary.  From what I understand, a Will does not supercede what is listed in banks etc. as beneficiaries.  That is why we all need to make sure we have beneficiaries listed for all our assets to avoid Probate.

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Comment #140 by Anonymous posted on
Anonymous
I've heard Ohio has some strange laws and the banks make up their own rules.

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Comment #141 by paoli2 posted on
paoli2
Note:  You do know that the POD on the savings account only gives you what is "left" in that account.  I agree with #138.  Unfortunately once you pulled it out it was your father's money gain and does become part of his estate.  Too bad you made that withdrawal or whatever was in the savings would have been yours.  In this case, the Will does give your sister the money she is due.  That is so odd that your father would have you withdraw so much at a time when he was so ill.

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Comment #142 by Anonymous posted on
Anonymous
If the check is still outstanding try to have it returned to the POD account...after all after x no. of days a check is generally invalid and the funds should revert to the account.  "You" generally don't have authority to cash a check after death since the POA does not survive death!  If previously cashed, then the funds should go as 138 stated.

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Comment #143 by Anonymous posted on
Anonymous
My father in law has a CD in trust for my husband. Both have recently passed away. Is my son able to claim it? He is my husband s only child. Thanks

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