4. If you picked
"True" you are correct. Your payable-on-death accounts (also called
testamentary, Totten trust or "In Trust For" accounts) are insured separately
from your individual or joint accounts at the same institution, but only if certain
conditions are met. One of these conditions is that the beneficiaries of the account must
be the owner's spouse, children, grandchildren, parents or siblings (called
"qualifying beneficiaries"). Parents and siblings were added to this list on
April 1, 1999. If this requirement and the other requirements are satisfied, the account
will be insured up to $100,000 for each beneficiary. For example, a POD account with three
qualifying beneficiaries could be insured up to $300,000 (combined with any other POD
accounts held by the account owner for the same beneficiaries). The list of qualifying
beneficiaries also includes adopted children, adoptive parents, brothers and sisters
through adoption, stepchildren, stepparents, stepbrothers and stepsisters. The list does
not include cousins, aunts, uncles, nieces, nephews, friends or in-laws. This means a
$300,000 POD account for three non-qualifying beneficiaries would be added to any other
individual accounts the owner held at the bank and would be insured to only $100,000 in
total.
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