Trust Services

Individual Retirement Account Trusts

Individual Retirement Account Trusts – Feel secure knowing that your retirement assets are administered by experienced professionals.

Individual Retirement Accounts (IRA)

This simple long-term savings plan allows you to save for retirement with the advantage of tax deferral until you reach the age of 59 1/2. If you receive compensation, you may qualify to save for your retirement now with a minimal starting deposit of $100.

Roth IRA

This is a tax-preferred savings and investment account . Although there is no tax deduction up front for the contribution, you may never be taxed on the earnings from your Roth IRA if you meet the required distribution rules. Please contact our Trust Employees to find out your contribution limits.

Education IRA

Save for future education expenses with the Education IRA, a tax-preferred savings and investment account. You may make contributions for any family member's higher education and if the requirements are met, you will never be taxed on the earnings realized by the Education IRA. Please contact one of our Trust Professionals to learn more! We also encourage you to consult with your tax advisor.

Simple IRA

A Simple IRA plan is a new type of employer-sponsored retirement plan. A Simple IRA has its own special features which will make it attractive to many employers. If you are an employee and not an employer, you will still benefit from understanding how a Simple IRA plan works. An employee may enjoy substantial tax benefits by participating in a Simple IRA plan.

What Businesses or Employers May Establish a SIMPLE?

To be eligible to have a SIMPLE, an employer must meet two requirements:

First, an employer will be eligible if it employed 100 or fewer on any day during the year who earned $5,000 or more in compensation from the employer during the year.
Second, the employer (or any predecessor employer) cannot currently maintain during any part of the calendar year another Qualified Plan. For these purposes, a Qualified Plan includes a qualified retirement plan, a qualified annuity plan, a governmental plan, a tax-sheltered annuity, and a SEP to which contributions were made or benefits were accrued, for service in the calendar year.

May a Sole Proprietor Establish a SIMPLE?

Yes. A sole proprietor may establish a SIMPLE as long as the rules discussed above are satisfied. When a self-employed individual sponsors a SIMPLE, he or she is considered to be both the employer and an employee.

Why Would an Employer & Its Employees Want a Simple-IRA?

There are six simple reasons:

An employee, by making elective deferrals, can defer current income taxation.
An employer is allowed to deduct the cost of funds contributed to employees plan.
Income earned on the SIMPLE deferrals is sheltered from federal and most state income taxes until withdrawn.
Due to the effects of compounding, the SIMPLE funds may grow into a sizable nest egg for retirement.
Administrative costs are generally substantially less than would be incurred under a qualified plan.
Current IRA rules limit deductibility for regular IRA contribution for employees who themselves (or their spouse) participate in an employer-sponsored retirement plan. However, an employee’s participation in a SIMPLE-IRA may provide him or her additional opportunities to save for retirement.

Health Savings Account (HSA)

An HSA is a tax-exempt trust or custodial account established for the purpose of paying medical expenses in conjunction with a high-deductible health care plan.

What is the HSA’s Purpose? The HSA purpose is to create tax incentives so persons will save for future health and retirement needs. The HSA is used to accumulate funds to pay health care expenses on a tax-preferred basis.

However, the HSA will also be used to accumulate wealth on a tax-preferred basis. This will happen when the contributed funds and the earnings are not spent on health expenses. HSAs, will give employees more control over where their health care dollars are spent.

What Requirements must be met to be a HSA? There must be a written plan agreement which creates a trust or custodial account. The purpose of the trust is to pay qualified medical expenses. The trust must be created or organized in the U.S. The HSA plan agreement must meet the following requirements:

The trustee or custodian must be a Bank , insurance company or a nonblank trustee as defined for IRA purposes.
No part of the HSA assets may be invested in life insurance contracts.
The HSA assets cannot be commingled with other assets unless pursuant to a common trust fund or common investment fund.
The account beneficiaries interest in the HSA is non-forfeitable.
The HSA assets may not be used to purchase health insurance. However, there are certain exceptions.
The contributions must in the form of cash unless a certain rollover contribution is made. It will be permissible to roll over funds into an HSA from another HSA or an MSA.
The contributions for a given calendar year cannot exceed established limits.

Who is Eligible to Establish an HSA? An “eligible individual” can establish an HSA. An “eligible individual” is any individual who:

Is covered under a high-deductible health plan (HDHP) on the 1st day of such month;
Is not also covered by any other health plan that is not an HDHP (with certain exceptions for plans providing certain limited types of coverage).
Is not enrolled in Medicare.
May not be claimed as a dependent on another person’s tax return.

See us today to learn more about this money saving plan.