FDIC Federal Register Citations

Robert E. Feldman, Exec. Secretary
Attention: Commends/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

RE: Deposit Insurance Regulations; Living Trust Accounts

Dear Mr. Feldman:

Thank you for the opportunity to comment on this confusing and growing issue. Living Trusts are becoming quite prevalent, and subject to much confusion as to insurance.

On balance, I would prefer Alternative Two due to the industry burdens imposed by Alternative One. Although I feel that Alternative One is the "fair" option due to the parallel treatment with POD accounts, the bank's burden related to reading and understanding beneficiary designations within the trust is overwhelming. This review of the trust document would be fraught with dangers. I do not believe the FDIC could rely on each bank's interpretation of the trust document, thereby Alternative One would not relieve the problems during a bank failure.

Alternative Two does cause a reduction in coverage for many customers. Some of these customers are clearly naming qualified beneficiaries, and it is regrettable to decrease this coverage. An attractive option would be to provide $200,000 in coverage per grantor instead of $100,000. Clearly, Living Trusts are designed for customers with estates valued sufficiently to have need of Living Trusts. Increasing the coverage per grantor to $200,000 would greatly assist banks in retaining these accounts. This increase would probably cause no greater increase in total coverage than would Alternative One, which calculates coverage by qualified beneficiary.

Thank you again for the opportunity to comment.

Sincerely,
Gaynell Lawson,
EVP/CFO
Citizens Bank of Blount County
Maryville, TN