Mr. Robert D. Feldman
Executive Secretary
Attn: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th St NW
Washington, DC 20429-0002
RE: Living Trust Accounts
Dear Mr. Feldman:
The Independent Bankers Association of Texas (“IBAT”)
represents approximately 600 independent community banks domiciled in
Texas and Oklahoma. All of our members have customers utilizing the
living trust as a mechanism for managing their estate planning. We have
seen the number of these trusts proliferate in recent years. Therefore,
an amendment to the Deposit Insurance Regulations is vital to our
members. Again, although the number of accounts has increased
significantly, our best estimates are that fully insuring the
beneficiaries of these accounts will have a fairly minimal impact on the
deposit insurance fund. Many of the living trusts are set up for persons
of modest means. Larger estates typically manage their funds and
investments not through deposit accounts but through trust accounts.
Accordingly, whichever solution is selected, the eventual impact of the
fund should be quite manageable.
Having said that, we recommend Alternative One. It is
important to community banks that they are able to represent to their
customers that the beneficiaries on an account, on a living trust
account, like the beneficiaries in a POD account, will each be insured.
Admittedly, there will be an additional record keeping requirement.
However, Texas law already permits the use of a “certificate of trust”
instrument to provide key information to the bank. A simple change to
this document will provide the bank with a one-page tool that provides
the critical information for management of the insurance and the account
relationship.
Thank you for this opportunity to comment.
Sincerely,
Karen M. Neeley
General Counsel
Independent Bankers Association of Texas
Austin, TX
