Special Treatment for Trusts at the FDIC

Special Treatment for Trusts at the FDIC

Question: I am confused by the rules for FDIC insurance.  I thought the limit for coverage was $250,000, but my friend says CDs owned by my trust can be insured for a lot more. Who is correct?

Answer: Thanks for your question. The good news is you are both right, but many people don’t realize that bank deposits made by revocable trusts get special treatment by the FDIC. Let me see if I can clear up some of the confusion.

The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency that protects depositors in United States banks. If you deposit money in an insured bank and that bank fails, the FDIC guarantees you get your money back, up to a certain limit.

Brokers and the Fiduciary Standard

Brokers and the Fiduciary Standard

Question: Should I be concerned about President Trump’s executive order last week that repeals the fiduciary rule for brokers? Sounded like a good thing to me that brokers should put client’s needs ahead of their own! 

Answer:  Last Friday, President Trump signed an executive order instructing the Department of Labor (DOL)  to review (not repeal) the previous administration’s order that was due to take effect April 10th.  The rule requires registered representatives of brokerage firms (brokers) who are paid commissions for sales to adhere to a fiduciary standard when giving advice on retirement plans, including IRAs. The DOL may postpone the effective date while it reviews the rule.

Market Performance Benchmarks

Market Performance Benchmarks

Question:   Whenever I hear a stock market report on radio or TV, the commentator mentions the Dow.  It recently topped 20,000.  Is the Dow a realistic proxy for the stock market?

Answer: Because you hear commentators quote the Dow so often, you might tend to associate it with the overall performance of the stock market.  But in reality, the Dow is just one small part of a big picture.  “The Dow” is short for the Dow Jones Industrial Average (DJIA).  The Dow is a market index, and an index is a composite performance measure of a group of securities.