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4000 - Advisory Opinions

Revocable Testamentary Trust Accounts


October 20, 1987

Walter P. Doyle, Counsel

Thank you for your September 29 letter inquiring about FDIC insurance coverage of deposits made at an insured bank pursuant to a revocable trust document enclosed with your letter.

Under the trust husband and wife are co-grantors and co-trustees, as well as life income beneficiaries. As drafted, the trust in effect treats the one-half interest of each spouse separately. The surviving spouse and two children (or their issue) are the primary beneficiaries of the one-half interest of each spouse. Each spouse has power of revocation as to his or her one-half interest during such spouse's lifetime.

Because of the separability of each spouse's one-half interest in the trust, it is my view that insured deposits by the spouses as co-trustees under the trust should be properly regarded as being made one-half by husband as trustee for wife and two children and one-half by wife as trustee for husband and two children. Accordingly, under section 330.3 of our regulations (12 C.F.R. 330.3), the total insurance on deposits made by husband and wife as co-trustees under the trust at any one FDIC-insured bank would be $100,000 for each trustee as to each beneficiary, or $600,000 in total, assuming both spouses and both children are alive when the bank is closed.

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