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Home >> Special Situations >> Deceased Individuals
Bank Employee Puts Herself as Beneficiary of CD
I'm the executor of my grandmother's estate. My sister and I are the next of kin as my father, the only child, is deceased. Five months after my grandmother's death, we found out that one of the CDs my grandmother had was rewritten in 2006, when my grandmother was blind and showing some signs of mental decline, by "Jane" at the bank where my grandmother did business. "Jane" assisted my grandmother with paying bills and while she wasn't designated financial POA, wrote her checks and paid her bills. This CD was changed to POD CD with "JANE" as one of the beneficiaries. The other beneficiary is another elderly person in town who has no family that "Jane" likely helps pay bills, too. Is it legit that a beneficiary on a CD is able to also complete the paperwork for that CD? Seems to me it's a conflict of interest. |
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 What you have described appears to be much more than a simple conflict of interest, and you should immediately take steps to contact the management of the bank to protect those funds. There is nothing inherently wrong with helping out an elderly customer with account management and bill paying. A lot of bankers do exactly that, particularly when the customer doesn't have involved family members to assist with that necessary task. However, banks should have a very well-defined ethics policy that forbids an employee, except a customer's family member, from being named as a customer's beneficiary on a deposit account, or from accepting an appointment under a power of attorney by a customer, becoming a joint owner of a deposit account of any such customer. Most banks do have policies forbidding employees from handling transactions in which they themselves have or could have, a financial interest. All of those actions constitute conflicts of interest and self-dealing, and, depending on the circumstances, could constitute elder financial abuse, fraud and theft.
It is, of course, possible that your grandmother knowingly made the change to the CD in 2006, but the circumstances suggest that she may have been unduly influenced by "Jane" to do so. If Jane had followed a well-written ethics policy at her bank, she would have refused to be named as a beneficiary.
Make your contact with the bank's management right away. If you sense that the bank won't take steps to protect those funds to protect any interest you might have in them, don't waste further time: contact an attorney.
Published on BankingQuestions.com 11/14/08
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