My parents jointly held a 3 year CD at a Virginia credit union that matured and auto-renewed while my father was terminally ill a few months before he passed away. My mother would like to withdrawl the CD but the credit union has refused to allow her to do so without thousands of dollars in penalties. Yet they are asking her to fill out paperwork to remove my father from the account. Does she have any recourse?
Answers
It also might make a difference whether it was a POD account or a Totten trust account (ITF -- in trust for) -- I don't know the difference between the two.
Still, once checked out and you are knowledgeable, it would be worth going up the ladder to the CEO to ask for a courtesy waiver. There would be no guarantee of getting that, but it might be more possible than you would think.
I will say, I have done that, and the banks I dealt with allowed the closer of the CD without penalty, because it was a POD and the account holder had died.
Thank you for contacting the FDIC. In your email you asked the following question: “If a person had a joint account and one person died is the bank required to let the CD be cashed in without penalty?”The FDIC will insure a deceased person's accounts as if he or she were still alive for six months after the death of a deposit owner. During this grace period, the insurance coverage of the deposit owner's accounts will not change unless the accounts are restructured by those authorized to do so.Thus if a co-owner of a joint account should pass away during the term of a CD, after the grace period the account would be insured as the surviving owner's single ownership funds, up to a maximum of $250,000. It is important to note that most CD contracts have provisions permitting early withdrawal (without penalty) following the death of an accountholder. You should contact your financial institution to determine their policies in this situation.For deposit insurance purposes, a joint account is a deposit owned by two or more people, with no beneficiaries designated.Each co-owner's share of every joint account that he or she owns at the same insured bank are added together and the balance insured for up to $250,000, if the following requirements are met:1. All co-owners must be living people. Legal entities such as corporations, trusts, estates or partnerships are not eligible for joint account coverage.2. All co-owners must have equal rights to withdraw deposits from the account. For example, if one co-owner can withdraw deposits on his or her signature alone but the other co-owner can withdraw deposits only with the signature of both co-owners, the co-owners would not have equal withdrawal rights. 3. All co-owners must sign the deposit account signature card unless the account is a CD or is established by an agent, nominee, guardian, custodian, executor or conservatorIf you wish to learn more about FDIC deposit insurance coverage, please review our brochure, “Your Insured Deposits” (Comprehensive Guide) which explains in detail all of the deposit insurance ownership categories. This document and other deposit information can be found on our web page at:https://www.fdic.gov/deposit/deposits.html We hope you found this information helpful. If you have additional questions please feel free to write back or contact us at 1-877-275-3342. Sincerely,Federal Deposit Insurance CorporationDivision of Depositor and Consumer Protection550 17th Street, N.W.Washington, DC 20429 As part of our ongoing efforts to improve our service to the public, we would appreciate it if you would complete a short consumer satisfaction survey on the level of service you received from this office. The survey can be accessed at: <http://www2.fdic.gov/starsmail/customer.html>.
check immediately let them know you will be contacting NCUA. I think Ken posted something on this. I had to do this when my husband died when I tried to disclaim his IRA's so that the children would inherit them immediately. I think I posted my problems with one of the 5 credit unions that gave me trouble.
Make sure that the IRA had beneficiaries (or it will go through probate) and then read the disclosure and contact NCUA. They will get back to you that day or the next. I was contacted on a Saturday morning when the Labor Day Holiday was on Monday. I had emailed them on Friday night about midnight. They have an amazing Staff.
I would still buck it up to the top and ask for a courtesy waiver -- nothing to lose, and they might consider it a gesture of good will and sympathy to waive the EW under these conditions. Give them a sob story, such as that her Social Security has been cut as a survivor (it has) and what the couple got under his pension has been severely cut to hardly anything as a survivor (like it was with my mother) , she needs the cash for bills and needs to restructure her finances. And don't forget to point out what a good customer they have been for some time, and she would like to feel she can continue that once she can srestructure.
Thousands doesnt sound right even for a Large CD.
If already into it more than 6 mo or so, could have a
hard time. but as others said death of a joint owner should give you options
Try this---If you have to file a complaint. They are very responsive and will rectify problems. I have used them in the past.
http://www.mycreditunion.gov/consumer-assistance-center/Pages/contact-us.aspx