September 23, 1997

Cathy Allard, Member Services
Michigan Federal Credit Union
1314 East Coldwater Road
Flint, Michigan 48505-1797

Dear Ms. Allard:

You have asked for an opinion regarding the extent of insurance coverage for a living trust account in the amount of $285,000 to be established by a husband and wife, as settlors and trustees. You have not advised us whether the trust is revocable or irrevocable or who the beneficiary is. Below is our analysis based on the assumption that the trust is irrevocable and that the husband and wife are the named beneficiaries. The attached letter from me dated July 3, 1997, explains the insurance coverage for a revocable living trust.

A trust account in which the named beneficiaries are members is insured up to $100,000 for each beneficiary. 12 C.F.R. §745, Appendix Part G. Therefore, the account would be insured up to $200,000 leaving approximately $85,000 uninsured.

For additional reference, I am enclosing copies of the provisions of the National Credit Union Administration Rules and Regulations that address insurance coverage for revocable and irrevocable trust accounts. 12 C.F.R. §§745.4 and 745.9-1 and Appendix Parts B and G.

Sincerely,

Sheila A. Albin
Associate General Counsel

GC/MFR:bhs
SSIC 3000
97-0903

Enclosures