Here is the scenario.... My Grandmother passed away recently (2 months) and she had several CD's that were in both here name (or) and my Uncle's name. Is there a penalty for early w/d and if so how much is it? They were mostly 6 months and I believe 1 was for a year if that makes a difference.
I know there is usually a charge, but I did not know for sure with there being a death if there would be. I got 2 conflicting answers here. There was a paid upon death with my sister and my name on them, but again since it was in both names (uncles and hers) I am assuming that would only transpire if they both died, which obviously did not happen.
Ask to speak with the branch mgr. I have never seen a fee. I assist clients every week with transactions like this in the case of death. in 20+ years I have never seen a bank chrage a penality for death on a CD. A few insurance companies will with an Annuity being submitted in the surrender period in the case of death, but I have NEVER seen a bank CD do that.
The POD (pay on death) has nothing to do with the penality for withdraw, what that is set up to do is avoid having to go thru probate.
What probate does is distribute properity. With a POD clause on a CD the owner of the assest has already PRIOR to death determined whom that want to get the assest, so it avoids the delay of probate upon death and goes right to the person names. BTW still subject to estate taxes of the person who passed away.
the early with draw penality is another issue, but commonly waived by banks in case of death. Horrible for buisiness when the family is told, they will lose 437 because Aunt Edna died prior to the CD maturity.
By contract they CAN charge the penality, but ask to speak to the branch MGR. take a copy of the death cert to the bank along with the papers that name you as being in charge of the estate.
GL
What probate does is distribute properity. With a POD clause on a CD the owner of the assest has already PRIOR to death determined whom that want to get the assest, so it avoids the delay of probate upon death and goes right to the person names. BTW still subject to estate taxes of the person who passed away.
the early with draw penality is another issue, but commonly waived by banks in case of death. Horrible for buisiness when the family is told, they will lose 437 because Aunt Edna died prior to the CD maturity.
By contract they CAN charge the penality, but ask to speak to the branch MGR. take a copy of the death cert to the bank along with the papers that name you as being in charge of the estate.
GL
