October 18, 2023 • 23 mins
In this episode, we talk with Nick Emmerson, who is the Head Trust Officer and Vice President at Farmers National Bank, to help us better understand how a Trust Department can help you navigate and better understand these financial areas. When it comes to financial matters like Wealth Management, Retirement Planning, Farm Management, and Estate & Trust Administration it is easy for many individuals to get lost in various options and details.
Contact Information:
Farmers National Bank Website Wealth Management Team
Locations Prophetstown Office: (815) 537-2348 Geneseo Office (309) 944-0580 Morrison Office (815) 772-3700
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Trust
departments and how they can help you.
It's a question many people askand one that more people should ask.
(00:23):
In this episode,we'll take a look at the different aspects
of how trust departments workand how they can help you.
With us today, we have nick Emerson,
who is the head trust officer and vicepresident at Farmer's National Bank
with offices in Profitstown,Geneseo, and Morrison.
Good morning.How are you doing this morning?
I'm doing well.
Excellent.
(00:44):
Hey, I'd like to start offwith a very simple question.
What type of products does a trustdepartment have to help customers?
Well, I would like to, I guess, separatethose into three different categories.
Three main categories.
The first would be wealthmanagement and retirement planning.
Second would be farm management.
(01:06):
And the third would be trustand estate administration.
Each one of those has different
items that comes with itfor us to help customers.
I guess those would be the main three.
Let's dig a little bit deeperinto each one of those topics.
But first, tell us a little bit about
(01:27):
the products you use to help with wealthmanagement and retirement planning.
If it's okay with you, Neil,
I'd like to talk just a little bit aboutmy background and how that would fit in.
No, I think that'd be great.
How that would fit in,how that fits into each one
of the different categoriesthat we're going to talk about.
Well, first in this categoryand others to come.
(01:48):
But first, I guess I got a financedegree from Iowa State University.
Then after that,I worked for Edward Jones.
I got my Series 7 license and becamea financial planner there.
After that, I went to work for a company
called Ag Perspective and did cropinsurance and grain marketing.
(02:11):
I've got
both the finance side and money managementside, as well as farm management,
which we'll talk about maybea little bit here in the future.
Then I came to the bank here about 10years ago to run the trust department.
I've got a CTFA,
which is a certified trust and financialadvisor certificate as well.
(02:33):
Well-rounded individual, lots of differentexperiences throughout the years.
But then I guess the first,
as far as wealth managementand retirement, I wanted to talk about...
We'll talk about retirementplanning here first.
The different types of accounts that wehave in retirement planning would be
traditional IRA, Roth IRAs, SEP IRAs,and simple IRAs, which are all different
(02:59):
types of individual retirementaccounts which can be utilized.
Then we've also got for businesses,
we've got safe harbor 401(k)sthat we're able to utilize.
Each one of these different typesof accounts has different tax
consequences,which I can delve into further,
either pre-tax dollars or post-taxdollars, but each person's individual
(03:20):
situation is different, but we can helpyou decide which would be best for you.
The other thing that's unique to the trust
department would be we're able to holdwhat I would call hard to value assets,
where at mostbrokerage firms, you're only able to put
mutual funds, stocks,bonds inside of an IRA.
(03:41):
Within our trust department,
being a fiduciary, we can put inside farmground or gold, different things that...
Antique cars, different things that havea harder way to,
I guess, value to them so that we'reable to just be unique in that way.
Those are the retirement planningoptions that we have.
(04:05):
As far as wealth management is concerned,there's the two different types
of accounts that we would have to helpyou grow your money outside of an IRA.
The first would be a custody account.
Inside a custody account,
actually the customer,we're really just holding these assets.
Customer, I'd help them set upthe account, but the customer is directing
(04:27):
how or what we're buying for them;it's less active.
We're not going to take into considerationa lot of what the market is doing.
The other type of account would bewhat's called an agency account.
An agency account is actively managed.
We're putting the funds,the assets inside that we like.
(04:50):
We're taking into consideration whatthe market is doing and then buying
and selling assets at the opportunetimes to try to beat the market.
Those would be the two different types of
accounts inside that wealth managementpiece that we do for customers.
I'd like to follow up with a question
on that because I think one of the thingsis when people do look at retirement
(05:13):
planning, at what pointshould they be looking at?
Is this something that it's a one-time
decision or what should they be lookingat and what can you offer them?
It sounds like you can actually walk
through the different scenarios and whatwould best fit their situation.
That's a really good question.
You
need to start looking at growing yourassets and retirement planning
(05:37):
right away as soon as you startwork right out of college.
The longer you can grow your assets,
the more we're going to be ableto exponentially grow them.
We start putting money into the marketat an early age,
those assets are going to growexponentially by the time you're retired.
There's a little rulecalled the Rule of 72.
(06:00):
So money doubles at an 8% rate,then it grows every nine years.
So if you have $1,000 at the age of 30,at 39, it is going to be 2,000.
At 48, it's going to be 4,000.
If I can keep my math going straight here,
(06:22):
at 57, it's going to be 8,000,so on and so forth until retirement.
Just an example that the early you start
this process, the more money you'regoing to have in retirement.
That makes sense.
That makes sense.
Do a lot of people do this planning or is
this something that theywait to the last minute?
(06:43):
Typically, they're waitingto the last minute.
A lot of people are lucky enough to havea 401(k) at their job that they are
throwing some money into,but not really thinking about it.
It's what everybody else is doing,so what they're doing.
But you really need to start making
a serious plan for actualretirement, probably at 50.
(07:07):
You need to start looking into this even
more in-depth and saying, Okay, am Ipaying off my bills in the correct time?
What bills am I goingto have in retirement?
Then also how much money is going to be
there and what's my socialsecurity going to be?
What's my tax implicationsfor each decision I make?
There is an in-depth process each timethat you,
(07:29):
when you're trying to make that planfor retirement to make sure you're going
to be able to live the samelife that you're living today.
I think that's some great advice,
and that's definitely an area that Ithink people should be aware of.
I'd like to delve into the next area.
You had mentioned farm management,and maybe you could explain a little bit
what that is and exactlywhat that entails.
(07:49):
Sure, I can do that.
There'd be two main typesof farm management.
There'd be, first, there'd bea cash rent lease or cash rent.
Thecustomer would have an actual dollar
amount that comes to themon a regular basis.
(08:11):
We enter into a lease contract
with a farmer, and that can be$300 an acre, 350 per acre.
It's a guaranteed price that you're going
to get per year,and you can actually enter into contracts
on a longer period of time,one, two, three years.
But it is a fixed price per year.
There are variable contracts as well whereyou can make that change a little bit
(08:35):
to help fit more scenarios,whether crop prices go up or down.
That would be the first type.
The other type would be a crop share lease
where you enter into the farmer,the people that own the ground,
enter into the farmer and share in theexpenses and then share in the profits.
(08:56):
You can enter into a 50-50crop share lease.
The lessee pays for 50% of the inputsand then gets 50% of the profit.
This is going to have a lot morevariability inside of it based on what
happens with farm pricesand yields, weather.
(09:17):
There's typically more downside in thissituation because the farmer and you are
taking the risk, but there'stypically more upside as well.
Those are the two types of
farm management agreements that we wouldenter into with lessees and tenants.
(09:38):
The last category you mentioned wastrust and estate administration.
If you could tell us a little bit about
the difference betweena trust and an estate.
Sure.The difference between a trust and estate,
I guess, an estate comes from a will,and a will goes through probate.
(09:59):
Probate is a six-month process where
a predator are able to come and makesure that they get paid, essentially.
A will takes longer.
It actually is a little cheaper
for an attorney to draw up a will, but ittakes six months longer at a minimum.
(10:20):
It has to go through that probate process.
As opposed to a trust does not haveto go through that probate process.
You don't have to wait that six-month
period for creditors tocome in and make claims.
It can be administereda lot quicker than a will.
The other main differenceis a will is public.
(10:42):
It has to be filed with the courtas opposed to a trust, that does not.
So a trust is way moreprivate than a willless.
Is there any advantageto a will over trust?
Is it something that they're all...
Is better all of trust?
What would be the better scenariofor a will versus a trust?
When would you best apply either one?
(11:05):
Sure, good question.
A will typically appliesto maybe simpler assets.
A customer has maybe cash only or
not as many assets, as opposed to a trustwhere you've got farm ground inside of it
or stocks, bonds, mutual funds or a lotof assets where you're wanting to get
(11:28):
those assets out quicker througha less cumbersome process.
That would be the main differencesbetween when you might choose them.
A will is really for simplesituations like I stated before.
Another trust, you can make much more
complex beneficiarydesignations inside of a trust.
(11:51):
You can keep the asset inside the trust.
You can make it out, give it out to thebeneficiaries in a much more complex way.
You can set parameters wherethey don't get it within...
They get some of the assets at 25,they get some of the assets at 30,
they get some of the assets at45 or whatever, as opposed to a will where
(12:16):
the estate is administeredand they go out right away.
There's just a lot more flexibilitywith the trust that there is a will.
Do you write wills or trusts?
Neil, no, we don't.
We get confused.
There are a lot of people our customersthink that we do, but we don't.
We work with attorneys that write trusts.
(12:39):
We can refer you to those attorneys,
but we don't actuallywrite them ourselves.
We work with them on a regular basisso we can understand them.
There's a lot of lawyerees in therewhere they can be hard to understand.
We've read...
(13:00):
I've read thousands of trusts,
so I can helpyou make sure that what the lawyer is
writing is actually what you'resaying just to verify that for you.
But we're not going to write them for you.
We can just help you understand themand then administer them after the fact.
Listening to you discuss trust, it soundslike there are different types of trusts.
(13:22):
Maybe you could just touchbase on that a little bit.
Sure.
There are many,many different types of trusts.
There's revocable trusts,which would be the most common type.
There's irrevocable trusts,but there's special needs trusts where you
can have a grantor if you have a specialneeds child to help in the future.
(13:44):
There's land trusts to put them inside of.
There's insurance trusts.
There's many different types of trusts
that fit many differenttypes of situations.
There's so many, in fact,
that we could go on for a long,long time and not cover them all.
(14:06):
But there's a trust to fit almostevery situation that you've got.
Well, that definitely soundslike you need guidance.
This is not something you juststumble into by yourself.
You definitely need a trusted advisor
to be able to go throughthis is what it sounds like.
I would agree with that statement 100%.
That's what we're here for.
(14:26):
What does trust in a stateadministration include?
Trust and administration, I guess, is morecomplex maybe than people would think.
Every trust or a state is goingto have different assets inside of it.
It could be stocks, bonds, mutual funds,farm ground, gold.
(14:48):
It could be a house inside of there.
It could be a rentalproperty inside of there.
We are going to either sell those assets,
we're going to do whateverthe document is telling us.
But we're going to start by collecting
the income and dividends that aregenerated by those assets that you have
to make sure that theyget to the correct place.
(15:10):
Then if the document calls for it,
we're going to distribute that income tothe beneficiaries per the document.
We'll make decisions based on your estate
planning documents, whetherit's a trust or an estate.
That may sound like a simple thing,but when you've got a family member
in charge of it,a lot of times they can feel pressure
(15:32):
from other family members to notdo exactly what's in the document.
You're making sure that family membersdon't butt heads in a lot of cases.
We maintain records
for the assets and investments so you cansee exactly what comes in,
exactly what goes out to make sure thatyou're comfortable with what's going on.
(15:53):
We provide those records on a monthlybasis to make sure that you know what's
happening inside the trust as we'readministering them.
Wehave resources and knowledge to help save
time and identify tax savingstips to simplify you.
This is something that a normal personisn't going to have the expertise to do,
(16:15):
but we not only have that expertise,but then we've got other tax professionals
that we work with as wellthat can help do that.
That could be for income taxes.
There's also estate taxes.
You want to have somebody that'sfamiliar with estate taxes as well.
We have expertise in those estate tax
situations, helps you minimize federalestate tax and gift tax that go out.
(16:40):
Then I guess we pay all the debts
of the creditor that come in to make surethat that person,
before we distribute the income to makesure that all the debts have been paid
and we don't have any creditors comingin and trying to take our money.
Those are really the big steps inside ofthe trust administration from what I see.
(17:05):
That's a lot.
That's a lot to offer and veryin-depth that might also add.
We want to make sure that
you feel comfortable, so we liketo be very open in the process.
I'm going to ask,are there any other types of accounts
that Farmers National BankTrust Department offers?
(17:25):
There is one other large typeof account that we offer.
It's called a community.
We have a community foundationin the trust department,
and I'm Executive Directorof the community foundation.
I guess you're probably asking,what is a community foundation?
First of all, it's a public charitythat focuses on a geographical region.
(17:50):
They pool donations from individuals to
address community needs or supportlocal nonprofit organizations.
Really, you can give donations
to the community foundation to help yourlocal community is what it amounts to.
There's many different types of accountsinside of their donor-advised funds,
(18:15):
which would mean that the donorthemselves, the person giving the donation
gets to advise the community foundationon how those funds are spent.
Field-of-interest funds where they can
just say, Hey, we want to give to artor we want to give to farming.
Then the community foundation,
based on those parameters, decideswhat the funds can be given away to.
(18:40):
There are scholarship funds.
You can start a scholarship fund and give
money away to high school studentsgraduating and going to college.
Then this isn't all of them,
but another large one would be just whatwe would call the unrestricted fund.
You can give money to the communityfoundation and the community foundation
(19:02):
can give the money awayto the community how it sees fit.
This happens a lot when people pass awaybecause they don't
know 20 years, 30 years down the roadwhat the community is going to need.
So they may give a chunk of their estateto the community foundation and say,
(19:22):
Just let the community foundationgive it away as they see fit.
I guess the reason somebody would do this,any of these, though, is because
money given or donated to the communityfoundation is a tax write-off.
Anything, whether it's income tax oractually estate tax after passing,
you can give your money away and it'sa one-for-one tax write-off.
(19:45):
It also sounds like a great way ofproviding a legacy for yourself as well
to be able to give back to the communityafter you've passed on.
So it sounds like a greatopportunity like that.
Many people think of it that way.
Well, nick, thank you very much for allthe information that you provided today.
I think everybody shouldbe listening to this.
(20:06):
Definitely, you pointed out in-depth,
I think, a lot of the advantages and justhow a trust department can help somebody.
I'm going to give you the last few minutesto give me your final thoughts and maybe
summarize things or thingsthat you'd like to bring up as well.
Sure.
Neil, I think people don't think
(20:26):
of a local trust department that hasfor all of these services,
they go elsewhere, where somebody can showup at your bank and all these services are
provided right there for themand they just don't know it.
I guess the thing I just want to go over
again is the main typesof accounts that we have.
(20:47):
If you need money managed for you,
whether that's in retirement or whenyou're 30 or 40 just trying to make
a financial plan,we can help you with that.
If there's an estate or trust that you
feel like you would need administered,you don't have the people around to do it,
or you just don't know what that allentails, we can help you with that.
(21:12):
Then third, we have that farm managementpiece where we can manage a farm for you.
If you're not in the area,you're not here.
If you just don't feel like you havethe expertise,
if you're that next generation and youdon't know,
we can manage that farm for you to makesure that it maximizes the profits.
I guess that last one that you asked meabout last, the community foundation,
(21:36):
if you're needing tax write-offs,if you want to provide a legacy
after you pass or even while you're here,you're around and watch how that money is
spent to help in your community whileyou're getting that tax write-off.
These are great ways to do it.And the trust department,
Farmer's National Bank trust departmentcan help you with any of those.
(21:59):
Again, thank you for your wealthof knowledge and your experience.
What is the best way,
if somebody's listening to this and whatis the best way they could get in touch
with you or to start talkingto a trust department?
So Farmers National Bank,I'm in the Geneseo branch.
We're in Profitstown, Morris in Geneseo.
I'm mainly in the Geneseo branch.
(22:20):
The phone number in Geneseo is309-944-0580.
Our website is www.
New.Farmersnationalbank.
Bank.You can find my email there.
That's Nik.E@farmerismationalbank.
Bank.If you bank with us or don't bank with us,
(22:43):
just give us a phone call at any of thebranches and they can get you to us.
That sounds great.
What we're going to do is also put the webaddress and the phone number in the show
notes so that if somebody is driving orsomething like that,
they can go back in and be able to haveall that information right there.
Sounds great.
Well, again, nick,thank you very much for what I feel is
a very educationalepisode that we put together here.
(23:07):
Again, thank you for your time
and for your experienceand sharing that with us today.
I appreciate you giving methe opportunity to do so, Neil.
Thank you.Thank you.
Trust
departments and how they can help you.
It's a question many people askand one that more people should ask.
(00:23):
In this episode,we'll take a look at the different aspects
of how trust departments workand how they can help you.
With us today, we have nick Emerson,
who is the head trust officer and vicepresident at Farmer's National Bank
with offices in Profitstown,Geneseo, and Morrison.
Good morning.How are you doing this morning?
I'm doing well.
Excellent.
(00:44):
Hey, I'd like to start offwith a very simple question.
What type of products does a trustdepartment have to help customers?
Well, I would like to, I guess, separatethose into three different categories.
Three main categories.
The first would be wealthmanagement and retirement planning.
Second would be farm management.
(01:06):
And the third would be trustand estate administration.
Each one of those has different
items that comes with itfor us to help customers.
I guess those would be the main three.
Let's dig a little bit deeperinto each one of those topics.
But first, tell us a little bit about
(01:27):
the products you use to help with wealthmanagement and retirement planning.
If it's okay with you, Neil,
I'd like to talk just a little bit aboutmy background and how that would fit in.
No, I think that'd be great.
How that would fit in,how that fits into each one
of the different categoriesthat we're going to talk about.
Well, first in this categoryand others to come.
(01:48):
But first, I guess I got a financedegree from Iowa State University.
Then after that,I worked for Edward Jones.
I got my Series 7 license and becamea financial planner there.
After that, I went to work for a company
called Ag Perspective and did cropinsurance and grain marketing.
(02:11):
I've got
both the finance side and money managementside, as well as farm management,
which we'll talk about maybea little bit here in the future.
Then I came to the bank here about 10years ago to run the trust department.
I've got a CTFA,
which is a certified trust and financialadvisor certificate as well.
(02:33):
Well-rounded individual, lots of differentexperiences throughout the years.
But then I guess the first,
as far as wealth managementand retirement, I wanted to talk about...
We'll talk about retirementplanning here first.
The different types of accounts that wehave in retirement planning would be
traditional IRA, Roth IRAs, SEP IRAs,and simple IRAs, which are all different
(02:59):
types of individual retirementaccounts which can be utilized.
Then we've also got for businesses,
we've got safe harbor 401(k)sthat we're able to utilize.
Each one of these different typesof accounts has different tax
consequences,which I can delve into further,
either pre-tax dollars or post-taxdollars, but each person's individual
(03:20):
situation is different, but we can helpyou decide which would be best for you.
The other thing that's unique to the trust
department would be we're able to holdwhat I would call hard to value assets,
where at mostbrokerage firms, you're only able to put
mutual funds, stocks,bonds inside of an IRA.
(03:41):
Within our trust department,
being a fiduciary, we can put inside farmground or gold, different things that...
Antique cars, different things that havea harder way to,
I guess, value to them so that we'reable to just be unique in that way.
Those are the retirement planningoptions that we have.
(04:05):
As far as wealth management is concerned,there's the two different types
of accounts that we would have to helpyou grow your money outside of an IRA.
The first would be a custody account.
Inside a custody account,
actually the customer,we're really just holding these assets.
Customer, I'd help them set upthe account, but the customer is directing
(04:27):
how or what we're buying for them;it's less active.
We're not going to take into considerationa lot of what the market is doing.
The other type of account would bewhat's called an agency account.
An agency account is actively managed.
We're putting the funds,the assets inside that we like.
(04:50):
We're taking into consideration whatthe market is doing and then buying
and selling assets at the opportunetimes to try to beat the market.
Those would be the two different types of
accounts inside that wealth managementpiece that we do for customers.
I'd like to follow up with a question
on that because I think one of the thingsis when people do look at retirement
(05:13):
planning, at what pointshould they be looking at?
Is this something that it's a one-time
decision or what should they be lookingat and what can you offer them?
It sounds like you can actually walk
through the different scenarios and whatwould best fit their situation.
That's a really good question.
You
need to start looking at growing yourassets and retirement planning
(05:37):
right away as soon as you startwork right out of college.
The longer you can grow your assets,
the more we're going to be ableto exponentially grow them.
We start putting money into the marketat an early age,
those assets are going to growexponentially by the time you're retired.
There's a little rulecalled the Rule of 72.
(06:00):
So money doubles at an 8% rate,then it grows every nine years.
So if you have $1,000 at the age of 30,at 39, it is going to be 2,000.
At 48, it's going to be 4,000.
If I can keep my math going straight here,
(06:22):
at 57, it's going to be 8,000,so on and so forth until retirement.
Just an example that the early you start
this process, the more money you'regoing to have in retirement.
That makes sense.
That makes sense.
Do a lot of people do this planning or is
this something that theywait to the last minute?
(06:43):
Typically, they're waitingto the last minute.
A lot of people are lucky enough to havea 401(k) at their job that they are
throwing some money into,but not really thinking about it.
It's what everybody else is doing,so what they're doing.
But you really need to start making
a serious plan for actualretirement, probably at 50.
(07:07):
You need to start looking into this even
more in-depth and saying, Okay, am Ipaying off my bills in the correct time?
What bills am I goingto have in retirement?
Then also how much money is going to be
there and what's my socialsecurity going to be?
What's my tax implicationsfor each decision I make?
There is an in-depth process each timethat you,
(07:29):
when you're trying to make that planfor retirement to make sure you're going
to be able to live the samelife that you're living today.
I think that's some great advice,
and that's definitely an area that Ithink people should be aware of.
I'd like to delve into the next area.
You had mentioned farm management,and maybe you could explain a little bit
what that is and exactlywhat that entails.
(07:49):
Sure, I can do that.
There'd be two main typesof farm management.
There'd be, first, there'd bea cash rent lease or cash rent.
Thecustomer would have an actual dollar
amount that comes to themon a regular basis.
(08:11):
We enter into a lease contract
with a farmer, and that can be$300 an acre, 350 per acre.
It's a guaranteed price that you're going
to get per year,and you can actually enter into contracts
on a longer period of time,one, two, three years.
But it is a fixed price per year.
There are variable contracts as well whereyou can make that change a little bit
(08:35):
to help fit more scenarios,whether crop prices go up or down.
That would be the first type.
The other type would be a crop share lease
where you enter into the farmer,the people that own the ground,
enter into the farmer and share in theexpenses and then share in the profits.
(08:56):
You can enter into a 50-50crop share lease.
The lessee pays for 50% of the inputsand then gets 50% of the profit.
This is going to have a lot morevariability inside of it based on what
happens with farm pricesand yields, weather.
(09:17):
There's typically more downside in thissituation because the farmer and you are
taking the risk, but there'stypically more upside as well.
Those are the two types of
farm management agreements that we wouldenter into with lessees and tenants.
(09:38):
The last category you mentioned wastrust and estate administration.
If you could tell us a little bit about
the difference betweena trust and an estate.
Sure.The difference between a trust and estate,
I guess, an estate comes from a will,and a will goes through probate.
(09:59):
Probate is a six-month process where
a predator are able to come and makesure that they get paid, essentially.
A will takes longer.
It actually is a little cheaper
for an attorney to draw up a will, but ittakes six months longer at a minimum.
(10:20):
It has to go through that probate process.
As opposed to a trust does not haveto go through that probate process.
You don't have to wait that six-month
period for creditors tocome in and make claims.
It can be administereda lot quicker than a will.
The other main differenceis a will is public.
(10:42):
It has to be filed with the courtas opposed to a trust, that does not.
So a trust is way moreprivate than a willless.
Is there any advantageto a will over trust?
Is it something that they're all...
Is better all of trust?
What would be the better scenariofor a will versus a trust?
When would you best apply either one?
(11:05):
Sure, good question.
A will typically appliesto maybe simpler assets.
A customer has maybe cash only or
not as many assets, as opposed to a trustwhere you've got farm ground inside of it
or stocks, bonds, mutual funds or a lotof assets where you're wanting to get
(11:28):
those assets out quicker througha less cumbersome process.
That would be the main differencesbetween when you might choose them.
A will is really for simplesituations like I stated before.
Another trust, you can make much more
complex beneficiarydesignations inside of a trust.
(11:51):
You can keep the asset inside the trust.
You can make it out, give it out to thebeneficiaries in a much more complex way.
You can set parameters wherethey don't get it within...
They get some of the assets at 25,they get some of the assets at 30,
they get some of the assets at45 or whatever, as opposed to a will where
(12:16):
the estate is administeredand they go out right away.
There's just a lot more flexibilitywith the trust that there is a will.
Do you write wills or trusts?
Neil, no, we don't.
We get confused.
There are a lot of people our customersthink that we do, but we don't.
We work with attorneys that write trusts.
(12:39):
We can refer you to those attorneys,
but we don't actuallywrite them ourselves.
We work with them on a regular basisso we can understand them.
There's a lot of lawyerees in therewhere they can be hard to understand.
We've read...
(13:00):
I've read thousands of trusts,
so I can helpyou make sure that what the lawyer is
writing is actually what you'resaying just to verify that for you.
But we're not going to write them for you.
We can just help you understand themand then administer them after the fact.
Listening to you discuss trust, it soundslike there are different types of trusts.
(13:22):
Maybe you could just touchbase on that a little bit.
Sure.
There are many,many different types of trusts.
There's revocable trusts,which would be the most common type.
There's irrevocable trusts,but there's special needs trusts where you
can have a grantor if you have a specialneeds child to help in the future.
(13:44):
There's land trusts to put them inside of.
There's insurance trusts.
There's many different types of trusts
that fit many differenttypes of situations.
There's so many, in fact,
that we could go on for a long,long time and not cover them all.
(14:06):
But there's a trust to fit almostevery situation that you've got.
Well, that definitely soundslike you need guidance.
This is not something you juststumble into by yourself.
You definitely need a trusted advisor
to be able to go throughthis is what it sounds like.
I would agree with that statement 100%.
That's what we're here for.
(14:26):
What does trust in a stateadministration include?
Trust and administration, I guess, is morecomplex maybe than people would think.
Every trust or a state is goingto have different assets inside of it.
It could be stocks, bonds, mutual funds,farm ground, gold.
(14:48):
It could be a house inside of there.
It could be a rentalproperty inside of there.
We are going to either sell those assets,
we're going to do whateverthe document is telling us.
But we're going to start by collecting
the income and dividends that aregenerated by those assets that you have
to make sure that theyget to the correct place.
(15:10):
Then if the document calls for it,
we're going to distribute that income tothe beneficiaries per the document.
We'll make decisions based on your estate
planning documents, whetherit's a trust or an estate.
That may sound like a simple thing,but when you've got a family member
in charge of it,a lot of times they can feel pressure
(15:32):
from other family members to notdo exactly what's in the document.
You're making sure that family membersdon't butt heads in a lot of cases.
We maintain records
for the assets and investments so you cansee exactly what comes in,
exactly what goes out to make sure thatyou're comfortable with what's going on.
(15:53):
We provide those records on a monthlybasis to make sure that you know what's
happening inside the trust as we'readministering them.
Wehave resources and knowledge to help save
time and identify tax savingstips to simplify you.
This is something that a normal personisn't going to have the expertise to do,
(16:15):
but we not only have that expertise,but then we've got other tax professionals
that we work with as wellthat can help do that.
That could be for income taxes.
There's also estate taxes.
You want to have somebody that'sfamiliar with estate taxes as well.
We have expertise in those estate tax
situations, helps you minimize federalestate tax and gift tax that go out.
(16:40):
Then I guess we pay all the debts
of the creditor that come in to make surethat that person,
before we distribute the income to makesure that all the debts have been paid
and we don't have any creditors comingin and trying to take our money.
Those are really the big steps inside ofthe trust administration from what I see.
(17:05):
That's a lot.
That's a lot to offer and veryin-depth that might also add.
We want to make sure that
you feel comfortable, so we liketo be very open in the process.
I'm going to ask,are there any other types of accounts
that Farmers National BankTrust Department offers?
(17:25):
There is one other large typeof account that we offer.
It's called a community.
We have a community foundationin the trust department,
and I'm Executive Directorof the community foundation.
I guess you're probably asking,what is a community foundation?
First of all, it's a public charitythat focuses on a geographical region.
(17:50):
They pool donations from individuals to
address community needs or supportlocal nonprofit organizations.
Really, you can give donations
to the community foundation to help yourlocal community is what it amounts to.
There's many different types of accountsinside of their donor-advised funds,
(18:15):
which would mean that the donorthemselves, the person giving the donation
gets to advise the community foundationon how those funds are spent.
Field-of-interest funds where they can
just say, Hey, we want to give to artor we want to give to farming.
Then the community foundation,
based on those parameters, decideswhat the funds can be given away to.
(18:40):
There are scholarship funds.
You can start a scholarship fund and give
money away to high school studentsgraduating and going to college.
Then this isn't all of them,
but another large one would be just whatwe would call the unrestricted fund.
You can give money to the communityfoundation and the community foundation
(19:02):
can give the money awayto the community how it sees fit.
This happens a lot when people pass awaybecause they don't
know 20 years, 30 years down the roadwhat the community is going to need.
So they may give a chunk of their estateto the community foundation and say,
(19:22):
Just let the community foundationgive it away as they see fit.
I guess the reason somebody would do this,any of these, though, is because
money given or donated to the communityfoundation is a tax write-off.
Anything, whether it's income tax oractually estate tax after passing,
you can give your money away and it'sa one-for-one tax write-off.
(19:45):
It also sounds like a great way ofproviding a legacy for yourself as well
to be able to give back to the communityafter you've passed on.
So it sounds like a greatopportunity like that.
Many people think of it that way.
Well, nick, thank you very much for allthe information that you provided today.
I think everybody shouldbe listening to this.
(20:06):
Definitely, you pointed out in-depth,
I think, a lot of the advantages and justhow a trust department can help somebody.
I'm going to give you the last few minutesto give me your final thoughts and maybe
summarize things or thingsthat you'd like to bring up as well.
Sure.
Neil, I think people don't think
(20:26):
of a local trust department that hasfor all of these services,
they go elsewhere, where somebody can showup at your bank and all these services are
provided right there for themand they just don't know it.
I guess the thing I just want to go over
again is the main typesof accounts that we have.
(20:47):
If you need money managed for you,
whether that's in retirement or whenyou're 30 or 40 just trying to make
a financial plan,we can help you with that.
If there's an estate or trust that you
feel like you would need administered,you don't have the people around to do it,
or you just don't know what that allentails, we can help you with that.
(21:12):
Then third, we have that farm managementpiece where we can manage a farm for you.
If you're not in the area,you're not here.
If you just don't feel like you havethe expertise,
if you're that next generation and youdon't know,
we can manage that farm for you to makesure that it maximizes the profits.
I guess that last one that you asked meabout last, the community foundation,
(21:36):
if you're needing tax write-offs,if you want to provide a legacy
after you pass or even while you're here,you're around and watch how that money is
spent to help in your community whileyou're getting that tax write-off.
These are great ways to do it.And the trust department,
Farmer's National Bank trust departmentcan help you with any of those.
(21:59):
Again, thank you for your wealthof knowledge and your experience.
What is the best way,
if somebody's listening to this and whatis the best way they could get in touch
with you or to start talkingto a trust department?
So Farmers National Bank,I'm in the Geneseo branch.
We're in Profitstown, Morris in Geneseo.
I'm mainly in the Geneseo branch.
(22:20):
The phone number in Geneseo is309-944-0580.
Our website is www.
New.Farmersnationalbank.
Bank.You can find my email there.
That's Nik.E@farmerismationalbank.
Bank.If you bank with us or don't bank with us,
(22:43):
just give us a phone call at any of thebranches and they can get you to us.
That sounds great.
What we're going to do is also put the webaddress and the phone number in the show
notes so that if somebody is driving orsomething like that,
they can go back in and be able to haveall that information right there.
Sounds great.
Well, again, nick,thank you very much for what I feel is
a very educationalepisode that we put together here.
(23:07):
Again, thank you for your time
and for your experienceand sharing that with us today.
I appreciate you giving methe opportunity to do so, Neil.
Thank you.Thank you.
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