FDIC Insurance
** Breaking News **
Along with the $700 billion bailout of Wall Street and the mortgage industry, Congress has just increased the individual FDIC Insurance from $100,000 to $250,000.
Now is the time to point out some important facts about FDIC Insurance.
Revocable Living Trust (Living Trust or Family Trusts)
Most of what we hear of the advantages of the revocable living trust
is either exaggerated or just plain wrong when contrasted with planning that is
done with a traditional will and powers of attorney, but there are genuine
advantages. One of those genuine advantages is that the FDICs bank insurance
rules are definitely more favorable for the Living Trust as they were released
last Friday. While generally $ is the li250,000 limit per
account owner per bank, a living trust with 5 or more beneficiaries can count on
up to $500,000 in insurance protection **(This may be increased to $1,250,000 with the new law.)** This is a clear advantage to the
living trust if the depositor has a habit of keeping over $250,000 in bank
deposits.
It may also be timely to point out that retirement accounts
and IRAs are protected up to $250,000 per owner per bank for such accounts. Note
should be taken to be careful if funds are transferred from bank to bank in the
context of IRAs in order to increase the insurance protection not to violate the
one rollover per year rule that can apply to such transfers which would result
in disastrous results, with taxation and potentially early withdrawal penalties
as well. Note that a custodian to custodian or trustee to trustee transfer is
not a rollover. It is when the account holder actually touches the money that
the rollover rules apply.
So be careful out there! |