REVOCABLE
LIVING TRUST
(BY-PASS
TRUST FORM)
I
hereby transfer to _____________________________________ hereinafter called the
Trustee, the property set forth on Schedule A attached hereto and made a part
hereof, to be held IN TRUST, for the purposes and in accordance with the
provisions which follow:
ARTICLE I:
Lifetime Benefits
Prior to my death, my Trustee shall:
(1) pay over to me such part or all of the
income or principal of this trust as I may from time to time direct;
(2) pay or apply such part or all of the income
and principal of this trust as it may deem necessary to provide for the proper
support and maintenance of myself, my wife and my minor children and to provide
for any medical or other expenses that I, my wife or my minor children may
incur and
ARTICLE II:
Coordination with Probate Estate
Following
my death, my Trustee shall collect all property distributable to my Trustee as
a result of my death whether by will or otherwise. In the collection of proceeds payable under any life insurance
policies, payment to and receipt by the Trustee shall be a full discharge of
the liability of any insurance company, and any such company need not take
notice of this agreement or see to the application of any such payment by the
Trustee. All such property, together with all other
property constituting this trust (hereinafter referred to as the trust fund),
shall be held, managed and distributed as follows:
If
my probate estate (excluding the income thereof) has insufficient liquid assets
to pay my funeral expenses, claims against my estate, expenses of administering
my estate, death taxes chargeable to my estate and to satisfy all pre-residuary
devises under my will, my Trustee shall make available to my Executor, from the
trust fund, such sum or sums as my Executor in its sole discretion shall
determine to be necessary to satisfy such deficiency; provided my Trustee shall
not pay to or otherwise make available for the benefit of my estate or my
Executor life insurance proceeds, or any other assets, which would otherwise be
exempt from the claims of creditors.
My
Trustee shall pay out of principal those expenses connected with the
administration of the trust fund (including but not limited to the attorney's
fees and Trustee's commissions) incurred after my death.
ARTICLE III
SECTION
1: Allocation of Property to Trust
On
the death of Grantor, the trustee shall retain in Trust, the maximum amount of
property which Grantor could retain without payment of federal estate taxes
giving effect to the maximum unified credit available to Grantor as of the date
of Grantor's death. In allocating
property to be retained, the trustee shall give first consideration to any
property which would not qualify for the Estate Tax Marital Deduction.
In
addition to the property allocated above the trustee shall retain any property
which remains and which does not qualify for allocation to the Marital
Deduction. If, on the death of Grantor,
Grantor is not survived by a spouse then all of Grantor's property shall be
retained.
Any
residue of property not retained as hereinabove provided shall be distributed
to Grantor's spouse upon the death of the Grantor.
SECTION
2: Disposition of Income and Principal
After
the death of the Grantor, the Trust shall be held and disposed of, as follows:
Payment
of Income to Spouse. Commencing with
the death of the Grantor, the trustee shall pay the net income at least
quarterly to Grantor's surviving spouse for so long as the spouse survives.
Payment
of Principal to Spouse. The trustee
shall pay to Grantor's surviving spouse so much of the principal, as the
trustee, in the trustees sole discretion, from time-to-time believes desirable
for the spouses reasonable support, medical care, and education, taking into
account, however, other resources available to the spouse which are known to
the trustee; PROVIDED, HOWEVER, that no funds or property shall be expended by
the trustee under this provision to provide for any goods or services the means
for acquisition of which are available from other sources, including, but not
limited to, insurance or governmental benefits. Should two or more persons, whether individual or corporate,
serve as trustee, and Grantor's spouse serve as one of those trustees, the
decision to pay principal to Grantor's spouse shall be made by the trustee or
trustees other than Grantor's spouse, and without Grantor's spouse taking part
in that decision.
Surviving
Children. The trustee shall pay so much
or all of the net income and principal of this trust, even to its exhaustion,
to each child under age 21 (the termination
age) as required, in the judgment of the trustee to (1) provide
proper care and support, including housing, food, clothing, and medical and
dental expenses; (2) provide an education, including tuition, books, fees,
housing, board, spending money, travel, camp and including public or private
school, college, university, graduate, professional, or technical school,
during such time as the child shall pursue his or her education in good faith;
(3) provide funds for a wedding and other necessary social expenses; (4) meet
extraordinary or emergency expenses which arise through illness or other
misfortune; (5) pay expenses arising out of last illness and burial; or (6)
provide for the general welfare and well being. In making income and principal
distributions, the trustee may, but is not required to, consider any other
income or property available to a child from any other source (including any
self-help ability) known to the trustee. Net income not distributed shall be
accumulated and become part of the principal.
The trustee shall govern aid and assistance to a child with due regard
to the future financial requirements of Grantor’s other children under the
termination age, and for their support, care, and completion of their
education. It is Grantor’s intent that
Grantor’s children have equal opportunity but not that the trustee necessarily
expend equal dollar amounts on behalf of each child. A child's right to net income and principal, as provided above,
terminates when the child attains the termination age, PROVIDED, HOWEVER, that
the trustee may pay so much or all of the net income and principal of this
trust, even to its exhaustion, as required in the judgment of the trustee, to
(a) meet extraordinary or emergency expenses which arise through illness or
other misfortune of a child who has already attained the termination age, or
(b) provide a child with an education even though the child has already
attained the termination age if the trustee shall determine the child has been
unavoidably prevented (e.g., military draft, illness, or similar reason) from
taking advantage of education opportunities available to children under the
termination age. Any child who shall
receive any net income or principal under this provision shall not be required
to repay the same to this trust nor shall any such payment be set off against
the distributive share of the child.
Loans
to Children. The trustee may also make
loans to any child for any of the six (6) purposes specified above or for such
purposes as purchasing a home, starting a business, or other similar purposes
at any time, regardless of his or her age, provided all such loans shall be
made with due regard to the future financial requirements of Grantor’s other
children under the termination age for their support, care, and completion of
their education. All loans shall be
repaid as the trustee shall determine and may be secured or unsecured and with
or without interest.
Family
Home. In the event that the family home
of Grantor's children shall become an asset of this trust, the family home may
be retained for the benefit of all, some, or one of Grantor’s children at the
expense of the trust. In addition, the
trustee may provide financial assistance by outright grant (without obligation
for repayment), investment, loan, or otherwise, to the guardian or any other
person having the care and custody of Grantor’s children for the purpose of
providing funds for the purchase, expansion, alteration, or rental of living
accommodations for such children, it being Grantor’s intent to protect the
guardian or any other person having the care and custody of Grantor’s children
from any significant economic burden by reason of their appointment and to give
the trustee broad discretion in assisting the guardian or any other person
having the care and custody of Grantor’s children in providing living
accommodations for Grantor’s children.
Distribution
to Children. When the last of Grantor’s
children attains the termination age, or if all Grantor’s children have
attained the termination age at Grantor’s death, the trustee shall divide and
distribute all principal and undistributed net income of this trust into equal
shares, one for each child surviving, and one for each child, not surviving but
leaving a child of his or her own, share and share alike, per stripes and not
per capita.
SECTION
3: Death of Child
If
any child dies before complete distribution of that child's separate share and
leaves no descendants surviving, that child's share shall be divided into equal
shares for Grantor's remaining children and be continued in trust or
distributed as provided in this trust.
SECTION
4: Residuary Distribution
If, at any time following the creation of this trust,
Grantor and Grantor's spouse and issue should all die without having acquired
the rights to the immediate payment of all the property held in trust for them,
the trustee shall terminate this trust and pay all property held by the trustee
to my heirs at law.
ARTICLE IV:
Revocability
I
reserve the right to amend or revoke this agreement, without the consent of any
other person, by a writing signed by me and delivered to my Trustee; provided
that the duties, responsibilities and compensation of my Trustee shall not be
altered without my Trustee's written consent.
ARTICLE V:
Fiduciary Powers
I
grant my Trustee (including any successor Trustee) the authority and power to
exercise, in its sole discretion and without court order, in respect of any
property forming part of any trust created under this agreement or otherwise in
its possession hereunder, all powers conferred by law upon trustees, or
expressed in this agreement, and I intend that the powers so granted be
construed in the broadest possible manner.
In addition, my Trustee shall also have the power, authority and
discretion hereinafter set forth:
(1) Facility of Payments: To apply for the benefit of, or to the use
of, any person, any property (whether principal or income) vesting in or
payable to such person, without seeing to the application of the payments so
made and for which the receipt of the payee shall be full acquittance to my
Trustee.
(2) Non-Pro Rata Distribution: To make distributions under this agreement
(without the consent of any beneficiary) in cash or in specific property, real
or personal, or in undivided interests therein, or partly in cash and partly in
such property, and to do so without regard to the income tax basis of specific
property allocated to any beneficiary (including any trust) and without making
pro rata divisions of specific assets.
(3) Holdback Trusts: To withhold distribution of any property, whether principal or
income, vesting pursuant to the provisions of this agreement in any person who
is then under twenty-one (21) years of age and, if this power is exercised, the
continuing power to hold such property in trust for such person; to apply such
part of the income or principal therefrom at such times and in such amounts as
my Trustee shall deem requisite or desirable for the support and education of
such person; and to accumulate and add to trust principal all current income
not so applied until such person attains twenty-one (21) years of age, or shall
sooner die, whereupon the property then remaining in the trust shall be
distributed to such person or to the personal representative of such person's estate,
as the case may be.
(4) Elimination of Small Trusts: To terminate or not establish any trust
created or to be created under this agreement (other than a qualified
charitable remainder trust) whenever the total fair market value of the assets
of any such trust is so small that my Trustee's annual fee for administering
the trust would be the minimum annual fee set forth in my Trustee's regularly
published fee schedule then in effect, or whenever my Trustee determines it
would be contrary to the best interest of the beneficiaries by reason of
legislation or unforeseen changes or circumstances to create or continue such a
trust, in which event the property then constituting or receivable by such
trust shall be distributed to the beneficiaries then entitled to the income of
such trust. If the beneficiaries of
such income depend upon the exercise of my Trustee's discretion, then my
Trustee shall distribute such property among those beneficiaries and in such
proportions as my Trustee, in its sole discretion, shall determine, and its
determination shall be binding and conclusive upon all interested persons.
(5) Transactions Between Related Entities: To sell assets of any trust created under
this agreement to itself, as Executor or Trustee of any other trust or estate,
to the beneficiaries thereof or to any member of my family at the fair market
value thereof, and to purchase assets from any other such trust or estate, or
from the beneficiaries thereof, or from any member of my family for any trust
created under this agreement at the fair market value thereof; and, to the
extent allowed by law, to lend money to itself as Executor or Trustee of such
other trusts or estates, or to the beneficiaries thereof, or to any member of
my family at rates of interest and with security determined by my Trustee to be
adequate; providing I, my spouse, my parents or my descendants are the
respective grantor's or decedents of such other trusts or estates.
(6) Court Accounting and Bond Excused: My Trustee shall not be required to qualify,
to make or file any inventory, appraisal, account or report to any court or to
give bond (unless in each instance it is otherwise required to do so
notwithstanding this provision), but shall be required to furnish at least
annually to each current beneficiary a statement giving a summary of receipts
and disbursements during each accounting period and assets on hand at the end
of the accounting period. Such
accountings are deemed correct and are accepted if no notice to the contrary is
received within 90 days.
(7) Merger of Trusts: To merge the assets of any trust created under this agreement
(other than a trust qualifying for the marital deduction) with those of any
other trust, by whomsoever created, maintained for the same beneficiaries upon
substantially the same terms (even though the component trusts differ as to
contingent beneficiaries, in which case, if the contingency occurs, the funds
may be distributed in such shares as my Trustee, in its sole discretion, deems
necessary to create a fair ratio between the various sets of remaindermen);
provided, however, that property which would otherwise remain exempt from
generation-skipping taxes shall not be merged with any other trust.
(8) Retention of Trustee's Stock: To retain any shares of stock which I may
own at the time of my death in my Trustee or in the bank holding company of
which my Trustee is a subsidiary or any affiliate company, or in any successor
corporation to my Trustee or holding company; to exercise rights to purchase its
own stock or securities convertible into its own stock when offered pro rata to
stockholders and to purchase additional fractional shares to round out
fractional share holdings of its stock occasioned by such exercises or by the
receipt of a stock dividend.
(9) Withholding For Taxes: To withhold distribution of an amount of
property sufficient, in its judgment, to cover any liability that may be
imposed on my Trustee for estate or other taxes until such liability is finally
determined and paid.
(10) Investment of Cash: To invest and reinvest any income or proceeds from trust assets
in short-term investment funds or accounts pending instructions from me as to
the disposition or investment thereof.
(11) Provisions Regarding Holding and Management
of Real Property:
(a) To
deal with matters involving the actual or threatened contamination of trust
property (including interests in sole proprietorships, partnerships or
corporations and any assets owned by such business entities) by hazardous
substances, or involving compliance with environmental laws. In particular, my Trustee is empowered:
(i) To inspect any such property
periodically, as it deems necessary, to determine compliance with any
environmental law affecting such property, with all expenses of such inspection
and monitoring to be paid from the income or principal of the trust;
(ii) To respond (or take any other
action necessary to prevent, abate or clean up) as it shall deem necessary,
prior to or after the initiation of enforcement action by any governmental
body, to any actual or threatened violation of any environmental law affecting
any of such property, the cost of which shall be payable from trust assets;
(iii) To refuse to accept property as a
trust asset if it determines that such property is contaminated by any
hazardous substance or that such property is being used or has been used for
any activities directly or indirectly involving hazardous substances which
could result in liability to the trust or otherwise impair the value of trust
assets;
(iv) To settle or compromise at any time
any claim against this trust related to any such matter asserted by any
governmental body or private party;
(v) To disclaim any power which it
determines may cause it to incur personal liability as a result of such
matters, whether such power is set forth in this document, incorporated by
reference herein, or granted or implied by any statute or rule of law;
(vi) To decline to serve as Trustee or,
having undertaken to serve, resign at any time it believes there is or may be a
conflict between it in its fiduciary capacity and in its individual capacity
because of potential claims or liabilities which might be asserted against this
trust because of the type or condition of trust assets.
(b) My
Trustee shall not be personally liable to any beneficiary or other party
interested in this trust, or to any third parties, for any claim against the
trust for the diminution in value of trust property resulting from such
matters, including any reporting of or response to (1) the contamination of
trust property by hazardous substances, or (2) violations of environmental laws
related to my trust; provided that my Trustee shall not be excused from
liability for its own negligence or wrongful or willful acts;
(c) When
used in this document the term hazardous substance shall mean any substance
defined as hazardous or toxic or otherwise regulated by any federal, state or
local law, rule or regulation relating to the protection of the environment or
human health (environmental law);
(d) On
behalf of myself and my successors, heirs and assigns, I hereby indemnify and
hold harmless my Trustee from and against any and all claims, liabilities,
penalties and costs, including attorneys' fees, arising from any claim, demand,
order or other action related in any way to (1) the actual or threatened
contamination of trust property by any hazardous substance, or (2) the generation,
use, treatment, storage, disposal, release (actual or threatened) or discharge
on or from trust property or in connection with operations conducted on trust
property of any hazardous substance in violation of any environmental law.
(12) Renounce Powers: Following my death, to renounce, in whole or in part, any rights,
privileges, powers and immunities granted to my Trustee, whether such rights,
privileges, powers and immunities are granted under this agreement or conferred
by law, by executing and filing a written renunciation with the clerk of court
of the county in which proceedings have been commenced for the administration
of my estate. My Trustee's assumption
of duties as fiduciary shall not waive or bar my Trustee's right to renounce
any right, privilege, power or immunity.
(13) Income and Principal Apportionment: The Trustee shall have discretion to
determine whether items should be charged or credited to income or principal,
or be apportioned between income and principal, including the power to provide
or not to provide a reasonable reserve against depreciation, depletion or
obsolescence. The Trustee shall
exercise its discretion in such manner as it may reasonably deem equitable and
just under all the circumstances and regardless of whether such items are
charged or credited to or apportioned between income and principal as provided
in __________ Statutes.
Notwithstanding
any other provision of this agreement to the contrary, no power or authority
conferred by law or expressed or specifically incorporated in this agreement
shall be exercised in a manner which would cause any distribution hereunder for
the benefit of my spouse which would otherwise qualify for the federal estate
tax marital deduction to fail to qualify for such deduction. My spouse shall have the power to require my
Trustee to make productive any non-income producing property in any trust which
would otherwise qualify for the federal estate tax marital deduction, or to
convert such property into productive property within a reasonable period of
time.
ARTICLE VI:
Resignation
My
Trustee or any successor Trustee may resign during my lifetime by giving me
thirty (30) days notice in writing, whereupon I shall have the right to appoint
a successor Trustee. Delivery to the successor
Trustee or to me, if I do not appoint a successor Trustee, and proper
accounting for all property received and disbursed by my Trustee shall
discharge my Trustee from all responsibility and liability with respect to and
in connection with this trust.
After
my death my Trustee, or any successor Trustee, may resign as Trustee of any
trust being held under this agreement in a writing signed and acknowledged and
delivered to all current adult income beneficiaries of such trust, such
resignation to be effective upon a successor Trustee being appointed to act in
its place. No judicial proceeding shall
be necessary. A majority of the
beneficiaries entitled to receive such notice shall have the power to sign an
acknowledged writing delivered to the then acting Trustee appointing a
successor Trustee.
Any
successor corporate Trustee domiciled outside the State of __________________
and duly appointed hereunder, shall be authorized to remove any personal
property constituting the principal of such trust to the domicile of the
successor corporate Trustee; provided that the laws in the State of
________________________ shall continue to govern the rights of beneficiaries
in such property and the manner in which such trust is construed and
administered.
Any
successor Trustee is authorized and directed to accept from any prior Trustee
the assets delivered by such predecessor on the basis of the predecessor's
accounting for such assets without requiring an audit or other independent
accounting of the transactions, acts or omissions of such prior Trustee, and any
successor Trustee shall not have any duty, responsibility, obligation or
liability whatsoever for the acts or omissions of such prior Trustee.
ARTICLE VII:
Situs
This
agreement shall be construed and the trusts created by this agreement shall be
regulated and governed in accordance with the laws of the State of
______________.
ARTICLE VIII: Compensation of Fiduciary
As
compensation for its services hereunder, my Trustee shall receive the
commissions stipulated in its regularly adopted schedule of compensation in
effect and applicable at the time of the performance of such services.
ACCEPTANCE
CLAUSE
In
Witness Whereof, I do hereby sign and seal this instrument, and my Trustee in
executing same hereby acknowledges receipt of property set forth on Schedule A
and accepts the trust created hereunder and covenants to faithfully discharge
all duties of its office as Trustee, this _______ day of ____________ (month),
______ (year).
_______________________________________
(SEAL)
Name of Grantor
_______________________________________
(SEAL)
Trustee
