Similar to a personal agency account for managing financial assets, a farm agency relationship is often used for managing farmland and/or ranchland. The services performed by the Trust & Wealth Department in these situations may include tenant selection, lease negotiations, rental collection, property inspection, insurance evaluation (liability, property, crop/hail) and compliance with various government agricultural programs. A farm management agency may be particularly beneficial to non-resident or absentee land owners and those who do not wish to devote the time and attention that property management entails.
Personal Trust & Investment Services
Whether serving as your trustee today or stepping in as successor trustee when the time comes, First Western provides steady and experienced guidance to ensure your wishes are carried out with care and precision.
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.
Donor Advised Funds
A donor advised fund is a flexible charitable giving vehicle that allows you to make contributions, receive an immediate tax benefit, and recommend grants over time. First Western partners with you to manage the fund’s investments, helping your charitable dollars grow and maximize their long-term impact.
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 & Wealth 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
Trust & Wealth
Susan Richard
VP Trust Officer
Chad Erickson
Wealth Management Banker NMLS: 635145
Downloads & Resources
Frequently Asked Questions
1. What personal trust and investment services does First Western offer?
First Western’s Trust & Wealth Department manages a range of trust and agency arrangements, including living trusts, testamentary trusts, charitable trusts, and mineral trusts, along with managing-agent relationships for investment portfolios and farm or land management. The right vehicle depends on your goals, whether that’s avoiding probate, providing for family, supporting a charity, or simplifying portfolio management. A trust officer can help you and your advisors determine which arrangement fits your situation.
2. What is a living trust, and how does it help avoid probate?
A living trust is established during your lifetime and typically takes effect immediately. Because assets placed in the trust are owned by the trust rather than by you individually, they can avoid probate, the court process of validating a will. A living trust also provides professional asset management and can offer protection if you become disabled or incapacitated, a benefit a will alone cannot provide. While living trusts generally don’t create income tax savings, a properly structured agreement may help reduce or eliminate estate taxes.
3. How is a testamentary trust different from a living trust?
A testamentary trust is created under the terms of your Last Will and Testament and does not take effect until after your death. Unlike a living trust, it does not avoid probate, because it only becomes operative once the estate has been administered. Testamentary trusts are often used to provide asset management and income for a surviving spouse or other family members, can be drafted to achieve estate tax savings, and can help protect an inheritance from creditors’ claims.
4. What is a charitable remainder trust (CRT)?
A charitable remainder trust lets you provide income to yourself or another beneficiary now, with the remaining assets passing to a qualified charity later. CRTs come in two main forms: a Charitable Remainder Annuity Trust (CRAT), which pays a fixed dollar amount, and a Charitable Remainder Unitrust (CRUT), which pays a fixed percentage of the trust’s assets recalculated each year. Charitable gifts in trust can carry income and estate tax advantages, and our Trust Department works closely with your tax advisor to determine the form of gift that best meets your needs.
5. What is a mineral trust, and who is it for?
A mineral trust is used to manage and eventually distribute mineral interests, an arrangement that became increasingly popular with the development of the Bakken shale formation. It’s especially useful when there are multiple owners or when individual interests are small, because the interests are consolidated under one trustee rather than requiring energy companies to negotiate leases with each owner separately. The trust handles collection of rental income and royalty payments, supports proper income tax reporting, and keeps the interests out of probate. For dedicated oil, gas, and mineral management, see our Oil & Gas Management services.
6. Can First Western manage my investments without setting up a trust?
Yes. If you want professional portfolio management without the formalities of a trust, an agency relationship may be a good fit. As managing agent, the Trust & Wealth Department can consolidate multiple accounts into one portfolio, streamline recordkeeping and tax reporting, and buy and sell assets within the guidelines you set. Keep in mind that an agency account terminates upon your death, whereas a living or testamentary trust can continue to benefit others. Learn more on our Asset Investment Management page.
7. Does the Trust Department manage farmland and ranchland?
Yes. Through a farm agency relationship, the Trust & Wealth Department can handle the day-to-day work of managing farmland or ranchland, including tenant selection, lease negotiations, rental collection, property inspection, insurance evaluation, and compliance with government agricultural programs. This is often especially valuable for non-resident or absentee landowners. For more detail, visit our Farm Management page.
8. Are trust and investment assets FDIC insured?
No. Products offered through the Trust Department are not FDIC insured, carry no bank guarantee, and may lose value. This is different from deposit products at First Western Bank, such as checking, savings, CDs, and IRAs, which are FDIC insured up to the maximum allowed by law. A trust officer can walk you through how your assets are held and managed.
9. How do I get started with trust and investment services?
Contact our Trust & Wealth Department or visit a branch near you to discuss your goals, and we’ll work alongside your attorney and tax advisor to structure the right arrangement. Whether you’re planning your estate, supporting a charity, managing mineral interests, or simplifying investment management, a trust officer can help you choose the vehicle that fits.
Get Started Today
Ready to experience personalized banking that fits your life? Visit a branch near you or sign up for online banking today. We’re here to help you achieve your financial goals.