5.3.5.1 Identification of Eligible Beneficiaries
- A natural person
- A charitable or non-profit organization
- All other types of beneficiaries are either ineligible or invalid.
An ineligible beneficiary does not meet the requirements of an eligible beneficiary but is still able to legally receive the bequest under law. In such cases, for the purposes of calculating deposit insurance, the result is a reversion of funds to the single account of the grantor. Under FDIC guidelines, for ineligible beneficiaries of a revocable trust, the amounts are treated as funds in the single account of the grantor.
An Invalid beneficiary is unable to legally receive the bequest under state law. For the purposes of deposit insurance, bequests to invalid beneficiaries are ignored and the funds are allocated to the remaining beneficiaries. Under FDIC guidelines, for an invalid beneficiary, the funds associated with the beneficiary should be allocated to other beneficiaries.
The Application takes the Invalid beneficiary’s Account participant interest and divides it equally among other beneficiaries’ Account participant’s interests. The Application identifies eligible beneficiaries by using the FDIC Customer type dimension. The following is an example:
Table 4-1 Identification of Eligible Beneficiaries
| Beneficiary (Account Participant) | Account Participant Description | FDIC Customer Type Code | Eligible Beneficiary Flag (Processing) |
|---|---|---|---|
| Hema | Individual | IND | Yes |
| Rekha | Individual | IND | Yes |
| Nirma | Others | OTH | No |
| Oxfam | Charitable or Non profit organisation recognised by the IRS | NFP | Yes |
| Amnesty International | Charitable or Non profit organisation recognised by the IRS | NFP | Yes |