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Can we contest changes to my aunt's CD beneficiaries after her death?

Can we contest changes to my aunt's CD beneficiaries after her death?

Q: Does a will override a beneficiary on a bank account?

No, a will does not override a beneficiary designation on a bank account. The funds in the account will go directly to the named beneficiary upon the account holder's death, regardless of what the will states. This is because beneficiary designations are considered contractual agreements with the financial institution.

Q: What happens to a CD if there is no beneficiary?

If there is no beneficiary named on a CD, the funds will typically be included in the deceased's estate. The distribution of these funds will follow the instructions in the will or, if there is no will, the state's intestacy laws. This may lead to a longer probate process.

Q: Is there a penalty on a CD if the owner dies?

Generally, if the owner of a CD dies, the financial institution may waive early withdrawal penalties for the beneficiaries. However, this can vary by institution and specific account terms, so it's important to check with the bank or credit union for their policies.

Q: Who gets the money if there is no beneficiary?

If there is no beneficiary designated, the money will go to the deceased's estate. It will be distributed according to the terms of the will or, if there is no will, according to state intestacy laws. This means that the funds may be divided among heirs as determined by law.

Full question:

It was unknown to us at the time, my deceased aunt's power of attorney (also a heir) changed the beneficiaries on all her cds to his name. Do we have any recourse to get these cds to the persons she originally designated them for?

Category: Wills and Estates
Date: 04/07/2025
State: National

Answer:

The options available to you depend on the specific powers granted in the power of attorney document and the circumstances surrounding its use. A power of attorney may allow the agent to make gifts to themselves, but this can be considered an abuse of authority if it involves changing beneficiary designations for personal gain.

Generally, the agent has a fiduciary duty to act in the best interests of the person who granted them power. If the power of attorney does not explicitly allow the agent to gift assets to themselves, such actions may be deemed a breach of fiduciary duty and could be voided or deemed illegal. If your aunt passed away before you discovered this issue, her estate or the intended beneficiaries may have grounds to sue the agent for breach of fiduciary duty or other legal claims.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Can power of attorney be challenged after death?

Yes, a power of attorney can be challenged after the principal's death. Once the principal passes away, the authority granted under the power of attorney ends. If there are concerns about the agent's actions while the principal was alive, such as misusing their authority, interested parties may have grounds to contest those actions in court.

What if there is no beneficiary on a CD?

If there is no beneficiary designated on a certificate of deposit (CD), the funds typically become part of the deceased's estate. The estate will then be distributed according to the terms of the will or, if there is no will, according to state intestacy laws. This process may take longer than if there were a designated beneficiary.