Trust and Estate Counsel

Tennessee Estate Planning Law

Insight and commentary on estate planning issues impacting affluent residents of Tennessee

Revocable Trusts Provide Additional FDIC Coverage

The recent turmoil in the financial markets has caused a lot of concern about FDIC coverage for CDs and other bank deposits. It is quite a nuisance for a depositor with hundreds of thousands of dollars or a few million dollars in CDs, to deposit the money in several banks and/or in several different names.

Last fall, the FDIC expanded the amount of coverage available to persons who have Revocable Trusts.  If you already have a Revocable Trust, or are willing to establish one, you can increase your FDIC coverage.

The new rules allow the trust to get $250,000 of coverage for up to five beneficiaries of the trust. Thus, as long as there are at least four persons who will become beneficiaries following your death, your trust can get coverage for $1,250,000 of CDs in the same bank. You can get an additional $250,000 of coverage for a CD owned by you that is payable to your trust upon your death. Several of my clients have used this simple method to obtain $1,500,000 of FDIC coverage for CDs in the same bank.

More information about FDIC Coverage: