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4000 - Advisory Opinions

Decedent's IRA, of which Spouse Is Beneficiary, Is Separately Insured from Spouse's Own IRA Held at Same Depository Institution


March 21, 1991

Mark A. Mellon, Attorney

I am writing in response to your letter dated March 1, 1991. In your letter you state that you own two Individual Retirement Accounts ("IRAs"), one in your name and one account established by your deceased husband of which you are the beneficiary. You indicate that the combined total of these two accounts exceeds $100,000. Your question is whether these two accounts are fully insured.

The rules governing deposit insurance coverage on individual retirement accounts provide that the interests of any one natural person in time and savings deposits in an insured depository institution shall be added together and insured up to $100,000 in the aggregate. 12 C.F.R. §330.13(a). This insurance coverage would be separate from, and in addition to, any other individual retirement accounts established by another individual on which you are named as beneficiary. The person who establishes an IRA account is the owner of the deposit during his or her lifetime and is insured up to $100,000 as to all IRA funds he or she deposits in time and savings accounts at any one insured bank, separately from the $100,000 limit applicable to such person's non-IRA deposits at the same bank. When the person who set up the IRA account dies, the beneficiaries previously designated by the deceased depositor become the vested beneficial owners of the IRA funds and are then separately insured up to $100,000 as to the IRA funds owned by each such beneficiary at the same bank. Therefore, the funds in your IRA account would be insured up to a maximum of $100,000. With regard to your deceased husband's individual retirement account of which you are the beneficiary, your interest in this account is insured up to $100,000, separately from the IRA established in your name in the same depository institution. If, however, you should elect to treat your interest in your husband's account as your own IRA for federal income tax purposes, then the funds in this account would be added to your IRA and insured in the aggregate.

I hope this information is helpful to you. If you have any further questions, I can be reached at (202) 898-3854.

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