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4000 - Advisory Opinions

Insurance Coverage of Husband/Wife Accounts


September 28, 1988

Walter P. Doyle, Counsel

This will reply to your letter dated August 23 concerning deposit insurance coverage afforded various accounts owned by husband and wife in the same bank. Specifically, you question whether individual and revocable trust accounts as to which husband and wife have granted each other powers of attorney would be insured separately from their joint accounts.

The FDIC insures deposit accounts according to the "rights and capacities" in which they are held, such as individually-owned accounts, jointly-owned accounts, or trust accounts. All accounts (including saving, checking, or certificates of deposit) owned by a depositor in the same right and capacity within one FDIC-insured institution will be added together and insured up to $100,000. Deposits maintained in different rights and capacities are separately insured up to $100,000. For example, deposits maintained by more than one person in a valid joint account are considered to be held in a different right and capacity from the individually-owned accounts (or trust accounts) of the co-owners and, therefore, are separately insured up to $100,000. Accordingly, if husband and wife co-own a joint account and, in addition, each owns individual and revocable trust accounts in favor of the other, the five accounts would each be separately insured up to $100,000.

The fact that husband and wife exchange powers of attorney on their respective individually owned and revocable trust accounts would not, in and of itself, preclude separate insurability, unless other surrounding facts and circumstances showed that the legal ownership of such funds was actually joint and not individual as recorded on the bank's records. Absent clear evidence that the individual and revocable trust deposits were, in fact, jointly owned under state law, we would respect the ownership status shown on the bank records and insure the funds separately, notwithstanding the exchange of powers of attorney.

Enclosed for your information is a copy of the FDIC's pamphlet "Your Insured Deposit" which answers many of the most frequently asked questions about deposit insurance coverage.

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