Spread your money around

Ask the Lawyer
By Stewart J. Berger

Dear Ask the Lawyer:
In a column you wrote several months ago in the Northeast Times, you talked about FDIC insurance limited to $100,000 per account.
I have $400,000 invested in one bank. I was told by the bank that the accounts could be titled in certain different ways that will increase the insurance so that all $400,000 is insured.
I believed the bank manager, but now I have my doubts.
What do you suggest?
Gus

Dear Gus:
The FDIC regulations concerning titling of bank accounts can, under certain circumstances, provide additional insurance over the $100,000 limit. However, a mistake can be fatal.
Banks would love to keep your money.
Therefore, many bank manages will pull out the regulations and make a valiant attempt to structure your accounts in certain ways such that the bank manager thinks they are insured.
But here is the proof.
Tell the bank manager that you will leave all $400,000 in that particular bank but only if the bank manager gives you a letter on which you can legally rely stating that your accounts are fully insured up to $400,000.
Don’t hold your breath waiting for the letter. Everybody is willing to give you an opinion, but when you ask them to put it in writing, the excuses start to flow.
The sensible solution is to divide your money among many banks.
Why take a chance? There is plenty of competition.
It makes no sense to risk not having your accounts fully insured when the alternative of dividing your money in the amount of no more than $100,000 per bank is so simple.
To do otherwise assumes a risk without any corresponding benefit. ••
Stewart J. Berger is an attorney with offices at 7207 Rising Sun Ave. Questions and comments may be addressed to Ask The Lawyer, c/o The Northeast Times, 2512 Metropolitan Drive, Trevose, PA 19053