Aaron Charles Gregg

Top 10 Success Tips for Estate Planning

“Estate planning is one of the most important steps you can take for yourself and your loved ones.”

Unless you’ve done the planning, assets may not be distributed according to your wishes and loved ones may not be taken care of after your death. These are just two reasons to make sure you have an estate plan, according to the recent article titled “Estate Planning 101: 10 Tips for Success” from the Maryland Reporter.

Create a list of your assets. This should include all of your property, real estate, liquid assets, investments and personal possessions. With this list, consider what you would like to happen to each item after your death. If you have many assets, this process will take longer—consider this a good thing. Don’t neglect digital assets. The goal of a careful detailed list is to avoid any room for interpretation—or misinterpretation—by the courts or by heirs.

Meet with an estate planning attorney to create wills and trusts. These documents dictate how your assets are distributed after your death. Without them, the laws of your state may be used to distribute assets. You also need a will to name an executor, the person responsible for carrying out your instructions.

Your will is also used to name a guardian, the person who will raise your children if they are orphaned minors.

Who is the named beneficiary on your life insurance policy? This is the person who will receive the death benefit from your policy upon your death. Will this person be the guardian of your minor children? Do you prefer to have the proceeds from the policy used to fund a trust for the benefit of your children? These are important decisions to be made and memorialized in your estate plan.

Make your wishes crystal clear. Legal documents are often challenged if they are not prepared by an experienced estate planning attorney or if they are vaguely worded. You want to be sure there are no ambiguities in your will or trust documents. Consider the use of “if, then” statements. For example, “If my husband predeceases me, then I leave my house to my children.”

Consider creating a letter of intent or instruction to supplement your will and trusts. Use this document to give more detailed information about your wishes, from funeral arrangements to who you want to receive a specific item. Note this document is not legally binding, but it may avoid confusion and can be used to support the instructions in your will.

Trusts may be more important than you think in estate planning. Trusts allow you to take assets out of your probate estate and have these assets managed by a trustee of your choice, who distributes assets directly to beneficiaries. You don’t have to have millions to benefit from a trust.

List your debts. This is not as much fun as listing assets, but still important for your executor and heirs. Mortgage payments, car payments, credit cards and personal loans are to be paid first out of estate accounts before funds can be distributed to heirs. Having this information will make your executor’s tasks easier.

Plan for digital assets. If you want your social media accounts to be deleted or emails available to a designated person after you die, you’ll need to start with a list of the accounts, usernames, passwords, whether the platform allows you to designate another person to have access to your accounts and how you want your digital assets handled after death. This plan should be in place in case of incapacity as well.

How will estate taxes be paid? Without tax planning properly done, your legacy could shrink considerably. In addition to federal estate taxes, some states have state estate taxes and inheritance taxes. Talk with your estate planning attorney to find out what your estate tax obligations will be and how to plan strategically to pay the taxes.

Plan for Long Term Care. The Department of Health and Human Services estimates that about 70% of Americans will need some type of long-term care during their lifetimes. Some options are private LTC insurance, government programs and self-funding.

The more planning done in advance, the more likely your loved ones will know what to do if you become incapacitated and know what you wanted when you die.

Resource: Maryland Reporter (Sep. 27, 2022) “Estate Planning 101: 10 Tips for Success”

Does Power of Attorney Perform the Same Way in Every State?

“The law sometimes appears to contradict itself. Specifically, the words ‘anything and everything’ do not always legally mean ‘anything and everything’.”

A power of attorney is an estate planning legal document signed by a person, referred to as the “principal,” who grants all or part of their decision-making power to another person, who is known as the “agent.” Power of attorney laws vary by state, making it crucial to work with an estate planning attorney who is experienced in the law of the principal’s state of residence. The recent article from limaohio.com, titled “When ‘anything and everything’ does not mean anything and everything,” explains what this means for agents attempting to act on behalf of principals.

When a global or comprehensive power of attorney grants an agent the ability to do everything and anything, it may seem to the layperson they may do whatever they need to do. However, each state has laws defining an agent’s role and responsibilities.

As a matter of state law, a power of attorney does not include everything.

In some states, unless certain powers are explicitly stated, the POA does not include the right to do the following:

• Create, amend, revoke, or terminate a trust
• Make a gift
• Change a beneficiary designation on an account
• Change a beneficiary designation on a life insurance policy.

If you want your agent to be able to do any of these things, consult with an experienced estate planning attorney, who will know what your state’s law allows.

You’ll also want to keep in mind any gifting empowered by the POA. If you want your agent to gift your property to other people or to the agent, the power to gift is limited to $16,000 of value to any person in one year, unless the POA explicitly states the power to gift may exceed $16,000. An estate planning attorney will know what your state’s limits are and the tax implications of any gifts in excess of $16,000.

These types of limitations are intended to give some common-sense parameters to the POA.

Most people don’t know this, but the power of attorney can be as narrow or as broad as the principal wishes. You may want your brother-in-law to manage the sale of your home but aren’t sure he’ll do a good job with your fine art collection. Your estate planning attorney can create a power of attorney excluding him from taking any role with the art collection and empowering him to handle everything else.

Reference: limaohio.com (April 30, 2022) “When ‘anything and everything’ does not mean anything and everything”

What Happens If You Become Incapacitated?

“Many people ask what would happen if they were in the hospital and unable to make their own medical decisions? The answer depends on whether you planned ahead.”

If you became incapacitated and advance planning had been done, your family will have the legal documents you need. Just as importantly, they will know what your wishes are for incapacity and end-of-life care. If there was no planning, your loved ones will have to start with a lengthy application to the court to have someone named a guardian. They are a person who has legal authority to make medical decisions on your behalf.

Having a plan in place beforehand is always better, explains the article “If I become incapacitated, who makes healthcare decisions?” from Waterdown Daily Times.

Another reason to plan ahead: the court does not require the guardian to be a family member. Anyone can request a guardian to be appointed for another incapacitated individual, whether incapacity is a result of illness or injury. If no planning has been done, a guardianship must be established.

This is not an easy or inexpensive process. A petition must be filed, and the person in question must be legally declared incapacitated. In some cases, these filings are done secretly, and a guardianship maybe established without the person or their family even knowing it has occurred.

There are also many cases where one family member believes they are better suited for the task, and the family becomes embroiled in controversy about who should serve as the guardian.

The entire problem can be resolved by working with an experienced estate planning attorney long before incapacity becomes an issue. A comprehensive estate plan will include a plan for distribution of assets (Last Will and Testament), Power of Attorney, Healthcare Power of Attorney and a Living Will.

These last two documents work together to describe your wishes for end-of-life care, medical treatment and any other medical issues you would want conveyed to healthcare providers.

Unfortunately, the pandemic revealed just how important it is to have these matters taken care of. If you did create these documents in the last few years, it would be wise to review them, since the people in key roles may have changed. While the idea of being on a respirator may have at one time been a clear and firm no, you may feel otherwise now.

A Healthcare Power of Attorney is an advance directive used to name a person, who becomes your “agent,” to make healthcare decisions. If there is no Healthcare Power of Attorney, physicians will ask a family member to make a decision. If no family can be reached in a timely manner, the court may be asked to appoint a legal guardian to be the decision-maker. In an urgent situation, the physician will have to make the decision, and it may not be the decision you wanted.

The Living Will explains your wishes for end-of-life care. For instance, if you become seriously ill and don’t want a feeding tube or artificial heart machine, you can say so in this document. You can even state who you do and do not wish to visit you when you are sick.

The best advice is to have a complete estate plan, including these vital documents, created by an experienced estate planning attorney. If you have an estate plan and have not reviewed it in the past three to five years, a review would be best for you and your loved ones.

Reference: Watertown Daily Times (April 14, 2022) “If I become incapacitated, who makes healthcare decisions?”

How to Handle Digital Assets in a Will

The rapid rise in circulation and growing popularity of cryptocurrencies is prompting attorneys and estate planners to adjust, as digital assets are inherited through wills, trusts and estates, according to experts who warn of the danger of lost or misappropriated assets.”

Now that cryptocurrency has become almost commonplace, it is necessary to incorporate it into estate plans and their administration, according to the article “Estate planners want to keep the crypt out of cryptocurrency” from Roll Call.

One advantage of using cryptocurrencies in estate planning is the ease of transference—if all parties know how crypto works. Unlike a traditional bank, which typically requires executors to produce an original death certificate and other documents to take control of accounts in the estate, cryptocurrency only requires the fiduciary to have passcodes to gain access to accounts.

The passcode is a complex, multicharacter code appearing to be a long string of unrelated numbers and letters. It is stored in a digital wallet, which can only be accessed through the use of the 64-digit passcode, also known as a key.

While the passcode is simple, it is also very vulnerable. If the key is lost, there is no way to retrieve it. The executor must know not just where the key is physically located if it has been written down on paper, or if it is kept in a digital wallet, but how to access the digital wallet. There are also different kinds of digital wallets.

People do not usually share their passwords with others. However, in the case of crypto, consider storing it in a safe but accessible location and telling a trusted person where it may be found.

People who own cryptocurrency need to give someone access info. If someone is named an executor at one point in your life and they have the information about digital assets, then at some point you change the executor, there is no way to guarantee the former executor might not access the account.

How do you protect digital assets? Using “cold storage,” an account passcode is stored and concealed on a USB drive or similar device, allowing the information to be shared without the user needing to learn the passcode to access the account. The cold storage USB drive can be given from one fiduciary to the successor fiduciary without either knowing the passcode.

Many bills have been introduced in Congress addressing cryptocurrency and blockchain policies. The IRS has issued a number of notices and publications regarding taxes on digital currency transactions. Crypto is no longer an “invisible” asset.

In addition to policies and regulations, litigation concerning estates and cryptocurrency is still relatively new to the judiciary. Planning for these assets to ensure they are passed to the next generation securely is very important as their use and value continues to grow.

Reference: Roll Call (Feb. 22, 2022) “Estate planners want to keep the crypt out of cryptocurrency”

Can Grandchildren Receive Inheritances?

“Children and grandchildren motivate us to think about a will and life insurance. However, it is problematic to name minor children as beneficiaries.”

Wanting to take care of the youngest and most vulnerable members of our families is a loving gesture from grandparents. However, minor children are not legally allowed to own property.  With the right strategies and tools, your estate plan can include grandchildren, says a recent article titled “Elder Care: How to provide for your youngest heirs” from the Longview News-Journal.

If a beneficiary designation on a will, insurance policy or other account lists the name of a minor child, your estate will take longer to settle. A person will need to be named as a guardian of the estate of the minor child, which takes time. The guardian may not be the child’s parent.

The parent of a minor child may not invest and grow any funds, which in some states are required to be deposited in a federally insured account. Periodic reports must be submitted to the court, and audits will need to be done annually. Guardianship requires extensive reporting and any monies spent must be accounted for.

When the child becomes of legal age, usually 18, the entire amount is then distributed to the child. Few children are mature enough at age 18, even though they think they are, to manage large sums of money. Neither the guardian nor the parent nor the court has any say in what happens to the funds after they are transferred to the child.

There are many other ways to transfer assets to a minor child to provide more control over how the money is managed and how and when it is distributed.

One option is to leave it to the child’s parent. This takes out the issue of court involvement but may has a few drawbacks: the parent has full control of the asset, with no obligation for it to be set aside for the child’s needs. If the parents divorce or have debt, the money is not protected.

Many states have Uniform Transfers to Minors Accounts. In Pennsylvania, it is PUTMA, in New York, UTMA and in California, CUTMA. Gifts placed in these accounts are held in custodianship until the child reaches 18 (or 21, depending on state law) and the custodian has a duty to manage the property prudently. Some states have limits on the amount in the accounts, and if the designated custodian passes away before the child reaches legal age, court proceedings may be necessary to name a new custodian. A creditor could file a petition with the court if there is a debt.

For most people, a trust is the best option for placing funds aside for a minor child. The trust can be established during the grandparent’s lifetime or through a testamentary trust after probate of their will is complete. The trust contains directions as to how the money is to be spent: higher education, summer camp, etc. A trustee is named to manage the trust, which may or may not be a parent. If a parent is named trustee, it is important to ensure that they follow the directions of the trust and do not use the property as if it were their own.

A trust allows the assets to be restricted until a child reaches an age of maturity, setting up distributions for a portion of the account at staggered ages, or maintaining the trust with limited distributions throughout their lives. A trust is better to protect the assets from creditors, more so than any other method.

A trust for a grandchild can be designed to anticipate the possibility of the child becoming disabled, in which case government benefits would be at risk in the event of a lump sum payment.

There are many options for leaving money to a minor, depending upon the family’s circumstances. In all cases, a conversation with an experienced estate planning attorney will help to ensure any type of gift is protected and works with the rest of the estate plan.

Reference: Longview News-Journal (Feb. 25, 2022) “Elder Care: How to provide for your youngest heirs”

What Is the HEMS Standard?

“The ‘HEMS’ (health, education, maintenance, support) standard in estate planning is used to guide trustees in how/when they should release funds to a beneficiary.”

The HEMS standard is used to inform trustees as to how and when funds should be released to a beneficiary, according to a recent article from Yahoo! News, “What is the HEMS Standard in Estate Planning.” Using HEMS language in a trust gives the trustee more control over how assets are distributed and spent. If a beneficiary is young and not financial savvy, this becomes extremely important to protecting both the beneficiary and the assets in the trust. Your estate planning attorney can set up a trust to include this feature.

When a trust includes HEMS language, the assets may only be used for specific needs. Health, education or living expenses can include college tuition, mortgage, and rent payments, medical care and health insurance premiums.

Medical treatment may include eye exams, dental care, health insurance, prescription drugs and some elective procedures.

Education may include college housing, tuition, technology needed for college, studying abroad and career training.

Maintenance and Support includes reasonable comforts, like paying for a gym membership, vacations and gifts for family members.

The HEMS language provides guidance for the trustee. However, ultimately the trustee is vested with the discretionary power to decide whether the assets are being used according to the directions of the trust.

Sometimes beneficiary requests are straightforward, like college tuition or health insurance bills. However, maintenance and support need to be considered in the context of the family’s wealth. If the family and the beneficiary are used to a lifestyle that includes three or four luxurious vacations every year, a request for funds used for a ski trip to Spain may not be out of line. For another family and trust, this would be a ludicrous request.

Having HEMS language in the trust limits distribution. It has greater value, if the trustee is also a beneficiary, lessening the chances of the trust diminishing for non-essentials or to fund a lavish lifestyle.

Giving the trustee HEMS language narrows their discretionary authority enough to help them do a better job of managing assets and may limit challenges by beneficiaries.

HEMS language can be as broad or narrow as the grantor wishes. Just as a trust is crafted to meet the specific directions of the grantor for beneficiaries, the HEMS language can be created to establish a trust where the assets may only be used to pay for college tuition or career training.

Reference: Yahoo! News (Jan. 7, 2022) “What is the HEMS Standard in Estate Planning”

What are the Advantages of Putting an Estate in a Modern Directed Trust?

“Modern trusts can be drafted, and existing trusts can be modified, to provide flexibility allowing a family the ability to navigate an unknown future and preserve family legacies intergenerationally.”

Many families use their estate, gift and generation-skipping transfer tax exemptions to fund a flexible modern trust for non-tax reasons, explains an article “Trust Planning in Unprecedented Times” from Wealth Management. Future uncertainty is one of the reasons, which seems keenly appropriate today.

Passing family values as well as wealth to future generations is an important part of estate planning for many families. A directed trust can accomplish both goals, through the participation of family members and advisors in the directed trust’s distribution committee (DC). The DC decides how trust income and principal will be distributed and directs the administrative trustee accordingly.

Any distribution over and above the health, education, maintenance and support of beneficiaries needs to be considered from a tax-sensitive perspective, but the DC has the flexibility to make these decisions.

These modern directed trusts can also be created to allow for charitable purposes. Donations to charity from a non-charitable modern directed trusts lets the family express its social responsibility, while obtaining unlimited income tax deductions to the trust.

There are instances where knowledge of a trust is kept from beneficiaries or other family members, if they lack the financial maturity or don’t understand or comply with family values. Other reasons to keep a trust quiet are asset protection, divorce, ID theft and similar issues. In many modern trust states, the trust can remain quiet, even after the grantor has died or becomes incapacitated.

Modern directed trusts provide protection against divorce. Often the trust’s main protection is the use of a spendthrift provision, which prevents the assignment of a beneficiaries’ interests in an irrevocable trust before the interest is distributed. There are exceptions to the spendthrift clause, and alimony is one of them. In recent cases, courts have disregarded the spendthrift clause when exceptions are involved, especially in cases of divorce.

Litigation can be a problem for trusts. Modern trusts provide excellent asset protection when trust discretionary interests are not defined as property or an enforcement right. Many trusts have clauses providing a court to award legal fees and costs to the winning party. The trustee may be reimbursed for attorney’s fees if the plaintiff loses, a significant discouragement for embarking on litigation against a modern trust.

COVID-19 has reframed how often people think about their mortality, which has fueled interest in creating trusts to protect family assets and heirlooms. A “purpose trust” doesn’t have beneficiaries, but is created to care, protect and preserve an asset, either for an extended period of time or even perpetuity. Assets typically placed in a purpose trust include gravesites, antiques, art, jewelry, royalties, digital assets, land, property, buildings and vacation homes.

The uncertain times in which we live call for unprecedented estate planning. Modern directed trusts are a way to preserve wealth across generations with flexibility. Regardless of what changes to federal estate, gift or generation skipping trusts may come in the future, trusts make sense.

Reference: Wealth Management (Jan. 10, 2022) “Trust Planning in Unprecedented Times”

What Is Considered an Asset in an Estate?

“This is an important question to ask, because the answer could tell you whether you need to worry about estate taxes, beneficiary issues or probate concerns.”

Estate planning attorneys are often asked if a particular asset will be included in an estate, from life insurance and real estate to employment contracts and Health Savings Accounts. The answer is explored in the aptly-titled article, “Will It (My Home, My Life Insurance, Etc.) Be in My Estate?” from Kiplinger.

When you die, your estate is defined in different ways for different planning purposes. You have a gross estate for federal estate taxes. However, there’s also the probate estate. You may also be thinking of whether an asset is part of your estate to be passed onto heirs. It depends on which part of your estate you’re focusing on.

Let’s start with life insurance. You’ve purchased a policy for $500,000, with your son as the designated beneficiary. If you own the policy, the entire $500,000 death benefit will be included in your gross estate for federal estate tax purposes. If your estate is big enough ($12.06 million in 2022), the entire death benefit above the exemption is subject to a 40% federal estate tax.

However, if you want to know if the policy will be included in your probate estate, the answer is no. Proceeds from life insurance policies are not subject to probate, since the death benefit passes by contract directly to the beneficiaries.

Next, is the policy an estate asset available for heirs, creditors, taxing authorities, etc.? The answer is a little less clear. Since your son was named the designated beneficiary, your estate can’t use the proceeds to fulfill bequests made to others through your will. Even if you disowned your son since naming him on the policy and changed your will to pass your estate to other children, the life insurance policy is a contract. Therefore, the money is going to your son, unless you change this while you are still living.

However, there’s a little wrinkle here. Can the proceeds of the life insurance policy be diverted to pay creditors, taxes, or other estate obligations? Here the answer is, it depends. An example is if your son receives the money from the insurance company but your will directs that his share of the probate estate be reduced to reflect his share of costs associated with probate. If the estate doesn’t have enough assets to cover the cost of probate, he may need to tap the proceeds to pay his share.

Another aspect of figuring out what’s included in your estate depends upon where you live. In community property states—Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin—assets are treated differently for estate tax purposes than in states with what’s known as “common law” for married couples. Also, in most states, real estate owned on a fee simple basis is simply transferred on death through the probate estate, while in other states, an alternative exists where a Transfer on Death (TOD) deed is used.

This legal jargon may be confusing, but it’s important to know, because if property is in your probate estate, expenses may vary from 2% to 6%, versus assets outside of probate, which have no expenses.

Speak with an experienced estate planning attorney in your state of residence to know what assets are included in your federal estate, what are part of your probate estate and what taxes will be levied on your estate from the state or federal governments and don’t forget, some states have inheritance taxes your heirs will need to pay.

Reference: Kiplinger (Dec. 13, 2021) “Will It (My Home, My Life Insurance, Etc.) Be in My Estate?”

How Do I Prepare a Digital Estate Plan?

“However, in a world where more and more of our personal information is stored online, it's also imperative to make a digital estate plan, so your loved ones can access your digital property.”

Today there is a new kind of asset class requiring attention when creating or reviewing your estate plan: digital assets. A recent article, titled “Everything you need to know about digital estate planning” from the Daily Herald, describes what needs to happen to protect your digital life.

Let’s start by defining a digital asset. These include social media, email accounts, online subscription services, personal images (photos and videos) stored online, blogs, online businesses, cryptocurrency, websites, web domains, gaming accounts and gambling websites, to name a few.

Signing up for any of these accounts involves a lengthy terms of service agreement (TOSA), which we all scroll past without reading and click “Agree.” What we don’t realize is our agreement is a legally-binding contract with the platform or service provider agreeing to whatever terms they have created. Many of these TOSAs include provisions stating when the original owner passes, the company may terminate their account, regardless of the value of the digital property or the wishes of the owner.

Most states have adopted legislation of some kind to address digital assets after the person has passed. Generally speaking, they grant the traditional executor or representative access to digital information. However, here’s the problem: the tech companies stand by their contracts. Protection of the original owner’s privacy is often cited as the reason contents cannot be shared with another person. Even if the executor knows the username and password, they may find the account and its content deleted. The executor may only find a small portion of the online information or be accused of committing fraud for logging on using the decedent’s username and password.

Big tech companies take the position the data and accounts were owned by one person. As a result, they have a responsibility to protect the person’s privacy. Therefore, they are not legally permitted to share data or content. The headlines of heirs trying to get family photos or police departments attempting to get evidence represent a tiny portion of the many people trying to access their loved one’s digital property. There are also millions lost in cryptocurrency from actual owners who forget their keys, or owners who never shared information with their heirs about accessing crypto wallets.

What can you do to protect your digital assets?

Appoint a digital executor in your will and provide them with the necessary materials to access your digital assets.

Create a digital asset inventory. There are online programs for this purpose, or you can use paper and pen. If you create a spreadsheet on a computer, you should encrypt it. Otherwise, you can expect it to be hacked and stolen. The only question is when, not if!

Keep the inventory up to date every time you change a password or username.

Decide what you want to happen to each digital asset after your death. Do you want your Facebook account changed to a “memorialized” account for a period of time? Or would you prefer it to be shut down, immediately?

Certain digital platforms have a process for assigning an executor—not many, but some. Find out what the policies are for all of your accounts.

Don’t share any digital asset information in your last will. The last will and testament becomes a public document when it is filed in the court. Anyone can gain access to it. Protect it the same way you would protect any major traditional asset.

Talk with your estate planning attorney about your state’s digital assets laws. This is still a relatively new asset class, but one that deserves the same level of protection as other assets.

Reference: Daily Herald (Nov. 10, 2021) “Everything you need to know about digital estate planning”

When Should You Fund a Trust?

“For larger estates, a revocable trust is generally the most effective tool for avoiding probate. It involves some setup costs. However, it allows you to manage the disposition of all of your wealth in one document, while retaining control and reserving the right to modify your plan.”

If your estate plan includes a revocable trust, sometimes called a “living trust,” you need to be certain the trust is funded. When created by an experienced estate planning attorney, revocable trusts provide many benefits, from avoiding having assets owned by the trust pass through probate to facilitating asset management in case of incapacity. However, it doesn’t happen automatically, according to a recent article from mondaq.com, “Is Your Revocable Trust Fully Funded?”

For the trust to work, it must be funded. Assets must be transferred to the trust, or beneficiary accounts must have the trust named as the designated beneficiary. The SECURE Act changed many rules concerning distribution of retirement account to trusts and not all beneficiary accounts permit a trust to be the owner, so you’ll need to verify this.

The revocable trust works well to avoid probate, and as the “grantor,” or creator of the trust, you may instruct trustees how and when to distribute trust assets. You may also revoke the trust at any time. However, to effectively avoid probate, you must transfer title to virtually all your assets. It includes those you own now and in the future. Any assets owned by you and not the trust will be subject to probate. This may include life insurance, annuities and retirement plans, if you have not designated a beneficiary or secondary beneficiary for each account.

What happens when the trust is not funded? The assets are subject to probate, and they will not be subject to any of the controls in the trust, if you become incapacitated. One way to avoid this is to take inventory of your assets and ensure they are properly titled on a regular basis.

Another reason to fund a trust: maximizing protection from the Federal Deposit Insurance Corporation (FDIC) insurance coverage. Most of us enjoy this protection in our bank accounts on deposits up to $250,000. However, a properly structured revocable trust account can increase protection up to $250,000 per beneficiary, up to five beneficiaries, regardless of the dollar amount or percentage.

If your revocable trust names five beneficiaries, a bank account in the name of the trust is eligible for FDIC insurance coverage up to $250,000 per beneficiary, or $1.25 million (or $2.5 million for jointlyowned accounts). For informal revocable trust accounts, the bank’s records (although not the account name) must include all beneficiaries who are to be covered. FDIC insurance is on a per-institution basis, so coverage can be multiplied by opening similarly structured accounts at several different banks.

One last note: FDIC rules regarding revocable trust accounts are complex, especially if a revocable trust has multiple beneficiaries. Speak with your estate planning attorney to maximize insurance coverage.

Reference: mondaq.com (Sep. 10, 2021) “Is Your Revocable Trust Fully Funded?”