There are cases where deposits/accounts may be held in trust. For example, a parent (the trustee) may establish a bank account at a member institution for his/her child (the beneficiary). In this case, the deposit is being held in another right and capacity for the purpose of calculating the insurable amount.
Illustration A: Calculation of DI Coverage on Trust Account
In a simple scenario, Joe establishes a trust account for his two sons, and also has two accounts with the same member institution.
Joe is the depositor on 3 accounts, including 1 trust account.
He is the beneficial owner of 2 accounts.
Trust account balances are not combined with a trustee’s individual accounts, so to obtain the insurable/payout amount, deposits which are beneficially owned by Joe are added together and the loan balance deducted from the deposits to obtain the insurable/payout amount.
Deposits held on the trust account are insured separately, with each beneficiary’s interest being insured up to a maximum of $50,000 for a total coverage of $100,000.
|Joe in trust for John/Mike||Savings||Main||$200,000||$100,000|