IRREVOCABLE TRUST AGREEMENT
IRREVOCABLE TRUST AGREEMENT made ______________, 20____, 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 of 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, quarter annually, 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 issue of the beneficiary then
living per stirpes; but if there be no issue, then to the other
beneficiaries if living, either outright, or, if the other 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 the other beneficiary; but if the other beneficiary
is not then living, then absolutely to the then living issue
of the other beneficiary per stirpes; and if there is no issue,
then to the estate of the beneficiary for whom the trust was
being held originally. (c) Notwithstanding anything contained
to the contrary, if at any time while the trusts are in force
any financial emergency arises in the affairs of either of the
primary beneficiaries of the trusts, or if the independent income
of either 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 the 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, of 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 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
attorneys' fees, accountants' 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,
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. (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 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 parts of the corpus or income
of the trusts for less than an adequate consideration in money
or monies 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.
7. 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
either or both of 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 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 _________________.
________________________________________________
Grantor: [NAME]
________________________________________________
Trustee: [NAME]
