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Revocable Trust Account Styling - FDIC Coverage

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In order for our customers to get the appropriate FDIC coverage for revocable trust accounts, how should an account be titled that has multiple beneficiaries, ssing the word "or", "and" or nothing at all? For example:1) Jane Smith ITF - John Smith, Dave Smith, Paul Smith2) Jane Smith ITF - John Smith, or Dave Smith or Paul Smith 3) Jane Smith ITF - Jane Smith and John Smith and Dave Smith Does it become the bank's responsibility to divide the estate equally between all beneficiaries upon a death?

There's no requirement that the names of the beneficiaries be included in the account title. The FDIC recently updated its Deposit Insurance Regs at 12 CFR Part 330. Review this section carefully, 330.10(b).

Be careful that you adhere to state laws, which may limit the number of beneficiaries on an account (Massachusetts rules, for example, limits such accounts to one beneficiary). Operationally, a one-beneficiary limit is much easier for you and your bank. If you have multiple beneficiaries on one account, you have the challenge of distribution, when it's unlikely you can get all the beneficiaries to act together at one time.

First published on 3/08/10

First published on 03/08/2010

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