In April of each year, CDIC member institutions will write to depositors that are acting as trustees of trusts with two or more beneficiaries to request these depositors to supply the CDIC member institution, by May 30 of that year, with particulars of the amount or percentage of each beneficial interest in the deposit that is subject to the trust as of April 30. This requirement ensures that the trusteeship is appropriately recorded in the records of the member institution.
If you are a trustee that holds funds in trust for only one beneficiary, you do not need to respond to this request.
It is the responsibility of the depositor that is acting as a trustee (i.e., the account holder, customer) to ensure that all required disclosures are made to its financial institution. Any information that is sent to CDIC inadvertently will not be transferred to your financial institution.
If the trusteeship is appropriately disclosed on the records of the member institution, and at such time as is required, eligible deposits for each beneficiary in the trust will be insured for up to $100,000. For example, if a grandmother set up a trust for seven grandchildren and observed the trust disclosure requirements each year, CDIC would insure eligible deposits in the trust for up to $700,000 (7 x $100,000).
If the trusteeship is not appropriately disclosed on the records of the member institution CDIC can aggregate all eligible deposits within a trust and insure them for up to $100,000, regardless of the number of beneficiaries. Had the grandmother in the example above failed to meet the disclosure requirements, eligible deposits in the trust would be aggregated and insured up to $100,000, to be shared between the seven grandchildren in the event the institution fails and insured deposits are reimbursed.
Missing the May 30 deadline
Trustees can ensure they meet the trust disclosure rules by providing the required information to their financial institution any time before a failure. If this is not done, CDIC by-laws state that the trust deposits may not be eligible for separate CDIC coverage.
Beneficiary information changes after a failure
Provided trustees have previously met the disclosure requirements, a trustee would have an opportunity to provide a further update within 20 days of the failure.