Ask Terry Questions Question on: CD’s from internet banks By Terry Savage on May 9, 2017 | Chicken Money

Question on: CD’s from internet banks By Terry Savage on May 9, 2017 | Chicken Money

By Terry Savage on May 29, 2017 | Chicken Money

I read this post and wonder about what to ask internet banks regarding death of the CD holder and the obtaining of the money by the inheritors. I have a internet CD and the bank doesn't have a method to identify beneficiaries. They said the survivor has to go to court and get "letters." Doesn't this make banking on the internet actually more expensive and not workt it? (I'm planning to take my CD back from the internet bank and invest it locally because of this concern.) Help me out Terry.

Terry Says

If a CD is in your name only  (not the name of your revocable living trust), then at any bank -- internet or not -- your beneficiary will have to get a court order to prove that he or she is the rightful heir (per the will you left, or by decision of the court order if you didn't leave a will) and a copy of the death certificate before the money can be transferred.  You're right -- this could take a LONG time, and it doesn't matter whether it is the bank down the street or an Internet bank. There are ways around this delay.  It all has to do with how you title the account.  You might have created revocable living trust (as recommended by me in a recent column) naming a successor trustee to distribute your assets without a court procedure (probate, as required by a will).  If you title the CD in the name of your RLT, your named successor trustee only has to provide the relevant section of the trust naming him or her as successor trustee, AND a copy of the death certificate.  That shouldn't take long. OR you could title the CD in "joint name with rights of survivorship" with another person, who could have the money immediately on proof of your death.  (But he or she could also withdraw it at any time!)  Or you could make the CD title read "POD" -- payable on death.  The beneficiary would still have to prove your death with a death certificate, but no court procedure is required. Bottom line:  when you die it will take your heirs at least a few weeks, or longer, to get the money.   depending on how you title the CD.  But that won't be your problem!

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