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FDIC Federal Register Citations

Via email

From: Hurlbert, Randy
Sent: Monday, July 07, 2003 1:06 PM
To: Comments
Cc: Williams, Jane; Whitson, Paula; Anderson, Cindy

Subject: Deposit Insurance Regulations; Living Trust Accounts

 Both proposed alternatives to clarify and simplify the FDIC's regulation on the coverage of accounts owned by living trusts will make it easier for banks to explain this coverage to customers.

 Alternative one "to provide coverage up to $100,000 per qualifying beneficiary named in the living trust, regardless of contingencies in the trust" : 

This alternative has as options

  •      that the institution would be required to include the names of the beneficiaries in the
         deposit account records.

  •     that the institution would be required to obtain beneficiary relationship information.

 These options would place a burden on institutions that seem out of synch with the benefit of having those pieces of information contained in our account records.  Because a Living Trust document is subject to amendments; this may cause frequent updates to signature cards with beneficiary names which would not be effective use of an institution's resources.  Relationship information would  be used only in the event of institution failure and the existing system of requiring the owners to complete an affidavit specifying the relationship should not slow down payment unduly.

 Alternative two "create a separate category of coverage for living trust accounts and to insure such accounts up to $100,000 per owner of the account".

 This alternative would require a specific and complete definition of "owner of the account". Strictly speaking, the "owner" of the account is the Trust itself. The grantors of the trust (those individuals who owned the funds before the trust was created) should be the ones that are used to determine total coverage i.e. - $100,000 per grantor.

Randy Hurlbert
Operations Specialist
Washington Trust Bank - Certificate # 1281
Retail Administration

Paula Whitson
Product Manager
Washington Trust Bank - Certificate # 1281
Product & Strategy Administration


Last Updated 07/07/2003

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