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FDIC Federal Register Citations

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From: Andrew Kloeckner  
Sent: Friday, August 29, 2003 9:17 AM
To: Comments
Subject: Comment on Insuring Living Trust Accounts

I support Alternative #2 as outlined in FIL 54 2003.

I feel strongly that simplicity is the best practice in what is perceived by
the public as a complicated issue.  Alternative #1 requires bank staff to
read through the entire trust to make a determination of who the
beneficiaries are.  First, many line personnel are not comfortable with
reading and interpreting trust documents.  Secondly, this process takes
additional staff time to read and explain to the customer.  Thirdly, many
customers are not comfortable with the bank knowing the details of their
trust agreement.  This may impose an impediment to the process.  Lastly, the
documentation requirement on the bank is significant.  The listing of
beneficiaries and their ownership interest on the signature cards would pose
a significant documentation issue.

Alternative #2, however, is very straightforward.  The front page of every
living trust states the owners/grantors of the trust.  The branch staff can
easily make this determination.  The coverage can be easily explained to the
customer.  Account titling already reflects the existence of the trust

I believe that the simplicity and straightforward nature of Alternative #2
make it the best option for both the banks and the customers.

Andy Kloeckner
Compliance Officer
Merchants Bank

Last Updated 08/29/2003

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