Midland Trust Is Now an Employee-Owned Company

We Are Midland

Midland Financial Corp., the Florida holding company for Midland IRA Inc. and Midland Trust Company, has become an employee-owned company effective December 2019. Midland sold a percentage of its ownership interest to a newly created Employee Stock Ownership Trust, allowing current and future employees to gain a beneficial ownership interest in the company. This was made possible with the help of Atlantic Management Company, Inc., Horizon Bank and Trust, and SES ESOP Strategies.

Effectively, the ESOP is a qualified retirement plan which, based on company performance, could generate significant retirement benefits for our 60+ Employee Owners.

Commenting on the announcement, Dave Owens, President, and CEO of Midland, said, “Becoming an employee-owned company was a major decision for me. Midland has been in business for over 26 years. In 2002, we expanded into the Custodial IRA Industry and we have been extremely successful. I am very proud of the business our employees helped to create, and I believe this is a great opportunity to plan for the future and give the next generation the opportunity to expand the business.”

In addition to the ESOP, we will be launching our biggest campaign ever in our new Midland Mission. Our new mission, simplified, is “People Make Midland.”

Employees here at Midland are excited to be a part of this change. Kelsey Dineen, a Sales Director who has been with Midland for over ten years, states, “With the ESOP in place, we all stand to benefit from the fruits of our labor. Each day is a chance to help grow the company. If I succeed, the entire Midland team also benefits. It’s incredibly motivating from both a financial and psychological perspective. Job security was always an important item for me. I didn’t want to worry about corporate buy-outs or consolidation. With an ESOP in place, Midland can offer more stability as the entire staff is pulling together to guarantee the future of the company.”

NCEO’s (National Center for Employee Ownership) statistics show “Companies that have high-involvement, idea-generating cultures, generate an incremental 6% to 11% added growth per year over what their prior performance relative to their industries would have predicted.”

For Midland’s customers, not much will change. Midland is still under the same management and our customers will deal with the existing team here at Midland. However, this should give both our customers and employees an even stronger sense of security in Midland’s future.

For questions concerning Midland Trust becoming an employee-owned company, contact us at (239) 333-1032 or visit www.midlandtrust.com. For more information on ESOPs, you can visit www.nceo.org and www.esopassociation.org.

Options for Taking An RMD When Your Account is Illiquid

Options for Taking an RMD When Your Account Is Illiquid

2020 brings changes to the Required Minimum Distribution rules, such as anyone under 70.5 may now wait until they turn 72 to begin taking mandatory withdrawals from their pre-tax retirement plans. One thing that has not changed is the 50% penalty for not taking a timely RMD. As an IRA custodian that specializes in holding alternative investments, many of our clients hold illiquid assets. If you are a client that needs to take an RMD, but find yourself with insufficient cash in your account you still have options.

Plan Ahead

First, if you are new to self-directing your IRA, consider leaving sufficient cash reserves in your account when making an investment. Many alternative investments have related expenses that should be paid out of the undirected cash in your account, in addition to the administrative fees associated with managing your account.

If this is not an option then this next suggestion may be useful. Do you have another pre-tax retirement plan with cash or assets which can be easily liquidated? You are not required to draw your RMDs from each account that you hold; instead, you can take your entire RMD from another existing account that you hold.

Find An Alternate Route

If you do not have another plan to withdraw from then you may want to consider taking a non-cash, or In-Kind, distribution. For example, if your Midland account holds Real Estate, you can distribute a part of, or the entire title to, the property.

Here is a detailed example of this scenario:

Bob is required to withdraw $10,000 as an RMD. He holds real property in his IRA that is worth $50,000.00. Bob provides Midland with a certified appraisal to authenticate the property value and has a Quit Claim Deed prepared which will effectively change the title from sole ownership to tenants in common. The Quit Claim Deed will re-register 20% to Bob as an individual while the IRA retains 80% ownership of the property. Midland will report to the IRS on a 1099-R that Bob took a distribution in the amount of $10,000. Bob’s RMD will be satisfied.

Sell An Asset

Another option to consider is selling an asset. The proceeds from the sale will return to the IRA, tax-deferred, and only the amount withdrawn will become taxable.

Take the 50% Penalty

Finally, as a last option, an account holder may choose to not take the distribution. If an account holder opts out of taking an RMD the penalty is 50% of the amount not taken. Here is an example:

Susan is required to withdraw $3,000.00 as an RMD. The asset she is holding will be very costly to re-register, so she decides not to take an RMD. Susan will have to pay $1,500 to the IRS when she files her taxes for not taking her RMD. The asset will remain untouched in the IRA.

It’s Up To You

Ultimately, the way that assets are distributed is up to you. These are just a few examples of ways to distribute cash and assets from your account, but as always, you should consult with your CPA or tax advisor about your specific situation.

Midland offers an RMD Calculator to make this process easy for our clients. For questions or more information regarding RMDs, please contact Midland Trust at (239) 333-1032 or visit www.MidlandTrust.com.