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Home >> Special Situations >> Deceased Individuals
Dealing with CDs of the Deceased
My father died in 2009. He had a CD at 4% that will mature in 2012. I am the beneficiary.
I would like to keep the CD open at 4% for the full term, but Wachovia Bank (in CA) says I cannot change the name on the account to myself. I would have to either keep it as is, in his name, or close it and re-invest at a much lower rate in my name. If I keep it in his name, it means that I will have to continue to file 1040 tax forms for my deceased father until 2012 because of the interest it generates.
I would rather settle his estate this year than draw it out for two more years. Do you have any suggestions?
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 The bank should realize that the fact of your father's death transferred ownership in the CD to you, and that it's inappropriate to continue paying interest to a deceased individual. Unless the bank has something in its contract calling for the CD to be paid out rather than being transferred to the beneficiary, you should try a bit tougher stance with them. At the end of the day, however, the bank obviously would be glad to be rid of a 4% CD in today's rate environment, and it might simply pay it out early, waiving any prepayment penalty. Then you'll need to find another account for the funds.
Published on BankingQuestions.com 3/17/10
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