The FDIC recently approved a rule to change how it calculates the amount of insurance is available for bank accounts held in trusts. Effective 4/1/2024, a trust account will be insured up to $250,000 per beneficiary, not to exceed five, regardless whether the trust is revocable or irrevocable or how the trust allocates inheritance among beneficiaries.
For example, a joint living trust for a married couple with 2 children might qualify for up to $1,000,000 of FDIC deposit insurance. But a joint living trust for a married couple with 5 children would only qualify up to $1,250,000.
The new rule is intended to simplify the calculation of an insurance pay-out in the event of a bank failure, which I do believe it accomplishes.
Thomas J. Bouman