03/17/2023
I posted this on LinkedIn some may find it interesting.
In the wake of , , and I wanted to circle back around to FDIC insurance after their assistance. Here is a quick tip for supercharging your FDIC coverage to 1.5 million dollars.
I'm quoting Danny Lohrfink:
"So let's break down how you can easily get $1.5M in FDIC insured coverage with pretty minimal lift, and without having to open accounts at different banks:
- Individual Account 1: $250k
- Individual Account 2: $250k
- Joint Account: $500k
- Entity (Rev Trust) 1: $250k
- Entity (Rev Trust) 2: $250k"
Now let's expand on the revocable trust. Again, I don't need to explain it to you, and you can set one up relatively easily at wealth.com (wealth.com is not a sponsor of this content).
How do we get to 1.5 million dollars in coverage with a trust? If three criteria exist, a revocable trust the FDIC will insure up to 250k per beneficiary.
The bank's account title must indicate a relationship with the trust.
The trust document must identify or list the beneficiaries on deposit account records.
All eligible beneficiaries must be a living person or an IRS-approved charity or non-profit.
Once the criteria for each of up to five beneficiaries are met, the trust owner's coverage is set at 250,000.00 per beneficiary. That adds up to 1.25 million dollars with a single owner revocable trust. When we pass five beneficiaries, if they all have an equal interest in the trust, it is an additional 250,000.00 each. Finally, if there are ten equal beneficiaries, we have managed to finagle FDIC coverage of up to 2.5 million dollars for our single trust.
Processes such as these are how you pass money through a trust to avoid probate and ensure that the FDIC will back our revocable trust as if we were too big to fail.
CC: https://lnkd.in/gTjExRxC Danny Lohrfink for his follow up post
CC: https://lnkd.in/gpJNv-g8 Haskell Shelton for his original post
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