On January 13, 2004, the FDIC adopted new rules for insurance coverage of living trust accounts. The new rules, which are effective on April 1, 2004, are summarized below.

What is a living trust?

A living trust (or family trust) is a formal revocable trust, usually set up by an attorney, in which the owner (also known as a grantor or settlor) specifies who will receive the trust assets when the owner dies. The owner keeps control of the trust assets during his or her lifetime and can change the trust at any time.

How are living trust accounts insured under the new FDIC rule?

The owner of a living trust account would be insured up to $100,000 per beneficiary if all of the following requirements are met:

1. The beneficiary must be the owner