Revocable Trust Accounts, FDIC Insurance and the Economic Bailout
Last Saturday I wrote about the interim new rule issued by the Federal Deposit Insurance Corporation, or FDIC, on September 26 with regard to the coverage of Revocable Trust Accounts, including payable on death (or POD), in trust for (or ITF), Totten trust, and formal Revocable Living Trust accounts. The new rule offers coverage for a wider range of trust beneficiaries (not just immediate family members), makes the calculation of coverage easier, and limits coverage for trusts that have more than five different beneficiaries and accounts holding more than $500,000.
As part of the $700 billion economic bailout package signed into law on October 3, 2008, FDIC coverage has been temporarily increased from $100,000 to $250,000 per depositor and per beneficiary of a Revocable Trust Account. The increase is scheduled to continue through December 31, 2009.
UPDATE: The Helping Families Save Their Homes Act has extended the $250,000 per depositor coverage through December 31, 2013.
Here’s a good guide to what FDIC insurance is and what it covers: http://www.life123.com/article_FullStory/Learn-About-FDIC-Insurance-and-What-It-Covers_3000002729042.html