POD Not Ready to Close CD's-Collect Interest?

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Question:

In regards to PODs. Customer dies and has numerous CD's with the same POD. The POD isn't ready to close the CD's. Do the CD's continue to collect interest? When they mature do they just roll over until the POD collects? Usually the customer is barely at the funeral home before POD's are making their claims. Different situation.

Answer:

The accounts belong to the beneficiary whether or not he or she is ready to close them. Interest earned through the date of death should be reported under the deceased owner's SSN. From the date of death forward, it should be reported under the SSN of the new owner. If the beneficiary wants the account to roll over, rather than withdraw the funds, I assume you'd accommodate him or her.

First published on BankersOnline.com 5/21/12