I was the beneficiary of a cd when my father passed away. Is it legal for my brother to sign it who is the trustee and deposit

Asked about 4 years ago - Lynnfield, MA

it into my trust and then take the money out to pay for estate taxes?

Attorney answers (2)

  1. Ilene L McCauley

    Contributor Level 13

    Answered . I am sorry for your loss.

    Your question is interesting but I think you have left out some important facts. Under the general rules, when someone dies, a bank account can pass to a beneficiary many different ways. If the CD is in joint name, the assets pass immediately to the survivor. If the CD has a beneficiary, the CD passes directly to the beneficiary upon death. However, if the CD is in the name of a trust, the CD passes to the trust. If you are the beneficiary of the trust, the trustee generally has the right to pay bills out of the CD, before the money will go to you, as the beneficiary.

    So, we need to know more about how the CD was owned by your father before his death in order to give you a definitive answer. I am sorry that I cannot be more specific.

    Why don't you try to find out how the CD was owned and write back to us here at AVVO. Then we can give you a more specific answer.

    Hope this helps. If you think this post was helpful, please check the thumbs up (helpful) tab below and/or designate my answer as best answer. Thanks.

    This answer does not constitute legal advice and does not and is not intended to create an attorney-client relationship. The law may vary depending on the state in which you reside. It is intended only to give some direction in which to seek assistance.

    Circular 230 Disclosure: Pursuant to recently-enacted U.S. Treasury Department Regulations, I am now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

  2. Judith A. McDougall-Flynn

    Contributor Level 11

    Answered . It depends on three things: the ownership of the CD, the terms of your father's Will, and the terms of the Trust. Without specific knowledge of these things, it is difficult to give you a clear answer. I do think that it seems unusual that the funds would be deposited in your trust first, then removed to pay for estate expenses - it is possible that there is a misunderstanding about that. Typically, funds would be deposited to the estate account, expenses paid, then the balance of funds distributed to the appropriate beneficiares, such as your trust. If you were the named beneficiary of the CD, your brother should not have been able to access the CD at all, so perhaps you could seek clarification from the bank. It is possible your brother claimed the CD as either trustee of a trust or executor of your dad's estate. You might also simply ask your brother to explain what he did. Good luck.

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