Irrevocable Trust for Lifetime Benefit of Trustor with Power of Invasion in Trustor
Trust agreement made __________________ (date) , between __________________
(Name of Trustor) of _____________________________________________ (street
address, city, county, state, zip code) , hereinafter called the Trustor,
and __________________ (Name of Trustee) , of
_____________________________________________ (street address, city, county,
state, zip code) , hereinafter called the Trustee .
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, Trustee and Trustor agree as follows:
I. Transfer in Trust. Trustor transfers and delivers to Trustee the property
described in Exhibit A, which is attached and incorporated by this reference. This
property, the receipt of which is acknowledged by Trustee, and all property later subject
to this Trust, shall constitute the Trust estate, and shall be held, managed,
administered, and distributed by Trustee as provided below.
II. Disposition of Income and Principal. Trustee shall hold, manage, invest, and
receive the Trust estate in the manner provided, shall collect the income, and shall
dispose of the net income and principal as follows:
A. During the life of Trustor, Trustee shall pay to Trustor, in monthly or other
convenient installments all of the net income from the Trust estate.
B. On the death of Trustor, Trustee may pay out of income or principal of the
Trust estate, at its discretion, the expenses of the last illness and funeral of
Trustor.
C. After the death of Trustor and payment of the expenses of Trustor's last
illness and funeral, Trustee shall dispose of the remaining principal and income
of the Trust estate in the following manner:
_______________________________________________________________
(Statement of provisions regarding disposition of remainder interests in Trust,
time of termination of Trust, and distribution on termination) .
III. Reserved Rights of Invasion. Trustor reserves the right at any time by written
notice to Trustee:
A. To withdraw from the principal of the Trust within each and any calendar
year cash or property not in excess of the sum or value of $ _______________ ,
provided that no such withdrawal shall diminish the value of the principal then
remaining below the total sum of $ _______________ .
B. On Trustee's consent, to withdraw from the principal of the Trust within
each and any calendar year, in addition to withdrawals made under Paragraph A
of this section, funds or property not in excess of the sum or value of
$ _______________ , provided that no withdrawal requiring Trustee's consent
shall diminish the value of the principal then remaining below the total sum of
$ _______________ .
C. Either or both of the powers that Trustor retains under this Section are to
be exercised only at Trustor's personal discretion, and not as powers to be
exercised by any other person, under any process of law for Trustor's benefit, or
for the benefit of Trustor's creditors by any other person or any court.
IV. Additions to Trust. Trustor, and any other person, shall have the right at any
time to add property acceptable to Trustee to this Trust. Such property, when received
and accepted by Trustee, shall become part of the Trust estate.
V. Irrevocability of Trust. This Trust shall be irrevocable and shall not be altered,
amended, revoked, or terminated by Trustor or any other person.
VI. Powers of Trustee. In the administration of this Trust, Trustee shall have the
following powers, in addition to but not in limitation of Trustee's common law and
statutory powers, such powers to be exercised in a fiduciary capacity in accordance with
the general standards of trust administration imposed on Trustees:
A. To receive and retain the initial Trust corpus and all other property which
may subsequently transfer to Trustee either during Trustor's lifetime, by will or
other testamentary disposition, or which any other person may subsequently
transfer to Trustee. Trustee shall receive all such property as part of the Trust
even though it may not be a legal investment for Trustee and even though the
property by reason of its character may not be an appropriate Trust investment
apart from this provision. Trustee is authorized to retain its own stock or other
securities or stock or securities of any affiliate or holding company which owns
Trustee.
B. To sell, exchange, give options on, partition, or otherwise dispose of any
property which Trustee may hold from time to time, at public or private sale, or
otherwise for cash or other consideration or on credit, and on any terms and for
any consideration as Trustee deems advisable; and to transfer and convey the
property free of all Trust.
C. To invest and reinvest in any property, real or personal, including, but not
limited to, securities of domestic and foreign corporations and investment Trusts,
bonds, preferred stocks, common stocks, option contracts, short sales,
mortgages and mortgage participations, even though the 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 the investment causes a greater proportion of the total Trust to be
invested in investments of one type or of one company than would be considered
appropriate for a fiduciary apart from this provision. The investment may be on a
cash or margin basis, and Trustee, for such purpose, may maintain and operate
cash or margin accounts with brokers, and may deliver and pledge securities
held or purchased by Trustee with the brokers both as security for loans and
advances made to Trustee and to insure the ability of Trustee to deliver stock
against short options. In addition, Trustee may purchase life insurance with Trust
assets only, even though it is non-income-producing. Trustee is authorized to
invest in any common fund, legal or discretionary, which may be operated by or
under the control of a corporate Trustee.
D. To make loans, secured or unsecured, in amounts, on terms, at rates of
interest, and to persons, Trusts, corporations or other parties, and to extend or
renew any existing indebtedness, as Trustee deems advisable.
E. To improve real estate, including the power to demolish buildings in whole
or in part and to erect new buildings; to lease (including leasing for oil, gas, and
minerals) real estate on any terms as Trustee deems advisable, including the
power to give leases for periods that extend beyond the duration of any Trust; to
foreclose, extend, assign, partially release, and discharge mortgages.
F. To collect, pay, contest, compromise, or abandon, on any terms and
evidence as Trustee deems advisable, any claims, including taxes, either in favor
of or against Trust property of Trustee; to abandon or surrender any property.
G. To employ brokers, banks, custodians, investment counsel, attorneys,
accountants, and other agents, and to delegate to them any duties, rights, and
powers of Trustee (including the right to vote shares of stock held by Trustee) for
any periods as Trustee deems advisable.
H. To hold and register securities in the name of a nominee with or without
the addition of words indicating the securities are held in a fiduciary capacity; to
hold and register securities in a securities depository or in any other form
convenient for Trustee.
I. To participate in any voting trust, merger, reorganization, consolidation, or
liquidation affecting Trust property and, in this connection, to deposit any Trust
property with or under the discretion of any protective committee and to
exchange any Trust property for other property.
J. To exercise any stock or other kind of option.
K. To keep Trust property in ________________________ (name of state) ,
or elsewhere, or with a depository or custodian.
L. To distribute the Trust estate in cash or in kind, or partly in cash and partly
in kind, as Trustee deems is advisable, to sell such property as Trustee shall
deem advisable for the purpose of making division or distribution, and for
purposes of distribution, to value the assets reasonably and in good faith as of
the date of distribution. The valuation shall be conclusive on all beneficiaries.
Trustee shall not be required to distribute a proportionate amount of each asset
to each beneficiary but may instead make non-pro rata distributions. In making a
distribution, Trustee may, but shall not be required to, take account of the
income-tax basis in relation to market value of assets distributed. Distribution
may be made directly to the beneficiary, to a legally appointed guardian, or
where permitted by law, to a custodian under any Uniform Transfers to Minors
Act, including a custodian selected by Trustee.
M. To deposit monies to be paid to a beneficiary who is a minor in any
demand savings bank or savings and loan account maintained in the sole name
of the minor and to accept and deposit a receipt as a full acquittance.
N. To accept the receipt of a minor as a full acquittance.
O. To borrow from anyone (including Trustee or any affiliate) in the name of
the Trust, to execute promissory notes and to secure obligations by mortgage or
pledge of Trust property, provided that Trustee shall not be personally liable and
that any such loan shall be payable out of Trust income or assets only.
P. To hold, manage, invest, and account for any separate Trust in one or
more consolidated funds, in whole or in part, as Trustee deems advisable. As to
each consolidated fund, the division into the various shares comprising the fund
need be made only on Trustee's books of account, in which each separate Trust
shall be allocated its proportionate share of the expenses. No such holding shall
defer any distribution.
Q. To carry, at the expense of the Trust, insurance of the kinds and in
amounts as Trustee deems advisable to protect the Trust estate and Trustee
personally against any hazard or liability.
Trustee shall not be required to diversify assets and is authorized to receive and retain
in the Trust any one or more securities or other property, whether or not the security or
other property shall constitute a larger share of the Trust than would be appropriate for
a fiduciary to receive and retain apart from this provision. With respect to all payments
of income and principal from this Trust to a minor, or any other person, including any
Trustor, under legal disability or to a person, including any Trustor, not adjudged
incompetent but who, by reason of illness or mental or physical disability, is, in the
opinion of Trustee, unable to properly administer such amounts, Trustee may retain all
or part of such income or principal and distribute all or part of the income or principal for
the suitable support, care, and maintenance of the person: (1) directly to the person; (2)
to the legally appointed guardian of the person; (3) to a custodian under any Uniform
Transfers to Minors Act where permitted by law; (4) to some person or persons having
the care of the person for his or her suitable support, maintenance, welfare, and
education; or (5) by direct application of such amounts for the suitable support,
maintenance, welfare, and education of the person, as Trustee deems advisable.
Trustee shall have the power to select a tax year and make, or refrain from making, all
other decisions and elections permitted under any applicable income, estate, or
inheritance tax law, including the imposition of a lien on Trust assets to secure tax
payments, without regard to the effect, if any, on any beneficiary of this Trust and, if any
such decision or election shall be made, to apportion or refrain from apportioning among
the respective interests of the beneficiaries of this Trust, all in a manner as Trustee shall
deem appropriate. If Trustee is responsible for preparing and filing a federal estate tax
return in Trustor's estate and determines there is uncertainty as to the inclusion of a
particular item of property in Trustor's gross estate for federal estate tax purposes, then
the property may, in the discretion of Trustee, be excluded from Trustor's gross estate in
Trustor's federal estate tax return. Similarly, if Trustee is responsible for preparing and
filing a federal estate tax return in Trustor's estate, then the decision of Trustee as to the
valuation date for federal estate tax purposes shall be conclusive on all concerned.
Trustor leaves to the discretion of Trustee the retention, continuance, sale, liquidation,
or other disposition of any business or business interest, partnership, corporate, or
otherwise, which may become an asset of this Trust. Trustee may take all steps Trustee
deems necessary or advisable in connection with any business or business interest and
shall be exempt from any liability for any loss for its acts or decision in good faith.
Trustee or any affiliate is authorized to lend money to or borrow money for the business
or business interests or to or for any corporation representing the same and to vote the
shares of stock in any such corporation as Trustee may in good faith determine to be
reasonable. Trustee shall have the discretion to elect the time and manner of payment
of all benefits payable to Trustee after Trustor's death from a qualified retirement plan or
any other source described in Section 2039 of the United States Internal Revenue
Code of 1986 , as amended, or any corresponding section of any future United States
law. During Trustor's lifetime Trustee is authorized to purchase and retain as an asset of
this Trust, or to receive from Trustor or any other person(s), United States Treasury
Bonds which may be redeemed at par for the payment of federal estate tax which is
expected to be imposed on Trustor's estate. Trustee is authorized to borrow funds for
the purpose of purchasing such bonds, and is authorized to secure any such borrowing
by a pledge of the bonds so purchased, or pledge of any other Trust assets, or by any
other security arrangement which Trustee determines to be feasible. The discretion
granted in this paragraph shall be freely exercised at any time or from time to time,
when information is received making it appear that such a tax will likely be imposed, that
the bonds are available to be acquired, and the circumstances are such that the
acquisition of the bonds and the proximity of their use would make their acquisition a
reasonable investment under the circumstances prevailing at the time of their
acquisition.
VII. Limitation on Powers. _________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Statement of provisions regarding general limitations on Trustee's powers so as to
exclude Trustor's retention of any taxable powers) .
VIII. Accounting. Trustee annually shall render an account of its administration of the
Trust to Trustor during Trustor's lifetime and subsequently to _____________________
(name of beneficiary) . Written approval of the person so entitled to an accounting shall,
as to all matters and transactions stated in the account or shown by it, be final and
binding on all persons, regardless of whether in being, who are then or may later
become interested in, or entitled to share in, either the income or the principal of the
Trust. However, nothing contained in this Section shall be deemed to give such person
acting in conjunction with Trustee the power to alter, amend, revoke, or terminate this
Trust.
IX. Death Taxes. Should any executor, administrator, or other person acting in a
fiduciary capacity pay death taxes levied or assessed under the provisions of any
federal or state inheritance, succession, or estate tax laws now existing or later enacted,
and should any or all of the Trust property be required under such provisions to be
included in the gross estate of Trustor, Trustee shall reimburse the executor,
administrator, or other person acting in a fiduciary capacity for that proportionate part of
the death taxes paid by reason of the inclusion of the Trust property in Trustor's gross
estate.
X. Allocation of Principal and Income. Trustee shall have the power to determine
whether any receipt is income or principal, or partly income and partly principal. Trustee
shall also have the power to determine whether any expense, charge, or loss is to offset
any item of income or principal, or partly income and partly principal.
XI. Compensation of Trustee. Trustee shall be entitled to reasonable
compensation from time to time for Trustee's ordinary services rendered under this
Agreement, for any extraordinary services performed by Trustee, and for all services in
connection with the termination of the Trust, either in whole or in part.
XII. Successor Trustees. If Trustee shall die, resign, or become incapacitated
during the term of this Trust, ________________________ (name of successor
Trustee) , of _____________________________________________ (address of
successor Trustee) , shall be the successor Trustee. The successor Trustee shall be
required to designate his or her own successor as Trustee when and if necessary.
Every successor Trustee shall have the same duties and powers as are assumed and
conferred in this agreement on Trustee, including the duty to appoint a successor
Trustee.
XIII. Trustee’s Bond. No bond shall be required of Trustee or of any successor
Trustee. If a bond is required by law, no surety shall be required on the bond.
XIV. Governing Law. This Agreement shall be governed by the laws of
________________________ (name of state) .
WITNESS our signatures as of the day and date first above stated.
_____________________________
(Signature of Trustor)
________________________
(Printed Name of Trustor)
_____________________________
(Signature of Trustee)
________________________
(Printed Name of Trustee)
(Acknowledgments) (Attachment of schedule)
