How do IOLTAs fit into FDIC insurance coverage? Are they considered fiduciary accounts?

Great resource. Print it out and give it to the lawyer. He or she should be capable of understanding it without interpretation.

Since FDIC insurance is such a hot topic right now, here's a scenario about IOLTAs.

If I have $250k at a financial institution, and meanwhile I receive a settlement from a lawsuit that my attorney is holding in his trust account at the same financial institution, am I underinsured?

Will the FDIC rely on the records of the attorney (which are not maintained in the bank) should payment be necessary? The funds in the IOLTA account are not under my TIN, but rather the law firm's TIN, so what if those records are subpar? Should the bank verify the law firm's accounting practices?

Should the bank verify the law firm's accounting practices?

Why would the bank care? The attorney already has a fiduciary duty to maintain those records. The bank has no dog in that hunt.

Details of fiduciary relationships. If the deposit account records of an insured depository institution disclose the existence of a relationship which might provide a basis for additional insurance (including the exception provided for in paragraph (b)(1) of this section), the details of the relationship and the interests of other parties in the account must be ascertainable either from the deposit account records of the insured depository institution or from records maintained, in good faith and in the regular course of business, by the depositor or by some person or entity that has undertaken to maintain such records for the depositor.

So nice to hear from you, "Elwood." Loved you in the play. Miss your gentle wit here. Not sure about the lawyer.