Personal Trust & Investment Services

Living Trust

A living trust, as the name implies, is established during the person’s lifetime and typically takes effect immediately. A properly drafted living trust document allows assets placed in the trust to avoid probate, the court process of validating a person’s will. A living trust provides comprehensive professional asset management, often relieving the creator of the trust from burdensome management details and responsibility. Another important advantage of a living trust is that it can offer protection in the event of the person’s prior disability or incapacity, which benefits are clearly not available with a will. While income tax savings are generally not associated with a living trust, a properly structured agreement may help reduce or eliminate estate taxes.

Testamentary Trust

A testamentary trust is one created under the terms of a person’s Last Will and Testament, and accordingly, does not take effect until the person’s demise. As such, a testamentary trust does not avoid probate, since it does not become operative until after administration of the estate has been completed. Testamentary trusts often provide asset management and income benefits for a surviving spouse, but may benefit other family members as well. Testamentary trusts can be drafted to achieve estate tax savings and are also good vehicles for protecting inheritances, as they can provide insulation from claims of creditors.

Charitable Trusts

The Trust Department actively manages charitable trust arrangements, the most common of which is the Charitable Remainder Trust (CRT). CRTs basically come in two forms: the Charitable Remainder Annuity Trust (CRAT), which pays a fixed dollar amount to the annuitant, and the Charitable Remainder Unitrust (CRUT), which pays a fixed percentage of the trust’s assets, determined each year. Upon the death of the annuitant (or if more than one, the death of the last survivor), the remaining assets in the trust are distributed to the qualified charitable organization(s). Charitable gifts in trust enjoy certain income and estate tax advantages, and we work closely with our clients’ tax advisors in determining the form of gift that best meets their individual needs.

Mineral Trusts

With the exploration and development of the Bakken shale formation, mineral trusts have become an increasingly popular vehicle to deal with the management and eventual disposition of mineral interests. Mineral trusts are particularly useful vehicles in situations where there are multiple owners and for those whose proportionate interests may be quite small. Absent a trust arrangement (where the interests are effectively consolidated and owned by one trustee), energy companies would be compelled to negotiate with each owner individually to execute an oil and gas lease. That process could be cumbersome and time consuming. A mineral trust alleviates those problems. It provides a mechanism for the collection of rental income and royalty production payments, and facilitates proper income tax reporting. Since the mineral interests are held in trust, they are not subject to probate upon death, and may continue in trust to benefit other family members.

Managing Agent for Investments

Many individuals desire assistance with managing their personal investment portfolios, but wish to do so without the formalities of a trust arrangement. An agency relationship is a good vehicle in these situations. It can consolidate multiple investment accounts into one portfolio, and streamline recordkeeping and income tax reporting. The Trust Department can serve as managing agent for the investment portfolio, and make investment purchases and sales of financial assets (stocks, bonds, mutual funds, CDs, etc.) within the guidelines established by the accountholder. An agency account must terminate upon the death of the client, whereas a living or testamentary trust may continue to benefit others beyond the death of the accountholder.

Farm / Land Management