From: John Rosino
Sent: Sunday, September 28, 2008 11:48 AM
To: Comments; John E. Rosino
Subject: Revocable Trusts
Ladies and Gentlemen:
First, I would like to state that I am unequivocably in favor of the
intended simplification of the revocable trust rules which you are now
proposing.
I do have a comment to address regarding the proposed new regulations issued
on September 26, 2008. The past and current rules regarding "payable on
death" ("POD") accounts which fall under this category seem to still require
that beneficiaries be named to receive an additional $100,000 of FDIC
coverage. However, for the convenience of the depositor many POD accounts
name a revocable trust as the named beneficiary. For example, this would
often be done because it would allow the account owner's financial power of
attorney holder to act on his or her behalf in the event of the account
owner's temporary disability or other situations for which the account owner
could not properly utilize the account for a period of time. If the account
is held directly by a revocable trust for which the account holder is often
the sole trustee the account holder would have to resign as trustee and name
a new trustee so that there would be appropriate access to the account.
Although I hope that POD accounts naming a revocable trust as beneficiary
would be treated under the FDIC regulations in the same way as if they were
initially titled to the revocable trust, the regulations do not seem to
specifically address this common practice of naming a revocable trusts as
the beneficiary of a POD account and therefore the regulations are not clear
as to how this arrangement would be treated. Would it be treated as just
one $100,000 beneficiary or would the revocable trust POD beneficiary then
fall under the new revocable trust rules just as if the revocable trust was
the initial owner of the account? I strongly recommend that this be
clarified in the regulations in order that banks and depositors can properly
anticipate the coverage and make any changes necessary. Perhaps a specific
example could be added to the final regulations which would clarify the
treatment of this common practice.
Thank you for taking the time to consider this comment.
John E. Rosino
Sandusky, Ohio