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Via email
From: Hurlbert, Randy
Sent: Monday, July 07, 2003 1:06 PM
To: Comments
Cc: Williams, Jane; Whitson, Paula; Anderson, Cindy
Subject: Deposit Insurance Regulations; Living
Trust Accounts
Both proposed alternatives to clarify and
simplify the FDIC's regulation on the coverage of accounts owned by
living trusts will make it easier for banks to explain this coverage to
customers.
Alternative one "to provide coverage up to
$100,000 per qualifying beneficiary named in the living trust,
regardless of contingencies in the trust" :
This alternative has as options
These options would place a burden on
institutions that seem out of synch with the benefit of having those
pieces of information contained in our account records. Because a
Living Trust document is subject to amendments; this may cause frequent
updates to signature cards with beneficiary names which would not be
effective use of an institution's resources. Relationship information
would be used only in the event of institution failure and the existing
system of requiring the owners to complete an affidavit specifying the
relationship should not slow down payment unduly.
Alternative two "create a separate
category of coverage for living trust accounts and to insure such
accounts up to $100,000 per owner of the account".
This alternative would require a specific
and complete definition of "owner of the account". Strictly speaking,
the "owner" of the account is the Trust itself. The grantors of the
trust (those individuals who owned the funds before the trust was
created) should be the ones that are used to determine total coverage
i.e. - $100,000 per grantor.
Randy Hurlbert
Operations Specialist
Washington Trust Bank - Certificate # 1281
Retail Administration
Paula Whitson
Product Manager
Washington Trust Bank - Certificate # 1281
Product & Strategy Administration
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