More than a third of individuals who recently purchased long-term care insurance are paying less than $1,499 . . .Read more
FDIC Temporarily Boosts Insurance Limit to $250,000, Including Trusts
- October 27th, 2008
The recently passed Emergency Economic Stabilization Act of 2008 (aka "the bailout bill") temporarily raises the basic limit on federal deposit insurance coverage (FDIC) from $100,000 to $250,000 per depositor. The legislation provides that the basic deposit insurance limit will return to $100,000 after December 31, 2009.
The rise in insurance coverage applies to trust accounts as well. The owner of a revocable trust is insured up to $250,000 for each beneficiary, provided certain requirements are met and there are no more than five beneficiaries. The temporary coverage increase, coupled with an earlier FDIC interim rule simplifying the rules for determining the coverage available on revocable trust accounts means that the opportunities for increased insurance coverage of revocable trusts -- both informal "pay-on-death" or formal "living trusts," are sizeable -- at least in the short term.
There can be several advantages to establishing a trust, depending on your situation. Best-known is the advantage of avoiding probate. In a trust that terminates with the death of the donor, any property in the trust prior to the donor's death passes immediately to the beneficiaries by the terms of the trust without requiring probate. This can save time and money for the beneficiaries. Certain trusts can also result in tax advantages both for the donor and the beneficiary. These are often referred to as "credit shelter" or "life insurance" trusts.
A qualified elder law attorney can help you determine whether your trust accounts are adequately insured or tell you whether your situation merits setting up a trust. To find an attorney near you, click here.
Bear in mind that while elder law attorneys may recommend a living trust as an estate planning device for some of their clients where it is appropriate for their particular needs, salespeople masquerading as professional estate planners are working the provinces trying to convince older Americans that such trusts are for everyone. For more on this from ElderLawAnswers, click here.
For the FDIC's press release on the temporary increase in coverage, click here.
For a Trusts & Estates article on "FDIC Deposit Insurance In These Hard Times," click here.
Local Elder Law Attorneys in Ashburn, VA
Margaret A. O'Reilly, PC
Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...
Law Offices of John L. Laster
John Laster is a lawyer licensed to practice in Virginia, Maryland and the District of Columbia. He limits his practice to wealth transfer planning, trusts, wills, powers of attorney, health care decision-making issues, estate administration and related tax, elder law and disability concerns. Listed in The Best Lawyers...
Hale Ball Carlson Baumgartner Murphy PLC
Attorney Samantha Simmons Fredieu is an associate at Hale Ball. Ms. Fredieu graduated magna cum laude from Vermont Law School where she was the symposium editor on the Vermont Law Review, a production editor on the Vermont Journal of Environmental Law, and a member of the Moot Court Advisory Board. She has clerked for...