Trust Agreement for Minor Qualifying for Annual Gift-Tax
Exclusion with Beneficiary having Option to Continue Trust Past
Age 21; Income must be Paid to Beneficiary after Age 21
This Trust Agreement is made (date), between (Name of Trustor), of (street address, city, state,
zip code), hereinafter called the Trustor, and (Name of Trustee), of (street address, city, state,
zip code), hereinafter called the Trustee.
For and in consideration of the mutual promises set forth in this Agreement, Trustor and Trustee
agree as follows:
I. Transfer in Trust. Trustor transfers and delivers to Trustee all of the property described
in Exhibit A, which is attached and incorporated by this reference. The described property,
together with all other property later transferred and delivered to Trustee, shall constitute the
Trust Estate, and shall be held, administered, and distributed by Trustee as provided in this
II. Disposition of Principal and Income. Trustee shall hold, manage, invest, and reinvest
the Trust Estate, shall collect and receive the income from the Trust, and shall pay, expend, or
distribute the net income and principal of the Trust Estate to or for the benefit of Trustor's (e.g.,
son), (Name of Minor Beneficiary), born on (date), the Beneficiary, in the following manner:
A. Trustee may distribute to, or expend for the benefit of, Beneficiary, until he
attains the age of 21 years, so much of the annual net income of the Trust Estate, up to
the whole of it, as Trustee may from time to time in Trustee's sole and absolute
discretion determine. The balance of the annual net income of the Trust Estate that is
not distributed during the year, if any, shall be accumulated by Trustee and added to the
principal of the Trust Estate at the end of the year.
B. Trustee may pay to or apply for the benefit of Beneficiary, until he attains the age
of 21 years, so much of the principal of the Trust Estate, up to the whole of it, at such
time or times and in such amounts and manner as Trustee, in its sole discretion, shall
C. When Beneficiary attains 21 years of age, this Trust shall terminate and all the
Trust Estate then in Trustee's possession, including any accumulated or undistributed
net income of the Trust Estate, shall be distributed to Beneficiary; provided, that
within (number) days after 21st birthday of the Beneficiary, Beneficiary shall have the
option to have the Trust continue until he attains the age of (age of Beneficiary at
termination) years, in which case all income from the Trust earned after Beneficiary's
21st birthday shall be paid to Beneficiary in annual installments. All the Trust Estate,
including any accumulated or undistributed net income, shall then be distributed to
Beneficiary on his attaining the age of (age of Beneficiary at termination) years, when
this Trust shall terminate.
D. If Beneficiary dies before attaining the age of 21 years, this Trust shall terminate
and all of the undistributed Trust Property, including accumulated and undisbursed net
income, shall be transferred, paid, and delivered to such persons, including Beneficiary's
Estate, as Beneficiary shall by last will appoint, which will shall specifically refer to this
Trust. Such appointment may be made absolutely or in Trust, on such Estates, subject
to such limitations, and in such shares or proportions as Beneficiary designates in the
will, admitted to probate and specifically referring to the power granted in this
Agreement. To the extent that the Trust Property is not effectively appointed, the
Property shall be transferred, paid, and delivered as follows: (per stirpes), first, to the
then-living descendants of Beneficiary, and if none, next, to the living descendants of
Trustor, and if none, finally to the personal representative of Beneficiary's Estate;
provided, that if Trustor has created a Trust or Trusts similar to this one for the benefit of
any descendants of Trustor, and such Trust or Trusts has or have not terminated, the
share otherwise payable to the descendant or descendants shall be added to the Trust
or Trusts in equal proportions, and subsequently shall be held, administered, and
distributed as provided in this Agreement.
III. Irrevocability of Trust. This Trust is irrevocable and shall not be subject to amendment,
alteration, or change. Trustor waives any and all rights or powers, whether alone or in
conjunction with others, and in whatever capacity, to alter, amend, revoke, or terminate the
Trust, or any of the terms of this Agreement, in whole or in part, or to designate the persons who
shall possess or enjoy the Trust Property or the income from it. Neither the creation of this Trust
nor any distribution of income or principal shall be deemed or considered to discharge or relieve
Trustor from any obligation to support any dependent of Trustor.
IV. Additions to Trust. In Trustee's discretion, Trustee may accept additions to the Trust
Estate from any source, provided that all such additions shall be irrevocable.
V. Manner of Distribution. Trustee, in its sole discretion, may make payments or
distributions under the terms of this Trust to or for the benefit of Beneficiary in any one or more
of the following ways:
A. To Beneficiary directly.
B. To the natural guardian or legally appointed guardian or conservator of the
person or Estate of Beneficiary.
C. To make expenditures directly for the benefit of Beneficiary. Trustee shall not be
required to administer the application of any funds paid or applied in any of the
mentioned ways, and Trustee's decision as to which of the mentioned methods should
be used in making payments and distributions shall be conclusive and binding on all
IV. Powers of Trustees.
A. Subject only to the provisions and limitations set forth in this Section IV and
elsewhere in this instrument and especially Section V, the Trustee, in extension and not
in limitation of the powers given them by law or other provisions of this instrument, shall
have the following powers with respect to the Trust created by this Agreement and its
property, in each case to be exercised from time to time in (his/its) discretion and without
the order or license of any court:
1. To change the situs of the Trust and of any property which is part of the
Trust to any place in the United States of America or any other country.
2. Not to file an inventory of the property which is part of the Trust nor
annual accounts of administration with and not to have any of such property
examined by any court where the filing or examination is not required by
3. To retain for any period of time any property which may be received or
acquired, even though its retention by reason of its character or otherwise would
not be appropriate apart from this provision.
4. To collect, receive, and receipt for rents, profits, or other income from any
property which may be held.
5. To expend money or other property in order to collect, sell, manage,
conserve, or administer any property which may be held, or in order to improve,
repair, equip, develop, furnish, maintain, alter, extend, or add to any such
6. To sell at public or private sale (including, specifically, the power to initiate
or participate in any public offering or underwriting), partition, exchange for like or
unlike property, lease for any period of time even though it may be longer than
the duration of the estate or of the Trust, modify, renew, or extend any lease,
grant, options on, release, demolish, abandon, dedicate and otherwise dispose of
any property which may be held, on such terms and conditions, including credit,
and for such consideration, even though it may be less than the value at which
the property was appraised in the estate or was received or acquired, or for such
other benefit, even though it may be intangible, as may be deemed appropriate.
7. To transfer title to, grant rights in, and convey in fee simple or otherwise
any property which may be held, free of all Trust.
8. To invest and reinvest in any and all kinds of securities, domestic or
foreign, including common and preferred stocks, bonds, debentures, notes,
commodity contracts, mortgages, and options on property; in money market
Funds, commercial paper, repurchase Agreements, United States Treasury
obligations, certificates of deposit, savings accounts, checking accounts, and any
other cash investment medium; in investment Trusts and in common trust funds;
in any real property; in any personal or mixed property; in any business, mining,
or farming operation, or other venture; or in any other interest or investment
medium, even though such investment would not be of a character authorized by
applicable law but for this provision.
9. Not to diversify the property which may be held, whether the property was
originally received or subsequently acquired by exchange, investment, or
10. To retain cash for reasonable periods of time in amounts sufficient to
meet anticipated needs, including payments of expenses and to beneficiaries.
11. With respect to property subject to depreciation or depletion, to withhold
an amount from Trust Income in the discretion of the Independent Trustee to
provide for a reasonable allowance for depreciation or depletion on such property
under generally accepted accounting principles.
12. To do all things necessary, customary, or desirable to conduct the affairs
of an unincorporated business, mining, or farming operation or other venture.
13. To do all things necessary, customary, or desirable to conduct the affairs
of any corporation; to act as officer, director, attorney, or employee of any
corporation; and to place stock in the name of an individual personal
representative or Trustee or any Beneficiary of the estate or of the Trust in order
to qualify the person as a director of the corporation.
14. Alone or with others, to organize, reorganize, merge, consolidate,
recapitalize, dissolve, liquidate, or otherwise create or change the form of any
corporation, partnership, joint venture, or other entity.
15. To exercise all voting, sale, purchase, exchange, or other rights or
options with respect to any security or other property which may be held.
16. To refuse, reject, or not to exercise any offer to purchase, option to
purchase, voting, or other right or option with respect to any security or
other property which may be held.
17. To participate in any plan or proceeding for protecting or enforcing any
right, obligation, or interest arising from any property which may be held; to serve
as a member of a securities-holder protective committee; and to deposit
securities in accordance with any plan agreed on.
18. To expend money or other property, whether by bidding in at foreclosure,
by making a contribution to capital, by paying an assessment, or otherwise, in
order to protect any property which may be held.
19. To pay, contest, compromise, abandon, release, adjust, submit to
arbitration, sue on, defend, and otherwise deal with and settle any claim in favor
of or against the estate or the Trust or the personal representative or Trustees.
20. To receive, acquire and retain policies of fire, motor vehicle, business-
interruption, title, liability, fidelity, indemnity, or other casualty insurance, either in
stock or in mutual companies, in any amount, against any risk in which the estate
or the Trust has an insurable interest.
21. To borrow money or other property for such periods of time, on such
terms and conditions, and for such purposes as may be deemed appropriate; to
mortgage, pledge, or otherwise encumber any property which may be held as
security for any such loan; and to renew, extend, or refund any existing loan
either as maker or endorser.
22. With respect to any obligation held, whether secured or unsecured, to
reduce the interest rate on