The deposit insurance coverage associated with an irrevocable trust account can be complex and the amount of insurance coverage available depends upon the terms of the trust agreement. I highly recommend the expertise of an estate planning attorney. I am not giving you legal advice. I am attempting to explain what my understanding is.
In most cases an Irrevocable Trust comes into existence upon the death of a grantor who had a revocable "living trust". "Irrevocable" means that the grantor does not possess the power to terminate, or revoke, the trust.
Since most Irrevocable Trusts contain specific conditions associated with the interest of the beneficiaries or provide the trustees with the authority to invade the principal, deposit insurance associated with an Irrevocable Trust is limited to a total of $100,000.
The basic rule is that the funds contributed by each grantor are insured up to $100,000 per beneficiary regardless of the relationship between the grantors and the beneficiaries. However, per beneficiary coverage is NOT available in most cases, resulting in the Trust only to be insured for $100,000.
An irrevocable trust account would NOT be insured on a per beneficiary basis if the grantor retains an interest in the trust.
If the grantor is living and retains an interest in the trust, the amount of the retained interest would be added to any single accounts owned by the grantor and the total insured up to $100,000. Thus the total coverage in both the Irrevocable Trust and the Single account for the grantor would be added together and insured for only $100,000 in total.
Also, an irrevocable trust account would NOT be insured on a per beneficiary basis if the interests of the beneficiaries are subject to contingencies.
When a beneficiary's interest can be determined without evaluation of a contingency other than life expectancy, they are considered to have an interest in the account that is capable of being determined.
If a beneficiary's interest is contingent - for example, they can only have access to certain funds if certain conditions as detailed in a trust are met - then their interest is not ascertainable (capable of being determined).
A situation which results in the trust being limited to $100,000 is where a trust agreement that gives the trustee discretion to distribute the trust money to any one of several beneficiaries. This is a contingency because no one can predict today how the trustee might exercise that discretion in the future.
Another situation which results in the trust being limited to $100,000 is if any designated trustee has the ability to invade the principal. For example, could any of the trustees use or reallocate (invade) the funds from the trust to provide specific funds to any of the beneficiaries?
Or, could the trustees reallocate the funds to address any potential medical condition of any beneficiary?
These are only examples of a few of specific provisions that may exist in the trust. When such provision exists, the trust would only be insurance for $100,000.
The only way you can be entitled to more than $100,000 in deposit insurance coverage is if your lawyer or financial advisor can provide you assurances that there are no conditions, such as those discussed above, present in the irrevocable trust.
Hope this helps