F19 Irrevocable Life Insurance Trust (One Life Insured)

Transcription

1 Irrevocable Life Insurance Trust (One Life Insured) [NAME OF SETTLOR] IRREVOCABLE FAMILY TRUST TRUST AGREEMENT THIS TRUST AGREEMENT is made this day,, 20, by and between [NAME OF SETTLOR], an individual domiciled and residing in County, Commonwealth of Pennsylvania (referred to herein as Settlor ), [NAME OF TRUSTEE], (herein the Trustee ). and WITNESS: WHEREAS, simultaneously with the execution of this Trust Agreement Settlor has irrevocably assigned to the Trustee certain property, which will be described on a receipt attached to this Agreement as Schedule A. The Trustee acknowledges receipt of such property and agrees to hold the same in trust under the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual promises made to each other and intending to be legally bound hereby, Settlor and the Trustee agree as follows: I. IDENTITIES AND DEFINITIONS A. Settlor is married to [Name of Husband/Wife], who will be referred to herein as Settlor s [Husband/ Wife]. They have [#] children, [Name] (born, ), [Name] (born, ), [Name] (born, ) ETC., who will be referred to together herein as Settlor s Children. B. Trustee refers to [Name of Trustee] and to the additional Trustees appointed in Article X below. C. The Trust s name is the [Name of Settlor] Irrevocable Family Trust. The Trust will be maintained under and for all purposes will be known by the Trust name. D. The Trust Property consists of the property referred to above; any life insurance policies on the life of Settlor or any other person the ownership of which will be originally issued to, or irrevocably assigned to, the Trust; the proceeds of all such life insurance policies; and any other assets of any kind or character whatever that may later be added to the Trust by Settlor or by anyone else, either during [his/her] lifetime or under the terms of [his/her] Will or the terms of any trust established by [him/her], or in any other manner. The Trust Property as presently constituted is set forth on Schedule A which is attached hereto and made a part hereof. Any property later added to the Trust Property will be set forth in consecutively lettered Schedules, which will be similarly attached hereto and made a part hereof. E. Descendants means the immediate and remote, lawful lineal descendants of the person referred to who are in being at the time they must be ascertained in order to give effect to the reference to them, whether they are born before or after Settlor s death or the death of any other person. Descendants includes any person legally adopted by the person referred to. Descendants will take by right of representation in accordance with the rule of per stirpes distribution, and not under the rule of per capita distribution. G. Survive means that the person referred to must survive the event referred to by thirty (30) days. If the person referred to dies within thirty (30) days of such event, the reference to him or her will be construed as if he or she had predeceased the event. FORMS 625

2 H. The Code refers to the Internal Revenue Code as amended from time to time, or any successor statute thereto. I. Wherever the context so requires, references in this Trust Agreement to the masculine, feminine, or neuter gender, and the singular or plural number, shall each be deemed to include the others. II. RIGHTS AS TO TRANSFERS TO TRUST A. At such time or times during any calendar year when Settlor or any other person transfers to the Trustee any property as an addition to the Trust that is subject to gift tax under the Code, the Trustee shall give notice of such addition and the amount thereof to Settlor s [Husband/Wife] and to each of Settlor s Children (who will be referred to herein as the donees ), or to their fiduciaries if applicable as provided in Paragraph E below and if the Trustee is aware of such fiduciaries existence. In the event that the Trustee is aware that several additions will be made to the Trust over the course of any calendar year, the Trustee will be authorized to provide the donees with a single notice of the aggregate additions made to the Trust during the entire calendar year and the total amount of his or her withdrawal rights arising therefrom. In such event, the notice shall be given promptly upon the last addition made for such calendar year, but in all events not later than December 1 of such calendar year. B. Upon the written request of one or more of the donees or their fiduciaries, the Trustee shall pay over to each donee making such request such donee s pro rata share of such addition (to be prorated by multiplying such amount by a fraction, the numerator of which is one and the denominator of which is the total number of donees then entitled to make such a request) not to exceed in the aggregate the amount allowed as an annual exclusion under Section 2503 of the Code as to any such donee in any one calendar year at the time such addition is made to the trust, or twice such amount if at the time of such addition the donor s spouse (other than Settlor s [Husband/Wife]) consents to having one-half of the addition considered as having been made by such spouse pursuant to Section 2513 of the Code. Notwithstanding any other provision herein to the contrary, a donee s withdrawal rights shall not exceed the lesser of: (1) an amount equal to the value of the donee s pro rata share of the above-described addition, or (2) the greater of Five Thousand Dollars ($5,000) or Five Percent (5%) of the Trust Property out of which, or the proceeds of which, the exercise of the withdrawal right could be satisfied (or such greater dollar amount or percentage as may be specified in Code Section 2514(e)). C. As an alternative source of funds from which to withdraw the above-specified amount if other funds are unavailable, the donees will have the unqualified right each year in which an addition is made to require the Trustee to offer for sale any group term insurance policy held in the Trust at a price equal to the federal gift tax value of the premium paid on such policy in that year, in which event Settlor will be required to purchase the policy at such price. D. The power of withdrawal provided in this Article will not be cumulative from year to year, and may be exercised separately for each transfer during each calendar year in which any such addition or additions is made, or for the aggregate amount of transfers if the Trust has chosen to provide a single notice for the entire calendar years as described in Paragraph A above. The withdrawal right shall expire upon the earlier of either thirty (30) days following the giving of notice or the donee s waiver of the withdrawal right. E. If any donee is a minor or under some other legal disability at the time of the initial transfer of property to the Trust or at the time of any addition to the Trust, then such donee s legal or natural guardian or like fiduciary may make the request described in this Article on behalf of such donee. The property received pursuant to such request shall be held and distributed by such fiduciary for the use and benefit of the donee, in the discretion of the fiduciary, or may be turned over to a guardian appointed under state law applicable to incapacitated persons, or (in the case of a minor donee) to a custodian for the donee appointed under the Pennsylvania Uniform Transfers to Minors Act or the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act in effect in the state wherein the minor beneficiary resides. Such fiduciary can be such custodian or guardian, if otherwise eligible under local law. 626 FORMS

3 III. CONTINGENT MARITAL TRUST FOR SETTLOR S [HUSBAND/WIFE] A. Upon Settlor s death, if or to the extent that any of the Trust Property is determined to be includable in Settlor s gross estate for federal estate tax purposes, and if Settlor s [Husband/Wife] does not predecease [her/ him], the Trustee shall then hold in trust under this Article that amount of the Trust Property, if any, which when added to all other property or interests in property passing to Settlor s [Husband/Wife] apart from this Trust and qualifying for the marital deduction in the federal estate tax proceeding in Settlor s estate, will equal the excess of the value of Settlor s gross estate, as finally determined for such tax purposes, reduced by all deductions allowed Settlor s estate other than the marital deduction, over that amount if any that will result in a federal estate tax in Settlor s estate equal to the total of the applicable credit amount (as defined in Section 2010 of the Code) available to Settlor s estate. This bequest is a pecuniary bequest and not a fractional bequest of the Trust Property. (For purposes of this Paragraph, Settlor makes no provision or condition that Settlor s [Husband/Wife] must survive [her/him] by any period, and if Settlor s [Husband/Wife] and Settlor die under circumstances from which the order of their deaths cannot be determined, it will be conclusively presumed that Settlor s [Husband/Wife] survived Settlor.) B. In funding the bequest described in Paragraph A above, the Trustee will select only those assets that are included in Settlor s federal gross estate and qualify for the marital deduction, and shall distribute such property based on each asset s current value at the time of distribution or its federal estate tax value, whichever is less. No estate, inheritance, or other death tax payable by reason of Settlor s death, or any interest or penalties thereon, will be prorated or apportioned against the bequest made in this Article. C. The Trustees shall hold and administer the amount determined in Paragraph A above in a separate Trust, to be referred to herein as the QTIP Trust for Settlor s [Husband/Wife], and it shall distribute the Trust Property of such Trust to or for the benefit of Settlor s [Husband/Wife] as follows: 1. The Trustees shall pay all the net income to or on behalf of Settlor s [Husband/Wife] in quarterannual installments, or more frequently if [he/she] so directs. 2. The Trustees shall distribute principal to or on behalf of Settlor s [Husband/Wife] in such amounts and at such times as the Trustee in [his/her/its] discretion determines to be necessary or advisable to provide for Settlor s [Husband/Wife] s health (including all medical, dental, hospital, and nursing expenses), maintenance, and support, if or to the extent that the income distributed to [him/her] under subparagraph 1 above does not adequately provide for such purposes. In exercising its discretion, the Trustee is further authorized to withhold making distributions of principal from this Trust if the cash or other liquid assets owned by Settlor s [Husband/Wife] or held in one or more other Trusts for [his/her] benefit, are available to [him/her] to provide for such purposes. D. Settlor s [Husband/Wife] may by written notice require the Trustee either to make any nonproductive Trust Property productive or to convert such nonproductive property to productive property within a reasonable time. E. Upon Settlor s [Husband/Wife] s death, the Trustee shall pay to the personal representative of [his/her] estate any undistributed net income then on hand, plus an amount if any equal to the federal estate tax and other death taxes that are payable by Settlor s [Husband/Wife] s estate by reason of the inclusion of part or all of the Trust Property of this Trust in [his/her] taxable estate. Such payment will be equal to the amount if any by which the total of such death taxes payable by Settlor s [Husband/Wife] s estate exceeds the total of such death taxes that would have been payable if such part or all of the Trust Property had not been included in [his/her] taxable estate. The final determination of the amount due hereunder will be based upon the values as finally determined for federal estate tax purposes in Settlor s [Husband/Wife] s estate. The determination by the personal representative of Settlor s [Husband/Wife] s estate of the amount payable hereunder will be final, and the Trustee shall pay such amount promptly upon written request of the personal representative. After payment of the amount finally determined to be due hereunder, the Trustee will be discharged from any further liability with respect to such payment. Settlor s [Husband/Wife] may waive [his/her] estate s right to payment hereunder by a provision in [his/her] Will in which [he/she] specifically refers to the right to payment hereby given to [his/her] estate. FORMS 627

4 F. After providing for the payments if any as described in Paragraph E above, the Trustee shall distribute all of the remaining Trust Property in accordance with the provisions of Paragraphs C F of Article IV below, the terms of which are incorporated herein by reference; provided, however, that for purposes hereof any condition of survivorship contained in such Paragraphs C F will be deemed to refer to the death of Settlor s [Husband/ Wife] and not to Settlor s death. G. Notwithstanding any provision in this Trust Agreement to the contrary, the QTIP Trust for Settlor s [Husband/Wife] as described herein will be void and of no effect if: (1) none of the Trust Property is determined to be includable in Settlor s gross estate for federal estate tax purposes, or (2) in any event, if the formula set forth in Paragraph A above results in a number that is zero or less than zero. IV. ADMINISTRATION AND DISTRIBUTION OF TRUST PROPERTY UPON SETTLOR S DEATH A. Upon Settlor s death, after providing for the amount if any determined under Article III above, the Trustee shall hold or distribute the Trust Property in accordance with the terms of this Article. In addition, if for any reason the proceeds of any insurance policies held by the Trust are paid out prior to Settlor s death, the Trustee shall hold, administer, and distribute such proceeds under the provisions of this Article. B. If Settlor s [Husband/Wife] survives Settlor, the Trust Property as described in Paragraph A above shall be distributed to the Trust for Settlor s [Husband/Wife] created in Article V below, to be held, administered, and distributed for [his/her] benefit under the terms thereof, subject, however, to the provisions of Paragraph G below. C. If Settlor s [Husband/Wife] does not survive Settlor, the Trustee shall divide all of the Trust Property into [#] ( ) equal shares and shall distribute such shares as follows: 1. One share shall be distributed to [name of child], if [he/she] survives Settlor s death; provided, however, that if [he/she] has not attained age thirty-five (35) at such time, the property constituting such share shall be transferred to the Trustee of the Trust for [name of child] created in Article VI below, to be held, administered, and distributed for [his/her] benefit under the terms of such Article. 2. One share shall be distributed to [name of child], if [he/she] survives Settlor s death; provided, however, that if [he/she] has not attained age thirty-five (35) at such time, the property constituting such share shall be transferred to the Trustee of the Trust for [name of child] created in Article VI below, to be held, administered, and distributed for [his/her] benefit under the terms of such Article. D. Notwithstanding any provision of Paragraph C above to the contrary, if [name of child] or [name of child] does not survive Settlor, but if he or she leaves any Descendants who survive [him/her], the share created for such beneficiary in subparagraph 1 or 2 of Paragraph C above will not lapse, but shall be distributed for the benefit of such Descendants; provided, however, that if any such Descendant has not attained age thirty-five (35) at such time, the property otherwise distributable to him or her hereunder shall be transferred to the Trustee of the Trusts for the Descendants of Settlor s Children created in Article VII below, to be held, administered, and distributed for such Descendant s benefit under the terms of such Article. E. If either subparagraph 1 or 2 of Paragraph C above cannot take effect because the Settlor s Child named therein does not survive Settlor and leaves no Descendants who survive him, such subparagraph will then be deemed canceled and of no effect, and in such case all of the Trust Property shall be distributed under the subparagraph that does take effect under Paragraph C above. F. If neither of Settlor s Children nor any of their Descendants survives Settlor, the Trustee shall distribute all of the remaining Trust Property as follows, subject to Article IX below: [Describe gifts to contingent beneficiaries]. G. Notwithstanding any other provision in this Article to the contrary, any provision contained in this Article IV and in Article V below in favor of or relating to Settlor s [Husband/Wife] will be deemed ineffective for all purposes if Settlor and Settlor s [Husband/Wife] are divorced from the bonds of marriage after the date of this Trust Agreement, or if Settlor dies domiciled in the Commonwealth of Pennsylvania during the course of divorce proceedings, no decree of divorce has been entered pursuant to 23 Pa.C.S. 3323, but grounds have been established as provided in 23 Pa.C.S. 3323(g). 628 FORMS

5 V. TRUST FOR SETTLOR S [HUSBAND/WIFE] A. The Trust created herein will become effective under Paragraph B of Article IV above if Settlor s [Husband/Wife] survives Settlor. The Trustee shall hold, administer, and distribute all of the property distributed to this Trust under such Paragraph B, and the income therefrom, as the Trust Property under the terms of this Article. B. The Trustee shall distribute to or on behalf of Settlor s [Husband/Wife] such amounts of the Trust Property during [his/her] lifetime, and at such times, as the Trustee in [his/her/its] complete discretion deems necessary or advisable to provide for the health, maintenance, and support of Settlor s [Husband/Wife] in the style and manner of living to which [he/she] has become accustomed, including but not limited to providing for the following items: 1. Household and personal care expenses of Settlor s [Husband/Wife], including but not limited to transportation, housecleaning, personal home care, meals and groceries, and items of clothing. 2. Doctor, hospital, drug, therapy, rehabilitation, dental, and other medical or health-related expenses incurred by or on behalf of Settlor s [Husband/Wife]. 3. Real estate taxes, personal income taxes, and personal property taxes, and any of Settlor s [Husband/Wife] s enforceable debts or bills that may be due and payable from time to time. 4. Utilities, premiums on policies of hazard insurance, and the expenses of any necessary repairs and maintenance, whether of an ordinary or extraordinary nature, payable with respect to Settlor s [Husband/ Wife] s residential real estate, and the rents, fees, and expenses payable by [him/her] in maintaining their residence in an apartment or condominium. 5. All costs related to Settlor s [Husband/Wife] s residing in a skilled nursing, assisted living, independent living, or other residential facility for any period of time, and all other expenses relating to the skilled or intermediate nursing care or custodial care of Settlor s [Husband/Wife]. 6. Premiums for health, hospital, and nursing-care or long-term-care insurance for the benefit and protection of Settlor s [Husband/Wife]. C. Settlor intends that distributions under Paragraph B above, to the extent applicable, will be restricted in purpose and amount so that they will only supplement, and not be substituted for or have priority in payment over, all the benefits and financial assistance that may otherwise be available to or on behalf of Settlor s [Husband/Wife] from all other sources, including but not limited to benefits available under policies of health or medical insurance, and all forms of assistance, benefits, income maintenance, or services that or Settlor s [Husband/ Wife] may be eligible to receive from time to time under applicable state and federal government programs. The Trustee, in exercising [his/her/its] discretion as to the amount and timing of distributions, shall take into account all such other available resources, and [he/she/it] shall withhold or limit making distributions from the Trust Property if or to the extent that the purposes of the Trust, as defined above, can be adequately fulfilled from such other resources. D. Upon the death of Settlor s [Husband/Wife], if or to the extent that [his/her] estate does not have sufficient assets with which to satisfy the items described below, the Trustee will be authorized, but in no event required, to expend such amounts of the Trust Property as [he/she/it] may deem necessary and appropriate to pay for: (1) any part or all of the funeral, burial, and estate administration expenses incurred on behalf of such decedent; (2) any of [his/her] enforceable debts that are outstanding at the time of [his/her] death, and (3) any federal estate tax or state inheritance, transfer or succession taxes, including penalties and interest thereon, that may be payable with respect to the property that is included in [his/her] gross estate (whether or not such property is included in the Trust Property of this Trust). E. After providing for the payments, if any, as described in Paragraph D above, the Trustee shall distribute all of the remaining Trust Property in accordance with the provisions of Paragraphs C F of Article IV above, the terms of which are incorporated herein by reference; provided, however, that for purposes hereof any condition of survivorship contained in such Paragraphs C F will be deemed to refer to the death of Settlor s [Husband/ Wife] and not to Settlor s death. FORMS 629

6 VI. TRUSTS FOR SETTLOR S CHILDREN A. The Trust or Trusts created in this Article will be effective under the provisions of Article IV or V above, whichever is applicable, in the event that one or both of Settlor s Children survives the event referred to but has not attained age thirty-five (35) at the time stated with reference to him or her therein. The Trustee will receive and receipt for the shares distributable to [him/her/it] in trust under such Article, and shall hold, administer, and distribute each share as a separate Trust for the sole use and benefit of one of Settlor s Children (who will be referred to herein as the Beneficiary ). B. During the term of the Beneficiary s Trust, the Trustee shall distribute to or on behalf of the Beneficiary such amounts of the Trust Property and at such times as the Trustee in [his/her/its] discretion determines to be necessary or advisable to provide for the Beneficiary s health, maintenance, support, and complete education. ( Complete education, as used anywhere in this Declaration of Trust, will mean the costs of tuition, fees, books, room and board, travel, and educational materials and equipment, incurred by the Beneficiary while he or she is enrolled in an educational or vocational program, including a professional or graduate school program, provided at a college, university, or other vocational, business, or technical school.) C. In addition to the distributions authorized in Paragraph B above, the Trustee shall distribute such amounts of the Trust Property and at such times as the Trustee in its discretion determines to be necessary or advisable to help defray the Beneficiary s wedding expenses, to assist him or her in the purchase of a first residence, and to assist him or her in entering a profession or business the Trustee considers a good risk. D. Any distribution made under Paragraph B or C above will be composed first from the current net income of the Beneficiary s Trust, then to the extent necessary from such Trust s net short-term capital gains for the calendar year, then if necessary from its net long-term capital gains for such year, and finally if necessary from principal. E. The Beneficiary s Trust will terminate when he or she attains age thirty-five (35), at which time the Trustee shall pay over to the Beneficiary all of the Trust Property remaining in such Trust at such time, including any undistributed net income then on hand, in complete termination of the Trust. F. If the Beneficiary dies prior to attaining age thirty-five (35), the Trust Property then remaining in his or her Trust shall be distributed to those of his or her Descendants who survive the Beneficiary, subject to Paragraph G below. If the Beneficiary leaves no Descendants who survive him or her, all the remaining Trust Property shall be distributed to Settlor s other child, if he or she survives the Beneficiary; provided, however, that if such other child has not then attained age thirty-five (35), such property shall be added to the principal of his or her separate Trust being administered under this Article. If Settlor s other child does not survive the Beneficiary but leaves any Descendants who survive the Beneficiary, the remaining property in the Beneficiary s Trust shall be distributed to such surviving Descendants, subject to Paragraph G below. G. Notwithstanding any contrary provision contained in Paragraph F above, if any Descendant referred to therein has not attained age thirty-five (35) at the Beneficiary s death, the property otherwise distributable to him or her hereunder shall be transferred to the Trustee of the Trusts for the Descendants of Settlor s Children created in Article IX below, to be held, administered, and distributed for such Descendant s benefit under the terms of such Article. H. In default of any of the beneficiaries described in Paragraph F above surviving the Beneficiary, the Trust Property remaining in the deceased Beneficiary s Trust shall be distributed in accordance with Paragraph F of Article IV above, the terms of which are incorporated herein by reference; provided, however, that for purposes hereof any condition of survivorship set forth in such Paragraph F will be deemed to refer to the Beneficiary s death and not to the death of Settlor. VII. TRUSTS FOR THE DESCENDANTS OF SETTLOR S CHILREN A. The Trust or Trusts created in this Article will be effective under the provisions of Article IV VI above, whichever is applicable, for the benefit of any Descendant of one of Settlor s Children who has not attained age thirty-five (35) at the time stated with reference to him or her therein. The Trustee will receive and receipt for the Trust Property distributable on behalf of such Descendant and shall hold, administer, and distribute it and the 630 FORMS

7 income therefrom as the Trust Property of a separate Trust for the sole use and benefit of such Descendant, who will be referred to herein as the Beneficiary. B. The Trustee shall make distributions from the Beneficiary s Trust in accordance with the same provisions as are set forth in Paragraphs B E of Article VI above, the terms of which are incorporated herein by reference; provided, however, that for purposes of this Article any reference to the Beneficiary as contained in such Paragraphs will be deemed to refer to the Beneficiary described in this Article. Notwithstanding any provision in Article VI to the contrary, no distribution of the Trust Property will be made hereunder if or to the extent that such distribution would be deemed to discharge a legal duty of support owed the Beneficiary by his or her parent or any other person under applicable law. C. If the Beneficiary dies prior to attaining age thirty-five (35), the Trust Property then remaining in his or her Trust shall be distributed to those of his or her Descendants who survive him or her, subject to Article IX below. If the Beneficiary leaves no Descendants who survive him or her, all the remaining Trust Property shall be distributed to the Descendants of Settlor who survive the Beneficiary, subject to Article IX below; provided, however, that if a Trust has been created for any such Descendant under any Article of this Trust Agreement and is still in existence at such time, the property distributable to such Descendant will be added to his or her separate Trust being administered thereunder. In default of any of the above-referenced beneficiaries surviving the Beneficiary, the remaining Trust Property shall be distributed in accordance with Paragraph F of Article IV above, the terms of which are incorporated herein by reference; provided, however, that for purposes hereof any condition of survivorship set forth in such Paragraph F will be deemed to refer to the Beneficiary s death and not to the death of Settlor. VIII. MISCELLANEOUS TRUST PROVISIONS The following provisions will be deemed incorporated into and made part of each of the Trusts created in Articles III, V, VI, and VII above, as if such terms were fully set forth therein: A. Notwithstanding any provision of this Trust Agreement to the contrary, Settlor directs that the interests in the Trust Property of each beneficiary named or referred to herein will be held subject to a spendthrift trust that restrains both the voluntary and involuntary transfer of such beneficiary s interest in the Trust. No interest of any beneficiary will be subject or liable in any manner to involuntary transfer, including but not limited to attachment, garnishment, execution, sequestration, claims for alimony, maintenance, or support, or other process, nor to a beneficiary s own voluntary anticipation, alienation, assignment, conveyance, sale, pledge, or other transfer. The Trustee is empowered and directed to disregard and defeat any such involuntary or voluntary act or attempt in any manner provided by law. Notwithstanding any provisions above to the contrary, Settlor declares that spendthrift trust protection is not a material purpose of the Trust. B. The Trustee at any time may, but shall not be required to, file an account of [his/her/its] administration of the Trust with a court of competent jurisdiction. Prior to transferring any part or all of the Trust Property of a Trust to a successor Trustee or to making complete distribution of the Trust Property to the beneficiaries entitled thereto upon the termination of a Trust, the Trustee may require the approval of [his/her/its] account either by a court of competent jurisdiction or by the Trust s qualified beneficiaries (as such term is defined in 20 Pa.C.S. 7703). All of the Trustee s fees and expenses (including reasonable attorneys fees) incurred in connection with such accounting and approval shall be paid from the Trust assets as administration expenses. C. Notwithstanding any other provision of the Trust to the contrary, the Trust created herein will terminate prior to the event of termination defined herein if all three of the following conditions have occurred, as permitted under 20 Pa.C.S. 7740: (1) the Trustee has concluded that the value of the Trust Property has become insufficient to justify the costs of continued Trust administration; (2) the Trustee has given written notice of the proposed termination of the Trust to the Trust s qualified beneficiaries, as defined above, at least sixty (60) days before the proposed date of termination; and (3) no such qualified beneficiary has provided the Trustee with a written objection to the proposed termination by the date specified in the notice. Upon the occurrence of all such conditions, the Trust will be deemed to have terminated upon such proposed date of termination, and the Trustee shall then distribute all the Trust Property remaining at such time in accordance with the terms hereof, in complete termination of the Trust; provided, however, that the condition of survivorship contained in this Article will be FORMS 631

8 deemed to refer to the above-described proposed date of termination under this Paragraph and not to the event of termination defined herein. The written receipt and release of such beneficiaries will be a sufficient discharge of the Trustee s duty to distribute the Trust Property under this Article, and shall terminate absolutely the rights of all persons who might otherwise have had a future interest in the Trust, whether vested or contingent, without notice to them and without the necessity of filing a fiduciary account with any court. IX. PROVISION FOR MINOR OR INCAPACITATED BENEFICIARIES A. If at the time for distribution of any property under this Article there is a beneficiary entitled to receive such property outright and free of trust but who has not yet attained age twenty-five (25) or has been adjudicated to be an incapacitated person, or who is, in the opinion of a qualified physician or psychologist, unable to prudently manage his or her financial resources, such property will vest in such beneficiary, but the Trustee will have the power to distribute that beneficiary s property to his or her guardian, agent, spouse, or (in case of a beneficiary under age twenty-five (25)) a custodian under the Pennsylvania Uniform Transfers to Minors Act, or to transfer such property in trust with such trustee, including the Trustee, all as the Trustee in its discretion may select. The receipt of such beneficiary s property by his or her guardian, agent, spouse, custodian, or the trustee will be a sufficient discharge of the Trustee s duty to distribute such beneficiary s property. B. If such property is placed in trust under Paragraph A above, the trustee shall invest the principal and shall pay to or for the benefit of the beneficiary so much or all of the net income or principal, or both, as the trustee deems necessary or advisable from time to time for the beneficiary s health, maintenance, support, and complete education, if or to the extent that such purposes cannot be fulfilled by the beneficiary s parent or other person who owes him or her a legal duty of support. Net income not so paid will be accumulated. The trust created herein will continue until the beneficiary attains age twenty-five (25), or has been adjudicated to be no longer an incapacitated person, or becomes able to prudently manage his or her financial resources, whichever event is the last to occur, at which time the remaining trust property shall be distributed outright to the beneficiary, or if he or she dies prior to such time, then to his or her estate. X. APPOINTMENT OF TRUSTEE A. [Name of Trustee] agrees to serve as the initial Trustee of the Trust, and [he/she] will continue to serve until such time as [he/she] ceases to serve whether due to death, voluntary resignation, or becoming incapable of properly performing the duties of a trustee (as will be determined by a qualified physician or psychologist). If during Settlor s lifetime [Name of Trustee] ceases to serve as Trustee, as defined above, Settlor appoints [Name of Successor Trustee] to serve as successor Trustee. If [Name of Successor Trustee] or any later Trustee is or becomes unable or unwilling to serve as Trustee hereunder, Settlor (or, if [he/she] is then incapacitated, [his/her] agent or other legal representative) shall appoint another individual or a corporate fiduciary to serve as successor Trustee; provided, however, that in such event, Settlor shall not appoint an individual if such person is either related or subordinate (as defined in Section 672(c) of the Code) to Settlor. B. [Name of Trustee] is hereby appointed to serve as the Trustee of the QTIP Trust for Settlor s [Husband/ Wife] created in Article III above, and of the Trust for Settlor s [Husband/Wife] created in Article V above, if one or both such Trusts becomes effective. If [Name of Trustee] initially declines to serve in such capacity for either of the Trusts described above, or if [he/she/it] later voluntarily resigns or is removed as Trustee, as described more fully below, Settlor authorizes Settlor s [Husband/Wife] to appoint another trust company that is then authorized to act as a fiduciary in the Commonwealth of Pennsylvania to serve as alternate or successor Trustee. In no event will an individual be appointed or serve as an alternate or successor Trustee of such Trust. C. [Name of Trustee] is hereby appointed to serve as the Trustee of each Trust created for one of Settlor s Children or for any Descendant of Settlor s Children under Article VI or VII above, whichever may become effective. If [Name of Trustee] initially declines to serve as Trustee of any such Trust, or if [he/she/it] later voluntarily resigns or is removed as Trustee of any such Trust, Settlor authorizes the named Beneficiary of such Trust (or if he or she at such time is a minor or under some other legal disability, then his or her parent, guardian, or agent) 632 FORMS

9 to appoint another trust company that is then authorized to act as a fiduciary in the Commonwealth of Pennsylvania to serve as alternate or successor Trustee. In no event will an individual be appointed or serve as an alternate or successor Trustee of any such Trust. D. [Applicable if there are co-trustees, one of which is a corporate fiduciary] Notwithstanding any other provision in this Trust Agreement to the contrary, if a corporate fiduciary is serving as a co-trustee of the Trust created in Article III, V, VI, and VII above, Settlor directs that the then-serving individual Trustee shall have the authority exercisable upon one or more occasions, upon his or her good-faith determination that it would be in the best interests of the Trust, to remove the existing corporate fiduciary upon written thirty (30) days written notice, and to promptly replace it with a successor corporate fiduciary (and not an individual) that is then qualified to serve as a fiduciary in the Commonwealth of Pennsylvania; provided, however, that no corporate fiduciary will be qualified to serve as successor Trustee if such entity is either related or subordinate (as defined in Section 672(c) of the Code) to the above-described person exercising such authority or to any beneficiary of the Trust, as the case may be. E. [Applicable if there are co-trustees, one of which is a corporate fiduciary] In the event that both an individual and a corporate fiduciary serve together as co-trustees of any Trust created under Article VI above, if there is any disagreement between a corporate Trustee and an individual Trustee regarding the exercise or nonexercise of the Trustees discretionary power to make or withhold distributions of the Trust Property to or on behalf of one of Grantor s Children as provided in such Article, the decision of the individual Trustee will control, without liability to the corporate Trustee for the consequences of such decision. F. Upon executing a written acceptance of the office, a successor Trustee will be authorized to exercise all the powers granted to the Trustee under this Will, without the necessity of obtaining the appointment by any Court. A successor Trustee may take receipt and control of the Trust Property in its condition when delivered to him or her by the prior Trustee, and may assume for all purposes that the assets so delivered constitute all the assets the successor is entitled to hold hereunder. C. Notwithstanding any other provision in this Trust Agreement to the contrary, the current beneficiary (as defined in 20 Pa.C.S. 7703) of any Trust being administered under Article III, V, VI, or VII above (or if such beneficiary at the time is a minor or under some other legal disability, then his or her parent, guardian, or agent) will have the authority, exercisable at any time and on more than one occasion, upon his or her good-faith determination that it would be in the best interests of the Trust, to remove the existing Trustee upon a minimum of thirty (30) days advance written notice delivered to such Trustee; provided, however, that such Trustee s removal will not be deemed final until and unless a successor corporate fiduciary appointed by the current beneficiary, as provided for above, has filed its acceptance of such appointment with the court. No corporate fiduciary will be appointed hereunder or be qualified to serve as successor Trustee if such entity is either related or subordinate (as defined in Section 672(c) of the Internal Revenue Code) to the Beneficiary or to any other beneficiary of the Trust, as the case may be. D. Upon the filing of a written acceptance of the office with the court, a successor Trustee will be authorized to exercise all the powers granted to the Trustee under this instrument, without the necessity of obtaining the appointment by any court. A successor Trustee may take receipt and control of the Trust Property in its condition when delivered to [him/her/it] by the prior Trustee, and may assume for all purposes that the assets so delivered constitute all the assets the successor is entitled to hold hereunder. No successor Trustee will have any duty or responsibility to audit or review the actions or accounting of [his/her/its] predecessor trustees, and each successor Trustee hereunder is expressly relieved from any and all liability or responsibility for the actions or failure of any such predecessor. XI. ADMINISTRATIVE POWERS OF TRUSTEE A. In the management, care, and disposition of the several Trusts created herein, the Trustee (including all successor Trustees) will have all the powers described in Section of the Pennsylvania Probate, Estates and Fiduciaries Code (herein PEF Code ), including all of the specific powers defined in PEF Code Section (a)(1) (34), the terms of which are incorporated herein by reference. FORMS 633

10 B. In addition to such statutory powers, the Trustee will have the power to do all things and to execute such instruments as may be necessary or proper, including the following powers, all of which may be exercised without order of or report to any court: 1. To sell, exchange, or otherwise dispose of any property at any time held or acquired hereunder, at public or private sale, for cash or on terms, without advertisement, including the right to lease for any term notwithstanding the period of the Trust, and to grant options, including an option for a period beyond the duration of the Trust. 2. To purchase assets from, make loans to, or otherwise deal without restriction with the personal representatives of Settlor s estate or the trustee of another trust created by Settlor, and to retain any assets purchased for any period, without liability for loss or depreciation in value, and notwithstanding any risk, lack of productivity, or lack of diversification; and the determination by the trustee with respect to the desirability of any such purchase, loan, or other transaction shall be conclusive on all persons. 3. To retain or invest during the period of trust administration the assets of any Trust created herein, consistent with the principles of diversification, risk, and productivity, in real property and all interests in real property, including residential real estate; in bonds, notes, debentures, mortgages, commercial paper, preferred or common stocks, or other securities; in rights or obligations in property, real or personal, including shares or certificates of participation issued by regulated investment companies or regulated investment trusts, shares or units of participation in qualified common trust funds or in qualified pooled funds, or in certificates of deposit or savings accounts in a bank or other savings institution supervised by the United States or a state, without regard as to whether such are legal uses or investments for a fiduciary as may be defined by law; and in all forms of property, including but not limited to participation in registered investment companies (including money-market funds), and interest-bearing deposits in a bank or other financial institution under state or federal supervision, without restriction to legal investments. 4. To use real estate brokers, attorneys, accountants, and other agents, if such employment be deemed necessary or desirable, and to pay reasonable compensation for their services. 5. To compromise, settle, or adjust any claim or demand by or against the Trust. C. In the distribution of the Trust and any division into separate trusts or shares, the Trustee is authorized to make the distribution and division in money or in kind or in both, regardless of the basis for income tax purposes of any property distributed or divided in kind, and the distribution and division made and the values established by the Trustee will be binding and conclusive on all persons taking hereunder. The Trustee, in making such distribution or division, may allot undivided interests in the same property to several trusts or shares. D. In addition to the powers granted in Paragraph B 2 above, the Trustee may, but in no event will it be required to, lend or borrow (at an adequate rate of interest and with adequate security and upon such terms and conditions as the Trustee will deem fair and equitable), or to sell or purchase (at such fair market value as determined by the Trustee) any property to or from a decedent s estate or any trust created during life or by Will, even though the same person or corporation may be acting as executor of such estate or as trustee of any of such other trusts and as a Trustee of this Trust. E. The Trustee will have the discretion to determine whether items should be charged or credited to income or principal or allocated between income and principal as the Trustee may deem equitable and fair under all the circumstances, including the power to amortize or fail to amortize any part or all of any premium discount, to treat any part or all of the profit resulting from the maturity or sale of any asset, whether purchased at a premium or at a discount, as income or principal or apportion the same between income and principal, to charge any expense against income or principal or apportion the same, and to provide or fail to provide a reasonable reserve against depreciation or obsolescence of any asset subject to depreciation or obsolescence. XII. IRREVOCABLE NATURE OF TRUST A. Settlor acknowledges that [he/she] understands the nature and meaning of an irrevocable trust, and [he/ she] expressly renounces and relinquishes irrevocably any right to amend or revoke this Trust Agreement or 634 FORMS

11 recover back or retain a reversionary interest in any property [he/she] has transferred or may later transfer to the Trust, including the income therefrom. B. Settlor absolutely and irrevocably assigns and relinquishes to the Trustee all rights and incidents of ownership that [he/she] has now or may hereafter acquire as to any asset transferred to or acquired by the Trust, including, as to any policy of life insurance, the right or privilege: to make any further assignment of such policy or to revoke the assignment to the Trust; to change the beneficiary designation of the policy; to surrender or cancel the policy; as to an employment-related policy, to convert such policy in any manner or form after the termination of employment; to obtain the cash surrender value of the policy; to change the beneficial ownership of the policy or its proceeds, or the time or manner of its enjoyment; to retain any veto power over this Trust or the policy; to borrow from the insurer against the policy; to maintain or acquire a reversionary interest, whether express or implied, and whether by the policy, the Trust, or by operation of law, in the policy or its proceeds; to pledge the policy as security for a loan; and to withdraw any dividends or funds from such policy or convert it into any other form of insurance. C. The Trustee will be vested with and may exercise all rights, privileges, options, and incidents of ownership over any policy of insurance owned by the Trust, including but not limited to all powers to borrow from the insurer or to pledge the policy for a loan from any financial institution, or to obtain the cash surrender value of the policy. D. Notwithstanding anything contained in this Trust Agreement expressly or impliedly to the contrary, no power enumerated herein or accorded to fiduciaries generally pursuant to law will be construed: 1. To enable Settlor, or any nonadverse party, as defined in the Code, to borrow all or any part of the Trust Property or any income therefrom, directly or indirectly, without giving adequate interest or adequate security therefor, or to revest in [himself/herself] title to any of the Trust Property. 2. Without the approval or consent of an adverse party, as defined in the Code, to enable Settlor or a nonadverse party to purchase, exchange, or otherwise deal with or dispose of any of the Trust Property or any income therefrom for less than an adequate consideration in money or money s worth, or to dispose of the beneficial enjoyment of the Trust Property or any income therefrom, or to enable any of the income from the Trust to be distributed to, or be held or accumulated for future distribution to Settlor (by discharging a support obligation or otherwise) or applied to policies of insurance on [his/her] life (excepting only policies irrevocably payable to organizations qualified under Section 170(c) of the Code). 3. To enable Settlor to remove any Trustee or to hereafter appoint a successor Trustee or co-trustee. 4. To permit any person other than the Trustee to have or exercise the power to vote or direct the voting of any stock or other securities of the Trust, to control the investment of the Trust Property either by directing or vetoing investment or reinvestment, or to acquire the Trust Property by substituting other property of an equivalent value. E. Settlor will have no duty to pay any premium, assessment, or other charge that may be due in connection with an insurance policy owned by the Trust, and [he/she] will be excused and released from all liability to any party, including the Trustee or the beneficiaries hereof, if any policy lapses or is canceled for nonpayment of premium, assessment, or other charge, or if such policy for any reason becomes uncollectible. F. The Trustee is authorized to pay such premiums, assessments, or charges as necessary to keep in force each policy included in the Trust Property; provided, however, that the Trustee is expressly prohibited from using or applying any of the net income of the Trust Property to or for the payment of any insurance-related premium, assessment or charge. The Trustee may in its discretion surrender one or more policies of life insurance and use the proceeds thereof to purchase new policies of insurance on any person s life. The Trustee will have no other duty with respect to such insurance policies, except for the safekeeping of any policies that are assigned to or deposited with him. G. Upon the maturity of any life insurance policy included in the Trust Property, whether at an insured s death or at any other time, the Trustee will promptly take all the steps necessary or advisable to collect the proceeds thereof, including proceeds in the nature of double indemnity benefits. FORMS 635