Trust Deposit Insurance: Combining Revocable and Irrevocable Trust Balances

A trust account's deposit-insurance coverage depends on the owners, eligible beneficiaries, and other trust deposits held at the same insured bank. Under the FDIC rules effective in April 2024, revocable and most irrevocable trust deposits are considered within a combined framework. This guide explains the definitions, coverage limits, and recordkeeping requirements. It helps depositors understand why separate trust documents or account numbers do not automatically create independent insurance coverage.

Adapted from public-domain educational material published by FDIC. Fynoptic has organized and edited the material and added introductory and practical guidance. Sources were reviewed on October 28, 2026; original publication dates, where available, are listed below.

Trust Accounts (12 C.F.R. § 330.10)

Disclaimer

This section explains FDIC insurance coverage for trust accounts and is not intended as estate planning advice or guidance. Depositors should contact a legal or financial advisor for assistance with estate planning.

I. Definition

As of April 1, 2024, the FDIC’s regulation at 12 C.F.R. § 330.10 governs coverage for deposits of both revocable trusts and most irrevocable trusts, including:

1. Informal Revocable Trusts - trusts under which a deposit passes directly to one or more beneficiaries upon the depositor’s death without a written trust agreement. These trusts are commonly referred to as payable on death (“POD”), in trust for (“ITF”), as trustee for (“ATF”), transfer on death (“TOD”), or Totten trust accounts. They are created when an account owner signs an agreement with the insured bank directing the insured bank to transfer the funds in the account to one or more named beneficiaries upon the owner’s death.
2. Formal Revocable Trusts - revocable trusts established by a written trust agreement under which a deposit passes to one or more beneficiaries upon the owner’s death. These are often referred to as “living trusts” or “family trusts,” and generally are created for estate planning purposes. Under the agreement, the owner controls the deposits and other assets in the trust during his or her lifetime. Formal revocable trust agreements sometimes refer to the trust owner as the grantor, settlor, trustor, maker, or donor.
3. Irrevocable Trusts - irrevocable trusts established by statute or by a written trust agreement in which the owner contributes deposits or other property to the trust and gives up all power to cancel or change the trust. An irrevocable trust also may come into existence upon the death of an owner of a formal revocable trust.

Trust Deposits Insured Under Other Categories

The following trust deposits are excluded from the Trust Accounts category described here, and are instead insured under one of the FDIC’s other deposit insurance categories:

• Deposits of employee benefit plans, even if held in connection with a trust, are insured as Employee Benefit Plan Accounts under 12 C.F.R. § 330.14.
• Deposits such as Individual Retirement Accounts (IRAs) that name beneficiaries are insured as Certain Retirement Accounts under 12 C.F.R. § 330.14.
• Deposits of certain trusts classified as corporations are insured as Business/Organization Accounts under 12 C.F.R. § 330.11(a)(2).
• Deposits held by an insured bank in its capacity as trustee of an irrevocable trust are insured as provided by 12 C.F.R. § 330.12.
• Interest on Lawyers’ Trust Accounts would generally be insured on a pass-through basis to each client of the attorney or law firm, as provided by 12 C.F.R. § 330.5 and § 330.7.

For additional information on the coverage available in each of these categories, see the relevant sections of this Guide.

II. Insurance Limit

An owner’s trust deposits are insured for up to $250,000 per eligible beneficiary, up to a maximum of $1,250,000 if five or more eligible beneficiaries are named. Allocations of the deposited funds among the trust’s beneficiaries do not factor into this calculation.

The FDIC’s regulations do not limit the number of beneficiaries that a trust owner identifies for their estate planning purposes, and do not affect the distribution of trust funds under state law. However, if a trust owner has identified more than five eligible beneficiaries for a trust account, the owner will not be insured beyond $1,250,000 for deposits at that insured bank.

While beneficiaries factor into the calculation of deposit insurance coverage for Trust Account deposits, this does not mean that the FDIC considers the beneficiaries to be the owner(s) of the deposited funds. In the event of an insured bank’s failure, the FDIC pays deposit insurance to the trust’s owner (assuming that he or she is still alive) rather than making payment to the designated beneficiaries.

Trust Accounts Combined for Deposit Insurance Purposes

All deposits that a depositor holds in informal revocable trusts, formal revocable trusts, and irrevocable trusts at the same insured bank are added together for deposit insurance purposes, and the deposit insurance limit is applied to the combined total. Formal trusts often govern the distribution of assets other than deposits held at an insured bank, but the FDIC does not consider non-deposit assets in calculating deposit insurance coverage.

Multiple Trust Account Owners

If a trust has multiple owners, each owner’s insurance coverage is calculated separately. Deposit insurance coverage for each trust owner is calculated by multiplying $250,000 times the number of eligible beneficiaries, with an overall maximum insurance amount of $1,250,000 per owner if five or more eligible beneficiaries are named. Unless otherwise specified in the insured bank’s deposit account records, the FDIC presumes that the deposit is owned by each owner in equal shares.

Calculation of Coverage

The FDIC generally calculates deposit insurance coverage for trust accounts using the following formula:

III. Requirements

1. Informal Revocable Trusts – Beneficiaries Must be Named in the insured bank’s Records

For an informal revocable trust account, such as a payable on death account, to be insured under the Trust Accounts category, the beneficiaries must be specifically named in the insured bank’s deposit account records. This does not necessarily mean that beneficiary names must appear in the account title; they may be located elsewhere in the insured bank’s deposit account records.

Note that the requirement to name beneficiaries in the insured bank’s deposit account records applies only to informal revocable trusts. This does not apply to deposits of formal trusts, where beneficiaries are often identified in the formal trust agreement.

2. Formal Revocable Trusts – insured bank’s Records Must Identify Trust Account

For a formal revocable trust account, such as a deposit held in the name of a living trust, to be insured under the Trust Accounts category, the account title must include terminology sufficient to identify the account as a trust account, or the insured bank’s deposit account records must otherwise identify the account as belonging to a testamentary trust. For example, the account titling may include words such as “living trust” or “family trust.”

Note that the FDIC’s deposit insurance regulations do not require insured banks to maintain copies of depositors’ trust agreements, but may request a copy should the insured bank holding the deposit fail.

3. Irrevocable Trusts – insured bank’s Records Must Identify Trust Account

For an irrevocable trust account to be insured under the Trust Accounts category, the account title must include terminology sufficient to identify the account as a trust account, or the insured bank’s deposit account records must otherwise identify the account as belonging to a trust.

Putting this into practice

Inventory the trust deposits held by each owner at the bank and identify eligible beneficiaries under the applicable rules. Confirm that the bank records and trust documents support the arrangement. Deposit-insurance calculations are a separate task from deciding whether the trust meets your estate-planning objectives.

Sources and further reading

• Trust Accounts — FDIC, May 29, 2024