I have joint CD accounts with my elderly mother. Can I remove her from the accounts with her written permission? How do I go about doing so?
In many cases the removal of a name from an account is up to the bank, and most want an account closed and a new account opened. It is a cleaner way to distinguish ownership, tax liability and access to the account.
In the common case of a checking account, if A and B own an account and the bank allows B to be removed, what happens when an old check signed by B is presented for payment? Is it not valid because B is no longer on the account, valid because B was on the account when it was written, and who is to verify when it was written? Obviously there are problems in this scenario.
With a CD the main issue is interest reporting. Who received the interest and the liability of it up to a certain date? There are fewer problems with the removal in the case of a CD so your bank may be agreeable. The bank's judgment may also be influenced based on the rest of your relationship with them, how long you've been their customer, how much you have on deposit, loans, and other business you do with them.
The bottom line is that the bank has the option as to what their policy will be, and it can vary from bank to bank.
Published on BankingQuestions.com 2/20/08
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In many cases the removal of a name from an account is up to the bank, and most want an account closed and a new account opened. It is a cleaner way to distinguish ownership, tax liability and access to the account.
In the common case of a checking account, if A and B own an account and the bank allows B to be removed, what happens when an old check signed by B is presented for payment? Is it not valid because B is no longer on the account, valid because B was on the account when it was written, and who is to verify when it was written? Obviously there are problems in this scenario.
With a CD the main issue is interest reporting. Who received the interest and the liability of it up to a certain date? There are fewer problems with the removal in the case of a CD so your bank may be agreeable. The bank's judgment may also be influenced based on the rest of your relationship with them, how long you've been their customer, how much you have on deposit, loans, and other business you do with them.
The bottom line is that the bank has the option as to what their policy will be, and it can vary from bank to bank.
