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ALEXANDRIA, Va. — NCUA regulations permit deposit insurance coverage for individual retirement accounts and trusts upon the death of the accountholder even if the beneficiary is not a credit union member.

NCUA Associate General Counsel Sheila Albin wrote in an April 18 legal opinion letter (07-0132) that NCUSIF coverage on IRAs “is based on the present vested ascertainable interest of a participant or designated beneficiary.” She explained, “While the participant or original owner of the IRA would have to have been a member to open the account in the first instance, ?745.9-2(c)(2) provides coverage to a designated beneficiary without specifically requiring the designated beneficiary to be a member.”

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