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Friday, August 22, 2008
U.S.
Rep.
Barney
Frank
(D-Mass.)
is
looking
into
a
Federal
Deposit
Insurance
Corporation
policy
that
disqualifies
domestic
partners
from
receiving
coverage
available
to
married
couples.
Frank,
one
of
two
openly
gay
members
of
Congress,
is
chair
of
the
influential
House
Financial
Services
Committee,
which
oversees
legislation
and
government
regulation
of
the
nation’s
banks
and
other
financial
institutions.
“He
will
talk
to
the
FDIC
to
see
if
they
have
the
authority
to
do
something
about
this
administratively
or
whether
a
legislative
remedy
is
needed,”
said
Steve
Adamske,
Frank’s
press
spokesperson.
The
FDIC
is
an
independent
federal
agency
that
protects
Americans
against
the
loss
of
their
deposits
in
banks
and
savings
institutions
in
the
event
that
a
bank
fails.
FDIC
insurance
covers
accounts
of
up
to
$100,000
per
bank
or
other
covered
financial
institutions
and
protects
against
the
loss
of
up
to
$250,000
for
certain
retirement
account
deposits.
The
agency
also
provides
$100,000
in
insurance
protection
for
each
owner
of
a
joint
account
and
any
two
or
more
individuals
are
eligible
for
coverage
in
joint
accounts,
including
domestic
partners.
Under
FDIC
rules,
a
same-sex
couple
opening
a
joint
bank
account
would
be
eligible
for
deposit
protection
for
a
total
of
$200,000,
just
like
a
married
couple.
But
the
FDIC
restricts
its
deposit
insurance
protection
for
revocable
trust
accounts
to
a
list
of
“qualifying”
beneficiaries
—
and
domestic
partners
are
excluded
from
that
list.
Under
FDIC
rules,
those
eligible
to
be
beneficiaries,
for
purposes
of
receiving
$100,000
in
deposit
insurance
protection
per
beneficiary,
are
the
trust
owner’s
married
spouse,
child,
grandchild,
parent
and
sibling.
Adopted
and
stepchildren
also
qualify
under
FDIC
rules.
“Others,
including
in-laws,
cousins,
nieces
and
nephews,
friends,
organizations
[including
charities]
and
trusts
do
not
qualify,”
according
to
a
description
of
the
rules
posted
on
the
FDIC
web
site.
Mica
Salb,
a
D.C.
attorney
whose
law
firm
specializes
in
family
and
estate
law,
and
whose
clients
include
same-sex
couples,
said
revocable
trusts
provide
a
means
of
transferring
an
individual’s
or
a
couple’s
assets
upon
death
to
one
or
more
heirs
without
the
need
for
a
will.
Salb
said
asset
transfer
through
trusts
remains
private
and,
for
the
most
part,
doesn’t
involve
the
probate
process
associated
with
a
will,
which
is
a
public
process
that
involves
disclosure
of
the
beneficiaries.
He
noted
that
a
will
becomes
a
public
document
at
the
time
of
probate.
“Some
people
want
to
keep
their
relationships
personal
and
private,”
Salb
said.
“If
you
want
to
leave
your
estate
to
a
domestic
partner
and
you
don’t
want
it
publicly
disclosed
at
the
time
of
your
death,
a
revocable
trust
is
one
way
to
do
that.”
He
said
trusts
also
provide
tax
benefits
under
certain
circumstances.
Kate
Spears,
an
official
with
the
FDIC’s
Division
of
Supervision
&
Consumer
Protection,
said
the
rules
excluding
domestic
partners
from
FDIC
deposit
protection
for
revocable
trusts
are
based
on
federal
financial
statutes
as
well
as
on
the
1996
Defense
of
Marriage
Act
or
DOMA.
DOMA
bars
the
federal
government
from
recognizing
same-sex
relationships
and
prevents
same-sex
couples
from
receiving
federal
benefits
and
rights
available
to
opposite-sex
married
couples.
“You
can
name
anyone
you
want
as
a
beneficiary
to
a
trust,
including
a
domestic
partner,”
Spears
said.
But
she
noted
that
the
FDIC
cannot
provide
insurance
protection
for
deposited
funds
in
a
trust
designated
for
a
domestic
partner
because
domestic
partners
are
not
included
in
the
FDIC’s
list
of
qualified
beneficiaries.
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