"Your Insured Funds" NCUA brochure - North Island Credit Union

Some living trusts give a beneficiary the right
to receive income from the trust or to use
trust assets during the beneficiary’s lifeme
(known as a life estate interest), and then other
beneficiaries receive the remaining trust assets
aer the life estate beneficiary dies. In such a
case, NCUA will recognize all beneficiaries in
determining insurance coverage.
For example: A husband has a living trust giving
his spouse a life estate interest in the trust deposits,
with the remainder going to their two children
equally upon his spouse’s death. The husband’s
living trust would be insured up to $750,000. In
this example, NCUA’s insurance rules recognize the
wife and two children as beneficiaries. Because
there is one trust owner who has three beneficiaries,
the husband’s trust account at an insured
credit union would be insured up to $750,000.
3. If a living trust has mulple owners, coverage
would be up to $250,000 per beneficiary for
each owner, provided the beneficiary would be
entled to receive the trust assets when the last
owner dies.
For example: A husband and spouse are coowners
of a living trust. The trust states that
upon the death of one spouse the assets will pass
to the surviving spouse, and upon the death of
the last owner the assets will pass to their three
children equally. This trust account would be
insured up to $1.5 million. Because each owner
names three beneficiaries, the owners (husband
and spouse) will be insured up to $750,000 each.
4. The $250,000 per beneficiary insurance limit
applies to all formal and informal revocable
trust accounts that an owner has at the same
credit union.
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