Bypass Trust

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					Bypass Trust
This Bypass Trust is a trust in which the person creating it intends to deposit their
assets to pay trust income to their spouse for the rest of the spouse’s life. Customize the
information of the parties, the trustee, the executor, the trust’s assets, and more. It is
vital to get this trust in writing to ensure the understandings of the parties are properly
set forth. This trust is ideal for individuals that want to ensure their spouses receive
property for the duration of the spouse’s life.
LAST WILL AND TESTAMENT OF _________________________________ [Instructions:
                   Insert the full legal name of Testator]

I, _____________________, [Instructions: Insert the full legal name of Testator] of the City
of ___________________, [Instructions: Insert city] County of _______________________,
[Instructions: Insert county] and State of _______________________, [Instructions: Insert
state] being of sound mind, do hereby declare this to be my Last Will and Testament, hereby
revoking all prior Wills and Codicils made by me.

1.       EXECUTOR

         a.       Appointment.

               i.      I nominate and appoint _______________________, [Instructions: Insert
the full legal name of the Executor] of the City of ____________________, [Instructions:
Insert city] County of ____________________, [Instructions: Insert county] and State of
_______________________ [Instructions: Insert state] as the Executor of this Will. I,
reposing special trust and faith in the Executor, direct that no bond or other security be required
for the faithful performance of the Executors duties or, if bond is required, that sureties thereon
be waived.

              ii.     Should _______________________ [Instructions: Insert the full legal
name of the Executor] predecease me or fail to qualify as Executor or, having qualified, die,
resign or become incapacitated, then I nominate and appoint _______________________,
[Instructions: Insert the full legal name of the Back-Up Executor] of the City of
____________________, [Instructions: Insert city] County of ____________________,
[Instructions: Insert county] and State of _______________________ [Instructions: Insert
state] as the Executor of this Will, and confer upon _______________________, [Instructions:
Insert the full legal name of the Back-Up Executor] the same powers and authority as my
original Executor was given.

        b.     Powers of Executor. In addition to any powers and authority conferred by law, I
give to the Executor of this Will the full power and authority to do any and all things necessary
for the complete administration of my estate, including, but not limited to, the power to
mortgage, lease, sell, or otherwise encumber any real, personal or mixed property that may be a
part of my estate, by public or private transaction, without court order or approval and without
notice to anyone. The Executor of this Will shall not be accountable or responsible to any person
interested in my estate for the manner in which reasonable discretionary authority is exercised.

        c.    Debts and Expenses. I direct the Executor of this Will to first pay any legally
enforceable debts still owing at my death, last illness, funeral expenses and estate administration
expenses from my estate, except that any debt or expense secured by a mortgage, pledge or
similar encumbrance on property owned by me at my death need not be paid by my estate, but
such property may pass subject to such mortgage, pledge or similar encumbrance.

2.       RESIDUE OF ESTATE



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I give, devise and bequeath all the rest, residue and remainder of my estate, including real,
personal or mixed property, whether tangible or intangible, of whatever kind and nature,
wherever situated, including all property that I may acquire or become entitled to after the
execution of this Will, or other gifts made by this Will that fail for any reason, that I may own at
the time of my death, or which I have the power to dispose of at the time of my death, to the
person or corporation that at the time of my death is serving as Trustee, in trust, to be held,
administered, and distributed according to the terms set forth herein. The trust created hereunder
shall henceforth be referred to as the “Bypass Trust.”

         a.           Trustee.

                 i.          Nomination of Trustee.

                        (1)    I nominate and appoint my Spouse as Trustee of the Bypass Trust.
I, reposing special trust and faith in Trustee, direct that no bond or other security be required for
the faithful performance of the Trustee’s duties or, if bond is required, that sureties thereon be
waived.

                      (2)     Should my Spouse predecease me or fail to qualify as Trustee or,
having qualified, die, resign or become incapacitated, then I nominate and appoint
__________________________, [Instructions: Insert the full legal name of Back-Up
Trustee] of the City of __________________, [Instructions: Insert city] County of
__________________, [Instructions: Insert county] and State of _____________________
[Instructions: Insert state] as successor Trustee and confer upon ____________________,
[Instructions: Insert the full legal name of Back-Up Trustee] the same powers and authority
as my original Trustee was given.

             ii.        Powers of Trustee. To carry out the purposes of the Bypass Trust, and
subject to any limitations stated elsewhere in this Will, the Trustee shall have all of the following
powers, in addition to all of the powers now or hereafter conferred on trustees by law:

                        (1)    Retain property received into the trust at its inception, or later
added to the trust, as long as the Trustee considers that retention in the best interests of the trust
or in furtherance of my goals in creating the trust, as determined from this Will, but subject to the
standards of the prudent investor rule as set forth in the California Uniform Prudent Investor Act.

                       (2)     Invest and manage the trust assets as a prudent investor would, by
considering the purposes, terms, distribution requirements, and other circumstances of the trust.
In satisfying this standard, the Trustee shall exercise reasonable care, skill, and caution. The
Trustee's investment and management decisions respecting individual assets and courses of
action must be evaluated not in isolation, but in the context of the trust portfolio as a whole and
as a part of an overall investment strategy having risk and return objectives reasonably suited to
the trust.

                     (3)    With or without court authorization, sell (for cash or on deferred
payments, and with or without security), convey, exchange, partition, and divide trust property;



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grant options for the sale or exchange of trust property for any purpose, whether the contract is to
be performed or the option is to be exercised within or beyond the term of the trust; and lease
trust property for any purpose, for terms within or extending beyond the expiration of the trust,
regardless of whether the leased property is commercial or residential and regardless of the
number of units leased.

                         (4)   Engage in any transactions with the executor of my estate that are
in the best interest of any Bypass Trust under this Will.

                      (5)     Manage, control, improve, and maintain all real and personal trust
property. In the Trustee's discretion, abandon any unproductive or wasted trust asset or interest
therein.

                       (6)    Employ and discharge agents and employees, including but not
limited to attorneys, accountants, investment and other advisers, custodians of assets, property
managers, real estate agents and brokers, and appraisers, to advise and assist the Trustees in the
management Bypass Trust, and compensate them from the trust property.

                       (7)     Borrow money for any trust purpose from any person or entity on
such terms and conditions as the Trustee deems advisable, and obligate the trust for repayment;
encumber any trust property by mortgage, deed of trust, pledge, or otherwise, whether for terms
within or extending beyond the term of the trust, as the Trustee deems advisable, to secure
repayment of any such loan; replace, renew, and extend any such loan or encumbrance; and pay
loans or other obligations of the trust deemed advisable by the Trustee.

                      (8)    In the Trustee's discretion, make loans to beneficiaries out of funds
of the trust and to guarantee the repayment of loans made to beneficiaries by third parties by
encumbering trust assets.

                       (9)     Enforce any obligation owing to the trust, including any obligation
secured by a deed of trust, mortgage, or pledge held as trust property, and to purchase any
property subject to a security instrument held as trust property at any sale under the instrument
Pay or contest any claim against the trust; release or prosecute any claim in favor of the trust; or,
in lieu of payment, contest, release, or prosecution, adjust, compromise, or settle any such claim,
in whole or in part, with or without consideration. At trust expense, prosecute or defend actions,
claims, or proceedings of whatever kind for the protection of the trust property and of the Trustee
in the performance of the Trustee's duties, and employ and compensate attorneys, advisers, and
other agents as the Trustee deems advisable.

                      (10) The enumeration of specific powers under this Will shall not limit
the Trustee from exercising any other power with respect to the Bypass Trust that may be
necessary or appropriate for the Trustee to have and exercise in order to carry out the purposes of
the Bypass Trust or to permit the Trustee to fulfill the Trustee's responsibilities and duties with
respect thereto.




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            iii.      Duty to Account. The Trustee shall render accounts at least annually, at
the termination of a trust, and upon a change of Trustees, to the persons and in the manner
required by law.

           iv.       Compensation of Trustee. The Trustee shall be entitled to reasonable
compensation for services rendered, payable without court order.

         b.       Bypass Trust.

               i.     Administration. The Trustee shall hold, administer, and distribute the
assets of the Bypass Trust as follows:

                      (1)     The Trustee shall pay to or apply for the benefit of my spouse,
___________________ [Instructions: Insert the Spouse’s name] (henceforth, my “Spouse”),
all of the net income of the Bypass Trust, in monthly or other convenient installments agreed
upon by my Spouse and the Trustee, but not less often than annually, for life. The Trustee shall
distribute to or apply for the benefit of my Spouse, for life, as much of the principal of the
Bypass Trust as the Trustee, in the Trustee's discretion, deems necessary, when added to the
income payments from this trust, for my Spouse’s health, education, support, and maintenance.

                        (2)     On the death of my Spouse, the Trustee shall divide the trust
property into as many shares of equal market value as are necessary to create one share for each
of my children who survives my Spouse, and one share for the issue who survive my Spouse of
each of my children who predeceases my Spouse, per stirpes and not per capita. The Trustee
shall pay or distribute to or apply for the benefit of that child, in monthly or other convenient
installments, but not less often than annually, as much of the net income of the trust, and as much
of the principal of the trust, as the Trustee, in the Trustee's discretion, deems necessary for the
child’s health, education, support, and maintenance, until that child reaches the age of
__________ (___) [Instructions: Insert the number of years] years. When that child reaches
the age of age of __________ (___) [Instructions: Insert the number of years] years, the
Trustee shall distribute to the child the outright balance of the child’s share of trust property.

                     (3)   If all my children predecease my Spouse without leaving issue who
survive my Spouse, the Trustee shall distribute any undistributed balance of the trust property
outright to _____________________. [Instructions: Insert alternate disposition]

                       (4)     All decisions of the Trustee regarding Bypass Trust payments, if
any, are within the Trustee's discretion. In making any payments of income and distributions of
principal from the Bypass Trust for the health, education, support, and maintenance or care and
comfort] of any beneficiary, the Trustee shall take into consideration, to the extent the Trustee
deems advisable, any other income or resources available to that beneficiary that are known to
the Trustee and that are reasonably available for that purpose.

                      (5)     Unless otherwise specifically provided in this Will, the
determination of all matters with respect to what is principal and income of the Bypass Trust and
the apportionment and allocation of receipts, expenses and other charges between principal and



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income shall be governed by the provisions of the Uniform Principal and Income Act from time
to time existing. The Trustee in the Trustee's discretion shall determine any matter not provided
for either in this instrument or in the Uniform Principal and Income Act.

             ii.     Federal Generation-Skipping Transfer Tax. In the event that any property
within the Bypass Trust is or may become subject to the federal generation-skipping transfer tax:

                        (1)    Should the Executor intend to allocate any part of the generation-
skipping transfer tax exemption that is available to me to some but not all of the property to be
distributed to the Bypass Trust, the Executor shall obtain an order for distribution that divides the
trust into two separate Bypass Trust, to be designated as the Exempt Trust and the Non-Exempt
Trust. The Exempt Trust shall contain the share of the property of the Bypass Trust equal in
value to the amount of the generation-skipping transfer tax exemption that the Executor intends
to allocate to the trust. The Non-Exempt Trust shall contain the balance of the property of the
Bypass Trust. The Executor shall then actually allocate the generation-skipping transfer tax
exemption to the Exempt Trust and not to the Non-Exempt Trust so that the Exempt Trust shall
have an inclusion ratio of zero for federal generation-skipping transfer tax purposes and the Non-
Exempt Trust shall have an inclusion ratio of one for federal generation-skipping transfer tax
purposes. Should the amount of my generation-skipping transfer tax exemption actually
allocated by the Executor to the Bypass Trust be equal to the value of the property of the Bypass
Trust so that the entire Bypass Trust has an inclusion ratio of zero for federal generation-
skipping transfer tax purposes, the entire trust shall be referred to as the Exempt Trust. On the
other hand, if no part of my generation-skipping transfer tax exemption is actually allocated to
the trust by the executor so that the entire trust has an inclusion ratio of one for federal
generation-skipping transfer tax purposes, the entire trust shall be referred to as the Non-Exempt
Trust.

                        (2)     The purpose of this section is to allow the Trustee to administer the
Bypass Trust so as to decrease the amount of generation-skipping transfer taxes owed on
transfers from the Bypass Trust. The Trustee shall balance that consideration against any other
tax and non-tax considerations, and may disregard the generation-skipping transfer tax
consequences to the extent that the Trustee determines that doing so will allow the Trustee to
carry out my intentions in creating the Bypass Trust. All decisions of the Trustee under this
subsection are within the Trustee's discretion. If, in the judgment of the Executor or the Trustee,
at any time after the execution of this Will, any statute, regulation, court decision, or
administrative ruling imposes different or additional requirements on the trust in connection with
the generation-skipping transfer tax the executor or the Trustee may petition the court to amend
the terms of the trust to meet those requirements and achieve the purpose of this section.

             iii.       Failure of Trust Instrument or Gift. If, for any reason, the Bypass Trust is
not in force at the time of my death, or if this gift, devise and bequest to the then-current Trustee
of the Bypass Trust is held invalid, then I direct that this gift, devise and bequest shall be held
and managed in the manner described in the instrument of Trust now in existence by the same
Trustee, and for that purpose I hereby incorporate that instrument of Trust, as it now stands, by
reference into this, my Last Will and Testament.




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\
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IN WITNESS WHEREOF, I have subscribed my name to this, my Last Will and Testament,
consisting of __________ (___) [Instructions: Insert the total number of pages] pages, in the
presence of two (2) persons witnessing at my request, on ___________________. [Instructions:
Insert the date]



__________________________
__________ [Instructions: Insert Full Legal name of Testator],
Testator


We, the undersigned, do hereby certify that:

       (a)    In our sight and presence, __________ [Instructions: Insert the full legal name
of Testator] (the “Testator”) signed and executed this instrument as Testator’s Last Will and
Testament.

       (b)     To the best of our knowledge, Testator was, at the time of Testator’s signing and
execution of this Will: (i) at least eighteen (18) years of age, (ii) signing willingly, freely and
voluntarily for the purposes therein expressed (iii) of sound mind, and (iv), under no constraint
or undue influence.

       (c)        Each of us signed this Will as witnesses, in the presence and hearing of the
Testator.

WITNESS                                                          WITNESS



__________________________                                       __________________________
__________ [Instructions: Insert Name]                           __________ [Instructions: Insert Name]
__________ [Instructions: Insert City]                           __________ [Instructions: Insert City]
__________ [Instructions: Insert State]                          __________ [Instructions: Insert State]




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Description: This Bypass Trust is a trust in which the person creating it intends to deposit their assets to pay trust income to their spouse for the rest of the spouse’s life. Customize the information of the parties, the trustee, the executor, the trust’s assets, and more. It is vital to get this trust in writing to ensure the understandings of the parties are properly set forth. This trust is ideal for individuals that want to ensure their spouses receive property for the duration of the spouse’s life.