Section 745.4 - [Effective 12/1/2026] Trust accounts(a)Scope and definitions. This section governs coverage for funds held in connection with informal revocable trusts, formal revocable trusts, and irrevocable trusts. For the purposes of this section: (1)Informal revocable trust means a trust under which deposited funds pass directly to one or more beneficiaries upon the owner's death without a written trust agreement, commonly referred to as a payable-on-death account, in-trust-for account, or Totten trust account.(2)Formal revocable trust means a revocable trust established by a written trust agreement under which deposited funds pass to one or more beneficiaries upon the grantor's death.(3)Irrevocable trust means an irrevocable trust established by statute or a written trust agreement, except as described in paragraph (e) of this section.(b)Calculation of coverage -(1)General calculation. Deposited trust funds are insured in an amount up to the SMSIA multiplied by the total number of beneficiaries identified by each grantor, up to a maximum of five beneficiaries. (2)Aggregation for purposes of insurance limit. Deposited trust funds that pass from the same grantor to beneficiaries are aggregated for the purposes of determining coverage under this section, regardless of whether those funds are held in connection with an informal revocable trust, formal revocable trust, or irrevocable trust.(3)Separate insurance coverage. The share insurance coverage provided under this section is separate from coverage provided for other funds at the same federally insured credit union.(4)Equal allocation presumed. Unless otherwise specified in the account records of the federally insured credit union, deposited funds held in connection with a trust established by multiple grantors are presumed to have been owned or funded by the grantors in equal shares.(c)Number of beneficiaries. The total number of beneficiaries for trust funds deposited under paragraph (b) of this section will be determined as follows: (1)Eligible beneficiaries. Subject to paragraph (c)(2) of this section, beneficiaries include natural persons, as well as charitable organizations and other non-profit entities recognized as such under the Internal Revenue Code of 1986, as amended.(2)Ineligible beneficiaries. Beneficiaries do not include: (i) The grantor of a trust; or(ii) A person or entity that would only obtain an interest in the deposited funds if one or more named beneficiaries are deceased.(3)Future trust(s) named as beneficiaries. If a trust agreement provides that trust funds will pass into one or more new trusts upon the death of the grantor(s) ("future trusts"), the future trust(s) are not treated as beneficiaries of the trust; rather, the future trust(s) are viewed as mechanisms for distributing trust funds, and the beneficiaries are the natural persons or organizations that shall receive the trust funds through the future trusts.(4)Informal trust account payable to member's formal trust. If an informal revocable trust designates the account owner's formal trust as its beneficiary, the informal revocable trust account will be treated as if titled in the name of the formal trust.(d)Account records-(1)Informal revocable trusts. The beneficiaries of an informal revocable trust must be specifically named in the account records of the federally insured credit union.(2)Formal revocable trusts. The title of a formal trust account must include terminology sufficient to identify the account as a trust account, such as "family trust" or "living trust," or must otherwise be identified as a testamentary trust in the account records of the federally insured credit union. If eligible beneficiaries of such formal revocable trust are specifically named in the account records of the federally insured credit union, the NCUA shall presume the continued validity of the named beneficiaries' interest in the trust.(e)Deposited funds excluded from coverage under this section -(1)Revocable trust co-owners that are sole beneficiaries of a trust. If the co-owners of an informal or formal revocable trust are the trust's sole beneficiaries, deposited funds held in connection with the trust are treated as joint ownership funds under § 745.8 .(2)Employee benefit plan deposits. Deposited funds of employee benefit plans, even if held in connection with a trust, are treated as employee benefit plan funds under § 745.9. 74 FR 55749 , Oct. 29, 2009