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FDIC Federal Register Citations

Via email

August 27, 2003

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.

Karen M. Neeley
General Counsel
Independent Bankers Association of Texas
Austin, TX


Last Updated 09/10/2003

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