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What to do with CD of Deceased
My father passed away in March. I am the executor. My sister and I are his equal and only heirs. He has a twelve month CD that just matured. I have been told I can't let it just renew. Do I open a new CD in the estate's name or do I have to take the money and distribute it to my sister and myself? I want to minimize our taxes until the estate is out of probate.
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 It is true that the account cannot simply be renewed under your father's name, because the account is properly owned now by the estate. Whether you and your sister take the funds right away or postpone the distribution is a matter between the two of you and the probate court. In either event, the funds from the CD should be placed in an account in the name of the estate. If distribution will be immediate, you should put the CD proceeds into a short-term account, such as a checking or savings account for the estate. If you plan to postpone distribution, it certainly makes sense to deposit those funds in a higher-yielding account, such as a CD, either at the bank where the funds are currently held or at another institution.
If the estate's deposit accounts, including the CD, are substantial, you should consider whether they will be completely insured in estate accounts in the same bank. The estate can currently have up to $250,000 on deposit in the same bank or credit union and be fully insured. That limit is scheduled to drop back to $100,000 after 12/31/2009.
Published on BankingQuestions.com 11/25/08
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