"Your Insured Funds" NCUA brochure - North Island Credit Union
"Your Insured Funds" NCUA brochure - North Island Credit Union "Your Insured Funds" NCUA brochure - North Island Credit Union
As in the previous illustraon, none of the coowners has an interest of more than $250,000 in all of the joint accounts, so the total amount held by the each of the co-owners in all of the joint accounts is insured. ($1,000,000 for all individual accounts plus $1,000,000 for all joint accounts plus $1,500,000 for all revocable trust accounts) C. REVOCABLE TRUST ACCOUNTS This secon explains NCUA share insurance coverage for revocable trust accounts, and is not intended as estate planning advice or guidance. Members should contact a legal or financial advisor for assistance with estate planning. A revocable trust account is a share account owned by one or more people idenfying one or more beneficiaries who will receive the funds upon the death of the owner(s). An owner of a revocable trust has discreon to change, terminate, or revoke the trust at any me. In this secon, the term ‘owner’ means the grantor or selor of the revocable trust. Although some unique circumstances can exist, depending upon state law, in general when calculang insurance coverage, trustees, cotrustees, and successor trustees are not relevant. They are administrators and have no impact on insurance coverage unless they also are the owners or beneficiaries of the trust. For the purposes of share insurance coverage, the revocable trust category includes both informal and formal revocable trusts: 33
• Informal revocable trusts – oen called payable on death (POD), Toen trust, in trust for (ITF), or as trustee for accounts (ATF) – are created when the account owner signs an agreement – usually part of the signature card – direcng the credit union to transfer the funds in the account to one or more eligible named beneficiaries upon the owner’s death. • Formal revocable trusts – known as living or family trusts – are wrien trusts created for estate planning purposes. The owner controls the funds and other assets in the trust during his or her lifeme. The agreement establishes that the funds are to be paid to one or more idenfied beneficiaries upon the owner’s death. The trust generally becomes irrevocable, or parally irrevocable, upon the owner’s death. All funds an owner has in both informal and formal revocable trusts are added together for insurance purposes, and the insurance limit is applied to the combined total. Coverage and Requirements for Revocable Trust Accounts In general, the owner of a revocable trust account is insured up to $250,000 for each different beneficiary, if all of the following requirements are met: 1. The account tle or other account records of the credit union must indicate the account is held pursuant to a trust relaonship. This rule can be met by using the terms payable on death (or POD), in trust for (or ITF), as trustee for (or ATF), living trust, family trust, or any similar language to indicate the existence of a trust relaonship. 34
- Page 1 and 2: WHERE CAN I FIND MORE INFORMATION C
- Page 4 and 5: FORWARD The purpose of this booklet
- Page 6: TABLE OF CONTENTS Share Insurance C
- Page 9 and 10: A co-owner’s interest in all join
- Page 11 and 12: is provided when the NCUA Board, th
- Page 13 and 14: y opening a different type of accou
- Page 15 and 16: up to $250,000. As co-owners, the i
- Page 17 and 18: especve interest in the revocable t
- Page 19 and 20: OTHER FREQUENTLY ASKED QUESTIONS 25
- Page 21 and 22: insurance coverage will be provided
- Page 23 and 24: A. SINGLE OWNERSHIP ACCOUNTS All fu
- Page 25 and 26: Example 4 Queson: Member A holds a
- Page 27 and 28: community property) is insured up t
- Page 29 and 30: of survivorship. How much insurance
- Page 31 and 32: the right to withdraw funds on the
- Page 33: Family of Three The husband is insu
- Page 37 and 38: REVOCABLE TRUST INSURANCE COMPUTATI
- Page 39 and 40: the dollar amount or percentage all
- Page 41 and 42: Example 3 - Maximum insurance cover
- Page 43 and 44: long as the primary or inial benefi
- Page 45 and 46: Some living trusts give a beneficia
- Page 47 and 48: uninsured. A’s individual account
- Page 49 and 50: containing funds belonging to the p
- Page 51 and 52: Example 3 Queson: A is Treasurer of
- Page 53 and 54: separate insurance for each tribe.
- Page 55 and 56: Tax Regulaons (26 C.F.R. 20-2031-10
- Page 57 and 58: Example 1 Queson: Member S invests
- Page 59 and 60: Answer: Each of A’s accounts woul
- Page 61: Financial Notes 60
• Informal revocable trusts – oen called<br />
payable on death (POD), Toen trust, in trust<br />
for (ITF), or as trustee for accounts (ATF) – are<br />
created when the account owner signs an<br />
agreement – usually part of the signature<br />
card – direcng the credit union to transfer the<br />
funds in the account to one or more eligible<br />
named beneficiaries upon the owner’s death.<br />
• Formal revocable trusts – known as living<br />
or family trusts – are wrien trusts created<br />
for estate planning purposes. The owner<br />
controls the funds and other assets in the<br />
trust during his or her lifeme. The agreement<br />
establishes that the funds are to be paid to<br />
one or more idenfied beneficiaries upon the<br />
owner’s death. The trust generally becomes<br />
irrevocable, or parally irrevocable, upon the<br />
owner’s death.<br />
All funds an owner has in both informal and<br />
formal revocable trusts are added together for<br />
insurance purposes, and the insurance limit is<br />
applied to the combined total.<br />
Coverage and Requirements for Revocable<br />
Trust Accounts<br />
In general, the owner of a revocable trust account<br />
is insured up to $250,000 for each different<br />
beneficiary, if all of the following requirements<br />
are met:<br />
1. The account tle or other account records of<br />
the credit union must indicate the account is held<br />
pursuant to a trust relaonship. This rule can<br />
be met by using the terms payable on death (or<br />
POD), in trust for (or ITF), as trustee for (or ATF),<br />
living trust, family trust, or any similar language to<br />
indicate the existence of a trust relaonship.<br />
34
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