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Irrevocable Discretionary Trust
(With Crummey Powers)
I, [name], of [city, county, state] make this Trust Agreement dated
---------, 20-- with [name] ("my Trustee").
CREATION AND DISPOSITION OF TRUST
1. Creation of Trust. I have transferred to my Trustee the
assets listed on the attached Schedule. My Trustee shall hold all
assets received in trust under the terms of this Agreement. The
Beneficiary of the trust is [name].
2. Trust Until Age ----------. Until the Beneficiary reaches
age ----------, and subject to the provisions of Article Ill, my Trustee
may pay to or for the benefit of the Beneficiary as much of the net
income or principal of the trust as my Trustee may deem necessary for
the Beneficiary's support, health, and education. My Trustee may pay
principal while income is accumulated, and shall annually add any
undistributed income to principal.
3. Termination. When the Beneficiary reaches age --, my
Trustee shall distribute the principal and any undistributed income to
4. Limited Power of Appointment. If the Beneficiary dies
before reaching age --, my Trustee shall distribute the principal and
any undistributed income as the Beneficiary may appoint by specific
reference to this power in the Beneficiary's will. The Beneficiary may
appoint to or among any of the Beneficiary's spouse and descendants and
any of my descendants, and the Beneficiary may appoint outright or in
further lawful trust. My Trustee shall distribute the unappointed
principal and income of the trust to the Beneficiary's then living
descendants, per stirpes, or, if there are none, to my then living
descendants, per stirpes. If at the Beneficiary's death there is no
living beneficiary designated to receive the trust assets, my Trustee
shall distribute the trust assets to [name of charitable
INTERESTS VESTING IN CERTAIN BENEFICIARIES
1. Vested Interests Retained in Trust. Whenever any interest
in the trust vests in a beneficiary under age twenty-one, my Trustee may
hold the interest in trust. My Trustee may pay to or for the benefit of
the beneficiary as much of the net income or principal of the trust as
my Trustee may deem necessary for the beneficiary's support, health, and
education. When the beneficiary reaches age twenty-one, my Trustee
shall distribute the trust assets to the beneficiary. If the
beneficiary dies before reaching that age, my Trustee shall distribute
the trust assets to the beneficiary's estate.
2. Distribution to Custodian. While any beneficiary is a
minor, my Trustee may distribute any interest vesting in the beneficiary
to a custodian under the [state] Uniform Gifts to Minors Act.
3. Vesting Not Postponed. The provision of this Article shall
not postpone vesting of any interest in the beneficiary.
RIGHT TO WITHDRAW TRUST ASSETS
1. Withdrawal Right. Whenever a donation is made to the trust
under Article I by me (including my initial donation creating the trust)
or any other person other than by will, and the donor does not otherwise
advise my Trustee in writing, the Beneficiary shall have the right to
withdraw assets from the principal of the trust (including the donated
assets) having an aggregate value equal to the value of the donated
2. Notice. My Trustee shall promptly give written notice of
each donation to the Beneficiary. If the Beneficiary is a minor or
under legal disability, the notice shall be given to the Beneficiary's
legal guardian, but if there is none, to a parent or other adult person
responsible for the Beneficiary other than the donor.
3. Exercise of Withdrawal, Lapse. The Beneficiary may
exercise the withdrawal right by a written instrument delivered to my
Trustee. The legal guardian, parent, or other adult person who receives
notice of any donation on behalf of the Beneficiary may exercise that
right on behalf of the Beneficiary in the same manner. To the extent
the withdrawal right is not exercised within thirty days after receipt
of notice of the donation, the withdrawal right shall lapse.
4. Tax Objectives. I intend by this Article to create a
noncumulative right of withdrawal that will qualify a donation to the
trust as a transfer of a present interest for purposes of the gift tax
annual exclusion. I further intend that the lapse of any right of
withdrawal will not be treated as a completed taxable gift for federal
gift tax purposes.
1. Resignation of Trustee. My Trustee may resign as Trustee
by written notice delivered to each adult beneficiary and to an adult
responsible for each minor beneficiary then authorized to receive income
of the trust. The resignation shall be effective upon appointment of a
2. Successor Trustee. If my Trustee resigns or ceases to
serve, [name] shall have the right to become successor Trustee or to
designate any individual other than myself or any bank or trust company
having trust powers as successor Trustee. The appointment shall be
effective upon written acceptance of fiduciary duties by the successor
Trustee delivered to each adult beneficiary and an adult person
responsible for each minor beneficiary then authorized to receive income
of the trust.
3. Actions of Predecessor. No successor Trustee shall be
responsible for or required to inquire into the actions of my Trustee
occurring before the successor's appointment.
4. Compensation. Any Trustee shall be entitled to receive
reasonable compensation for his fiduciary services.
5. Fiduciary Powers. In addition to the powers granted by
law, I grant my Trustee the powers set forth in the following
subparagraphs. However, my Trustee shall not exercise any power
specifically prohibited under this Article or any other power that would
cause the trust assets to be taxable in my estate or cause trust income
to be taxable to me.
a. My Trustee may sell, exchange, lease, or encumber any
trust assets upon such terms as my Trustee may deem appropriate.
b. My Trustee may borrow money, grant security interests,
and execute mortgages, deeds of trust, and other instruments creating
security interests upon such items as my Trustee may deem appropriate.
c. My Trustee may compromise and adjust any claims against
or on behalf of any trust upon such terms as my Trustee may deem
d. My Trustee may make distributions to beneficiaries in
cash or in kind.
6. Restrictions on Use of Trust Assets. My Trustee shall have
no power to enable me, my Trustee, or any other person to purchase,
exchange, deal with, or dispose of any trust assets for less than
adequate consideration or to borrow any trust assets without adequate
interest and security. No person other than my Trustee shall have any
power, directly or indirectly, to vote any trust securities, to control
any trust investments, or to reacquire or exchange any trust assets by
substitution of other property. No trust income or principal shall be
used for my benefit, to satisfy my legal obligations, or to pay
insurance premiums for policies insuring my life or the life of my
7. Termination of Small Trusts. If at any time the size of
any trust under this Agreement is so small that, in the opinion of my
Trustee who is not the income beneficiary of the trust, the trust is
uneconomical to administer, my Trustee may terminate the trust and
distribute the assets to the person then authorized to receive trust
8. Fiduciary Restrictions. The powers and discretion granted
to my Trustee are exercisable only in a fiduciary capacity and may not
be used to enlarge or shift any beneficial interest except as an
incidental consequence of the discharge of fiduciary duties.
9. Restrictions on Individual Trustees. No individual serving
as my Trustee shall have a voice in any discretionary decision to
distribute income or principal of any trust in order to discharge a
legal obligation of the individual or for the individual's pecuniary
benefit unless necessary for the individual's support, health, or
1. Irrevocable Trust. This Agreement and any trust under this
Agreement shall be irrevocable. I reserve no power to alter, amend,
revoke, or terminate this Agreement, in whole or in part.
2. Additional Contributions. I reserve for myself and any
other person, with the consent of my Trustee, the right to transfer
additional assets to my Trustee. Except to the extent the donor may
otherwise direct, my Trustee shall add the assets equally to the
separate trusts then in existence.
3. Spendthrift Provisions. To the extent permitted by law,
the principal and income of any trust shall not be liable for the debts
of any beneficiary or subject to alienation or anticipation by a
beneficiary, except as otherwise provided.
4. Adoption. Persons related by or through adoption shall
take under this Agreement as if related by or through birth.
5. Situs, Multiple Counterparts. This Agreement is made or
delivered in [state] and shall be governed by its laws. This
Agreement is signed in more than one counterpart, each of which is an
WITNESS my signature and seal:
. . . . . . . [Seal]
The terms of the Trust Agreement are accepted.
. . . . . . . [Seal]
This Section for Notary:
State of _________
County of ________ [County]
On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
My commission expires: _____