FDIC Law, Regulations, Related Acts
4000 - Advisory Opinions
Insurance Coverage for Revocable Testamentary Trust Account
October 15, 1987
Claude A. Rollin, Attorney
This is in response to your letter dated September 18, 1987 regarding deposit insurance coverage.
The account described in your letter appears to be a testamentary trust account (also known as a revocable trust, tentative or Totten trust or a "payable-on-death" account). This type of account evidences an intention that on the death of the owner, the funds will pass to the named beneficiary. If the named beneficiary is the spouse, child or grandchild of the owner, the account is insured to the owner up to $100,000 per beneficiary, separately from any other accounts of the owner. Thus your account would be insured to the $100,000 maximum.
If the named beneficiary does not meet the required degree of kinship with the owner, the funds in the account are added to any individual accounts of the owner and insured up to $100,000 in the aggregate.