Is it true that the Federal Deposit Insurance Corp. (FDIC) covers my two accounts?
I’m told that the FDIC will insure $200,000 in a revocable trust with me as trustee and my two daughters as beneficiaries, and $200,000 in an account that is under my name and with my two daughters as payable-on-death beneficiaries. A. Yes. Your $400,000 is covered as the accounts currently are structured, even if they are at the same bank. But if your deposits grow substantially, or if you change the number of beneficiaries, you could have an insurance shortfall. In general, the FDIC insures up to $250,000 worth of deposits per person per institution. That protection is available to every beneficiary of formal revocable trusts and informal trusts, such as payable-on-death deposits. As long as you have less than $500,000 in those accounts, your assets are fully covered because you have two beneficiaries. But if you dropped one of your daughters as a beneficiary, only $250,000 of your $400,000 would be covered. You’d have $150,000 in uninsured assets unless you move one of the accounts
