An irrevocable trust also may come into existence upon the death of an owner of a revocable trust. The reason is that the owner no longer can revolve or change the terms of the trust. If a trust has multiple owners and one owner passes away, the trust agreement may call for the trust to split owned by the survivor. Because these two trusts are held under different ownership types, the insurance coverage may be very different, even if the beneficiaries have not change.
The interest of a beneficiary in all deposit accounts established by the same grantor and held at the same insured bank under an irrevocable trust are added together and insured up to $100,000, only if all of the following requirements are met:
- The insured bank's deposit accounts records must disclose the existence of the trust relationship.
- The beneficiaries and their interests in the trust must be identifiable from the bank's deposit account records or from the trustee's records.
- True trust must be valid under state law.
