My father recently died. He had a CD in his name with my mother as a POD beneficiary. The CD, purchased with both their funds, was put in my father's name. We live in the community property state of Texas, where the wife shares equally with the property ownership. How would community property rights effect this POD, as my mother would only be benefitting from my father's half, since half the funds were already hers to purchase it in the first place? Should she claim community property rights and just take over the CD? Any idea of the tax implications of taking this POD?
The manner in which the CD was held controls how the bank is required to handle the account upon your father's passing, regardless of the community property laws. To claim the account, which she should do, your mother will have to provide the bank with documentation of your father's death and identification sufficient for the bank to recognize her as the designated beneficiary. As to the tax implications of the transaction, your mother should consult a tax advisor familiar with Texas community property and taxation laws and federal tax rules.
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The manner in which the CD was held controls how the bank is required to handle the 