Does A CD Become Part Of One's Estate After That Person Passed Away?

Teemup12 | Sep 12, 2018 | 1 posts since 2018

Back in the nineties my mom passed away after a long battle with breast cancer but before she passed away, she urged my grandmother to open CDs for all of her grand-children (my mom's children).

My grandmother is still alive today but she has no power to make decisions anymore and instead my uncle is now in charge and he put his name on all the acounts (he was never happy about the CDs being open in our names) and he is refusing to let us cash in our CDs.

?My question is should we go to the bank without his approval to cash in what's ours or should we wait as he proposed till she passes away and only then close our CDs?

Does he have the power to confiscate our CDs now?

would he have more power to take it later when he becomes the main benefactor of my grandmother's estate?

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Answers

hank | Sep 21, 2018 | 110 posts since 2016

the poa can change pod beneficiaries at any time.

me1004 | Sep 21, 2018 | 1,379 posts since 2010

That may be. However, they could run into a serious conflict of interest if they named themselves as beneficiary and without the instruction of the account holder to do so -- they are merely POA, not conservator who gets to make the decisions, but even a conservator would have a conflict of interest is naming themselves as beneficiary. Changing beneficiaries to themselves and without the instructions of the account holder to do so could be serious embezzlement and fraud.

Ally6770 | Sep 21, 2018 | 4,294 posts since 2010

A POA cannot change the POD beneficiaries unless the POA actually states that they can, at least in my state it is not allowed.

RickZ | Sep 21, 2018 | 218 posts since 2010

As me1004 said, a POA or a conservator has a fiduciary duty to act in the best interests of the person he is overseeing, which means not changing his POD wishes. Because of the rise in fiduciary elder abuse (and accompanying litigation), many brokerage firms (e.g., Morgan Stanley, Merrill Lynch) have changed their Transfer on Death forms to prohibit a POA or conservator from changing the designation of beneficiary. I don't know whether or not banks have followed suit.

me1004 | Sep 12, 2018 | 1,379 posts since 2010

You have left out critical information for a definitive answer. However ...

If she opened CDs in your name only, then it was already your's from the day it was opened, not her's anymore. There is no further question about ownership.

If she simply added you on as POD beneficiary, that is outside the will, in a revocable trust, does not need to go through probate, nor does the executor of a will have any say over it. However, being a revocable trust, that can be changed before her death. No one can change that but her, and probably her Power of Attorney agent with her permission.

Are you saying your uncle had been added on as a joint owner of the account with your grandmother, and you remain beneficiary? She can add a joint owner, and then they both can have say over the account, and sometimes it is set up that both must sign for anything, but other times it is set up that either can sign. Nonetheless, as joint owner, I think he would get it at her death, you would collect only if both die. And so, he is not letting you take it, he wants it. Depending on how that situation came about, you might have a lawsuit against him.

You say your grandmother has no power to make decisions. Has the court named your uncle as her conservator? If the account was changed after she was declared to be incompetent, then legalities could come into play. See a lawyer about them, I'm not a lawyer. But one thing, it would be highly suspicious if a conservator set himself up as primary beneficiary! That would seem to be a conflict of interest, very challengeable in court. That kind of action could land him in prison.

If she made you a joint account holder, then what is the deal, is your uncle conservator acting on her behalf, and is he named on the account as conservator or as joint owner, or? I'm not sure about status of a power of attorney once someone is declared incompetent and a conservator is named. I suspect that serves to revoke the power of attorney. But I presume a conservator automatically also is power of attorney, they would pretty much have to be, although I suppose the functions could be split, but slitting it could easily leave each hamstringing the other.

There might be other details, but we need to hear more form you to know what to address.

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