Founders Bank & Trust

Frequently Asked Questions

Trusts and Estate Planning

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What is a trust?
A trust is a legal document through which a person names a "trustee" to carry out certain financial objectives. The person who creates the trust is referred to as the "grantor" or "settlor." The trustee will manage the assets in the trust. Trusts can be used to meet a wide range of objectives – from supporting an individual and/or spouse, to supporting heirs, educating children or grandchildren to helping a friend or favorite charity.

There a several types of trusts. Our Trust Department, together with your attorney, is ready to help you match the type of trust relationship to your specific needs.
What is a "revocable living trust"?
A revocable living trust is established during the grantor’s lifetime. It directs how assets in the trust are to be handled during lifetime It also contains instructions on how they are to be managed upon incapacity, and distributed upon death.
What is the difference between a revocable living trust and a Will?
A revocable living trust goes into effect during your lifetime; a Will does not take effect until after death. The assets in the trust will avoid the probate process; assets distributed through a Will do not. Also, with a revocable living trust, assets stay under your control, and the trust can be amended during your lifetime, so it is very flexible. In addition, it provides protection should you become physically or mentally incapacitated. A Will does not provide this protection.
How will a revocable living trust benefit me and my family?
Some of the benefits include:
  • Reduction or elimination of estate taxes
  • Probate avoidance
  • Privacy of settling estate
  • Financial protection for family members
  • Prevents court involvement at incapacity
  • Flexibility and control of assets
  • Can be changed or revoked at any time
  • Peace of mind
How much money do I need to benefit from a trust?
There is no "magic number." The first step is to calculate your current net worth. Add up the market value of all stocks, bonds, bank accounts, real estate, business interests, life insurance, IRAs and all other assets, then subtract your debts. The resulting number is your current net worth. After doing this most people are surprised to learn how much they are worth. Think about what inflation and appreciation will do to your property values over your lifetime and then the lifetime of your surviving spouse. Even if your current net worth is less than $1.5 millian (the 2005 estate tax exemption for each person), the benefits of avoiding probate could still mean that a trust "makes sense" for you.
Does joint ownership avoid probate?
Yes, but only upon the death of the first joint owner. The surviving owner will become the sole owner without going through the probate process. However, should both owners die at the same time, or the surviving owner does not name a new joint owner, the asset must go through the probate process before it passes on to the heirs.
Do I still need a Will if I have a Trust?
Yes. Most attorneys will recommend a "pour over Will" to designate assets not registered to the trust at the time of death to "pour over" to the trust after going through the probate process.
What are the advantages of naming Founders Bank & Trust as my personal representative in my Will?
The efficient and timely settlement of an estate is not an easy task. The settlement process is quite involved and many decisions must be made at each step during the process. Your estate benefits from our investment and administrative expertise, knowledge of taxes and attention to detail. Other advantages include reliability, objectivity of following your wishes, and peace of mind knowing that the bank will act in the best interests of you and your family.

Charitable Remainder Trust (CRT)

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How does a Charitable Remainder Trust work?
A Charitable Remainder Trust (CRT) can be used to increase income, save on taxes and benefit your favorite charity(ies). This is usually done by transferring a highly appreciated asset such as stock or real estate to the irrevocable trust. When the asset is sold by the trustee, no capital gains tax is paid. The full proceeds are then reinvested into an income producing asset. You will either receive a fixed percentage of the trust assets each year (a unitrust) or a fixed income amount (annuity trust) for your lifetime and/or the lifetime of your spouse. With either type of CRT (unitrust or annuity trust), there is a minimum and maximum payout rate required by the IRS.

In addition, you will receive an income tax deduction in the year the trust is funded, based on various factors. No estate tax will be due on the asset since it was removed from your estate. Upon death, the trust assets will go to the charity(ies) designated by you in the trust.

Since a CRT is irrevocable, it is imperative that you determine exactly what you intentions are and that you understand the document before you sign it.

A CRT can be an excellent way to supplement retirement income, and allow you help charitable organizations that have a special meaning for you and your family

Investment Management

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How can the bank help me with my investments?
Founders Bank & Trust offers Investment Agency Accounts. With this account, the bank acts as your agent so you can benefit from our expertise, and be relieved of receiving numerous statements from various mutual fund companies, brokerage firms etc. We do all the recordkeeping, collection and disbursement of income. We will manage the assets according to your written instructions in an agency agreement. Or, we can totally manage your portfolio for you. You choose the level of responsibility that you are most comfortable with.

We begin the relationship with a thorough assessment of your needs, focusing on your financial goals. We consider your willingness and ability to take risk and identify the proper investment approach that is conservative, moderate, aggressive or somewhere in between.

Founders Bank & Trust does not have proprietary mutual funds. Instead, we offer a variety of no-load, independent mutual fund families, in addition to our expertise in managing portfolios of individual stocks and bonds.

Individual Retirement Accounts (IRA's)

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I am retiring next year – or - I have recently changed jobs. What should I do with my retirement plan distribution?
You may be faced with the task of evaluating several different options. One option is a Direct Rollover from the retirement plan to your own IRA Rollover Account. A Direct Rollover avoids the twenty percent tax withholding requirement and puts the management of the funds into your control. Founders Bank & Trust can provide the IRA Rollover Account to accept the distribution. You may self-direct the account, use our investment advice, or rely on us to fully manage the assets. Flexibility is the key. Explore all your options before you make this important decision.
My company doesn’t have a retirement plan. How can I start saving for my own retirement?
The Individual Retirement Account is the answer– whether it is the "traditional" IRA or the new Roth IRA. Founders Bank & Trust can help you with either type of IRA and we will also provide the investment expertise and guidance to assist you with your retirement goals.

NOTE: Non-deposit investment products are not insured by the FDIC, are not a deposit or other obligation of, or guaranteed by, Founders Bank & Trust, and are subject to investment risk, including possible loss of principal.

Products are not insured by FDIC, they are not deposits or other obligations of the institution and are not guaranteed by the institution and are subject to investment risks, including possible loss of the principal invested.