assets

Using a Trust to Safeguard Your Assets

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In the current climate of financial uncertainty, with markets and institutions experiencing significant turmoil, the security of personal assets has become a pressing concern for many. Protecting oneself and one’s family from potential financial crises is more crucial than ever. Fortunately, several protective mechanisms are in place for various types of financial assets and institutions. Here’s an overview of the protections available:

– Brokerage Accounts (Protected by SIPC): The Securities Investor Protection Corporation (SIPC) offers protection against the loss of cash and securities (like stocks and bonds) due to the failure of a brokerage firm. However, it does not cover losses from commodity futures contracts or foreign currency. Securities in your name or held in “street name” are protected up to $500,000, including up to $100,000 in cash. Utilizing a Trust to hold an account, alongside an individual account, can effectively double the protection offered by SIPC.

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– Bank and Savings & Loan Accounts (Protected by FDIC): The Federal Deposit Insurance Corporation (FDIC) insures deposits in banks and savings & loans up to $250,000 per depositor. Trusts can enhance FDIC coverage, as they allow for additional insurance based on the number of beneficiaries. For instance, a trust for three children can secure $250,000 coverage per child, totaling $750,000, significantly more than the single-owner limit.

– Credit Union Accounts (Protected by NCUSIF): The National Credit Union Share Insurance Fund (NCUSIF), overseen by the National Credit Union Association (NCUA), provides insurance similar to the FDIC for credit union members. This includes government-backed insurance up to $250,000. Trust accounts can also benefit from expanded coverage under NCUSIF rules.

A Trust enhances financial security through these protections and ensures that your assets remain safeguarded for the benefit of your loved ones in the future. Consulting with a qualified estate planning attorney can illuminate how a Trust can serve as a cornerstone in your strategy to protect against financial instability, safeguard your assets, and provide for your family’s future well-being.

From the desk of Attorney Brandon McGee, McGee Law Firm

Brandon McGee
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