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What should we do about my mother's undistributed CD?

What should we do about my mother's undistributed CD?

Q: What happens to CDs when the owner dies?

CDs follow the same rules as other assets upon the owner's death. If a beneficiary is named, the CD transfers directly to them. If not, the CD must go through probate, where the court will manage its distribution according to the state's intestacy laws.

Q: Is a CD taxable if you are the beneficiary?

Yes, if you inherit a CD, it may be subject to taxes. The interest earned on the CD is taxable income in the year it is received. Additionally, depending on the estate's overall value, there may be estate taxes to consider. It's advisable to consult a tax professional for specific guidance.

Q: Which of the following assets do not go through probate?

Assets that typically do not go through probate include those with designated beneficiaries, such as life insurance policies and retirement accounts, as well as jointly owned property and assets held in a trust. These assets pass directly to the named individuals without court involvement.

Q: Do bank CDs go through probate?

Yes, bank CDs usually go through probate if the account owner dies without a named beneficiary. The probate court will oversee the distribution of the CD as part of the deceased's estate. If a beneficiary is designated, the CD may transfer directly to them, avoiding probate.

Full question:

My mother passed away in 1997. We just found that she had a CD which was not distributed to the heirs. We did not know about the CD. What do we need to do? I live in Florida. My mother lived in Pa.

Category: Wills and Estates
Subcategory: Probate
Date: 04/07/2025
State: Florida

Answer:

When someone dies, their assets typically go through probate for distribution. If your mother did not leave a will, the court will appoint an administrator to manage the estate's distribution according to Pennsylvania's intestacy laws. In Pennsylvania, if the estate's value is under $25,000, you might qualify for a small estate administration process, which is simpler than formal probate.

If the CD does not have a named beneficiary, you may need to open an estate with the probate court to transfer ownership legally. However, you might also consider using a small estate affidavit to avoid the full probate process, depending on your situation.

Consulting a local attorney is crucial to determine the best course of action. They can help you decide whether to open an estate and may offer a flat fee for their services, which can be more cost-effective. For more information on small estates, you can refer to Pennsylvania statutes, specifically 20 Pa.C.S.A. § 3102.

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

Do CDs go through probate?

Yes, certificates of deposit (CDs) generally go through probate if the owner has passed away and there is no named beneficiary. The probate process allows the court to oversee the distribution of the deceased's assets, including CDs, according to state laws. If the CD has a designated beneficiary, it may bypass probate and go directly to that person.

What happens to a CD when the owner dies?

When the owner of a CD dies, the fate of the CD depends on whether there is a named beneficiary. If there is a beneficiary, the CD typically transfers directly to them without going through probate. If there is no beneficiary, the CD becomes part of the deceased's estate and will go through the probate process for distribution according to state laws.

What happens to CDs when the owner dies?

Is a CD taxable if you are the beneficiary?

Which of the following assets do not go through probate?

Do bank CDs go through probate?

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