• Professionals Prosper Working with Idaho Trust
• Charitable Giving Provides Personal, Social and Financial Rewards
• Affluenza—The Disease of Wealth
• Idaho Trust Finds Solution for Terminally Ill Client
• New Trustee Laws Impact Choices

Advisors Cite Referrals. Legal Acumen, and Innovative Trust Solutions

November 24, 2003 - Idaho Trust National Bank has excelled by including legal and accounting advisors in their clients' wealth planning and implementation. This gives clients the best possible advice - and service - available. But how do professionals benefit from getting involved?

Michael, an attorney who works with Idaho Trust clients, mentions the referrals the bank has brought him. When Idaho Trust has a new client they work with them to determine their needs. If they do not have their own legal advisor the bank will suggest an advisor that may be a good match. Mike also stresses the value of working with a trust bank that understands the legal issues of setting up complex financial plans.

Idaho Trust is a national bank established by former attorneys to meet the needs of attorneys, accounting professionals, and their clients. Idaho Trust contributes its deep understanding of investment, tax and legal principles - and the expertise to apply them in virtually any situation.

"There are several benefits of working with Idaho Trust," states Michael. "The service is impeccable but best of all they speak our language. I have direct access to the President, Tom Prohaska. He was a practicing attorney and understands the issues. When Idaho Trust comes to me with a client, they have already mapped out a customized solution based on the latest legal, tax and financial methods. You cannot find service like this at other trust banks."

Advisors who work with Idaho Trust also enjoy educational benefits. For example, Idaho Trust experts have written a white paper on the recent Tax Court decision known as STRANGI III. The document explains a new legal strategy to allow wealth advisors to restructure or create new estate plans that take advantage of FLPs (Family Limited Partnerships). This type of legal knowledge in the wealth arena is invaluable to estate attorneys and tax advisors.

"I am always thrilled when Idaho Trust calls me and says they have a possible client," explains Keith, an advisor who has received referrals. "They come to your office. They have done all the background thinking and document preparation. They know the legal aspects of wealth planning and preservation and they are fluid and innovative in coming up with unique, comprehensive solutions for each client."

The bank is committed to "high touch" service for their clients and advisors. Most trust banks that offer the same level of service require exceptionally high financial commitments. At Idaho Trust there are low account minimums and all clients receive the all-inclusive planning and attention.

Clients are demanding more from their advisors and their financial services overall. They are asking for services that supplement the traditional investment management offerings, such as legal help, accounting services, and specialty investment vehicles. Companies and services that integrate all the wealth needs of the client are in a winning role.

"Idaho Trust is helping to reshape my practice," concludes Keith. "Instead of setting up one-time transactions, I get to work with clients over time. The long-term relationship can transfer to business with heirs too. I am getting new clients and they are thrilled with the solutions and service they are getting. It is a pleasure to be part of a team that can really make a difference for our clients."

October 28, 2003 - Have you ever dreamed about making a difference in the world or in your community? Charitable giving can bring your aspirations to life and provide very solid financial benefits for your estate and heirs. There are several sophisticated methods you can use and with skilled financial advisors it is easy to get started.

According to the report, Giving USA 2003, US donations in 2002 totaled $240.92 billion. Eighty-seven percent, or $211 billion, came from individuals and private foundations.

More people are realizing that it does not take a fortune to set up a charitable foundation. New and recently established foundations represent an increasingly important force in charitable giving. In 2001 newly active foundations accounted for one-fifth the growth in giving.

The most recent statistics from the Foundation Center, states that in 2002 there were 61,800 foundations operating in the U.S with a total of $476.8 billion in assets.

Many believe in giving up to 10% of their annual income to charity. This dates back to the ancient practice of "tithing" or "voluntarily giving a tenth part of one's annual income; usually for the support of the clergy or church."

"Charitable giving is an important part of financial responsibility," states Benjamin Prohaska, Senior Trust Officer at Idaho Trust National Bank. "If we could all plan to give away 10% of our income, save 10%, and have the rest to cover our living needs the world would be a much better place!"

Benefits of Planned Giving
Donating money, property, stock, or other assets can work well with financial goals and ensure family security. Heirs can be protected and families united as they redirect their social capital.

Families interested in charitable giving can meet their financial goals by developing a comprehensive financial and estate plan. A good Wealth Plan can:

• Align your financial and personal values
• Avoid or reduce estate and capital gains taxes
• Leave a powerful legacy for your life's work
• Reduce income taxes
• Create a foundation to carry out your vision in perpetuity
• Use a Charitable Remainder Trust (CRT) to plan giving multiple gifts
• Increase retirement income with a NIMCRUT or other financial vehicle
• Reposition real estate, stock portfolios, and business assets so they are tax-free - allowing you and your beneficiaries (charities and heirs) to reinvest gains.

There are many ways to manage your estate while helping the world. One of Idaho Trust's clients formed a foundation to preserve Jazz as an American art form. The foundation's programs include:

• Funding musicians to create new art
• Artists in residence programs for music professionals
• Educational music festivals aimed at high school students
• Music scholarships
• Funding documentaries on Jazz history and performers
• Providing musical instruments to inner city children.

Another client formed a smaller foundation to focus on social issues close to home. Through anonymous gifting, assistance was given to a program for children who are victims of domestic violence. The gifts helped the struggling organization change the very fabric of the community in the small town where it operates.

If you are making large gifts you may prefer to do so anonymously. There are good reasons for such anonymity. You may want to protect your privacy or prevent "me too" requests from other organizations. Some believe that giving anonymously is a virtue, a higher form of charity. Conversely, there are good reasons for not giving anonymously. Your name on an organization's list of donors can sometimes extend your contribution, adding credibility to the organization among people who know and respect you. Others may contribute because you did.

What Motivates Giving?
There are multiple factors at play in charitable giving. Some generous donors are motivated purely by compassion, while others have altruistic motives combined with more personal reasons. Here are some of the most-common reasons people give:

Altruism
Many of us simply want to help other people, the environment, or a cause that moves us. Donations are a great way to help and show support.

Family Tradition
Some parents consider generosity and social responsibility to be important ethical values to teach their children, so they make giving a priority or create a financial plan around social goals.

Personal Interest
Many people give to causes that directly interest and affect them such as the local Girl Scouts chapter, a museum or a public radio station. Charitable contributions and financial plans that provide tax deductions also serve personal interest while helping others.

Memorials
haritable contributions are also given to memorialize someone before or after death.

Giving Back
Grateful for their good fortune in life, many people want to "give something back" in appreciation to a school or organization that helped them.

Charitable Giving Instruments
Setting up a charitable trust or foundation is a terrific way to give while maximizing your financial and tax goals. Your financial advisor, attorney or accountant can help you plan and create the ideal arrangement. The most common methods include:

Private Foundations
Foundations are separate institutions established and maintained by contributions. Oftentimes the foundation is created with a certain asset amount, which remains untouched. The goals, or mission, of the foundation are achieved with investment income from the assets. They can be created by families and be an effective estate planning technique. A foundation can focus on education, religion or any social good. People are setting up foundations with $500,000 or more to champion various causes. This is a good choice for people who want an institution committed to a cause for years to come.

Charitable Remainder Trusts (CRTs)
Charitable Remainder Trusts, also known as CRTs, were created with the tax reform act of 1969. A CRT is an irrevocable trust designed to convert an investor's highly appreciated assets into a lifetime income stream without generating estate and capital gains taxes. CRTs have become very popular in recent years.

When you establish a CRT, you or another beneficiary receives income from the trust for life or for a term of up to 20 years. When the trust ends, the remaining assets pass to the qualified charity or charities. This is a good choice for people who want to use their assets during their lifetime but do not need them posthumously.

"CRTs are often set up for parts of an estate that heirs may not need," explains Prohaska. "A recent example at Idaho Trust was a wealthy rancher whose children did not want the property. Nor did they need the revenue it would generate. He set up a CRT, which left the ranch to a Bird Sanctuary after his death. The property was able to pass to this charity tax free."

Charitable Lead Trusts (CLTs)
Charitable Lead Trusts, also known as CLTs, are the reverse of a CRT. They allow your assets to generate an income stream for the charity of your choice for the duration of your lifetime. Upon death the heirs receive the remaining estate. This is a good choice for people who want to support a cause during their lifetime but ultimately want the bulk of their estate to go to their heirs.

NIMCRUT
A Net Income with Makeup Charitable Remainder Trust (NIMCRUT) is a type of trust requiring that a fixed percentage the annual value of trust assets be credited to the income beneficiary, tax-free. If the payout is less than the percentage established at onset, deficiencies can be made up in later years when trust income exceeds the required set percentage amounts for such years.

Returns are averaged over time and the trust has some discretion on the timing of payouts. This can allow for the buildup of income. Best of all, highly appreciated assets can be sold within the trust without creating a taxable event. Proceeds are reinvested within the NIMCRUT. This is ideal for programs or institutions that can deal with varying levels of donation.

Getting Started
Clarity in goals is key to making your charitable plan successful. Experienced Trust Attorneys, accountants, and your financial planner can help you:

• Define your charitable goals
• Work with family to achieve consensus around your goals
• Design your plan to optimize tax and financial benefits.

"The number-one reason people seek help is that they want to do some good, but they don't know how to implement their charitable intentions," says Desiree Newsom, a trust officer at Idaho Trust. "A qualified advisor can explain all the available methods for giving to charity and see which one fits you best."

You should consider talking to Idaho Trust in any one of these situations:

• You want to donate real estate, retirement accounts, shares of a private company and other legally complicated assets
• You want to set up a foundation or NIMCRUT
• You want to set up a charitable remainder or lead trust
• You and your spouse have a conflict about your charitable giving goals.

Before talking to an advisor you may want to make a list of causes that are important to you and make sure that they are run properly. Give.org is one of many Web sites providing data on charitable organizations.

"Once you and your family are clear on your charitable goals talk to you financial advisors about your Wealth Plan," concludes Prohaska. "Institutions like Idaho Trust can recommend the best options and will work with your legal or account advisors to bring your vision to life in a way that makes financial sense."

September 30, 2003

What is the impact of wealth on heirs? Can wealth sometimes cause more problems than it seems to fix?

These questions are receiving increasing attention from members of the financial community and a developing area of psychology. In particular, these interested professionals are studying what has become known as: Affluenza.

Simply put, Affluenza is the "disease" of wealth. People have Affluenza when inherited wealth robs them of their incentive, they lack an entrepreneurial spirit or they do not build on the wealth that is inherited. It may also cause guilt or feelings of insecurity in those that have inherited large sums of money.

Affluenza is caused by not preparing an heir for wealth on both emotional and estate planning levels. It strikes even the best of families. But, it can be avoided with proper advance planning and putting the right advisors and structures in place to assist potential victims from Affluenza's impact.

Since 1994, Idaho Trust National Bank has offered a Wealth Counseling program to clients to address the emotional impacts of wealth. The Association of Independent Trust Companies has awarded Idaho Trust its annual Innovation Award for its pioneering work in the field of Affluenza. Wealth Counseling assists Idaho Trust clients with understanding wealth and its implications. Through this confide ntial program, clients may receive counsel in defining personal and family life goals and assistance in integrating these goals into investment objectives and a Wealth Plan. The impact of wealth on children, grandchildren and the generations to come is a common concern of Idaho Trust clients. As such, Wealth Counseling is an important component of the Total Solution provided by Idaho Trust National Bank.

As part of its Wealth Counseling services, Idaho Trust also provides Inheritance Planning to heirs who are expected to receive or have already received a large inheritance. This counsel can empower them with a comprehensive understanding of the responsibilities of wealth. Heirs do not necessarily have to know how much they will be inheriting but they should know how to be responsible stewards of the wealth passing to them.

The best vaccine, though, against Affluenza is good estate planning. Idaho Trust assists clients with estate planning by closely working with the existing advisors of clients or helping them select qualified professionals as they are needed. Idaho Trust can review existing wills, trusts, and business entities and its analysis considers a client's estate, gift, and income tax exposure as well as asset protection. Idaho Trust then recommends modifications and improvements to achieve client goals, including sophisticated estate planning strategies used by America's wealthiest families. All drafted and executed by the attorney of the client's choice.

The sound estate planning structures that result can contain such things as incentive provisions that encourage education or business achievement. The plan can place restrictions on the access or use of inherited wealth. It can also mandate the investment of the funds to ensure the long-term benefit of the inheritance for generations to come. All of these planning provisions minimize the effects of Affluenza.

Affluenza is a cousin to what has become known as "Sudden Wealth Syndrome" (SWS). SWS is most commonly experienced by individuals who win a lottery or receive some other unexpected financial windfall. Advanced planning is not possible in these cases. However, planning after the receipt of wealth is essential in these cases to minimize what can be catastrophic consequences to the lucky winner.

Whether it is Affluenza or SWS, Idaho Trust is poised to help combat these modern diseases of wealth.

July 30, 2003 - Idaho Trust National Bank recently undertook one of its more challenging cases. A client came to the bank with an unusual - and sad - set of circumstances. Meeting her needs drew upon many of the services offered at Idaho Trust, including development of a Wealth Plan, Wealth Counseling^SM, estate planning, acting as trustee, and establishing a private foundation for charitable giving.

According to the client, throughout the creation of a comprehensive, long-term solution the most valuable service has been Idaho Trust's commitment to personal attention.

The Client's Personal Challenge
Shelley is a woman in her 30s with terminal cancer. She lives in the mid-West and has two children who will not be legal adults for some time. Through an unexpected twist she is currently pregnant with a third child. The children do not all share the same fathers so they will be going to different guardians in the future. The current marital situation is breaking apart so Shelley's support network is tenuous. It is hard to imagine a more stressful and threatening situation.

Some time ago Shelley was granted a large sum of money in a medical malpractice suit involving her cancer. Things were complicated further when her personal injury attorney could not account for the funds after the trial had ended. Needless to say she was frightened and wary.

Through a personal reference she found a new attorney she could trust. They went back to court and were able to obtain the awarded funds from the attorney in question. The settlement is now in her possession and it is imperative that she plan and implement financial strategies for her children's' future.

The Idaho Trust Solution

TriVantage®
Shelley's Attorney recommended Idaho Trust National Bank for financial planning, investment, and trust solutions. After researching several investment and trust options Shelley took his recommendation. She was particularly attracted to the Bank's TriVantage program. With TriVantage, the client's legal or accounting professional stays involved - at no additional cost to the client - to assist in strategic planning and providing ongoing wealth advice. This is exactly what Shelley had in mind.

Wealth Plan
One of the first things Idaho Trust did was to create a Wealth Plan outlining the financial steps Shelley should take and results she could expect. Meeting with Shelley was difficult given her health and medical routines. When it was time to review the plan she was physically not up to coming into the office. Her Idaho Trust representative made arrangements to visit her instead and spend the day reviewing the plan together.

Shelley was immensely comforted to have a concrete plan she could make sense of. She mentioned struggling with the myriad of new financial concepts. The Wealth Plan, with its pictures and graphs, helped her understand the investment strategy. She came out of the meeting feeling confident that her intent had been well mapped.

Wealth Counseling^SM
The next objective was to provide Wealth Counseling to ensure that the family would be emotionally prepared to deal with wealth and its responsibilities. To start the process Idaho Trust will help develop a family mission statement, which identifies and puts on paper the values that matter to the family. This will serve as a road map for the attorney, Idaho Trust, and the family once Shelley is no longer able to provide instructions.

Creation of Trusts and Trustee Designation
With the help of Idaho Trust, irrevocable trusts have been established for each of the children. Moreover, Shelley has named the bank as trustee. Per her plans, the bank is to keep the trusts growing until the minors each turn age 25.

The trusts are to be available for well-planned disbursements such as health care, education, weddings or buying a home. This takes good judgment and thorough understanding of the client's wishes. Her primary intent is to have the respective fathers handle the bulk of each child's needs. As trustee, Idaho Trust must ensure disbursements are in line with Shelley's intents.

Charitable Giving
Shelley also wishes to put the money to work helping others with cancer. Idaho Trust is helping her explore options for the creation of a foundation for charitable giving. She wants this to be part of her legacy and something her children can be a part of when they are grown. As trustee, the bank's goal is to understand her intentions so it can make the correct arrangements for her vision to help others.

A Focus on Personal Relationships
Finding solutions for Shelley's needs took comprehensive planning by all participants. This was a monumental task given her situation. Shelley has found great relief in Idaho Trust's implementation of her estate solution. She can now focus on her health, and has learned firsthand that Idaho Trust always puts their clients' best interests first.

Working with Idaho Trust, Shelley has accomplished all her goals: providing for her children, leaving a charitable legacy, and finding the peace of mind that she needs to battle illness.

So you want to create a trust for your child's education or to pass along your wealth to the next generation? Who should you name as the trustee? For many Americans the first choice is a relative that they think they can count on. In fact, using a family member as trustee has been common practice for a long time.

All of this may start to change with the introduction of new laws. There has been little change in the rules of trust management over the last century but a series of new state laws has greatly increased the financial and investment responsibilities of trustees.

Trustees will now be legally responsible for handling the funds of a Trust in a more sophisticated way - specifically by providing a diversified portfolio that mitigates risk. Trustees could also face more liability if something goes horribly wrong with the portfolio under their management.

The new laws have not only increased the responsibilities of trustees, but their flexibility as well. In the past trustees largely dispersed income from the trust. Now, in many states they have more discretion to pay beneficiaries with principal (the actual assets placed in the trust).

Given the new complexity and liabilities of acting as trustee, many people are starting to turn to professional investment and trust management firms instead. Here are some of the attendant benefits:

• The respectful objectivity of trustees that carry out the founders wishes
• Keeping the peace by preventing disputes between co-trustees or relatives
• Comprehensive advice through firms that work with or provide legal and accounting services
• Increased professionalism thanks to seasoned investment managers.

Some balk at the idea of having to pay fees to a firm that acts as trustee and manages their money. However, choosing a family trustee is not necessarily cheaper than relying on a bank or trust company. Many states set fees for trustees by statute. A family member might act as trustee without stipend but unless they are skilled investors you may still need to pay for professional advice to handle tax and investment issues.

Each person has unique family, investment and business considerations. In addition, trusts last for one or more generations. These factors make selecting the best trustee a critical issue. Only a careful decision will ensure the best possible management of your funds.

Here are some questions and issues to consider when choosing a trustee:

Will your trustee be available and accessible during the entire term of the trust?

How does the trustees track record compare to that of their peers? What are the resources available for investing your money?

Will the trustee work with your other trusted advisors, such as your attorney, to look out for your best interests? Will it cost your trustee or you more money to have other trusted advisors involved?

Does your trustee understand the accounting procedures, rules, compliance requirements, taxes and planning opportunities that may apply to your trust?

Will your trustee be flexible enough to accommodate the special needs of your family?

Does your trustee have the ability to administer your trust impartially, without bending to beneficiary demands and pressures?

If you own a business, does your trustee have experience running a business? How would your trustee dispose of it?

How will your trustee prepare accounting and report information to you or your beneficiaries?

Idaho Trust, a private national trust bank, specializes in multi-generational trust services. The bank encourages clients to use their TriVantage service when setting up trusts and choosing a trustee. With TriVantage, the client's legal or accounting professional stays involved - at no additional cost to the client - to assist in strategic planning and provide ongoing wealth counsel. The bank also provides Wealth Counseling to ensure that families are communicating and understand the wishes of a trust's founder.

Thomas Prohaska, the Founder and President of Idaho Trust, recommends that families consider using an outside trustee. He underscores that during times of grief and stress hard feelings can arise for families around wealth and its distribution. As an unbiased third party, a corporate trustee such as Idaho Trust can speak and act from the perspective of the deceased spouse, parent or family member and can clarify wishes and direction. Ultimately this may be the most loving thing that can be done for a family during a sensitive time.