Sample Trust

Articles I–VI are reproduced and described in Chapter 14. The remaining portion of the trust document contains provisions that are standard to most trust documents.

ARTICLE VII POWERS OF TRUSTEE AND OTHER PROVISIONS

7.1 Powers of Trustee. In the administration of this Trust, the Trustee shall have the following powers, in addition to and not in limitation of the Trustee's common law powers and statutory powers, provided (1) that such common law and statutory powers shall only be exercised to the extent they are not in conflict with the provisions of this Article and (2) that such common law and statutory powers shall be exercised in a fiduciary capacity in accordance with the general standards of trust administration imposed upon trustees.

(a) To receive and retain the initial Trust corpus and all other property which I may transfer to the Trustee either during my lifetime, by Will or other testamentary disposition, or which any other person may hereafter transfer to the Trustee. The Trustee shall receive all such property as part of the Trust even though it may not be a legal investment for the Trustee and even though such property by reason of its character may not be an appropriate trust investment apart from this provision. The Trustee is authorized to retain its own stock or other securities or stock or securities of any affiliate or holding company that owns the Trustee.

(b) To sell, exchange, give options upon, partition, or otherwise dispose of any property that the Trustee may hold from time to time, at public or private sale, or otherwise, for cash or other consideration or on credit, and upon such terms and for such consideration as the Trustee deems advisable; and to transfer and convey such property free of all trust.

(c) To invest and reinvest in any property, real or personal, including (without limiting the generality of the foregoing language) securities of domestic and foreign corporations and investment trusts, bonds, preferred stocks, common stocks, option contracts, “short sales,” mortgages and mortgage participations, even though such investment by reason of its character, amount, proportion to the total trust estate, or otherwise would not be considered appropriate for a fiduciary apart from this provision, and even though such investment causes a greater proportion of the total trust to be invested in investments of one type or of one company than would be considered appropriate for a fiduciary apart from this provision. Such investment may be on a cash or margin basis, and the Trustee, for such purpose, may maintain and operate cash or margin accounts with brokers, and may deliver and pledge securities held or purchased by the Trustee with such brokers both as security for loans and advances made to the Trustee and to ensure the ability of the Trustee to deliver stock against short options. In addition, the Trustee may purchase life insurance even though it is non-income-producing. The Trustee is authorized to invest in any common fund, legal or discretionary, which may be operated by and/or under the control of a corporate Trustee.

(d) To make loans, secured or unsecured, in such amounts, upon such terms, at such rates of interest, and to such persons, trusts, corporations, or other parties as the Trustee deems advisable.

(e) To improve real estate, including the power to demolish buildings in whole or in part and to erect new buildings; to lease (including leasing for oil, gas, and minerals) real estate on such terms as the Trustee deems advisable, including the power to give leases for periods that extend beyond the duration of any trust; to foreclose, extend, assign, partially release, and discharge mortgages.

(f) To collect, pay, contest, compromise, or abandon, upon such terms and evidence as the Trustee deems advisable, any claims, including taxes, either in favor of or against trust property or the Trustee; to abandon or surrender any property.

(g) To employ brokers, banks, custodians, investment counsel, attorneys, accountants, and other agents, and to delegate to them such duties, rights, and powers of the Trustee (including the right to vote shares of stock held by the Trustee) for such periods as the Trustee deems advisable.

(h) To hold and register securities in the name of a nominee with or without the addition of words indicating such securities are held in a fiduciary capacity; to hold and register securities in a securities depository or in any other form convenient for the Trustee.

(i) To participate in any voting trust, merger, reorganization, consolidation, or liquidation affecting trust property and, in connection therewith, to deposit any trust property with or under the direction of any protective committee and to exchange any trust property for other property.

(j) To exercise any stock or other kind of option.

(k) To keep trust property in [Florida] or elsewhere, or with a depository or custodian.

(l) To determine (reasonably and in accordance with sound trust accounting principles) as to all sums of money or other things of value received by the Trustee, whether and to what extent the same shall be deemed to be principal or to be income, and as to all charges or expenses paid by the Trustee, whether and to what extent the same shall be charged against principal or against income, including the power to apportion any receipt or expense between principal and income and to determine what part, if any, of the actual income received upon any wasting investment or upon any security purchased or acquired at a premium shall be retained and added to principal to prevent a diminution of principal upon exhaustion or maturity thereof. The Trustee may also establish reserves for depreciation and anticipated expenses and fund such reserves for depreciation and anticipated expenses with appropriate charges against income. All determinations made pursuant to this subparagraph by the Trustee shall be made fairly to balance the interest of the income beneficiary and the remaindermen. The Trustee shall resolve all doubtful questions in favor of the income beneficiary. If an income beneficiary also serves as one of the Trustees of the Trust, then the income beneficiary-Trustee shall not exercise any of the powers granted by this subparagraph and all such powers shall be exercised by the other Trustee(s) only.

(m) To distribute the trust estate in cash or in kind, or partly in cash and partly in kind, as the Trustee deems advisable, and for purposes of distribution, to value the assets reasonably and in good faith as of the date of distribution. Such valuation shall be conclusive on all beneficiaries. The Trustee shall not be required to distribute a proportionate amount of each asset to each beneficiary but may instead make nonpro rata distributions. In making distribution, the Trustee may, but shall not be required to, take account of the income tax basis in relation to market value of assets distributed. Distribution may be made directly to the beneficiary, to a legally appointed Guardian or Conservator or, where permitted by law, to a custodian under any Uniform Gifts to Minors Act, including a custodian selected by the Trustee.

(n) To deposit monies to be paid to a beneficiary who is a minor in any demand, savings bank, or savings and loan account maintained in the sole name of the minor and to accept the deposit receipt as a full acquittance.

(o) To accept the receipt of a minor as a full acquittance.

(p) To borrow from anyone (including the Trustee or any affiliate) in the name of the Trust, to execute promissory notes therefore and to secure obligations by mortgage or pledge of trust property, provided the Trustee shall not be personally liable and that any such loan shall be payable out of trust assets only.

(q) To hold, manage, invest, and account for any separate trust in one or more consolidated funds, in whole or in part, as the Trustee deems advisable. As to each consolidated fund, the division into the various shares comprising such a fund needs to be made only on the Trustee's books of account, in which each separate trust shall be allocated its proportionate share of principal and income of the fund and charged with its proportionate share of the expenses. No such holding shall defer any distribution.

(r) To carry, at the expense of the Trust, insurance of such kinds and in such amounts as the Trustee deems advisable to protect the trust estate and the Trustee personally against any hazard or liability.

(s) To exercise all of these powers without application to any court.

7.2 Diversification. The Trustee shall not be required to diversify assets and is authorized to receive and retain in the Trust any one or more securities or other property, whether or not such security or other property shall constitute a larger share of the Trust than would be appropriate for a fiduciary to receive and retain apart from this provision.

7.3 Receipt. No purchaser or other person dealing with the Trustee shall be responsible for the application of any money or other thing of value paid or delivered to the Trustee, and no purchaser or other person dealing with the Trustee and no issuer, transfer agent, or other agent dealing with the Trustee shall be under any obligation to ascertain or inquire into the power of the Trustee to purchase, sell, exchange, transfer, mortgage, pledge, distribute, or otherwise in any manner dispose of or deal with any property held by the Trustee. The Certificate of the Trustee that the Trustee is acting in conformance with the terms of this Agreement shall protect all persons dealing with the Trustee.

7.4 Creditors Clause and Spendthrift Provision. With respect to all payments and distributions to be made pursuant to the trusts established hereunder, no beneficiary shall have any right to or interest in the income or principal therefrom until the same has been paid to him or her. Both principal and income of such trusts shall be free from the interference and control of the creditors of any beneficiary and neither the principal nor income of such trusts shall be subject to assignment or other anticipation by any beneficiary unless the Trustee determines that such assignment or anticipation is clearly and unequivocally in the best interest of such beneficiary. Both principal and income of such trusts shall be free from seizure under any legal, equitable, or other process whatsoever. If the Trustee believes the foregoing may be violated or if the Trustee believes the protection of any beneficiary requires it, the Trustee may withhold any part or all of the income and principal payments to which a beneficiary may be entitled and use and pay directly such portion thereof as the Trustee deems advisable.

7.5 Corporate Merger. If the Trustee merges or consolidates, the corporation formed by such merger or consolidation shall act as Trustee and shall possess and exercise all powers and authority herein provided.

7.6 Exculpatory. No successor Trustee shall be liable for any act or failure to act of any predecessor Trustee. With the approval of the person making the appointment of the Trustee, the successor Trustee shall not be required to review the accounts, acts, or omissions of predecessor Trustees or to take action against predecessor Trustees for breaches of trust and may accept whatever assets are turned over without further inquiry.

7.7 Construction. This Agreement, all trusts established hereunder, all powers of appointment, and all other matters shall be constructed under and regulated by [Florida] law. The validity of this Agreement and all trusts established hereunder shall be determined by [Florida] law.

7.8 Notices. All notices required or permitted hereunder shall be in writing and sent by ordinary mail to the recipient at such address as may be specified from time to time. If any person receiving notice shall be a minor or under other legal disability, a living parent, guardian, or other person having physical custody of such person may act for such person in receiving notice. Nothing contained in this paragraph shall be deemed to give such person acting in conjunction with the Trustee the power or right to enlarge, shift, or restrict the beneficial interest of any beneficiary of any Trust.

7.9 Reduction or Release of Powers. I give to the Trustee the power to release or renounce any power, privilege, or right (including this power) or the power to reduce the scope and extent of any power, privilege, or right (including this power). If there is more than one Trustee of this Trust, this power may be exercised by any one Trustee individually or by all of the Trustees collectively.

7.10 Tax Elections. The Trustee shall have the power to select tax years and make, or refrain from making, all other decisions and elections permitted under any applicable income, estate, or inheritance tax law, including the imposition of a lien on Family Trust assets to secure tax payments, without regard to the effect thereof, if any, on any beneficiary of this Trust and, if any such decision or election shall be made, to apportion or refrain from apportioning the consequences thereof among the respective interests of the beneficiaries of this Trust, all in such manner as the Trustee shall deem appropriate. If the Trustee is responsible for preparing and filing a federal estate tax return in my estate, and determines there is uncertainty as to the inclusion of a particular item of property in my gross estate for federal estate tax purposes, then such property may, in the discretion of the Trustee, be excluded from my gross estate in my federal estate tax return. Similarly, if the Trustee is responsible for preparing and filing a federal estate tax return in my estate, then the decision of the Trustee as to the valuation date for federal estate tax purposes shall be conclusive on all concerned.

7.11 Termination of Trusts. Notwithstanding any other provision of this Agreement, no trust or interest in a trust created pursuant to this Agreement or any trust or interest established by the exercise of a power of appointment shall (1) continue to remain contingent beyond twenty-one years after the death of the last to die of any beneficiary who is living on the date on which this Trust becomes irrevocable, or (2) continue beyond the time at which their continued existence would violate the Rule Against Perpetuities. Upon the expiration of either of these periods, any trust or interest in a trust or any trust or interest established by the exercise of power of appointment shall terminate and the assets thereof shall be distributed outright in equal shares to the income beneficiaries thereof, or if any income beneficiary shall be deceased, that beneficiary's shares to his or her descendants per stirpes.

7.12 Loans and Purchases. The Trustee may utilize funds contained in the Family Trust, at the Trustee's discretion, to purchase assets from my estate and/or my wife's estate and/or to lend sums of money to the Personal Representative of either of same estates in order that cash may be made available to said estates. It is my intent by this provision to specifically authorize such purchases or loans even though the Personal Representative of said estates and the Trustee may be the same person(s) or corporation(s).

7.13 Captions. The captions in this Agreement are for convenience only and shall not be considered as part of this Agreement or in any way limiting or amplifying the terms and provisions hereof.

7.14 Severability. If any provision of this Agreement shall be invalid or unenforceable, the remaining provisions shall have full force and effect.

7.15 Exercise of Rights. All rights (such as release, disclaimer, and renunciation) exercisable by any beneficiary shall be exercised by delivery to the Trustee of a writing, signed and acknowledged by the person exercising such right. All notices, certificates, and other communications permitted or required hereunder shall be in writing.

ARTICLE VIII ACCOUNTING

Except to the extent otherwise excused by governing law, the Trustee shall keep the presently vested beneficiaries of the Trust reasonably informed of the Trust and its administration. Within thirty (30) days after my death, the Trustee shall inform in writing the presently vested beneficiaries of its name and address and of their right to request and receive a copy of the terms of the Trust that describe or affect their interest, and relevant information about the assets and administration of the Trust. The Trustee shall render annually, or as soon thereafter as reasonably practicable, and send to me or my guardian during my lifetime and after my death to each presently vested beneficiary, an annual accounting statement showing all receipts, disbursements, and distributions for the preceding year, together with a statement of all of the property then in the Trustee's possession belonging to the Trust. Such annual accounting statement shall be approved and be final and binding on me and on each presently vested beneficiary (1) when the same is approved in writing by such beneficiary or (2) unless a proceeding to raise an objection to the accounting statement is commenced within six (6) months after the date of sending by ordinary mail, or the delivery, of such annual accounting statement.

Upon termination of any Trust, the Trustee shall render and send to all beneficiaries a final accounting statement showing all receipts, disbursements, and distributions since my death, together with a statement of all the property then in the Trustee's possession and belonging to the Trust. Such final accounting statement shall be approved and be final and binding on each beneficiary (1) when the same is approved in writing by such beneficiary or (2) unless a proceeding to raise an objection to the accounting statement is commenced within six (6) months after the date of sending by ordinary mail, or the delivery of, such annual accounting statement. After approval of the final accounting statement and the payment of all the obligations of the Trust and distribution of the principal and accumulated net income of the Trust to the beneficiaries entitled to the same, the Trustee shall be released and discharged from all liability for the Trustee's acts and obligations under this Agreement. If an accounting statement is objected to as provided herein, the objection shall be heard and decided by the probate court in the county where the corporate Trustee is located.

If any beneficiary shall be a minor or under other legal disability, a living parent, guardian, or other person having physical custody of such beneficiary may act for such beneficiary in approving accounts with the same effect as if such beneficiary had been of full age or without legal disability, and had for himself approved such accounts. Nothing contained in this paragraph shall be deemed to give such person acting in conjunction with the Trustee the power or right to enlarge, shift, or restrict the beneficial interest of any beneficiary of any trust.

The books and records of the Trustee relating to duties as Trustee of this Trust shall be open during business hours for inspection by me or any beneficiary of this Trust or their duly appointed attorney, accountant, agent, or other representative.

AFFIDAVIT OF EXECUTION

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