�౦��Ϸ����

TO:	CHIEF EXECUTIVE OFFICER
SUBJECT:	�౦��Ϸ���� Board Simplifies Deposit Insurance Rules for Living Trust Accounts
Summary:	The �౦��Ϸ���� Board of Directors has approved a final rule that will simplify the deposit insurance regulations for deposits held in connection with a living trust. The rules are being changed primarily because the existing ones have been confusing for consumers and bankers. While the final rule will take effect April 1, 2004, the �౦��Ϸ���� will apply the new regulations at any insured institution that fails between January 13, 2004, and April 1, 2004, if doing so would benefit the affected depositors.

The Board of Directors of the Federal Deposit Insurance Corporation (�౦��Ϸ����) has approved the attached final rule to clarify and simplify the agency's deposit insurance regulations for accounts held in connection with living trusts. The final rule will take effect on April 1, 2004, but the �౦��Ϸ���� will apply the new regulations to living trust deposits at any insured institution that fails between January 13, 2004 (the date of the Board action), and April 1, 2004, if doing so would benefit the affected depositors.

The new rules are intended to address the confusion surrounding the coverage of living trust accounts. They are easier to understand than the existing rules and are designed to enable depositors and bankers to more easily determine the available deposit insurance coverage on depositors' living trust accounts. Also, the final rule eliminates the existing requirement that beneficiaries of living trust accounts be named in the records of the depository institution.

The attached �౦��Ϸ���� fact sheet provides examples of how the new coverage rules will work in the most common situations.

The �౦��Ϸ���� is planning several ways to raise awareness of the new insurance rules among bankers and bank customers:

• The �౦��Ϸ���� will be issuing new deposit insurance publications for consumers and bankers that will address the rule changes and replace the popular Your Insured Deposits brochure.
• The upcoming edition of the agency's quarterly publication �౦��Ϸ���� Consumer News will cover the living trust final rule in depth.
• Information on the new rules will be available on the �౦��Ϸ����'s Web site at www.fdic.gov .
• The �౦��Ϸ���� is planning special educational programs to explain the new rules to bankers.

Bankers (or their customers) who have questions about the new rules on living trusts or any other aspect of �౦��Ϸ���� insurance coverage may contact the �౦��Ϸ���� by phone (toll-free at 877-275-3342), mail (550 17th Street, NW, Washington, D.C. 20429) or e-mail (using an online form at ). The �౦��Ϸ����'s Web site also contains extensive information about �౦��Ϸ���� insurance coverage.

For your reference, �౦��Ϸ���� Financial Institution Letters (FILs) may be accessed from the �౦��Ϸ����'s Web site at www.fdic.gov/news/financial-institution-letters/2004/index.html . This FIL supersedes FIL-54-2003, dated July 2, 2003.

	Michael J. Zamorski
	Director
	Division of Supervision and Consumer Protection

# # #

• January 21, 2004 Federal Register, pages 2825-2830
• January 21, 2004, Federal Register, pages 2825-2830- PDF 56.3k ( PDF Help )
• �౦��Ϸ���� Insurance Coverage of Living Trust Accounts

Distribution: �౦��Ϸ����-Supervised Banks (Commercial and Savings)

NOTE: Paper copies of �౦��Ϸ���� financial institution letters may be obtained through the �౦��Ϸ����’s Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (1-877-275-3342 or (703) 562-2200).