On Monday, November 11, all Pinnacle offices will be closed for the Veterans Day federal holiday. 2024 Federal Holiday Closures
On Monday, November 11, all Pinnacle offices will be closed for the Veterans Day federal holiday. 2024 Federal Holiday Closures
You may have heard that a new rule became effective April 1, 2024, for FDIC insurance of trusts. The official language of the new rule can be confusing, but here are the basics:
Number of Trust Account Owners |
Number of Beneficiaries |
Insurance Limit |
1 |
1 |
$250,000 |
1 |
2 |
$500,000 |
1 |
3 |
$750,000 |
1 |
4 |
$1,000,000 |
1 |
5 |
$1,250,000 |
The bottom line? A revocable trust account owner who is fully insured under the current revocable trust account rules for five or fewer beneficiaries remain fully insured under the new trust account rules.
Before April 1, 2024, the owner of a revocable trust account with $2 million balance naming seven eligible primary beneficiaries was insured at 1 x 7 x $250,000 for a total of $1.75 million in FDIC insurance. This owner experienced a decrease in FDIC insurance for that account under the new rule, because under the new rule maxes out coverage at $1.25 million.
However, FDIC coverage increased for a depositor who has an irrevocable trust account with multiple beneficiaries. Under past rules, coverage was often limited to $250,000 due to contingencies in the form of terms, rules, and permissible uses of the funds. Under the April 1, 2024, rule those types of contingencies do not limit FDIC insurance. One owner/grantor of an irrevocable trust account with three eligible primary beneficiaries is now covered up to $750,000 in deposits.
The FDIC updated its convenient online calculator to reflect this rule on April 1, 2024.
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