I have a CD at my local bank valued at $100,000. Can I have my two children named as beneficiaries? Upon my death, would they be paid directly from the bank, or would the $100,000 have to go through the probate process?
You need to review with the bank the various ways they will let you title an account. If the accounts are "POD" = pay on death to your two children in equal shares, then on death the funds should transfer directly to the children by operation of law. This means without probate. The children might only have to present a death certificate to collect on the account. (The bank may even waive the premature withdrawal penalty in the event of death, but ask). Some accounts may be titled as "ITF" = in trust for. This should have a similar result. You might also be able to title the account JTWROS, which is joint tenants with rights of survivorship. However, be sure the bank will do this for a CD. If its an existing CD you should determine if trying to change the title will be treated as a termination. Be careful to ask the bank what types of accounts they offer, and since its a CD, specifically what they will let you do with a CD.
Finally, the real question is whether this approach is really what is best for you and your family. You should speak to an attorney as to the benefits of leaving the accounts in your name and using a power of attorney to enable your kids to use the money to help you. On death, a will can transfer the assets. The probate process that is required is not always a big deal. If you want to retain control and then transfer a revocable living trust could be another option.
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