Can a bank legally charge someone fees on a cd when paying out to beneficiary on death? It is my understanding they cannot. I would like to know if there is some federal or state law prohibiting a bank from charging the beneficiary? Also can we request to see any agreement from the bank where the insured agreed to such charges?

What fees exactly are they asking for ? Lost of interest on current period ? Transfer to new owner fee ?

Any fees that were due on the account would be deducted from the balance. There is no issue with that. However, there should be no specific fee just to transfer the account to the beneficiary.

So you need to be more specific about the nature of these fees for us to help.