Revocable Trust Accounts and FDIC Insurance Coverage: Interim New Rule

On September 26, 2008, the Federal Deposit Insurance Corporation, or FDIC, issued an interim new rule governing the coverage of trust accounts held in FDIC-insured banks.

The old rule covered accounts held in informal trust accounts, including payable on death, or "POD," accounts, in-trust-for, or "ITF," accounts, and "Totten Trust" accounts, as well as accounts owned by the Trustee of a formal Revocable Living Trust. The interim new rule still covers these same types of trust accounts but has been designed to offer coverage for a wider range of trust beneficiaries, make the calculation of coverage easier, and limit coverage for trusts that have more than five different beneficiaries and accounts holding more than $500,000.

The effective date of the new rule is September 26, 2008, which is the same day that the rule was approved by the FDIC Board of Directors. This is because the Board of Directors chose to "invoke the good cause exception to the requirements in the Administrative Procedure Act ("APA”) that, before a rulemaking can be finalized, it must first be issued for public comment and, once finalized, must have a delayed effective date of thirty days from the publication date." The Board of Directors believed that good cause existed to make the interim new rule effective immediately due to several recent bank failures and the growing concern for additional failures in the future.

Go to the FDIC's "Edie the Estimator" to calculate the amount of FDIC coverage you have on individual, trust, and business accounts held at FDIC-insured banks.

• Deposit Insurance Coverage Frequently Asked Questions


• FDIC Insurance, Revocable Trusts and Estates: Are Your Accounts Protected?
  
• Revocable Trust Accounts, FDIC Insurance and the Economic Bailout
  
• FDIC Insurance: Using CDARS to Protect Your Money
  
• FDIC Insurance and Estates: Different Rule From Trusts
  
• Using Joint and POD Accounts to Avoid Probate


• What is a Revocable Living Trust?