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Would money in a credit union go though probate?
Old 03-16-2009, 05:59 PM   #1
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Would money in a credit union go though probate?

Would money in a credit union go though probate if you were listed as the only beneficiary on the account?
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Old 03-16-2009, 06:18 PM   #2
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In general TOD/POD accounts do not go through probate. They are still subject to federal estate taxes and state estate/inheritance taxes (at least in the states with which I am familiar.)

The fact that the account is in a credit union is immaterial to whether it goes through probate.
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Old 03-16-2009, 07:14 PM   #3
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Probate is only required for an asset if the asset is not passed by some other mechanism. So,accounts with beneficiary designations, payable on death accounts, or joint accounts do not need probate. You may have to provide a death certificate to the credit union.

Fur Ball is also correct in that these assets are part of the estate for estate tax purposes. But not part of the probate estate.

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Old 03-17-2009, 01:00 AM   #4
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In general TOD/POD accounts do not go through probate. They are still subject to federal estate taxes and state estate/inheritance taxes (at least in the states with which I am familiar.)

The fact that the account is in a credit union is immaterial to whether it goes through probate.
A credit union does not used the term TOD/POD but they do let you set up a beneficiary on the account , I am guessing that it is the same thing.
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Old 03-17-2009, 07:00 AM   #5
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Probate is only required for an asset if the asset is not passed by some other mechanism. So,accounts with beneficiary designations, payable on death accounts, or joint accounts do not need probate.
Related question: I'm joint owner of a credit union account with my mother. She's the primary owner. Assuming she passes away first, you're saying this account does not need probate. How about taxes? I realize it will be subject to whatever inheritance taxes are due both federal and state, but would the IRS levy any personal income taxes on me, since I would then be the sole owner? Oh, there is a will in place as well.
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Old 03-17-2009, 09:33 AM   #6
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A credit union does not used the term TOD/POD but they do let you set up a beneficiary on the account , I am guessing that it is the same thing.
Mine does; use POD that is. PENFED. Separately, they also use Beneficiary designations and Joint Ownership, with and without Survivorship accounts.
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Old 03-17-2009, 01:56 PM   #7
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A credit union does not used the term TOD/POD but they do let you set up a beneficiary on the account , I am guessing that it is the same thing.
Beneficiary, when used in a non-testimentary instrument, implies POD or right of survivorship (if joint).
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Old 03-17-2009, 02:06 PM   #8
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Originally Posted by FinallyRetired View Post
Related question: I'm joint owner of a credit union account with my mother. She's the primary owner. Assuming she passes away first, you're saying this account does not need probate. How about taxes? I realize it will be subject to whatever inheritance taxes are due both federal and state, but would the IRS levy any personal income taxes on me, since I would then be the sole owner? Oh, there is a will in place as well.
If it is a joint bank-account then your interest should swell upon the death of the other owner. Correct me if I am wrong (martha), but in most state the property/account subject to "joint ownership" is presumed to be held in co-tenancy w/ right of survivorship. See this article => Joint accounts, joint owner property, and laws

As far as taxes, the transfer will be considered a "gift". Gifts are NEVER reported as income so long as they are not wage-substitutes (i.e. employer can't give you gifts in lieu of wages). Furthermore, unless the amount is in excess of the lifetime gift-tax exemption ($1,000,000 for 2008), then it will not be subject to a Gift tax.
Here is an informative source. Tax Rules for Gifts

Note: This is the federal application. State laws may differ.
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Old 03-17-2009, 04:21 PM   #9
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Beneficiary, when used in a non-testimentary instrument, implies POD or right of survivorship (if joint).
This is not a joint account but I am the beneficiary.
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Old 03-17-2009, 11:07 PM   #10
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This is not a joint account but I am the beneficiary.
Does not need to be a joint account as far as I know. Joint account implies some authority to control (withdraw, manage) the assets. Beneficiary gives one the right to recieve an interest in the property upon the death of the person in possession.

Two types of property are probated. (i) Property disposed of by a valid testimentary instrument (i.e. will). Property which passes via intestate succession.

Property which is non-testimentary in nature and is otherwise disposed of through the designation of a beneficiary does not enter probate.
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Old 03-18-2009, 09:34 AM   #11
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Thanks Landonew
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