"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
depends on if all owners and beneficiaries are living and the beneficiaries are idenfied in the trust document. While the owners of a trust may benefit from the trust during their lifemes, they are not considered beneficiaries for the purpose of calculang share insurance coverage. Beneficiaries are those idenfied by the owner to receive an interest in the account in the event of the owners’ deaths. The account records must idenfy the beneficiaries by name. Share insurance coverage for a revocable living trust account depends upon the answers to the following specific quesons: • Do the account tle or account records at the credit union indicate that the account is held by a trust This requirement can easily be met by using the words “living trust,” or “family trust,” or similar terms. • Who are the owners of the trust The owners are commonly referred to in the formal revocable trust document as trustees, grantors or selors. For the purpose of calculang share insurance coverage only, the trustees, co-trustees, and successor trustees are not relevant. They are administrators and have no impact on share insurance coverage unless they are also the owners of the trust. • Who are the beneficiaries of the trust The beneficiaries are the people or enes entled to an interest in the trust. Conngent or alternave trust beneficiaries are not considered to have an interest in the trust funds and other assets as 41
long as the primary or inial beneficiaries are sll living, with the excepon of revocable living trusts with a life estate interest. • Do the beneficiaries meet the eligibility requirement To qualify for revocable trust share insurance coverage, a trust beneficiary must be a natural person or a charity or another nonprofit organizaon recognized by the IRS. • What is the dollar amount or percentage interest each owner has allocated to each primary beneficiary This queson does not apply to revocable trust deposits with five or less eligible beneficiaries. Coverage is calculated at $250,000 mes the number of eligible beneficiaries up to $1.25 million. If the member has six or more beneficiaries and wants to insure more than $1.25 million, then the insurance coverage will be the greater of either $1.25 million or the aggregate amount of all eligible beneficiaries’ propor- onal interests in the revocable trust(s), limited to $250,000 per beneficiary. • Are all the owners and beneficiaries living The amount of share insurance coverage can change if there is a death of an owner or a beneficiary. Upon the death of an owner, NCUA provides a grace period up to six months during which the account is insured as if the owner were sll living. However, the six-month grace period does not apply to the death of a beneficiary named in a living trust account unless the account is restructured in that me frame. The following secon describes how insurance coverage is determined when a living (or family) trust has mulple beneficiaries with varying trust interests. 42
- 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 and 34: Family of Three The husband is insu
- Page 35 and 36: • Informal revocable trusts - oen
- Page 37 and 38: REVOCABLE TRUST INSURANCE COMPUTATI
- Page 39 and 40: the dollar amount or percentage all
- Page 41: Example 3 - Maximum insurance cover
- 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
depends on if all owners and beneficiaries<br />
are living and the beneficiaries are idenfied<br />
in the trust document.<br />
While the owners of a trust may benefit<br />
from the trust during their lifemes, they<br />
are not considered beneficiaries for the<br />
purpose of calculang share insurance<br />
coverage. Beneficiaries are those idenfied<br />
by the owner to receive an interest in the<br />
account in the event of the owners’ deaths.<br />
The account records must idenfy the<br />
beneficiaries by name.<br />
Share insurance coverage for a revocable living<br />
trust account depends upon the answers to the<br />
following specific quesons:<br />
• Do the account tle or account records at the<br />
credit union indicate that the account is held by<br />
a trust This requirement can easily be met by<br />
using the words “living trust,” or “family trust,” or<br />
similar terms.<br />
• Who are the owners of the trust The owners<br />
are commonly referred to in the formal revocable<br />
trust document as trustees, grantors or selors.<br />
For the purpose of calculang share insurance<br />
coverage only, the trustees, co-trustees, and<br />
successor trustees are not relevant. They are<br />
administrators and have no impact on share<br />
insurance coverage unless they are also the<br />
owners of the trust.<br />
• Who are the beneficiaries of the trust The<br />
beneficiaries are the people or enes entled to<br />
an interest in the trust. Conngent or alternave<br />
trust beneficiaries are not considered to have<br />
an interest in the trust funds and other assets as<br />
41
Change language