LIVING
TRUST
IRREVOCABLE
TRUST
TRUST
AGREEMENT made _______________ (Date), between _______________ (the
"Grantor"), and ________________ and __________________ (the
"Trustees").
1. TRUST PROPERTY. The Grantor, desiring to create trusts for the benefit of his
adult children and for other good and valuable consideration, irrevocably
assigned to the Trustees the property described in attached Schedule A (the
"Trust Property"), in trust, for the purposes and on the conditions
hereinafter stated.
2. DISPOSITIVE PROVISIONS. The Trustees shall hold the property for the
primary benefit of _______________________________________________________, and
the Trustees shall hold, manage, and invest the trust property, and shall
collect and receive the income, and after deducting all necessary expenses
incident to the administration of the trusts, shall dispose of the corpus and
income of the trusts as follows:
(a)
The Trustees shall pay the entire net income of the trust, quarterly, to
the beneficiaries of the trust, provided that there shall be paid over
absolutely to the beneficiaries at age _______ the corpus of the trust.
(b)
If any of the beneficiaries shall die before attaining the age of ______
years, the trust for his or her benefit shall cease, and the corpus, together
with any undistributed income, shall be paid over absolutely to the then living
issue of the beneficiary per stirpes; but if there be no issue, then to the
other beneficiaries if living, either outright, or, if any beneficiary shall
not have then attained the age of ____ years, in trust, to be added to, held,
administered, and distributed as part of the trust for such beneficiary; but if
no beneficiary is not then living, then absolutely to the then living issue of
the other beneficiaries per stirpes; and if there is no issue, then to the
estate of the beneficiaries for whom the trust was being held originally.
(c)
Notwithstanding anything contained herein to the contrary, if, at any
time, while the trusts are in force any financial emergency arises in the
affairs of any of the primary beneficiaries of the trusts, or if the
independent income of any of the beneficiaries (exclusive of the income from any
trust created for his or her benefit by the Grantor) and all other means of
support are insufficient for the support of such beneficiary, in the judgment
of the Trustees, the Trustees shall pay over to the beneficiary, solely out of
the corpus of the trust for his or her benefit, at any time and from time to
time, the sum or sums as the Trustees shall deem necessary or appropriate in
their discretion.
3. TRUSTEES' POWERS. In the administration of the trusts, the Trustees shall have the
following powers, all of which shall be exercised in the fiduciary capacity,
primarily in the interest of the beneficiaries:
(a)
To hold and continue to hold as an investment the property, or any
additional property which may be received by them, so long as they deem proper,
and to invest and reinvest in any securities or property, whether or not
income-producing, deemed by them to be for the best interest of the trusts and
the beneficiaries.
(b)
To rent or lease any property of the trusts for the time and upon the
terms and for the price or prices as in their discretion and judgment may seem
just and proper and for the best interest of the trusts and the beneficiaries.
(c)
To sell and convey any of the property of the trusts or any interest, or
to exchange it for other property, for the price or prices and upon the terms
as in their discretion and judgment may be deemed for the best interest of the
trusts and the beneficiaries.
(d)
To make all repairs and improvements at any time deemed necessary and
proper to and upon real property constituting a part of the trusts.
(e)
To deduct, retain, expend, and pay out of any money belonging to the
trusts and any and all necessary and proper expenses in connection with the
operation and conduct of the trusts.
(f)
To vote upon all securities belonging to the trusts, and to become a
party to any stockholders' agreements deemed advisable by them in connection
with the securities.
(g)
To consent to the reorganization, consolidation, merger, liquidation,
readjustment of, or other change in any corporation, company, or association.
(h)
To compromise, settle, arbitrate, or defend any claim or demand in favor
of or against the trusts.
(i)
To incur and pay the ordinary and necessary expenses of administration,
including (but not by way of limitation) reasonable attorney fees, accountant
fees, investment counsel fees, and the like.
(j)
To act through an agent or attorney-in-fact, by and under power of
attorney duly executed by the Trustees to the extent permitted by law, in
carrying out any of the authorized powers and duties.
(k)
To borrow money for any purposes of the trusts, or incidental to their
administration, upon their bond or promissory note as Trustees, and to secure
their repayment by mortgaging, creating a security interest in, or pledging or
otherwise encumbering any part or all of the property of the trusts.
(l)
To lend money to any person or persons upon the terms and in the ways
and with the security as they may deem advisable for the best interest of the
trusts and the beneficiaries.
(m)
To engage in business with the property of the trusts as sole
proprietor, or as a general or limited partner, with all the powers customarily
exercised by an individual so engaged in business, and to hold an undivided
interest in any property as tenant in common or as tenant in partnership, to
the extent permitted by law.
(n)
To determine the manner in which the expenses incidental to or in
connection with the administration of the trusts shall be apportioned as
between corpus and income.
(o)
The Trustees may freely act under all or any of the powers by this
Agreement given to them in all matters concerning the trusts, after forming
their judgment based upon all the circumstances of any particular situation as
to the wisest and best course to pursue in the interest of the trusts and the
beneficiaries, without the necessity of obtaining the consent or permission of
any interested person, or the consent or approval of any court.
The
powers granted to the Trustees may be exercised in whole or in part, from time
to time, and shall be deemed to be supplementary to and not exclusive of the
general powers of trustees pursuant to law, and shall include all powers
necessary to carry them into effect.
4. LIMITATION ON POWERS. Notwithstanding anything contained herein to
the contrary, no powers enumerated or accorded to trustees generally pursuant
to law shall be construed to enable the Grantor, or the Trustees or either of
them, or any other person, to sell, purchase, exchange, or otherwise deal with
or dispose of all or any part of the corpus or income of the trusts for less
than an adequate consideration in money or moneys worth, or to enable the
Grantor to borrow all or any part of the corpus or income of the trusts,
directly or indirectly, without adequate interest or security.
5. CORPUS AND INCOME. The Trustees shall have the power to determine the allocation of
receipts between corpus and income and to apportion extraordinary and share
dividends between corpus and income.
6. TRUSTEES' AUTHORITY AND THIRD PARTIES. No person purchasing, renting, or leasing
any of the property of the trusts, or in any manner dealing with the trusts or
with the Trustees, shall be required to inquire into the authority of the
Trustees to enter into any transaction, or to account for the application of
any money paid to the Trustees on any account.
17. ADDITIONAL PROPERTY. The Grantor reserves the right to himself or
to any other person at any time, by deed or will, to add to the corpus of
either or both of the trusts, and any property added shall be held,
administered, and distributed as part of the trust or trusts. The additional property shall be allocated
between the trusts in accordance with any directions given in the instrument of
transfer.
8.
ACCOUNTING BY TRUSTEES. The Trustees may render an accounting at any
time to the beneficiaries of the trust, and the written approval of a
beneficiary shall be final, binding, and conclusive upon all persons then or
thereafter interested in the trust for that beneficiary. The Trustees may at any time render a
judicial account of their proceedings for the trusts.
9. COMPENSATION OF TRUSTEES. The Trustees waive the payment of any
compensation for their services, but this waiver shall not apply to any successor
trustee who qualifies and acts under this Agreement except that no person who
adds to the corpus of either or both of the trusts shall ever be entitled to
any compensation.
10.
SUCCESSOR TRUSTEES. Either of the named Trustees shall have the power to
appoint his or her successor Trustee.
If either of the named Trustees shall die, resign, become incapacitated,
or refuse to act further as Trustee, without having appointed a successor
Trustee, the other named Trustee may, but shall not be required to, appoint a
successor Trustee. The appointment of a
successor Trustee shall be made by a duly acknowledged instrument delivered to
the primary beneficiaries and to the person, if any, then acting as Trustee.
11. BOND AND LIABILITY OF TRUSTEES. Neither of the two (2) named Trustees shall
be required to give any bond or other security. The Trustees shall not be liable for any mistake or error of
judgment in the administration of the trusts, except for willful misconduct, so
long as they continue to exercise their duties and powers in a fiduciary
capacity primarily in the interests of the beneficiaries.
12. IRREVOCABILITY. The trusts shall be irrevocable, and the Grantor expressly waives
all rights and powers, whether alone or in conjunction with others, and
regardless of when or from what source he may have acquired such rights or
powers, to alter, amend, revoke, or terminate the trusts, or any of the terms
of this Agreement, in whole or in part.
By this instrument the Grantor relinquishes absolutely and forever all
his possession or enjoyment of, or right to the income from, the trust
property, and all his right and power, whether alone or in conjunction with
others, to designate the persons who shall possess or enjoy the trust property,
or the income.
13. SITUS.
This trust has been executed and delivered in the State of _____________
and shall be construed and administered according to the laws of that state.
In
witness whereof the Grantor and the Trustees have executed this Agreement in
_________________________ (Place Of Execution).
______________________________
Grantor
______________________________
Trustee
