Marital Deduction Trust Agreement

Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust

This Trust Agreement is made on between , of , hereinafter called the Trustor, and , a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as Trustee.

I. Trust Estate

Trustor transfers and delivers to Trustee all of the property described in Exhibit A, which is attached to and made part of this Trust Agreement by this reference. Said property comprising the Trust is hereinafter referred to as the Property. The receipt of the Property is hereby acknowledged by Trustee. The Property, together with any other property that may later become subject to this Trust, shall constitute the Trust Estate and shall be held, administered, and distributed by Trustee as provided in this Agreement.

II. Disposition during Trustor’s Lifetime

Trustee shall pay the net income from the Trust Estate to Trustor until Trustor's death. Trustee shall also pay to or for Trustor and Trustor's Wife so much of the Trust principal as Trustee deems necessary for the health, education, support, and maintenance of Trustor and Trustor's Wife during Trustor's lifetime.

III. Disposition on Trustor’s Death

A. Payment of Funeral Expenses and other Items. On the death of Trustor, Trustee may, in Trustee's absolute discretion, pay from either income or principal any unpaid debts of Trustor, taxes due prior to Trustor's death, expenses of Trustor's last illness, and funeral and burial expenses of Trustor, provided Trustor has not made other adequate provision for the payment of such debts and expenses. Without limiting the authority of Trustee, Trustee shall not be required to make any payments authorized in this Agreement unless a claim in a form satisfactory to Trustee is filed with Trustee within days after Trustor's death. After the expiration of the -day period, Trustee shall be fully protected in distributing the Trust Property in the manner otherwise provided in this Agreement.

B. Division of Trust. Trustee shall, on the death of Trustor, divide the Trust Property and any Property added to the Trust Property under Trustor's will, after payment of the debts and expenses authorized in Paragraph A above, into two Trusts designated as the Marital Trust and the residuary Trust. Each of the Trusts shall be separately held and administered on the following terms:

1. Marital Trust. If Trustor's Wife survives Trustor, the Marital Trust shall consist of all assets selected by Trustee from the Trust Estate which qualify for the Federal Estate tax Marital deduction, equal in value to an amount which, when added to the final Estate tax value of all other Property included in Trustor's gross Estate which passes to Trustor's Wife and which qualifies for the Federal Estate tax Marital deduction, will entitle Trustor's Estate to the minimum Federal Estate tax Marital deduction allowable in determining the Federal Estate tax payable by reason of Trustor's death, necessary to reduce Trustor's taxable Estate to an amount on which no Federal Estate tax is due and which allows the Federal unified credit available to Trustor's Estate to be fully used. Such allocation to the Marital Trust shall be made only after taking into consideration all other Property that passes or has passed to or in Trust for the benefit of Trustor's Wife other than under this provision of this Trust Agreement, that is included in the gross Estate of Trustor, and that qualifies in determining the Marital deduction for Federal Estate tax purposes. The Property selected shall be valued as is finally determined for Federal Estate tax purposes. The Marital Trust shall receive Property, including cash, that is fairly representative of appreciation or depreciation in the value of all Property thus available to satisfy this provision. Insofar as possible, the nature, character, and extent of the Property, its qualification for the Marital deduction, the value of Property included in the gross Estate, and any other fact required by the terms of this Agreement to be determined, shall be the same as finally determined for Federal Estate tax purposes in Trustor's taxable Estate. Trustee may conclusively rely on a written statement from Trustor's personal representative, or from legal counsel for such representative, stating that the Estate tax has been finally determined and as to all facts determined. Unless otherwise directed by Trustor's will, no part of the Estate, inheritance, and succession taxes chargeable to Trustee or the Trust Property by reason of Trustor's death shall be charged to the Marital Trust.

2. Residuary Trust. If Trustor's Wife survives Trustor, the Residuary Trust shall consist of all Property held under this Agreement other than that allocated to the Marital Trust. If Trustor's Wife does not survive Trustor, the Residuary Trust shall consist of all Property held under this Agreement. Unless otherwise directed by the Will of Trustor, all Estate, inheritance, and succession taxes chargeable to Trustee of the Trust Property by reason of Trustor's death shall be charged to and paid from the Residuary Trust.

IV. Distributions from Separate Trusts

A. Disposition during lifetime of Trustor's Wife. Trustee shall pay to or for the benefit of Trustor's Wife during his lifetime all of the net income of both the Marital Trust and the Residuary Trust in installments as selected by Trustee but not less frequently than annually. In addition to income, Trustee shall pay to or apply for Trustor's Wife so much of the principal of the Marital Trust as Trustee, in Trustee's absolute discretion, deems necessary for her reasonable support, education, maintenance, and health expenses during her lifetime. If the principal of the Marital Trust is exhausted, or in Trustee's absolute discretion may not be readily used for such purposes, Trustee may pay or apply so much of the principal of the Residuary Trust as Trustee deems necessary for those purposes. Trustee may, but need not, take into consideration any other income or Property available to Trustor's Wife. In exercising such discretion, Trustee may rely on a written statement of Trustor's Wife as to other Property or income available to her, but Trustee may act without regard to such statement. The discretion of Trustee shall be exercised liberally in favor of Trustor's Wife, it being Trustor's intention that she shall have, in addition to the necessities, a reasonable number of luxuries of life.

B. Termination on Death of Survivor of Trustor or Wife. The Trusts created by this Agreement shall terminate on the death of the survivor of Trustor and Trustor's Wife, and then:

1. Payment of funeral expenses and other items. Trustee may pay any unpaid expenses of the last illness, and the funeral and burial expenses, of Trustor's Wife unless Trustee, in Trustee's absolute discretion, determines that adequate Property is otherwise available in the Estate of Trustor's Wife from which to pay those expenses. Without limiting the authority of Trustee, Trustee shall not be required to make any payments authorized in this Agreement unless a claim in form satisfactory to Trustee is filed with Trustee within days after the death of Trustor's Wife. After the expiration of the -day period, Trustee shall be fully protected in distributing the Trust Property in the manner otherwise provided in this Agreement. The payments, if any, authorized in this Agreement shall be paid from the Residuary Trust, unless Trustor's Wife provides otherwise in her last Will.

2. Wife general power of appointment over Marital Trust. Trustee shall distribute all the Property in the Marital Trust to the persons and objects appointed by Trustor's Wife in her last Will, admitted to probate, and specifically referring to this Trust. The power of appointment is exercisable solely and absolutely by Trustor's Wife, and may be exercised in favor of her Estate or any persons or objects. Such appointment may be made absolutely or in Trust, to create future interests, joint tenancies, or undivided interests, or on condition or conditions, on such Estates, subject to such limitations, and in such shares or proportions as Trustor's Wife designates in her last will, admitted to probate and specifically referring to the power granted to her in this Agreement. Any Property of the Marital Trust that is not effectively appointed by the Will of Trustor's Wife shall be added to the Residuary Trust and distributed as provided in this Agreement.

3. Residuary Trust distribution. The Property of the Residuary Trust, including any portion of the Marital Trust added to the same, together with undisbursed income shall be divided into two equal shares. One share shall be distributed to my Heirs, and the other share shall be distributed to my Spouse's Heirs.

V. Revocation and Amendment

Trustor by an instrument in writing delivered to Trustee may modify, alter, revoke, or terminate this Agreement, in whole or in part, and may withdraw any Property subject to this Agreement. However, the duties, powers, and liabilities of Trustee shall not be substantially changed without Trustee's written consent, except as to revocation or withdrawal.

VI. Additions to Trust

In Trustee's discretion, Trustee may accept additions to the Trust from any source. Additions received after the death of Trustor shall be irrevocable. Unless otherwise specified in the instrument of transfer, additions shall be applied in equal portions to the Trusts under this Agreement, if there is then more than one Trust.

VII. Powers of Trustee

In administering each of the Trusts, Trustee shall have the following powers, to be exercised in a fiduciary capacity:

A. The Trustee shall have full power and authority to invest and reinvest the principal of the Trust in such manner and upon such terms and conditions as the Trustee may see fit; to sell, exchange, pledge, mortgage or otherwise dispose of any property, real or personal, originally or subsequently acquired; to retain and hold in unchanged form any property, real or personal, coming into its hands; to rent or lease any of the properties embraced within the Trust, upon such terms and conditions as the Trustee deems advisable; to make all determinations respecting division, allotments and distributions of income and principal to the Beneficiaries; to pay taxes of every kind existing against the Trust property; and to do all other acts which, in the judgment of the Trustee, may be necessary or appropriate for the proper and advantageous management, investment and distribution of the Trust estate to the same extent as though it were the sole owner of the Trust property. In addition, the Trustee shall have all of the powers granted by the "Uniform Trustees' Powers Law," being Sections () as now enacted or hereafter amended, reference to which statute is hereby made for all purposes.

B. Neither the principal nor the income of the Trust fund, nor any part of same, shall be liable for the debts of any Beneficiary hereunder, nor shall the same be subject to seizure by any creditor of any Beneficiary hereunder, and no Beneficiary hereunder shall have any power to sell, assign, transfer, or in any manner to anticipate or dispose of his or her interest in the Trust fund, or any part of same, or the income produced from said fund or any part of same.

C. The Trust hereinbefore created is a private Trust, and the Trustee shall not be required to obtain the order or approval of any court for the exercise of any power or discretion herein given. The Trustee is hereby authorized to receive and retain for its services in administering the Trust reasonable fees and compensation in accordance with that which is customarily and generally charged for performing Trust services of the nature involved in said Trust. The income of the Trust herein created shall accrue from the date of my death, and during the period of the administering of my estate, and until the Trust is established, I hereby authorize my Executrix, in her sole discretion, to pay at least annually out of my general estate to my wife, as Beneficiary of said Trust as advanced payment of income, such sums as in their judgment equal the income which my said wife would receive from said Trust had the same been established. The Trustee shall not be required to enter into any bond as Trustee, nor shall it be required to return to any court any periodic formal accounting of its administration of the Trust, but the Trustee shall render annual accounts to my said wife. No person paying money or delivering property to the Trustee shall be required to see to its application.

VIII. Powers Reserved By Trustor

So long as Trustor is living and is not under such a disability as renders Trustor incapable to properly manage his own Property, Trustee shall consult with Trustor at any reasonable time to obtain Trustor's written approval before Trustee exercises any of the powers set forth in Section VII. If Trustor withholds his approval of any proposal made by Trustee, notwithstanding the actual or anticipated effect on the Trust Estate, Trustee shall not be liable or accountable in any manner for failing to act in the absence of that approval. In determining whether Trustor is under such a disability as renders Trustor incapable to properly manage Property, Trustee may rely on any information believed by Trustee to be accurate. Trustee shall be fully protected for acts done by Trustee, or Trustee's failure to take any action, in good faith reliance on such information. Trustor shall also have the power, while living and competent, by an instrument in writing delivered to Trustee, to direct Trustee in the exercise of any of the powers set forth in Section VII. Trustee shall not be liable or accountable for complying with Trustor's directions.

IX. Minority or Incompetency

When any Beneficiary entitled to receive payments under this Agreement is a minor, or in the absolute judgment of Trustee is mentally or physically incompetent (irrespective of whether legally so adjudicated), Trustee may, in Trustee's discretion, expend or apply such payments for the benefit of the Beneficiary, or, in the case of a minor, may make such payments to the parent or parents or the legal guardian of the Beneficiary or to the person or persons with whom the Beneficiary then resides.

X. Disposition of Proceeds

The proceeds from the sale or transfer, other than a leasing, of any part of the Trust Property shall be allocated to the Trust principal. Bonds or other obligations bearing no stated interest shall constitute income, when sold or redeemed, to the extent of the profit realized by Trustee.

XI. Commingling and Dividing Assets

Except as to the Marital Trust, Trustee shall have the power, in Trustee's absolute discretion, to retain or invest in undivided interests and commingle Property of separate Trusts under this Agreement and shall not be required to physically segregate or apportion undivided interests to the Trust. Except as to the Marital Trust, in making a division or distribution of the Trust Estate, Trustee is authorized and empowered, in Trustee's absolute discretion, to make such division or distribution among the respective Trusts or Beneficiaries at such valuation as Trustee shall deem fit and proper, and in Trustee's absolute discretion may distribute the Trust Property in cash or in kind to the Beneficiary or Beneficiaries then entitled to receive any part, or all, of the Trust Estate. Trustee is further empowered to sell any portion or all of the Trust Estate, and to take such other steps as may be necessary or proper in Trustee's absolute discretion to effect any such division or distribution.

XII. Termination in Trustee’s Discretion

If the value of the Property held in any Trust at any time is less than , the Trust shall terminate. If, in the absolute discretion of Trustee, the value of a Trust is such that the administration of it is no longer economically desirable or the continuation of the Trust is no longer in the best interests of the Beneficiary or Beneficiaries, Trustee may terminate the Trust. On termination of the Trust as provided in this Agreement, Trustee shall distribute the Trust Property to the person or persons then entitled to receive the income from it in the proportion provided in the Trust.

XIII. Compensation of Trustee

Any 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 Will. No Trustee, whether original or successor, shall be required to furnish bond or other security, except as provided in this Will.

XIV. Resignation of Trustee

Trustee may at any time resign from any Trust created by this Agreement by depositing in the United States mail, postage prepaid, a notice of resignation addressed to the persons or person then entitled to receive income payments under this Agreement at the addresses of the persons or person last known to Trustee. The resignation shall take effect days after the date of mailing of the notice. On such resignation, Trustor, if living, shall appoint a successor Trustee. If Trustor is deceased, a majority of the legally competent Beneficiaries then entitled to receive income from the Trust Estate or shares of it shall have the power, by vote, to appoint a successor Trustee. Notice of such appointment shall be made in duplicate in writing, one copy to be delivered to the then Trustee and one copy to the successor Trustee.

XV. Spendthrift Provision

Except as otherwise expressly provided in this Agreement, all income or principal to be paid to any of the Beneficiaries shall be paid by Trustee directly, and only to the Beneficiaries, to the personal representative of any Beneficiary, or, where authorized, applied for the benefit of any Beneficiary. Trustee shall not recognize any transfer, mortgage, pledge, hypothecation, order, or assignment of any Beneficiary by way of anticipation of income or principal. The income and principal of any Trust under this Agreement shall not be subject to transfer by operation of law, and shall be exempt from the claims of creditors or other claimants, and from orders, decrees, levies, attachments, garnishments, executions, and other legal or equitable processes or proceedings to the fullest extent permissible by law. With the exception of the Marital Trust, if any creditor or other claimant attempts by any means to satisfy any claim of the creditor or claimant by a levy on the interest of any Beneficiary entitled to receive payments from income or principal, or both, then notwithstanding any other provisions such Beneficiary, during such subsequent time as Trustee in its absolute discretion deems advisable, shall not be entitled to receive payments from the Trust. However, during the time payments are so suspended, Trustee, in its absolute discretion, may pay to or expend for the benefit of the Beneficiary so much of the Trust net income as Trustee deems necessary for the support and education of the Beneficiary. Such payment or expenditure is to be made in accordance with the Beneficiary's station in life, but in no event is to exceed the amount the Beneficiary would otherwise receive pursuant to this Trust. All income determined by Trustee to be in excess of the amount necessary for such purposes shall be accumulated and added to Trust principal.

XVI. Transactions with Executor or with other Trustees

Trustee shall have the power to sell to or purchase Property from, and to borrow from or lend money to, the executor of Trustor's Estate or the Trustee of any other Trust created by Trustor, including any Trust under Trustor's will. Any such sales or purchases shall be made at the fair value of the Property as determined by Trustee and the executor, or by such other Trustees. Any such borrowings or loans may be made with or without security, and at such interest as executor and Trustee, or the other Trustees, determine proper. The powers authorized in this Agreement may be exercised although the executor and Trustee, or the other Trustees of two or more Trusts, may be the same.

XVII. Powers Inconsistent with Marital Deduction

Notwithstanding any provision in this Agreement to the contrary, none of the powers or discretions granted in this Agreement to Trustee shall be exercised in a manner inconsistent with the allowance of the full Federal Estate tax Marital deduction to which the Estate of Trustor would otherwise be entitled.

XVIII. Governing Law

This Agreement, its validity, and construction shall be administered in, and controlled by the laws of .

Witness our signatures this the day of , 20.

Witness our signatures .

(Acknowledgment form may vary by state)

State

County of

Personally appeared before me, the undersigned authority in and for the said county and state, on this day of , 20, within my jurisdiction, the within named, , as Trustor under the , who acknowledged that he executed the above and foregoing instrument for and on behalf of said Trust and as his act and deed.

My Commission expires:

State of

County of

Personally appeared before me, the undersigned authority and in for the said County and State, on this , within my jurisdiction, the within-named , who acknowledged that he executed the above and foregoing instrument.

My Commission Expires: