The Federal Deposit Insurance Corp. (FDIC) in January
changed its insurance rules for deposits held in connection with a
living trust (
www.fdic.gov/deposit/deposits/deposit/index.html ). Under the
new provisions, if a bank fails, the FDIC will insure up to $100,000
of deposits for each beneficiary entitled to a living trust’s assets
upon the account holder’s death. Qualifying beneficiaries include only
the account owner’s spouse, children, grandchildren, parents and
siblings. The revised rules, which were to take effect April 1,
eliminate a prior requirement that the depository institution’s
records contain the names of trust beneficiaries. They also provide
for immediate payment of the full amount of FDIC coverage available to
beneficiaries, regardless of any limitations stipulated in the trust
document.