December 19, 1997
Debbie France, IRA Coordinator
Eastman Credit Union
P.O. Box 1989
Kingsport, Tennessee 37662
Dear Ms. France:
You have asked the amount of insurance coverage that would be
available to a member who has an individual retirement account
(IRA) established in his name and is also the beneficiary of his
deceased wife's IRA, where both IRAs are maintained at Eastman
Credit Union. Each IRA would receive $100,000 of separate insurance
coverage.
Section 745.9-2 of NCUA Rules and Regulations provides that the
present vested ascertainable interest of a member or designated
beneficiary of an IRA shall be insured separately from other accounts
of the member or beneficiary. Where a member or beneficiary has
a present vested ascertainable interest in more than one IRA account
maintained at the same credit union, the member's or beneficiary's
interest in each IRA will be aggregated together and insured up
to a maximum of $100,000. The Internal Revenue Code, however,
recognizes the continued existence of a member's IRA account after
the death of the member. 26 U.S.C. §408(a)(6); 26 U.S.C.
§401(a)(9). Thus, our position is that the death of a member
does not change the insurance coverage of the member's IRA provided
the account remains in the name of the deceased member and is
not combined with any other account.
In the case presented, your member's IRA was insured separately
from his wife's account prior to her death. Your member's IRA
continues to receive $100,000 of separate insurance coverage from
the wife's IRA, after her death, if the wife's IRA is maintained
in her name and is not combined with an account of the member.
Sincerely,
Sheila A. Albin
Associate General Counsel
GC/NSW:bhs / SSIC 8000 / 97-0923