Fill and Sign the Children Trusts Form

Trust Agreement for Minors Qualifying for Annual Gift Tax Exclusion Multiple Trusts for Children Trust Agreement made on the ___ day of __________________, 20_____, between _________________________ and _____________________________ who both reside at ________________________________________________________________ (street address, city, county, state, zip code), the Grantors, and ______________________________ of _____________________________________________________________________________________ (street address, city, county, state, zip code), the Trustee.Whereas, the Grantors wish to establish irrevocable trusts for the sole benefit of their minor children, ________________________________________________________ (names), during their lifetime; and Whereas, the Grantors wish to convey to such Trusts certain properties they now own; and Whereas, the Trustee is willing to carry out the duties enumerated in this Agreement; Now, therefore, for and in consideration of the mutual covenants contained in this agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Grantors and the Trustee agree as follows: I.Identifications A.Grantors. Both __________________________ and __________________________ may be referred to collectively in this Agreement as the Grantor or as Grantors.B. Primary Beneficiaries. Whenever used in this Agreement, the term Primary Beneficiaries shall mean the following individuals: _______________________________ (name), a _________________ (male or female), born _____________ (date), and __________________________ (name), a _________________ (male or female), born ________________ (date).C. Trustee. ____________________________ of ____________________________________ _______________________________________________(street address, city, county, state, zip code), shall be the Trustee of all Trusts created in this Agreement.D. Trust Committee. The Trust Committee shall have the powers granted in Section IV of this Agreement (dealing with changes in Trustee). The initial Trust Committee shall consist of the following individuals: _________________________ (name), of _____________________________ __________________________________________________ (street address, city, county, state, zip code), and ________________________________ (name), of _____________________________________________________________________________ (street address, city, county, state, zip code). II.Establishment of Trusts; Disposition of Trust Property A. Establishment of Trusts for Grantors' Children. 1. General. The Grantors have conveyed to the Trustee the properties listed in Exhibit A, attached to and made a part of this Agreement for all purposes. The Trustee accepts such properties in trust under the terms and conditions of this Agreement. The trust so established may be referred to as the ___________________________________. 2. Division Into Separate Shares. The Trustee shall divide and partition the trust properties into shares of equal value, one share for each Primary Beneficiary. Each such share shall be held and administered as a separate trust for the benefit of a Primary Beneficiary. The names of the trusts shall be: ____________________________ (name of minor child, 20___), Present Interest Trust; and __________________________ (name of minor child, 20___), Present Interest Trust. Property subsequently transferred to the Trustee to be held in trust under this Agreement shall be allocated among the various trusts in accordance with the directions given in the instrument of transfer or, in the absence of such directions, as though such properties were among the original properties listed in Exhibit A. 3. Distributions of Income and Principal. The Trustee shall have the power, in its sole discretion, to accumulate all or part of the net income of each Trust or to distribute all or part of the income or principal of each Trust to or for the benefit of the Primary Beneficiary whose name designates that particular Trust for any reason deemed appropriate by the Trustee, including, but not limited to, distributions for the comfort and luxury of the Primary Beneficiary. B. Final Distributions of Each Trust. 1. Age. The Trust for each Primary Beneficiary shall continue until the Primary Beneficiary attains the age of _____ (e.g., 30) years or sooner dies, unless the Primary Beneficiary of such Trust, within _____ (e.g., 60) days after the date of his or her _____ (e.g., 21st ) birthday, delivers to the Trustee a written direction to the Trustee to distribute a specific portion or all of such Trust to the Primary Beneficiary. Any part of a Trust over which a Primary Beneficiary does not timely exercise the right conferred on him or her by the immediately preceding sentence shall continue in trust, as provided in this Agreement, and in such event: a. The net income earned by such Trust after the Primary Beneficiary attains the age of ____ (e.g., 21) years shall be distributed to or for the benefit of the Primary Beneficiary at least annually or at more frequent intervals; the Trustee also shall have the power to make such distributions of principal to or for the benefit of such Primary Beneficiary for any reason deemed appropriate by the Trustee; and b. When the Primary Beneficiary attains the age of ______ (e.g., 30) years, the Trust named for such Primary Beneficiary shall terminate and all principal and undistributed income remaining in such Trust shall be distributed to the Primary Beneficiary. 2. Premature Death. If a Primary Beneficiary dies before the termination of a Trust named in this Agreement for such Primary Beneficiary, the Trustee shall distribute the principal and undistributed income then remaining in the Trust to, or hold the same for the benefit of, such person or persons or the estate of the Primary Beneficiary, in such amounts and proportions, outright or upon such terms, trusts, conditions, and limitations as the Primary Beneficiary shall appoint by a will admitted to probate by a court of competent jurisdiction, provided that this general power of appointment is specifically referred to by the terms of such will. If a Primary Beneficiary dies and fails to fully and validly exercise this general testamentary power of appointment, then, upon the death of the Primary Beneficiary, the Trustee shall distribute the principal and undistributed income then- remaining in the Trust to the then-living descendants of the Primary Beneficiary who survive the Primary Beneficiary, per stirpes; but if the Primary Beneficiary has no descendants who survive the Primary Beneficiary, the Trustee shall distribute the principal and undistributed income then remaining in the Trust as follows: a. To the then-living descendants of the Grantors who survive the Primary Beneficiary, per stirpes; but the share allocable to any person then living for whom a Trust created in this Agreement is then still in existence shall be added to that Trust; however, b. If the Grantors have no descendants who survive the Primary Beneficiary, then to those persons who would inherit from the Primary Beneficiary in accordance with the laws of intestate distribution then in effect in the State of _______________, as if the Primary Beneficiary had died intestate at the date of termination of the Trust not survived by spouse and descendants and domiciled in the State of_______________________.3. Contingent Trust for Persons Less Than the Age of _____ (e.g., 25). Notwithstanding the preceding provisions of this Section II, this Subparagraph B(3) shall apply if any portion of the principal of any Trust created in this instrument would be distributable to a beneficiary (other than a Primary Beneficiary or an appointee of the Primary Beneficiary under a power of appointment) who has not reached his or her ______ (e.g., 25th) birthday and no other Trust is created in this instrument for that beneficiary. If the Trustee in its sole discretion so elects, that portion shall be retained by the Trustee as a separate Trust for the benefit of the beneficiary. Until the beneficiary reaches his or her ____ (e.g., 25th) birthday, the Trustee shall have the power to accumulate all or part of the income of that Trust or to distribute so much of the income and principal of that Trust to or for the benefit of the beneficiary as the Trustee, in its sole judgment and discretion, deems necessary for the education, maintenance, support, and health of the beneficiary. When the beneficiary reaches his or her ____ (e.g., 25th ) birthday, the Trustee shall distribute all of the then remaining principal and undistributed income of the Trust to the beneficiary. If the beneficiary dies before reaching his or her _____ (e.g., 25th ) birthday, the Trustee shall distribute the then-remaining principal and undistributed income of the Trust to the estate of the beneficiary. C. Payments to Incapacitated Person. During the minority or physical or mental incapacity of any person to whom principal or income of any Trust created in this Agreement may be paid (either during the term of a trust or upon final distribution of a trust), the Trustee may make such payment in any one or more of the following ways: 1. To such person directly;2. To the guardian, committee, conservator, or other similar official of such person; 3. To a relative of such person to be expended by such relative for the benefit of such person, including payment to such relative; 4. To a custodian under an applicable Uniform Transfers _______________ (or Gifts, if applicable) to Minors Act; or 5. By the Trustee expending the same directly for the benefit of such person. The Trustee's determination of the minority or incapacity of any such person shall be final, and the Trustee shall not be responsible for the application of any payment after said determination in accordance with the provisions of this Paragraph C.D. Spendthrift Clause. All trusts created in this instrument shall be Spendthrift Trusts.E. Undistributed Income Added to Principal. Any income of any Trust not distributed within the first _____ (e.g., 65) days following the end of the taxable year of that Trust shall be added to the principal of the Trust and administered as a part of such principal. III. Powers of Trustee A. Definition of Trustee; Distribution of Powers. The Trustee, whether one or more, whether male or female, whether individual or corporate, whether original, successor, or substitute, is called Trustee in this Agreement. Except as expressly provided otherwise, each Trustee shall have the same duties, powers, and discretions.B. General Powers. In the administration of any Trust established in this agreement, the Trustee shall have the powers set forth herein, which powers shall be exercised in a fiduciary capacity. All powers and discretions of the Trustee shall be exercised free of court supervision. C. Limitations on Powers. No powers of the Trustee enumerated in this Agreement now, or later conferred upon trustees generally, shall be construed to enable a Grantor to purchase, exchange, or otherwise deal with or dispose of all or any part of the principal or income of any Trust for less than an adequate consideration in money or money's worth, or to enable a Grantor to borrow all or any part of the principal or income of any Trust, directly or indirectly, without adequate interest or security. No person, other than the Trustee, shall have or exercise the power to vote or direct the voting of any stock or other securities of any Trust, to control the investment of any Trust either by directing investments or by vetoing proposed investments, or to reacquire or exchange any property of any Trust by substituting other property of an equivalent value. D. Liability of Trustee and Persons Dealing With Trustee. The liability of the Trustee and persons dealing with the Trustee shall be according to Section VIII herein. E. "Present Interest" Trusts . Anything to the contrary in this Agreement notwithstanding, the Grantors intend that the Trusts initially created in this Agreement shall meet the requirements of Section 2503(c) of the Internal Revenue Code. To that end, the powers and discretions of the Trustee in the administration of the Trusts created in this Agreement shall be exercisable only in a manner consistent with this intention. Moreover, each Primary Beneficiary shall have the power to compel the Trustee of the Trust for that Primary Beneficiary to dispose of assets that produce no income so as to acquire assets that do produce income.F. Release of Power by Amendment of Trusts. Any Trustee shall have the power and authority to amend the provisions of the Trusts in order to surrender, release, renounce, or disclaim any one or more of the discretionary powers given by this agreement to that Trustee. Any such amendment shall be made by written instrument acknowledged and filed in the county _________ (title) clerk's office of the Grantors' County. After any power has been so surrendered, released, renounced or disclaimed, it shall never again be exercised by that Trustee.G. Records; Inspection. The Trustee shall keep accurate and complete records of Trust transactions. Any beneficiary (or his or her representative authorized in writing) may inspect the records at any reasonable time.H. Annual Report. Upon written request by the beneficiary or his or her personal representative, the Trustee shall make an annual report in writing to any living beneficiary over the age of _______ (e.g., 21) years who could, in the discretion of the Trustee, receive any income or distribution from the Trust estate during that year. Such report shall be for a calendar or fiscal year beginning each year on a date selected by the Trustee as appropriate for this purpose and shall be submitted to such income beneficiary (or to the guardian, conservator, committee, or other like official of any incapacitated beneficiary) with reasonable promptness after the end of such period. Each report shall include a statement of all property on hand at the end of such year, all receipts and disbursements during such year, all sales and purchases made during such year, and of such other acts of the Trustee as may be necessary to furnish such beneficiary with adequate information as to the condition of the Trust estate. I. Compensation and Bond. The Trustee shall be entitled to reasonable fees commensurate with its duties and responsibilities, taking into account the value and nature of the Trust estate and the time and work involved. The Trustee shall be reimbursed for the reasonable costs and expenses incurred in connection with its fiduciary duties under this Agreement. No Trustee, whether original or successor, shall be required to furnish a bond or other security, except as expressly provided in this Agreement. IV.Irrevocability; Change in Trustee and Trust Committee A. Trusts Irrevocable. This Agreement and the Trusts created by it shall be irrevocable and shall not be altered, amended, revoked, or terminated, in whole or in part, by the Grantors.B. Renouncement of Interest by Grantors. Notwithstanding any other provision in this Agreement, no part of the principal or income of any Trust established in this Agreement shall ever revert to or be used for the satisfaction of legal obligations of either Grantor; and no income of any Trust established in this agreement shall be applied to the payment of premiums of insurance on the life of either Grantor without the prior written approval of the Primary Beneficiary if there is one, or, if not, all of the then income beneficiaries of such Trust. The Grantors renounce for themselves and their estates any interest, either vested or contingent, including any reversionary right or possibility of reverter, in the principal and income of the Trusts, and any power to determine or control, by alteration, amendment, revocation, termination, or otherwise, the beneficial enjoyment of the principal or income of the Trusts.C. Resignation of Trustee. Any Trustee may resign by filing a written instrument acknowledged of record in the __________________________________ (title) county clerk's office of the Grantors’ County, which filing shall deprive the resigning Trustee of all powers as Trustee under this Agreement on the effective date of the instrument or, if no effective date is stated, immediately; provided, nevertheless, that at least _____ (e.g., 30) days prior to such filing, the resigning Trustee shall give written notice of the resignation to those persons who could in the discretion of the Trustee receive income from the Trust estate and are at such time sui juris. No purchaser from or other person dealing with any Trustee is obligated to examine such public records in the county __________________________________ (title) clerk's office of the Grantors' County, and any such person shall be protected in all transactions with any Trustee whether or not any such resignation has taken place. If the Trustee shall resign, or otherwise cease or fail to serve, the Trust Committee shall appoint a successor Trustee in the manner set forth in the following paragraph. D.Removal of Trustee and Appointment of Successor by Trust Committee. The Trust Committee shall have the power to remove the Trustee named in this agreement and any successor Trustee. The Trust Committee also shall have the power to appoint successor Trustees but shall not have the power to appoint more than ______ (e.g., three) Trustees to serve at one time. If a Trustee expressly is appointed for administration of the Trust because the Trustee or Trustees otherwise serving are prohibited from exercising a power or performing an act, then the Trust Committee may limit that Trustee's powers to the power or act the exercise or performance of which is prohibited to the other Trustee or Trustees. The Trust Committee shall act in its sole discretion in taking any action authorized in this paragraph and shall act by a majority vote of the members then serving. Any successor Trustee appointed by the Trust Committee shall be either (a) any individual who is not a beneficiary of the Trust of which such individual is to be appointed Trustee (but not an individual listed in Subparagraph E(2) of this Section IV), or (b) any national or state bank, trust company, or other financial institution in the United States having trust powers and a capital and surplus of ____________________ (e.g., $10,000,000) or more. Such removal and appointment shall be by written instrument executed and acknowledged by a majority of the Trust Committee members then serving and by the successor Trustee and filed in the county ___________________________________ (title) clerk's office of the Grantors' County. A member of the Trust Committee or the successor Trustee shall promptly deliver a copy of such instrument to the Trustee then serving, which shall immediately deprive such Trustee of all powers as Trustee under this Agreement, except those powers appropriate to the administration of the Trust during the time required for the transfer of the Trust assets. No purchaser from, or other person dealing with, any Trustee is obligated to examine such public records, and any such person shall be protected in all transactions with any Trustee, whether or not any such replacement has taken place.E. Administration of Trust Committee. 1. Replacement of Members. If through any member's ceasing or failing to serve, the membership of the Trust Committee shall be reduced to less than _______ (e.g., three) individuals, the remaining members shall appoint by majority vote a sufficient number of persons to bring the total membership to ________ (e.g., three) individuals. Any person may be reappointed to serve as a member of the Trust Committee. 2. Limitations Regarding Committee Members. The following individuals shall be ineligible to serve as a member of the Trust Committee if the appointment of such an individual would result in the Trust Committee's having a membership more than half of whom are: a Grantor or any beneficiary; the spouse of a Grantor or of any beneficiary; the father, mother, lineal descendant, brother, or sister of a Grantor or of any beneficiary; an employee of a Grantor or of any beneficiary; an employee of a corporation in which the stockholdings of the Grantors, the Trust, and the beneficiaries of the Trust are significant from the viewpoint of voting control; an employee of a corporation in which a Grantor or any beneficiary of the Trust is an executive; a partner of a partnership in which the interest of the Grantors, the Trust, and the beneficiaries of the Trust are significant from the viewpoint of operating control or distributive share of partnership income; or an employee of a partnership in which a Grantor or any beneficiary of the Trust is a partner. 3. Fiduciary Capacity; Bond; Compensation. In carrying out its duties, the Trust Committee shall act in a fiduciary capacity, but shall not be required to furnish bond. Each member of the Trust Committee shall be entitled to reimbursement for any out-of-pocket expenses incurred in the performance of such member's duties. No member of the Trust Committee shall be entitled to compensation (if appropriate, add: unless such member is a licensed attorney or certified public accountant, and, in that event, such member shall be compensated for services on the basis of such member's customary charges for legal or accounting services).4. Limitation on Scope of Trust Committee's Powers. Anything in this Agreement to the contrary notwithstanding, neither the Trust Committee nor any member of it, as a member of the Trust Committee, shall have any power to establish or alter the beneficial enjoyment of principal or income of any Trust created or authorized in this Agreement. F. Powers and Duties of Successor Trustee. Upon the appointment and qualification of any successor Trustee, the same duties shall devolve upon, and the same rights, powers, authorities, privileges, and discretions shall inure to it as to the Trustee originally designated under this Agreement; and all rights, powers, authorities, privileges, and discretions shall be exercised without the supervision of any court. G. Reorganization of Corporate Trustee. If a corporate Trustee should, before or after qualification, change its name; be reorganized, merged, or consolidated with, or acquired by any other corporation; or be converted into or assign its trust functions to a different type of entity, the resulting entity shall be deemed a continuation of the former one and shall continue to act as Trustee or continue to be eligible to become a Trustee, as the case may be. V.Trustee Powers The Trustee shall have the following powers: A. Standard. To exercise all powers granted to trustees by the common law or any applicable statutes (as they exist at this date or are subsequently amended), to the extent they increase the powers granted to trustees. If, however, those powers are in conflict with the provisions of this instrument, the terms of this instrument shall prevail.B. Selection and Retention of Assets. To retain, without liability for loss or depreciation resulting from such retention, any property or undivided interests in property received from any source, including residential property, regardless of any lack of diversification, risk, or non-productivity, for such time as the Trustee shall deem advisable, and the Trustee shall be under no obligation to dispose of or convert any such property. Any investments made by the Trustee pursuant to the terms of this instrument need not be diversified, may be of a wasting nature, and may be made or retained with a view to possible increase in value. The Trustee, except as otherwise specifically provided in this Agreement, shall have as wide a latitude in the selection, retention, or making of investments as an individual would have in retaining or investing his or her own funds, and shall not be limited to, nor be bound or governed by, any rules of law, statutes, or regulations respecting investments by trustees. C. Sale or Disposition of Trust Property. To sell, exchange, give options upon, partition, convey, or otherwise dispose of, with or without covenants (including covenants of warranty of title), any property that may from time to time be or become a part of the Trust estate, at public or private sale or otherwise, for cash or other consideration, or on credit, and upon such terms and conditions as the Trustee shall think advisable, and to transfer and convey the same free of all Trusts.D. Investment of Trust Property. To invest and reinvest the Trust estate from time to time in any property, real, personal, or mixed, including (without limiting the generality of the foregoing language) securities of domestic and foreign corporations and investment trusts, bonds, preferred stocks, common stocks, mortgage participations, and interests in common trust funds, with complete discretion as to converting realty into personalty, or personality into realty, or otherwise changing the character of the Trust estate, even though such investment (by reason of its character, amount, proportion to the total Trust estate, or otherwise) would not be considered appropriate for a fiduciary apart from this provision, and even though such investment causes a greater proportion of the total Trust estate to be invested in investments of one type or of one business or company than would be considered appropriate for a fiduciary apart from this provision. E. Loans of Trust Property. To make loans, secured or unsecured, in such amounts, upon such terms, at such rates of interest, and to such persons, firms, or corporations as the Trustee shall think advisable. F. Acquisition of Non-Productive Property. Except as limited by other provisions of this Agreement, to acquire property returning no income or slight income, or to retain any such property, so long as the Trustee shall think fit, without the same being in any way chargeable with income, or the proceeds in case of sale or other disposition being in any part deemed income.G. Improving and Leasing Trust Property. To improve any real estate comprising a part of the Trust estate; to demolish any buildings in whole or in part; to erect buildings; to lease real estate or personal property on such terms and conditions and for such length of time [including ______ (e.g., 99) years or more] as the Trustee shall think fit, even though such lease may extend beyond the term of any Trust; to foreclose, extend, renew, assign, release, or partially release, and discharge mortgages or other liens, and to accumulate income for the purpose of doing so (except where the Trustee is required in this agreement to distribute income). H.Borrowing Money. To borrow money and to execute promissory notes for the same; to secure such obligations by mortgages or other liens or pledges of any property of the Trust estate; to make any type of purchase or contract, including installment contracts or credit arrangements, the effect of which is to borrow money; and to accumulate income for the purpose of repaying any indebtedness owed by the Trustee under this Agreement.I. Adjustment of Claims and Suits; Prepayment of Existing Mortgage. To prosecute or defend any suit; to compromise or arbitrate any claim (including a claim for taxes) and any litigation, either in favor of or against the Trust estate or the Trustee in its capacity under this Agreement; to pay claims upon such evidence as the Trustee shall think sufficient; and to prepay all or part of any mortgage.J. Employment of Agents. To employ such brokers, bank custodians, investment counsel, attorneys, and other agents or servants, and to delegate to them such duties, rights, and powers of the Trustee for such period as the Trustee shall think fit; and to pay such persons reasonable compensation out of the Trust estate, all regardless of whether any such person or entity is (or is a partner, employee, or employer of, or is owned by) a beneficiary or Trustee under this Agreement.K. Voting Securities; Reorganization. To vote, in person or by proxy, any stocks or other properties having voting rights; to enter into voting trusts and voting agreements; to exercise any options, rights, or privileges pertaining to any property in the Trust estate; to participate in any merger, reorganization, or consolidation affecting the Trust estate; and, in connection with the same, to take any action that an individual could take with respect to property owned outright by such individual, including the payment of expenses or assessments, the deposit of stock or property with a protective committee, the acceptance or retention of new securities or property, and the payment of such amounts of money as may seem advisable in connection with the same. L. Insurance. To insure any part of the Trust estate against such risks as the Trustee shall think fit, such insurance to be based on market values or costs, and the coverage to be full or partial as the Trustee shall think fit; to pay the premiums and to collect or adjust the losses; except as limited by other provisions of this Agreement, to acquire, hold, and pay premiums on insurance upon the life of any person or persons, and to exercise any and all rights to ownership of the insurance; and to purchase other types of insurance or annuities for any beneficiary; provided, however, all incidents of ownership with respect to any policies of insurance on the life of any Trustee shall be vested in and exercisable solely by another Trustee. M. Mineral Contracts and Sales. To execute and deliver oil, gas, and other mineral leases containing such unitization or pooling agreements and other provisions as the Trustee shall think fit; to execute mineral and royalty conveyances; to purchase leases, royalties, and any type of mineral interest; and to execute and deliver drilling contracts and other contracts, options, and other instruments necessary or desirable to participate actively in the oil, gas, or mining business. All of the foregoing may include such terms, conditions, agreements, covenants, provisions, or undertakings as the Trustee shall think fit. N. Corporations. To incorporate any property in the Trust estate; to convey any such property to a corporation for all or part of its capital stock or other securities (whether or not any Trustee is also a security holder, officer, director, or manager of such corporation in an individual, fiduciary, or other capacity); to dissolve such corporation or any other corporation, the securities of which comprise a part of the Trust estate; and to hold or dispose of, as a part of the Trust estate, any property so received upon such dissolution; all in such manner, at or for such times, and on such terms as the Trustee shall think fit. O. Partnerships. To enter into partnerships; to transfer any property in the Trust estate to one or more partnerships for interests in such partnerships; to act as a partner in any partnership or with respect to any property, any part of which may be or become part of the Trust estate originally or later; to so act as a partner with itself acting in an individual, fiduciary, or other capacity; to participate in the management of such partnerships; to dissolve any partnership in which the Trustee acts as a partner; and to hold or dispose of, as part of the Trust estate, any property received upon any such dissolution; all in such manner, at or for such times, and on such terms as the Trustee shall think fit.P. Businesses. To start or to enter into any business enterprise, or to continue to operate any business interest which becomes part of the Trust estate; to delegate all or part of the management of the business; to invest other funds of the Trust estate in the business; to convert such business from one form (e.g., proprietorship, partnership, corporation, etc.) to another; to enlarge, diminish, or change the scope or nature of the activities of any business; to authorize the participation and contribution by the business in any form of plan to benefit employees, whether or not the contributions qualify as being tax deductible; to use the general assets of the Trust estate for the purposes of the business; to invest additional capital in or make loans to such business, regardless of the speculative nature or non-productivity of such investment or loan, and without regard to diversification of investment; to endorse or guarantee on behalf of the Trust estate any loan or loans made to the business, and secure such loan or loans by pledge or mortgage of any property of the Trust estate; to employ such officers, managers, employees, or agents as the Trustee deems advisable in the management of the business, including electing or employing directors, officers, or employees of the Trustee to take part in the management of the business as directors or officers or otherwise, and to pay such person or persons reasonable compensation; and to rely upon the reports of certified public accountants as to the operations and financial condition of the business without independent investigation; all in such manner, at or for such times, and on such terms as the Trustee shall think fit (except where the Trustee is required to distribute income).Q.Special Farm Powers. To retain any farm or farm property received from any source, and to acquire and retain other such property; to engage in farm operations and the production, harvesting, and marketing of farm products, including livestock breeding and feeding and poultry and dairy farming, by operating directly with hired labor, by retaining farm managers or management agencies, by renting on shares or for cash, or in any other manner; to enter into farm programs; to purchase or rent farm machinery and equipment, livestock, poultry, seed and feed; to improve farm property and to repair, improve, and construct farm buildings, fences, and drainage facilities; to borrow money for any of these purposes; and in general to do all things customary or desirable in farm operations.R. Payment of Expenses and Taxes. To incur such expenses or charges in the management of the Trust estate as the Trustee shall think fit; to render the Trust estate for taxes if the Trustee shall think it desirable, or to refuse to do so if the Trustee shall think it undesirable; to pay taxes, charges, and governmental assessments against the Trust estate; and, in anticipation of such expenses, charges, taxes, and assessments, to set up such sinking funds or reserves as the Trustee shall think fit (except where the Trustee is required to distribute income).S. Reliance on Business Documents. To rely upon the authenticity of affidavits, certificates, opinions of counsel, letters, notices, faxes, e-mails, telegrams, cablegrams, and other methods of communication in general use and usually accepted in business as genuine and as what such documents or communications purport to be.T. Acceptance of Additional Property. Except as limited by other provisions of this agreement, the Trustee (1) may accept from any source any property acceptable to the Trustee to be held as part of any Trust under this agreement; and (2) is authorized (but not directed) to accept from the Executor, at the termination of the administration of any estate of which any Trust established in this Agreement may be the beneficiary, the assets delivered by the Executor to the Trustee on the basis of the estate accounting as submitted by the Executor, without requiring an audit or other independent accounting of the acts of such Executor. No Trustee under this Agreement shall have any duty, responsibility, obligation, or liability whatsoever for, or any duty, responsibility, obligation, or liability whatsoever for failure to rectify, the acts or omissions of the Executor.U. Powers Under Changed Conditions. To exercise such powers as may be necessary or desirable in the management and control of the Trust estate, whether or not such powers are of like kind or character to those enumerated in this instrument; and in particular to enable the Trustee to act under changed conditions, the exact nature of which cannot now be foreseen.V. Custody of Trust Estate; Nominees; Disbursement of Funds. To retain sole custody of the Trust estate; to keep any of the property of the Trust estate in any place or places in the State of or elsewhere in the United States or abroad, or with a depository or custodian at such place or places; to hold any of the securities or other property of the Trust estate for any length of time in the name of a nominee or nominees without mention of any Trust created in this Agreement in any instrument of ownership; to make all disbursements of the Trust funds without any counter-signature; and to make all reports, including tax returns, to any agency of the government, local, state, or federal. W. Execution of Documents. To execute and deliver agreements, assignments, bills of sale, contracts, deeds, leases, notes, powers of attorney, warranties, covenants, guaranties, receipts, releases, discharges, acquittances, and other papers or documents reasonably necessary or desirable to carry out the powers granted to a Trustee. X. Division Into Shares or Separate Trusts. To hold, manage, invest, and account for the several shares or separate Trusts that may be held in trust, either as separate funds or as a single fund, as the Trustee shall think fit; if as a single fund, to make division of the fund only upon the books of account, to allocate to each share or Trust its proportionate part of the principal and income of the single fund, and to charge against each share or Trust its proportionate part of the common expenses. Y. Occupancy of Trust Property. Except as limited by other provisions of this Agreement, to allow any beneficiary to use or occupy Trust property without payment of rent. VI.Additional Trust Powers The Trustee shall have the following additional powers, and, if a corporate Trustee is serving as Trustee, these powers shall be vested solely in the corporate Trustee: A. Certain Transactions With Beneficiaries and Others. To make loans (secured or unsecured), to buy property from, to sell property to, and to otherwise deal with: 1. Any trust beneficiary;2. The estate of any beneficiary (whether living or dead);3. Any trust created by or for the benefit of any beneficiary (whether living or dead) or for others;4. Any executor or trustee of any estate or trust, including the estate of the Grantor;5. Any executor or trustee acting in his individual capacity; or6. Any business or trust controlled by any beneficiary or trustee or of which any such beneficiary or trustee, or any director, officer, employee, or partner of any such beneficiary or trustee, is also a director, officer, employee, or partner. B. Apportionment of Income and Expenses. Where not otherwise clearly provided by law or otherwise set forth in this Agreement, to determine with finality, as to each sum of money or other thing of value held or received by any Trustee, whether and to what extent the same shall be deemed to be principal or to be income, and as to each charge or expense paid by the Trustee, whether and to what extent the same shall be charged against principal or against income, including, but not limited to, power to apportion any receipt or disbursement between principal and income and to determine what part, if any, of income is available for distribution according to the terms of this Agreement, and what part, if any, of the actual income received upon a wasting investment, or upon any security purchased or acquired at a premium, shall be returned and added to principal to prevent a diminution of principal upon exhaustion or maturity of the same; and to set up such reserves out of principal or income as the Trustee shall think fit. 1. Mineral Interests. As regards periodic payments for oil, gas, and other minerals physically severed, however, the following provisions shall apply: a.Definitions i) Gross Proceeds. Gross Proceeds shall mean the total amount payable, without deduction for any tax, expense, or other charge. ii)Net Proceeds. Net Proceeds shall mean Gross Proceeds, less, if and to the extent applicable, according to generally accepted accounting principles, all recurring taxes (except income taxes), depreciation on equipment, lifting costs, and other expenses usually chargeable to income, including intangible drilling and development costs, but excluding depletion. In a determination of Net Proceeds, the Trustee shall adopt such accounting periods, not longer than one year, as the Trustee may deem proper. iii)Receipts. Receipts shall mean the amounts actually received by the Trustee, whether Gross or Net Proceeds. iv)Interest. Interest shall mean each tract or property the title to which is evidenced by a separate conveyance, assignment, lease, or other instrument that establishes the legal right to receive monetary payments in connection with the same; provided, however, that if the title to two or more areas that are non-contiguous is derived from a single instrument, each of such areas shall constitute a separate interest. b. Allocations. Receipts from each interest, treated by the Trustee as a separate asset, shall be apportioned as follows: i)If a production payment is acquired by the Trustee by gratuitous conveyance or purchase, and at time of exists is producing, in commercial quantities, oil or gas from which the payment is or will be payable, to income, an amount equivalent to ___% of the Net Proceeds, and the balance to corpus, provided that if and when there shall have been so added to corpus an amount equivalent either to cost, if the payment was purchased by the Trustee, or to value at gratuitous acquisition, if so acquired, subsequent receipts shall be divided between corpus and income, equally. If the property, however, when the payment was acquired either gratuitously or by purchase, was not so producing, or if the payment was created by reservation by the Trustee, whether or not the property was then producing, to income, the equivalent of ____________________ (one-third or other fraction) of the Net Proceeds, and the balance, to corpus.ii) If, by virtue of a so-called net profits contract, apportionment shall be in such manner as the Trustee deems equitable.iii) If from any other interest in oil, gas, or other minerals, to corpus, an amount equivalent to (a) _______% of the Gross Proceeds limited to ___% of the Net Proceeds from a working interest, or (b) depletion based on cost, computed in accordance with generally accepted accounting principles, whichever is greater, and the balance, to income; provided, however, that if such apportionment is, in Trustee's opinion, substantially inequitable when compared with the net income from the entire corpus of the Trust, then to corpus an amount equal to _____________________ (one-half or other fraction) of the Net Proceeds derived from such asset, and to income, the balance.iv)Cash bonuses received upon execution of leases shall be (one-third or other fraction) to income and (two-thirds or other fraction) to corpus, and delay rentals, wholly income.v)Income, determined as provided above, shall bear all pertinent deductible charges enumerated in the above definition of Net Proceeds, whether paid or deducted by Trustee or others, and, in turn, income and corpus shall, respectively, bear all additional charges, if any, in the same manner as other income and corpus would bear similar charges. 2. Personal Property and Buildings. Whenever corpus includes tangible personal property used in or for the production of income or includes buildings, the Trustee is authorized to establish such depreciation reserves as the Trustee shall deem reasonable, the amounts for such reserves to be retained out of income and to be corpus.3. Allocation of Deductions. If the full deduction allowable by income tax law for depletion of oil, gas, and other minerals is less, in any tax period, than the amount that is to be treated as corpus under Subparagraph 1 above, the Trustee shall, in computing the tax payable by the trust, take the full allowable deduction, but if it be greater than the amount so to be treated as corpus, the Trustee shall claim the allowable deduction only to the extent of the amount so to be treated as corpus, and the balance of such allowable deduction shall be available to the income beneficiary or beneficiaries, in the manner provided by law, except that if such income is accumulated and added to corpus, the Trustee shall take the full deduction, and if part is so accumulated and part distributed, the excess deduction shall be apportioned between the Trustee and income beneficiary in the same proportions as such income shall be accumulated or distributed. The allowable tax deduction for depreciation shall be allocated or apportioned in a like manner, depending upon whether and to what extent depreciation reserves are maintained. This Subparagraph 3 shall apply only so long as present pertinent income tax laws remain substantially unchanged.4. Property Treated as Corpus. Corpus shall bear income taxes in respect of property treated as corpus for trust purposes, even though treated as income for tax purposes. C. Method of Distribution or Division. In dividing the Trust estate into separate shares or trusts, or in distributing the same, to divide or distribute in cash, in kind, or partly in cash and partly in kind, using different properties according to their value or undivided interests in the same properties, as the Trustee shall think fit; for any purpose, including division or distribution, to value the Trust estate or any part of it reasonably and in good faith, such valuation to be conclusive upon all parties.D. Termination of Small Trust. Notwithstanding any other provision of this Agreement, to terminate any separate Trust established by this agreement whenever in the Trustee's opinion such Trust is so small in value that the administration of the Trust no longer is economically advisable. In making this determination, the Trustee is requested to take into consideration the financial or special advantages to the beneficiary or beneficiaries of continuing the Trust estate. In the event of such termination, the Trustee shall distribute the remaining Trust assets to the then income beneficiary or beneficiaries, per stirpes. The Trustee's judgment shall be final and binding upon all interested parties, and distribution of Trust assets in any manner provided in this Agreement shall relieve the Trustee of any further responsibility with respect to such assets. In no event shall a beneficiary, while serving as a Trustee under this Agreement, exercise the discretion granted in this Paragraph D, such discretion being exercisable solely by another Trustee. E. Generation-Skipping Transfer Taxes and Payment. If the Trustee considers any distribution or termination of interest under this Agreement as a distribution or termination subject to a generation-skipping transfer tax, the Trustee is authorized: 1. To augment any taxable distribution by an amount that the Trustee estimates to be sufficient to pay such tax and charge the same to the particular Trust or share to which the tax relates without adjustment of the relative interests of the beneficiaries; 2. To pay such tax, in the case of a taxable termination, from the particular Trust or share to which the tax relates without adjustment of the relative interests of the beneficiaries. If such tax is imposed in part by reason of the Trust property under this agreement and in part by reason of other property, the Trustee shall pay only the portion of such tax that the Trustee determines in good faith to be attributable to the taxable termination under this Agreement, taking into consideration deductions, exemptions, credits, and other factors which the Trustee deems advisable; and3. Subject to the limitations of the Rule Against Perpetuities, to postpone final termination of any particular Trust and to withhold all or any portion of the Trust property until the Trustee is satisfied that the Trustee and the Trust no longer have any liability to pay any generation-skipping transfer tax with reference to the Trust or its termination. F. No Court Supervision. No Trustee shall be required to qualify before, be appointed by, or in the absence of breach of trust, account to, any court or obtain the order or approval of any court in the exercise of any power or discretion.G. Out-of-State Properties. If at any time any Trust estate shall consist in whole or in part of assets located in a jurisdiction in which the Trustee is not authorized or is unwilling to act, the Trustee may appoint an ancillary trustee for that jurisdiction and may confer upon such ancillary trustee such rights, powers, discretions, and duties to act solely with respect to such assets as the Trustee may deem appropriate. The ancillary trustee shall be answerable to the Trustee for all monies and other assets that may be received by it in connection with the administration of such property. The Trustee may pay to the ancillary trustee reasonable compensation for its services and may absolve it from any requirement that it furnish bond or other security.H. Merger of Trusts. If at any time the Trustee of any Trust created by this Agreement (this Trust) shall also be acting as Trustee of any other trust (other Trust ) for the benefit of the same beneficiary or beneficiaries and upon substantially the same terms and conditions, the Trustee is authorized and empowered, if in the Trustee's discretion such action is in the best interest of the beneficiary or beneficiaries of this Trust, to transfer and merge all of the assets then held in this Trust to and with such other Trust and to then terminate this Trust. The Trustee is further authorized to accept the assets of the other Trust which may be transferred to the Trustee of this Trust and to administer and distribute such assets in accordance with the provisions of this Agreement. I.Division of Trusts. The Grantors direct the Trustee to divide any Trust established by this instrument, without court approval, into two or more separate Trusts so that the generation-skipping transfer tax inclusion ratio as defined in Section 2642(a) of the Code with respect to each Trust after such division shall be either zero or one. Unless otherwise specifically provided in this Agreement, the respective amounts of any such division shall be made on the basis of the value of the assets on the date of such division. Any such separate Trust shall have identical provisions as the Trust so divided; provided, however, if any such separate Trust shall have an inclusion ratio of greater than zero, then upon the death of the Primary Beneficiary of such Trust, such Primary Beneficiary shall have the power to appoint the assets of his or her separate Trust to such Primary Beneficiary's estate, to such Primary Beneficiary's creditors, or to the creditors of such Primary Beneficiary's estate in addition to the other permissible appointees. If a Trust is divided into separate Trusts, the Trustee may (1) make different tax elections with respect to each separate Trust, (2) expend principal and exercise or not exercise any other discretionary powers with respect to each such separate Trust differently, (3) invest the property of each such separate Trust differently, and (4) take all other actions consistent with each such Trust being a separate entity. Further, the person holding any power of appointment with respect to a Trust so divided may exercise such power differently with respect to the separate Trusts created by the division. The Trustee is exonerated from any liability arising from any exercise or failure to exercise these powers, provided the actions (or inactions) of the Trustee are taken in good faith.J. Corporate Trustee. The powers and authorities granted to the Trustee shall not be limited by the fact that a Trustee is a trust company, bank, or financial institution, or a member of a group of affiliated entities under common control, and no Trustee shall be subject to limitations or restrictions imposed upon a trust company, bank, financial institution, bank holding company, or upon fiduciaries generally, with respect to the type of investment any such Trustee may make of its own funds or of the funds of others, including affiliated entities. Specifically (but not by way of limitation), the Trustee may (1) retain, acquire, or otherwise deal in the capital stock or other securities of a Trustee or of a corporation for which a Trustee is registrar, transfer agent, or affiliate of the Trustee, such as a holding company; (2) deposit Trust funds with a Trustee or an affiliate of the Trustee as a bank; and (3) contract or otherwise enter into transactions with a Trustee as a bank or any of its affiliates or any other Trust for which it is acting as Trustee. VII.Trustee’s Rights and Responsibilities Regarding Life Insurance A. All Rights Relinquished by Grantors. The Grantors may irrevocably assign, convey, transfer, and deliver to the Trustee, all right, title, and interest in and to any insurance policy, and the Grantors may cause the Trustee to be named owner and beneficiary of such policy. If any insurance policy so becomes part of any trust estate, the Grantors shall execute any and all instruments or documents necessary or appropriate to permit the Trustee to exercise all or any rights, powers, options, or privileges under such policies. B. Rights of Trustee in Insurance. With respect to any policies of insurance that are or may at any time become part of the trust estate, the Trustee at all times shall own all right, title, interest, and incidents of ownership in and to such insurance and shall have the sole and exclusive right under this Agreement to receive and exercise all payments, dividends, surrender values, options, rights, powers, privileges, interests, and benefits of every kind with respect to such insurance, including, but not limited to, the following: 1. The power to change any beneficiary; 2.The right to receive all disability benefits, dividends, payments, loan values, or surrender values; 3. The power to borrow on, surrender, or pledge any of the policies; and 4. The power to exercise any option, such as the power to convert to a different kind or amount of insurance, or the power to select the method of settlement of the proceeds. (Any insurance policies that at any time or from time to time compose part of the trust estate may be referred to in this agreement collectively as insurance.) C. Payment of Premiums. The Trustee may in its sole and absolute discretion determine whether or not to pay the premiums or other charges on any part or all of the insurance. If at any time the liquid assets of the Trust are insufficient or the Trustee determines not to pay such premiums or other charges on the insurance, the Trustee shall not be required to pay the premiums or other charges, and the Trustee shall not be liable for its failure to do so. However, in any such event, the Trustee may, in its sole and absolute discretion, pay the premiums or other charges, or any of them, and the Trustee may obtain the necessary funds for such payment in any of the following manners: 1. By selling at public or private sale, without notice to the Grantors or to the beneficiaries of the Trust or to other persons, a sufficient portion of the principal of the Trust; 2. By borrowing on the security of the principal of the Trust or on any of the insurance, including, by way of example only, by borrowing against the cash surrender value of any insurance;3. By applying the dividends of any of the insurance;4. By surrendering any of the policies of insurance for their cash surrender value; or5. By converting any policy of insurance on which premiums or other charges have not been paid into paid-up insurance pursuant to the terms of such policy of insurance. D. Collection of Insurance Proceeds. Upon the death of an insured, the Trustee shall take all necessary steps to collect the proceeds of the insurance, including double indemnity benefits, if they are payable. To facilitate the prompt collection of such proceeds, the Trustee shall furnish the necessary proofs of death to the respective insurance companies and is authorized and empowered to do any and all things that in such Trustee's sole and absolute discretion are necessary or appropriate to collect such proceeds, including, but not limited to, the following: 1. To execute and deliver to the respective insurance companies any releases, receipts, acquittances, or other necessary or appropriate instruments or documents to fully discharge any such insurance company's liabilities under such insurance. 2. To compromise, adjust, or settle any claim arising out of any insurance on such terms and conditions as the Trustee, in its sole and absolute discretion deems advisable.3. To bring suit upon any policy of insurance, the payment of which is ` contested by the insurer, and to pay the expenses of any such suit, including attorney fees, from the Trust estate or from any other insurance proceeds; provided, nevertheless, that the Trustee shall be under no obligation and duty to bring suit unless it is advisable in the opinion of counsel selected by the Trustee and unless the Trustee shall have either adequate funds with which to pay the expenses of such suit or indemnification to the Trustee's satisfaction against any loss, liability, or expense, that may be incurred in bringing such suit. E. No Tracing by Insurance Companies. No insurance company that has issued or shall issue any insurance shall have any obligation to inquire into the terms of this instrument or see to the application of the proceeds and benefits of any policy of insurance, and a receipt of the Trustee given to any such insurance company shall be effective to release such insurance company from any liability as the result of such policy or policies of insurance and shall be binding upon every beneficiary of the Trust.F. Trustee's Obligation to Collect. The Trustee, except for its own negligence or willful misconduct, shall not be liable to anyone for failure to collect all or any part of the proceeds of any policy of insurance, and the Trustee shall be responsible for the proceeds and benefits of such insurance only when collected by or paid to the Trustee. G. Application of Proceeds and Benefits. Proceeds and benefits of insurance collected by or paid to the Trustee shall be added to and become part of the principal of the Trust estate and shall be held, managed, invested, and reinvested as a part of the Trust estate. VIII.Liability of Trustee and Persons Dealing with Trustee A. Persons Dealing With Trustee. No purchaser from or other person dealing with the Trustee shall be responsible for the application of any purchase money or other thing of value paid or delivered to any Trustee, and the receipt by any Trustee shall be a full discharge. No purchaser from or other person dealing with any Trustee, and no issuer, transfer agent, or other agent of any issuer of any securities, to which any transaction with any Trustee shall relate shall be under any obligation to ascertain or inquire into the power of the Trustee to transfer, pledge, or otherwise in any manner dispose of or deal with any securities or other property comprising part of the Trust estate. B. Liability of Trustee. No Trustee shall be responsible or liable for any loss to the Trust estate that may occur by reason of depreciation in value of the properties at any time belonging to the Trust estate, nor for any other loss to the Trust estate that may occur, except that each Trustee shall be liable for its own negligence or willful misconduct.C. Liability of Trustee for Acts of Others. No Trustee shall be liable or responsible for the acts, omissions, or defaults of any agent or other person to whom duties may be properly delegated under this agreement (except officers or regular employees of any Trustee), if such agent or person was appointed with due care. No Trustee shall be liable or responsible for failure to contest the accounts of any other Trustee, or otherwise to compel any other Trustee to redress any breach of trust, unless requested in writing to do so by a beneficiary or a guardian or guardian ad litem of a beneficiary. No Trustee shall be liable or responsible for any act within the sole power and discretion of any other Trustee. D. Limitation of Personal Liability of Trustee. No Trustee acting in its fiduciary capacity under this Agreement shall incur any personal liability to any third party who deals with the Trustee in the administration of the Trust estate. Each Trustee shall be entitled to reimbursement from the Trust estate for any liability, whether in contract or in tort, incurred in the administration of the Trust estate in accordance with the provisions of this agreement. Each Trustee may contract in such form as to exempt the Trustee from such personal liability and to cause such liability to be limited to the Trust estate. No successor Trustee shall have any duty, responsibility, obligation or liability whatsoever for, or any duty, responsibility, obligation or liability whatsoever for failure to rectify, the acts or omissions of any predecessor Trustee.E. Reliance on Probated Will of Person Possessing Power of Appointment. Wherever in this Agreement a person is given a power of appointment by Will, the Trustee may rely upon an instrument admitted to probate in any jurisdiction as the last Will of the person possessing such power. If the Trustee has no written notice of the existence of such Will within a period of _________ (e.g., three) months after the death of the person possessing such power, the Trustee may presume that such person died intestate, and the Trustee shall be protected in acting in accordance with such presumption. This protection to the Trustee shall not limit or qualify any power of appointment or the rights of any person to pursue the property affected by the exercise of the power, irrespective of the place of probate or time of discovery of any such Will.F. Judgment and Discretion of Trustee Final. Wherever the judgment or discretion of any Trustee may be exercised, it shall be final and binding upon every person interested in the Trust estate. Any Trustee exercising any discretionary power relating to the distribution or accumulation of principal or income, or to the termination of any Trust, shall be responsible only for lack of good faith in the exercise of such power.IX.Definitions A. Code. All references in this agreement to the Code shall mean the Internal Revenue Code of 1986, as amended, and shall be deemed to refer to corresponding provisions of any subsequent federal tax law.B. Education. Whenever used in this Agreement, the term education shall include elementary, secondary, college, and postgraduate study or vocational training or study, so long as pursued to advantage by the beneficiary at an institution of the beneficiary's choice. In determining distributions for education, the Trustee may consider the beneficiary's reasonable living expenses.C. Grantors' County. Wherever used in this Agreement, the term Grantors' County shall mean __________________County, State of ___________________________. D. Issue and Descendants. Wherever used in this Agreement, the word issue or the word descendants shall mean legitimate descendants of whatever degree, including descendants both by blood and by adoption. For purposes of this Agreement, a person shall