FDIC Rule Change Reduces Protection for Bank Depositors With Trusts

• Affluent Americans may want to double-check how much of their bank deposits are protected by government-backed insurance.
• New rules implemented capped what the Federal Deposit Insurance Corporation (FDIC) will insure in a trust account at $1.25 million.
• Before, there was no limit on trust accounts, which are legal arrangements that ensure an individual's assets are distributed to specific beneficiaries.

Who is Affected by the Change?

• Tens of thousands of bank customers could be affected by the change, which could lower how much in those accounts are insured if their financial institution fails.
• Those affected may need to restructure their deposits or open new accounts at another bank to ensure their funds are protected.
• The change primarily impacts trusts with multiple beneficiaries.

How to Determine if You're Affected

• To find out if you're affected, use the FDIC's tool — Electronic Deposit Insurance Estimator — to figure out on a per-bank basis how much of your money, if any, exceeds the new coverage limits.
• If you find that some of your money is now uninsured, talk to your bank.
• Financial institutions typically work with customers affected by regulatory changes to ensure their large deposits are protected.