Trust Deposit Insurance Examples: Testing Coverage Across Accounts
Trust coverage is easier to understand when actual account combinations are worked through. The FDIC's examples show how owners, eligible beneficiaries, and multiple trust accounts interact, including cases where part of a balance remains uninsured. This guide presents those examples within the rules effective from April 2024. It helps readers test their assumptions about payable-on-death accounts and formal trusts before applying the same reasoning to their own bank records.
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.
VIII. Examples of Trust Account Coverage
| Example 9 – Depositor with Both Revocable and Irrevocable Trusts | ||||
|---|---|---|---|---|
| Account Title | Owner | Beneficiaries | Deposit Type | Account Balance |
| Alice Doe POD | Alice Doe | Child 1,Child 2, and Child 3 | CD | $500,000 |
| Alice Doe Irrevocable Trust | Alice Doe | Child 1,Child 2, and Child 3 | DDA | $300,000 |
| Total | $800,000 | |||
Facts:
Alice Doe is the owner of a payable on death account at an insured bank with three named beneficiaries – Child 1, Child 2, and Child 3 (who are all living individuals) – with a balance of $500,000. Alice Doe has also established an irrevocable trust naming these same three beneficiaries – Child 1, Child 2, and Child 3. The trust maintains a deposit account with a balance of $300,000 at the same insured bank. Assuming that Alice Doe does not maintain any other trust accounts at the same bank, what is the level of coverage for these deposit accounts?
Answer:
Both the payable on death account and the irrevocable trust account are insured under the Trust Accounts category. This means that the two accounts’ balances would be added together for purposes of determining deposit insurance coverage. In this case, the balances of the two trust accounts total $800,000. It does not matter that some of the deposits are held in a revocable trust account and some are held in an irrevocable trust account.
Alice Doe has named three individuals as beneficiaries of trust deposits at the same insured bank. Under the FDIC’s rules, 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. Alice’s trust account coverage is calculated as follows:
1 owner x 3 beneficiaries x $250,000 = $750,000
Here, Alice Doe’s trust accounts at the same bank total $800,000, but coverage is $750,000. This means that Alice Doe is insured for $750,000, with the remaining $50,000 uninsured.
| Example 10 – More than Five Beneficiaries Named | ||||
|---|---|---|---|---|
| Account Title | Owner | Beneficiaries | Deposit Type | |
| Ben Doe Revocable Trust | Ben Doe | 1, 2, 3, 4, 5, 6, and 7 | DDA | $1,750,000 |
| Total | ||||
Facts:
Ben Doe is the owner of a deposit account at an insured bank titled in the name of Ben Doe’s formal revocable trust. The trust names seven beneficiaries (who are all individuals). The deposit account’s balance is $1,750,000. Assuming that Ben Doe does not maintain any other trust accounts at this same bank, what is the level of coverage for this deposit?
Answer:
The revocable trust deposit account would be insured under the Trust Accounts category.
Ben Doe has named seven individuals as beneficiaries of trust deposits at the same insured bank. Under the FDIC’s rules, 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.
This means that Ben Doe is insured for $1,250,000, with the remaining $500,000 uninsured.
Note that the deposit insurance rules do not affect the distribution of funds upon Ben Doe’s death, and trust funds could be distributed to all seven named beneficiaries. The FDIC’s rules only affect the level of deposit insurance coverage that would apply to the deposit in the unlikely event of a bank failure.
| Example 11 – Revocable and Irrevocable Trusts with Different Beneficiaries | ||||
|---|---|---|---|---|
| Account Title | Owner | Beneficiaries | Deposit Type | |
| Carol Doe Revocable Trust | Carol Doe | Child 1, Child 2, and Child 3 | Savings | $600,000 |
| Carol Doe Irrevocable Trust | Carol Doe | Child 4, Child 5, and Child 6 | CD | |
| Total | $1,100,000 | |||
Facts:
Carol Doe is the owner of a $600,000 savings account at an insured bank held in the name of a formal revocable trust. The formal revocable trust names three beneficiaries – Child 1, Child 2, and Child 3 (who are all individuals). Carol Doe also established an irrevocable trust that names three different beneficiaries – Child 4, Child 5, and Child 6 (who are also individuals). The irrevocable trust maintains a $500,000 CD account at the same insured bank. Assuming that Carol Doe does not maintain any other trust accounts at this bank, what is the level of coverage for these deposit accounts?
Answer:
Both the formal revocable trust account and the irrevocable trust account are insured under the Trust Accounts category. This means that the two accounts’ balances would be added together for purposes of determining deposit insurance coverage.
In this case, the balances of the two trust accounts total $1,100,000. It does not matter that some of the deposits are held in the name of a revocable trust, while some are held in the name of an irrevocable trust.
Carol Doe has named six individuals as beneficiaries of trust deposits at the same insured bank. It does not matter that under the terms of the relevant trusts, some beneficiaries might receive a greater share of the trust funds than others. Under the FDIC’s rules, 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.
Here, Carol Doe’s trust accounts total $1,100,000, which is less than the maximum of $1,250,000 for a trust owner with five or more beneficiaries. This means that the full balance of $1,100,000 is insured by the FDIC.
Note that the deposit insurance rules do not affect the distribution of funds upon Carol Doe’s death, and trust funds could be distributed to all six named beneficiaries. The FDIC’s rules only affect the level of deposit insurance coverage that would apply to the deposit.
| Example 12 – Revocable Trusts (Formal and Informal, with Multiple Owners) | ||||
|---|---|---|---|---|
| Account Title | Owners | Beneficiaries | Deposit Type | |
| John and Jane Doe Revocable Trust | John and Jane Doe | Child 1, Child 2, and Child 3 | Savings | $1,500,000 |
| John and Jane Doe POD | John and Jane Doe | Child 4, Child 5, and Child 6 | MMDA | |
| Total | $2,000,000 | |||
Facts:
John and Jane Doe own a $1,500,000 savings account at an insured bank held in the name of their formal revocable trust. Their formal revocable trust names three beneficiaries – Child 1, Child 2, and Child 3 (who are all individuals). John and Jane Doe also own a $500,000 payable on death account at the same bank that names three different beneficiaries – Child 4, Child 5, and Child 6 (who are also individuals). Assuming that John and Jane Doe do not maintain any other trust accounts at this bank, what is the level of coverage for these deposit accounts?
Answer:
Both the formal revocable trust account and the payable on death account are insured under the Trust Accounts category.
This means that the two accounts’ balances would be added together for purposes of determining deposit insurance coverage.
In this case, the balances of the two trust accounts total $2,000,000. It does not matter that some of the deposits are held in the name of a formal revocable trust, while some are held in a payable on death account.
John and Jane Doe have named six individuals as beneficiaries of their trust deposits at the same insured bank. It does not matter that some beneficiaries might receive a greater share of the trust funds than others. Under the FDIC’s rules, 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. If a trust deposit has multiple owners, each owner receives separate coverage up to this limit.
Here, the trust accounts total $2,000,000, which is less than the maximum of $2,500,000 ($1,250,000 per owner) in insurance coverage that could apply for John and Jane Doe collectively. This means that the full balance of $2,000,000 is insured by the FDIC.
Note that the deposit insurance rules do not affect the distribution of funds upon the death of the depositors, and trust funds could be distributed to all six named beneficiaries. The FDIC’s rules only affect the level of deposit insurance coverage that would apply to the deposits should the insured bank fail.
| Example 13 – POD, Formal Revocable, and Irrevocable Trusts with Multiple Owners | ||||
|---|---|---|---|---|
| Account Title | Owners | Beneficiaries | Deposit Type | |
| Husband and Wife Revocable Trust | Husband and Wife | Child 1, Child 2, and Child 3 | Savings | |
| Husband and Wife POD | Husband and Wife | Child 1, Child 2, and Child 3 | MMDA | |
| Husband and Wife Irrevocable Trust | Husband and Wife | Child 1, Child 2, and Child 3 | CD | |
| Total | $2,300,000 | |||
Facts:
A Husband and Wife co-own a $1,500,000 savings account at an insured bank held in the name of their formal revocable trust. Their formal revocable trust names three beneficiaries – Child 1, Child 2, and Child 3 (who are all individuals). The Husband and Wife also co-own a $500,000 payable on death account at the same bank that names the same three beneficiaries.
Finally, the Husband and Wife have established an irrevocable trust naming the same three beneficiaries (Child 1, Child 2, and Child 3), and this trust also maintains a $300,000 CD at the same insured bank.
Assuming that the Husband and Wife do not maintain any other trust accounts at this bank, what is the level of coverage for these deposit accounts?
Answer:
All three accounts are insured under the Trust Accounts category, which includes deposits of informal revocable trusts, formal revocable trusts, and irrevocable trusts. This means that the three accounts’ balances would be added together for purposes of determining deposit insurance coverage. In this case, the balances of the three trust accounts total $2,300,000. It does not matter that some of the deposits are held in the name of a revocable trust, some are held in a payable on death account, and the remainder is held in an irrevocable trust account.
The Husband and Wife have named three individuals as beneficiaries of their trust deposits at the same insured bank. Under the FDIC’s rules, 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. If a trust deposit has multiple owners, each owner receives separate coverage up to this limit.
The Husband’s trust account coverage is calculated as follows:
1 owner x 3 beneficiaries x $250,000 = $750,000
The Wife receives the same amount of coverage, $750,000, calculated in the same manner:
1 owner x 3 beneficiaries x $250,000 = $750,000
The total amount of deposit insurance coverage that applies to the Husband and Wife’s trust account deposits is therefore $1,500,000. This is less than the $2,300,000 combined balance of their three trust accounts, with the result that their balance in excess of the insurance limit, $800,000, would be uninsured.
| Example 14 – Multiple Trust Accounts with Common Owners and Beneficiaries | |
|---|---|
| Account Title | Balance |
| Paul & Lisa Li Living Trust (John and Sharon, as beneficiaries) | $700,000 |
| Lisa Li POD to Paul, John, and Sharon | $450,000 |
Facts:
Paul and Lisa Li, husband and wife, are co-grantors of a revocable living trust which designates their two children, John, and Sharon, as beneficiaries.
At their local insured bank, they have one deposit account in the amount of $700,000 titled in the name of their living trust. Paul has no other deposits at the insured bank, but Lisa also has an informal revocable trust account in the amount of $450,000 payable on death to Paul, John, and Sharon.
Answer:
Both accounts are insured under the Trust Accounts category, which includes deposits of informal revocable trusts and formal revocable trusts. It does not matter that some of the deposits are held in the name of a formal revocable trust and some are held in a payable on death account.
Under the FDIC’s rules, 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. If a trust deposit has multiple owners, each owner receives separate coverage up to this limit.
Paul is presumed to own one-half of the $700,000 living trust account, meaning his interest in the trust account is $350,000. He has named two beneficiaries - John and Sharon. His trust account coverage is therefore calculated as follows:
Paul’s Coverage = 1 owner x 2 beneficiaries x $250,000 = $500,000
Accordingly, Paul’s $350,000 trust deposit is fully insured.
Lisa is presumed to own the remaining $350,000 share of the living trust account, and she is the sole owner of the $450,000 POD account. Lisa’s trust deposits therefore total $800,000. She has named three beneficiaries - Paul, John, and Sharon. Her trust account coverage is calculated as follows:
Lisa’s Coverage = 1 owner x 3 beneficiaries x $250,000 = $750,000
Lisa’s $800,000 in trust deposits exceeds her $750,000 in coverage, with the result that the excess of $50,000 would be uninsured.
Putting this into practice
Match an example to the legal ownership and beneficiary structure, not simply to a similar balance. Add all relevant trust deposits at the same bank and check which beneficiaries qualify. If a small difference in the arrangement changes the calculation, resolve that detail before moving or retitling funds.
Sources and further reading
- Trust Accounts — FDIC, May 29, 2024