April 2023:

The MLO Minute: “Why Did an NBA Superstar Get FDIC Insurance on $12,500,000?” — 

By, Dennis McAndrews, Esq., Founder and Managing Partner Emeritus, and Katharine Ryan, Esq., Chief Executive Officer — 

Giannis Antetokounmpo is one of the most decorated players in NBA history. He won consecutive NBA Most Valuable Player Awards in 2019 and 2020. He was also named the NBA Defensive Player of the Year in 2020. In 2021, Antetokounmpo led the Milwaukee Bucks to their first NBA championship since 1971 and was named Finals MVP. The same year, he was honored as one of the league’s greatest players of all-time by being named to the NBA 75th Anniversary Team. And while most ordinary citizens only have bank accounts insured by the FDIC up to $250,000, when Giannis signed a big contract, he somehow got this federal insurance for $12,500,000. Was he getting the “star treatment” from the FDIC? Not really, and his approach is available to everyone.

 

It’s actually very simple. Giannis had 50 different accounts at 50 different banks, each at the $250,000 insurance limit. His money was safe. Anyone can do this. And there are other mechanisms to obtain more than $250,000 in FDIC insurance at a single bank, and the FDIC website has mechanisms to use toward this end. https://www.fdic.gov/resources/deposit-insurance/financial-products-insured/.

 

For example, a joint account of multiple individuals may be eligible coverage beyond the normal $250,000 limit as described below from the FDIC website:

“A deposit account owned by two or more people, without named beneficiaries. To qualify for coverage, all owners must:

1. 1. 1. Be living people
      2. Have equal rights to make withdrawals
      3. Sign the deposit account signature card (unless the account is a CD). Electronic signatures meet this requirement.

Coverage Limit: Each co-owner’s shares of every joint account at the same insured bank are added together and insured up to $250,000.”

 

The Marketplace Morning Report recently discussed this issue at length and is available at the following link. https://www.marketplace.org/2023/03/22/how-to-get-more-than-250000-covered-by-federal-deposit-insurance/.

 

We encourage our Estate Planning clients — past or present — to review their account levels in their banking institutions in light of the recent challenges in the banking industry to be sure that their deposits are federally insured. If you are a new client and filling out our Estate Planning Questionnaire, this is an excellent opportunity to review your banking circumstances. We look forward to serving your estate planning needs!