Financial FAQs

Understanding is half the battle.


Why should I offer a 401(k) to my employees?

Most importantly, it shows you care about their future. These types of benefits are especially important to millennials. Most companies already provide a 401(k) benefit, so you’ll be competing with these companies for good talent. Research shows that employees tend to stay longer if their company offers retirement benefits. And it will save you money on your taxes. You can deduct your employer contribution to your team’s 401(k). For small businesses with less than 100 employees, there is an additional credit for the first three years to offset the cost of administration fees.

If I still have a 401k account with my former employer can I have it transferred over to my IRA? If this is allowed, are there any penalties?

Yes, this is known as a trustee-to-trustee 401k rollover. All you have to do is request the distribution 401k rollover forms from your old employer. Once your former employer has given them to you then you can transfer your 401k to an IRA. There are no penalties for a trustee-to-trustee transfer. If the former employee sends the funds to you directly then there will be a deduction and 20% will be remitted to the IRS.


Do I need to have a Trust to use your investment service?

Many of our clients choose to use the trust arrangement because of the unique advantages it offers. However, you are not required to create a trust to use our investment services. If you prefer, you can sign an Investment Advisory Agreement with First Bank Richmond which allows us to act as your investment agent to manage your investment portfolio.

Can I make the investment decisions?

You may do so if you wish. However, most of our clients look to us for objective, unbiased portfolio advice and supervision because of the time or specialized knowledge required to do all of the necessary investment homework themselves. You have the option to delegate to us as much or as little investment responsibility as you want.

What kind of investment performance should I expect?

That depends on market conditions and your specific investment objectives. Historically, the average annual return from a balanced investment program of stocks and bonds is somewhere between 8 to 10 percent. However, performance is not measured solely in percentages. What is important is how well a trust investment program meets your goals without taking more risks than what you are comfortable with. At First Bank Richmond our goal is to provide reasonably consistent returns over time. We emphasize asset allocation, the selection of quality investments and constant vigilance.


What is a Trust?

A trust is an arrangement in which you transfer assets to a legal entity, the trust, created by a separate agreement. The trust will be administered by a trustee (a trust institution such as First Bank Richmond or an individual) for a beneficiary (yourself or another person).

What are the advantages of a Trust?

With a trust you will not only draw on our broad investment capabilities, but also arrange to have us perform any number of special services, now or in the future. These personalized services can even include providing full personal financial management in the event you suffer an incapacitating illness. Also, with a trust, you can name one or more beneficiaries to receive your assets at your death and avoid probate. Or, you can have your trust continue beyond your lifetime, serving as a source of continuing income and support for your spouse, a child or others whom you designate.

Is it difficult to set up a Trust?

No. You should start by discussing your financial and investment goals with us and with your attorney. Your attorney can prepare your trust agreement or you can use our form trust agreement document. You sign the trust agreement as creator of the trust, and we sign to indicate acceptance of the responsibilities that you give us as trustee. You deliver the money and/or the securities that you wish to place in the trust. It is that simple.

Do I have to give up control if I set up a Trust?

No. You do not have to give up control when you create a Revocable Living Trust. You keep as much control as you want. Typically, the creator of a Living Trust stays in control by retaining the power to do one of the following:

  • Take your business elsewhere by changing trustees 
  • Withdraw trust assets
  • Change instructions to the trustee by amending the trust agreement
  • Cancel the trust all together

How does the Trust avoid probate?

When someone dies, his or her will must be probated and proven valid. The process of settling an estate controlled by a will is referred to as “going through probate”. Because a Living Trust is a separate legal entity, assets that have been placed in the trust are not subject to probate when the creator of the trust dies. As a result, the directions contained in the trust agreement can be carried out without undue delays. Also, the terms of the Living Trust Agreement will remain private, unlike the terms of a person’s will which becomes public record once the will is probated.

Do I have enough money for a Trust?

Many people still mistakenly believe that trusts are only for the very wealthy. Here at First Bank Richmond, the majority of our customers do not classify themselves as wealthy, they do not have multi-million dollar trusts. Whether you just sold your business for a great deal of money, need to safeguard a retirement nest egg, or need assistance with your investments, you should consider our services.


Why do I need a Will?

A will outlines how your affairs are handled after your death. You may want to preserve your assets for your family and friends, and direct specific property or specific amounts of property to specific people. If you have minor children, you would want to designate a guardian for them. You may also want to minimize taxes and makes things as easy as possible for your family.

What does an Executor do?

Your executor is the person who is responsible for settling your estate. This means gathering together your assets, paying your debts and death taxes, and making distribution to your beneficiaries. The executor is responsible for keeping property insured, deciding what should be sold, investing cash, getting appraisals and filing income tax returns.

What happens if I die without a will and a trust?

With the exception of assets that will be passed to your beneficiary by designation or operation of law, your state’s probate laws will determine how your assets are distributed in the absence of a will. Many states have different rules related to the distribution of a deceased person’s assets when no will is presented for probate.

What is the difference between a will and a trust?

The main differences between a will and a trust are:

  •  Wills become effective after death. Some trusts are effective upon creation.
  • Wills direct who receives property upon death and appoint a legal representative to administer this process. A trust can distribute property prior to death.
  • Trusts cover only property in the trust. Wills cover anything owned by the person creating the will.
  • Wills are public record. Trusts are private.

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