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Why Do Some CU/Banks Require Equal Share For Beneficiaries In POD Accounts

SMT1
  |     |   38 posts since 2018

Does anyone have an answer to this? Most POD accounts allow you to name multiple beneficiaries with your choice of percentages each beneficiary would receive, but some require equal shares period. It shouldn't matter to the financial institution and it really doesn't add any extra work for them.

I believe it would be to the FI's benefit to allow percentages. CD investors like their funds to be insured with the least number of financial institutions to invest in. They may want up to five beneficiaries so they could deposit more at the same institution and still be insured. But they may not want all 5 beneficiaries receiving equal shares, so they may limit how much they deposit in that FI or just skip them altogether.

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paoli2
  |     |   2,641 posts since 2011
That's odd. In all my years of working with banks/cus I have never had one dictate how much a certain beneficiary should be left. Since it is not the institution's money, why should they have any say in how much who gets at this point. I know some have made suggestions on their forms as 50% each or 100% if it is only one but never a certain requirement. Maybe this is something new they have come up with for beneficiaries.

BTW, if one has more than one beneficiary on the account it is very important to let them be aware of where the account is and how much they are supposed to get. The institutions do not contact the beneficiary upon our passing. That is "our" responsibility to take care of "before" we leave this life.
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SMT1
  |     |   38 posts since 2018
Thank you for responding. I pushed Connexus on this issue and they were FIRM that equal shares is their policy. The beneficiary form for GTE Financial indicate that if there are more than 2 beneficiaries they are to receive equal shares. I have not pushed that with them, but I probably should, because I wanted a lot of rate insurance with their Add-On CD by adding beneficiaries.

Thanks for the BTW comment on letting the beneficiaries know. I really don’t like to let them all know details. I don’t want too many people with a reason to want me dead. Lol. I can handle those details with an umbrella estate plan.
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SMT1
  |     |   38 posts since 2018
Correction: Meant to say 2 or more beneficiaries.
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