Answer:
The funds are not assets of the decedent's estate because they became the property of the POD beneficiary at the moment of the decedent's death. That assumes, of course, that the beneficiary was still alive at that time. If the beneficiary pre-deceased the account owner, the account will be part of one estate or the other, depending on the laws of the appropriate state. As the bank left "holding the bag" on this account, you don't really have a choice if you are unable to determine the whereabouts of the beneficiary. You have to "sit on" the account until it becomes unclaimed property under the law.
First published on BankersOnline.com 6/25/07