Spouse beneficiary CD IRA
Customer died and spouse is the beneficiary. It is currently in a CD that is making a good interest. She wants to “make it her own”. Our policy is to close the deceased customer CD IRA and she, as beneficiary, needs to open a new CD IRA or IRA Savings at the lower, current rate. It is our policy we do not keep the high interest rate on the CD. Are there any problems with this? Any PLR’s on CD assets? Many thanks.
Permalink Submitted by Alan - IRA critic on Fri, 2021-11-12 18:21
I am not aware of an PLRs or legal problems relating to this. It appears that the IRS allows the decision to require a new CD and/or new current interest rates to fall under the institution’s procedural policy. Most banks or CUs do not charge an early withdrawal penalty for the decedent’s CD however.