Created in 1933 during the Great Depression, the FDIC is a United States government entity that provides federally backed deposit insurance for member banks, ensuring depositor confidence during economic downturn or when a bank fails.
Until recently, the amount that each account could be insured for was $ 100,000. New legislation entitled the Emergency Economic Stabilization Act of 2008-was signed into law on October 3, 2008, and has raised the amount that each account could be insured for to $ 250,000.
The FDIC’s insurance is vital to those who have created a revocable trust (also known as a “living trust”) as part of their estate plan. Such insurance is extended to living trust accounts held at FDIC-insured banks, with even more insurance offered on such accounts. Each beneficiary is insured for $ 250,000 up to the amount of $ 1,250,000 per bank. Although some limitations do apply, you can rest assured that the FDIC protects your living trust money if it is held at a member bank.
In times such as these, when our nation is facing an economic crisis and many banks are at risk of failing, it’s important to know that the future of your money (as well as the future and economic security of your beneficiary or beneficiaries) is protected. The recent Economic “Bailout” Package passed by Congress is part of the overall effort on the part of the government to ward off another Great Depression:
The FDIC has raised the insurance limits on depositors’ accounts to restore consumer confidence in the banking industry.
Since its inception in the 1930s, the FDIC has successfully accomplished this goal-helping to both stabilize the markets and keep the American economy healthy during the worst of times.
If you already have a revocable or living trust, you should make sure that all trust owned accounts are held in FDIC insured banks. If so, you should feel confident that your personal wealth secure for you and your heirs.
Because, let’s face it: economic conditions do change and sometimes very rapidly. Therefore, it is vital that you regularly confer with your California estate planning attorney to ensure that the wealth you worked so hard to accumulate remains secure and will benefit your loved ones in the way that you have planned.
Whether your estate planning goals are immediate or long-term, a qualified California estate planning attorney will be able to counsel you on the best options available to you to meet your individual needs.