The FDIC made some changes, effective as of April 1, 2024, which it says will simplify deposit insurance rules for trust accounts. The FDIC outlined the key changes in an official statement:
- To make the deposit insurance rules easier to understand for depositors and bankers, the rules currently used to determine coverage for deposits of revocable trusts and irrevocable trusts – which are different for the two types of trusts -will be replaced with a simpler common rule.
- A deposit owner’s trust deposits will be insured in an amount up to $250,000 for each of the trust beneficiaries, not to exceed five, regardless of whether a trust is revocable or irrevocable, and regardless of contingencies or the allocation of funds among the beneficiaries.
- This will provide for a maximum amount of deposit insurance coverage of $1,250,000 per owner, per insured depository institution for trust deposits.
- The final rule is also intended to facilitate more timely deposit insurance determinations for trust accounts in the event of a bank failure by streamlining the detailed, time-consuming review of trust agreements that is often required under the current, complicated trust rules.
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