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Copyright 2008, 2009, Marc S. Weissman Weiss & Weissman, San Francisco, California (650) 574-0362 To Contact us: email Phone/Fax/Mail Homepage |
FDIC Rules for Revocable Living Trusts
September 29, 2008 Updated again June, 2009
These FDIC coverage rules are beyond comprehension and make no sense, but here is a grossly simplified version. Please have these matters reviewed closely with your professional to see how they apply to you before acting (or not acting) in reliance on this information.
Joe, a single person, has an account with $1,000,000 in a troubled Bank. His coverage depends on how he holds the account:
|
Owned By: |
Beneficiaries |
FDIC Insurance Coverage |
|
Joe |
1 = Joe |
$250,000 |
|
Joe, but:
his 3 kids
|
3 kids x 250,000 |
$700,000 |
|
OLD Rules Joe’s Revocable Living Trust
|
3 kids |
$750,000 |
|
OLD Rules Joe’s Revocable Living Trust
|
3 kids x 250,000 + $200 |
$750,200 |
|
NEW Rules* Joe’s Revocable Living Trust
|
3 kids x 250,000 |
$750,000 |
|
NEW Rules* Joe’s Revocable Living Trust
|
3 kids + 2 charity x 250,000 |
$1,250,000 |
*NEW RULE FOR REVOCABLE LIVING TRUST, EFFECTIVE September 26, 2008:
MAYBE BETTER COVERAGE. Unlike the concept of Qualifying Beneficiaries required above for the Old Rules, this Revocable Living Trust limit is based on the total number of beneficiaries, at $100,000 per beneficiary, with a limit of $500,000 FDIC COVERAGE.
Jack and Jill have 1 child: Hillary. Jack and Jill own a $1,000,000 CD.
|
Owned By: |
Beneficiaries |
FDIC Insurance Coverage |
|
Jack and Jill |
2 = Jack and Jill x 100,000 |
$200,000 |
|
Jack and Jill, but:
daughter Hillary
|
Hillary x 2 x 100,000 |
$200,000 |
|
OLD Rules Wishing Well Trust “owned” by Jack and Jill
|
Hillary x 2 x 100,000 |
$200,000 |
|
OLD Rules Wishing Well Trust “owned” by Jack and Jill
|
Hillary x 2 x 100,000 + $400 |
$200,400 |
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NEW Rules Wishing Well Trust “owned” by Jack and Jill
|
Hillary x 2 x 100,000 |
$200,000 |
|
NEW Rules Wishing Well Trust “owned” by Jack and Jill
|
Hillary + 4 charity x 2 x$100,000 |
$1,000,000 |
Dick and Jane, married, have 6 kids. And own a $1,000,000 CD.
|
Owned By: |
Beneficiaries |
FDIC Insurance Coverage |
|
Dick and Jane |
2 = Dick and Jane x 100,000 |
$200,000 |
|
Dick and Jane, but:
6 kids |
6 kids x 2 x 100,000 |
$1,200,000 |
|
OLD Rules Wishy Won’t Trust “owned” by Dick and Jane
|
6 kids x 2 x 100,000 |
$1,200,000 |
|
OLD Rules Wishy Won’t Trust “owned” by Dick and Jane
|
6 kids x 2 x 100,000 + $400 |
$1,200,400 |
|
NEW Rules Wishy Won’t Trust “owned” by Dick and Jane
|
6 kids x 2 x 100,000 |
$1,200,000 |
|
NEW Rules Wishy Won’t Trust “owned” by Dick and Jane
|
6 kids x 2 x 100,000 + $400 |
$1,200,400 |
The New Reg is located at: http://www.fdic.gov/regulations/laws/federal/2008/08sep26rule.html