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Revocable Inter-Vivos Trust - Married in a Community Property State

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Revocable Inter-Vivos Trust - Married in a Community Property State Powered By Docstoc
					This is a legal document that determines how a married couple's property is to be
managed and distributed during their lifetime and also upon death. This particular trust
is created by a married couple in a community property state. This trust is revocable
and designates the spouse that survives longer as the beneficiary in order to avoid
estate and gift taxes, but this agreement can easily be customized to provide for
different beneficiaries. This document can be used by married couples in community
property states that want to designate each other as beneficiaries for distribution upon
the death of one spouse.
                         INTER-VIVOS REVOCABLE TRUST
THIS INTER-VIVOS REVOCABLE TRUST (this “Instrument”) is made this ____ day of
_________, _____, by ________________ [Comment:     INSERT   FIRST    SPOUSE’S
NAME] and _______________ [Comment: INSERT SECOND SPOUSE’S NAME] of
County of ___________________, State of ___________________, as Settlors, and by
________________ [Comment:             INSERT FIRST    SPOUSE’S   NAME]      and
_______________ [Comment: INSERT SECOND SPOUSE’S NAME], as Trustees
(collectively referred to as the “Trustee”).

                                                       Recitals

WHEREAS, Settlors, also referred to as husband and wife, are currently married;

WHEREAS, Settlors have ____ (__) children, referred to herein in as “child” or “children,” all
of them adults, namely: (1) _______________, who resides at ___________________ in the of
County of ___________________, State of ___________________; (2) ___________________,
who resides at ________________ in the County of ___________________, State of
___________________; and (3) ___________________, who resides at ________________ in
the County of ___________________, State of ___________________;

WHEREAS, Settlors declare that they have transferred to the Trustee the property described in
Schedule “A” attached to this Instrument.

WHEREAS, the Trustee hereby agrees to hold such property and any other property included in
the trust estate, in trust, on the terms and conditions set forth herein.

WHEREAS, the Settlors wish, by this Instrument, to create an inter-vivos revocable trust in
accordance with the laws of the State of ___________________ whereby their community
property and their separate property will be held in trust and managed for their benefit during
their respective lives and distributed to their beneficiaries upon their death;

                                                        Terms

                                               I TRUST ESTATE.

1. Trust Estate

All property subject to this Instrument is referred to as the “trust estate” and shall be held,
administered, and distributed according terms and conditions set forth in this Instrument.




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2. Trust Property

         A. The trust estate consists of the property (plus the proceeds and undistributed income
            of such property) listed in Schedule “A” and hereafter transferred to the trust by the
            Settlors or their Wills, as insurance proceeds or pension benefits, or from any other
            person or source.

         B. The Settlors’ community property, listed in Schedule “A” or subsequently transferred
            to the trust estate, is called the “community estate” and shall remain the community
            property of the Settlors during their joint lifetimes.

         C. Either Settlor’s separate property, now transferred or subsequently added to the trust
            estate, is called and shall remain such Settlor’s separate estate.

         D. Unless otherwise specified at the time of an addition, it is hereby agreed by the
            Settlors that any quasi-community property transferred to the trust estate by a Settlor
            shall thereby become community property and shall be included in the community
            estate.

         E. Unless changed or transmutated by separate written agreement entered into on the
            same date or after the date of this Trust Agreement, the assets of the trust estate shall
            retain their original character as separate, quasi-community or community property of
            the Settlors, and shall be accordingly designated.


               II INCOME AND PRINCIPAL DISTRIBUTIONS DURING LIFE

1. Community Property

         A. During the joint lifetimes of Settlors (except as provided herein below), the Trustee
            shall pay to husband or wife for the account of the community, or shall apply for the
            Settlors’ benefit, all of the net income of the community estate in _____________
            [quarterly] or more frequent installments.

         B. The Trustee shall pay to the Settlors for the account of the community, or apply for
            the benefit of the Settlors, as much of the principal of the community estate as a
            Settlor directs or as is necessary in the Trustee’s discretion for the Settlors’ proper
            health, education, support, maintenance, comfort and welfare, in accordance with
            their accustomed manner of living during their joint lifetimes.

         C. The spouse receiving payments shall have the same duty to use community income
            and principal received under this Instrument for the Settlors’ benefit as they have for
            any other community property.


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         D. Any income or principal paid to or for the Settlors’ benefit or withdrawn by them
            shall continue to retain its character as community property.

2. Separate Property

         A. During the Settlors’ joint lifetimes, the Trustee shall pay to or apply for the benefit of
            the Settlor whose separate property was transferred to the trust, the net income of that
            Settlor’s separate property in ____________ [quarterly] or more frequent
            installments.

         B. The Trustee shall pay to or apply for the benefit of said Settlor as much of the
            principal of that Settlor’s separate estate as the Settlor directs or as is necessary in the
            Trustee’s discretion for the proper health, education, support, maintenance, comfort
            and welfare of that Settlor in accordance with that Settlor’s accustomed manner of
            living at the date of this Instrument.

3. Residence

     At such times as the trust estate includes a family home, which Settlors or either of them
     occupy as their principal place of residence, and so long as doing so does not pose a threat to
     the health and physical or financial security of Settlor(s), the Trustee shall allow them or
     either of them to continue to occupy such home rent free, with all expenses, including taxes,
     insurance, repairs and maintenance, paid from the trust estate.


                                 III INCAPACITATION OF SETTLOR.

1.   Payments for Benefit of Settlor That Is Incapacitated

         A. If at any time, as certified in writing by the Settlor’s attending physician or, if such
            Settlor has no regularly attending physician, two licensed physicians, not related by
            blood or marriage to either Settlor or any beneficiary of this trust, either spouse has
            become incapacitated, whether or not a court of competent jurisdiction has declared
            him or her incompetent or mentally ill or has appointed a conservator, the Trustee
            shall take the steps provided for in this Article.

         B. Trustee shall pay to the other spouse or apply for the benefit of either Settlor, first
            from the community estate, and then from the separate estates, if any, of either or
            both Settlors, in equal shares to the extent possible, amounts of net income and
            principal necessary in the Trustee’s discretion for the proper health, support,
            maintenance, comfort and welfare of both Settlors in accordance with their
            accustomed manner of living during their joint lifetimes.


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         C. The Trustee shall make such payments or applications until the incapacitated Settlor,
            as certified by the Settlor’s attending physician or, if such Settlor has no attending
            physician, by two licensed physicians not related by blood or marriage to either
            Settlor or to any beneficiary of this trust, is again able to manage his or her own
            affairs, or until the earlier death of either Settlor.

         D. The non-incapacitated spouse may also withdraw from time to time accumulated trust
            income and principal of community property and of separate property contributed by
            that spouse.

         E. Income and principal from community property so paid or withdrawn shall be held
            and administered as community property by the non-incapacitated spouse.

         F. Any income in excess of the amounts applied for the benefit of the Settlors shall be
            accumulated and added to principal of the community or the separate estate, as the
            case may be.

         G. The Trustee shall take into consideration, when making distributions of principal, to
            the extent the Trustee deems advisable, any income or other resource of the Settlors
            outside the trust estate known to the Trustee.

         H. The words “incapacity” or “incapacitated” shall include any condition that renders a
            person unable to conduct his or her regular affairs and that is likely to extend for a
            period longer than ninety (90) days. The certification of incapacity shall be filed with
            and accepted by the Trustee, or for an incapacitated Trustee, filed with and accepted
            by the successor Trustee.

2. Undistributed Income

Any of the net income derived from the trust estate which may not have been distributed to the
Settlors shall be accumulated and added to the principal of the community or separate trust estate
as the case may be.

3. Public Benefits

In making distributions, the Trustee shall take prudent and lawful measures to ensure the earliest
possible eligibility of Settlors for health and income public benefits for which either or both of
them may qualify because of their age or disability.

4. Durable Power of Attorney

In the event that a Settlor is incapacitated as determined in this Article, and it is foreseeable that
major expenses for the incapacitated Settlor will seriously deplete the trust estate of Settlors, the
Trustee shall follow the direction of a Settlor who has capacity and of the holder of the Durable

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Power of Attorney of an incapacitated Settlor in transferring assets into or out of this trust, or in
otherwise amending or revoking this Instrument in accordance with the powers given in the
Durable Power of Attorney.


                                IV AMENDMENT AND REVOCATION.

1. Settlor May Amend or Revoke

Settlor may amend or revoke this Instrument as to all or any part of the property held therein by
an executed writing, dated and delivered to the Trustee. Upon delivery of the revocation, the
property shall revert to the Settlor as Settlor's separate property. At and after either Settlor's
death the trust shall be irrevocable.

2. Disability of Settlor

All of the Settlor's powers to revoke and amend this instrument are personal to Settlor; however,
in the event of disability, the powers may be exercised (during the Settlor's lifetime) on Settlor's
behalf by an attorney in fact under a durable power of attorney signed by Settlor with powers
given in such durable power of attorney; or by a conservator with court approval.


                                     V DESIGNATION OF TRUSTEE

1. Trustee


         A. __________________ [Comment: INSERT NAMES OF SPOUSE 1 AND SPOUSE
            2] shall serve as initial Trustees.

         B. The Settlor shall have the power to appoint a Co-Trustee or a successor Trustee by an
            instrument signed, dated and delivered to the Trustee, and by the same method may
            revoke such appointments and make new ones. The appointment of a Co-Trustee
            shall become effective on the written acceptance of the trust by the newly appointed
            Trustee and the delivery of the acceptance to Settlor. The appointment of a successor
            Trustee must be effective upon the date the last Trustee fails to qualify or ceases to
            act.

         C. If Settlor has not exercised Settlors’ power to select other successor Trustees during
            Settlors’ lifetime, the following shall serve as successor Trustees, in order of
            preference as listed:

                                     1. ______________________


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                                     2. ______________________


2. Incapacity of a Trustee


         A. If the Trustee is not capable of administering the trust because of incapacity, during
            any period of incapacity the successor Trustee named herein shall act as Trustee,
            having all rights and powers granted to the Trustee by this instrument.

         B. Incapacity shall be conclusively established if either the Trustee's regularly attending
            physician or two doctors, authorized to practice medicine in the State of
            ___________________ (or in any State or country in which the Trustee is then
            residing) issue written certification to that effect.

         C. In the absence of certification, a Co-Trustee or successor Trustee or beneficiary(ies)
            hereunder may petition the court having jurisdiction over this trust to remove a
            Trustee and, if there is no other acting Trustee, replace him or her with the successor
            Trustee. Neither a Trustee nor beneficiary who so petitions the court shall incur
            liability to any beneficiary of the trust or to the substituted Trustee as a result of this
            petition, provided the petition is filed in good faith and in the reasonable belief that
            the substituted Trustee is incapacitated or otherwise cannot act.

3. Resignation

         A. Any Trustee may resign at any time by giving written notice of resignation to the
            Settlor, and/or the other Trustee(s) then acting, if any, and if there are none, then to all
            the then current income beneficiaries. Any such resignation shall become effective
            immediately upon such notice or at such date as the Trustee and the Settlor, or the
            said beneficiaries may agree, but no later than thirty (30) days after such written
            notice.

         B. All trusts under this Agreement need not have the same Trustee or Co.-Trustee, and a
            Trustee may resign from one or more Trusteeships without resigning from all.

4. Bond

No bond shall be required of any person named in this instrument as a Trustee, for the faithful
performance of his or her duties as Trustee, but a subsequent named Trustee or successor Trustee
may be required to be bonded, in accordance with the terms of appointment.

5. Reimbursement and Compensation



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         A. An individual Trustee may receive reasonable compensation. A corporate Trustee's
            compensation shall be according to its schedule of fees for the administration of
            living trusts in effect from time to time. Any Trustee shall be reimbursed for expenses
            on behalf of the trust estate and shall receive reasonable compensation for
            extraordinary services rendered to the trust estate.

         B. A Trustee shall be entitled to reimburse himself or herself for any personal costs
            incurred in the administration of this trust and for any expenses of the trust that he/she
            has paid.

6. Trustee Accounting

         A. During the lifetime of the Settlor, as long as Settlor has capacity, the Trustee shall
            account to Settlor, and the written approval of the Settlor shall be final and conclusive
            in respect to transactions disclosed in the account as to all beneficiaries of the trust,
            including unborn and contingent beneficiaries.

         B. If anyone other than Settlor is serving as Trustee, and so long as he/she is not serving
            as a Co-Trustee with Settlor, that Trustee shall provide an annual accounting which
            reflects assets, obligations, income, distributions, and expenditures, to Settlor if
            Settlor has capacity or, in the event of Settlor's incapacity or demise, to the
            beneficiaries of the residue of the remainder of the Trust Estate.

         C. The records of the Trustee shall be open at all reasonable time to inspection by
            Settlor, and in the event of Settlor's incapacity or demise, to Settlor's children or other
            beneficiaries named herein.


                                          VI TRUSTEE’S POWERS

1. Specific Powers

The Trustees shall have the power to mortgage, lease or sell the whole or any part of the estate or
any trust at either public or private sale, with or without notice; to determine what is principal or
income of my estate or any trust and to apportion and allot receipts and expenses between these
accounts; the power to invest and reinvest principal and income of my estate or any trust; and the
power, upon any division or partial or final distribution of the estate or any trust, to partition,
allot or distribute the estate or such trust in undivided interests or in kind, or partly in money and
partly in kind, at equitable valuations determined by the Trustees in a pro rata or non-pro rata
manner, so long as assets allocated to beneficiaries have equivalent or proportionate fair market
value; and to hold, manage or operate any property or business as they shall deem it advisable.

2. General Powers


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The enumeration of certain powers in this Instrument shall not limit the general powers of the
Executors and Trustees, who shall have all the rights, powers and privileges which an absolute
owner of the same property would have, subject to their fiduciary obligations.

 VII DIVISION OF TRUST INTO TWO TRUSTS AT FIRST DEATH OF A SETTLOR

1. Division of Trust Into Two Trusts at Settlor’s Death

On the death of the first Settlor to die (hereafter called the deceased spouse), and within
___________________ [six (6)] months following the death of the deceased spouse and no later,
the trust estate (including any additions made to the trust by reason of the deceased spouse’s
death, such as from the decedent’s Will or life insurance policies on the decedent’s life) shall be
divided into separate trusts for the primary benefit of the other spouse (hereafter called the
surviving spouse) as provided below. These trusts shall be called the “Survivor’s Trust” and the
“Exemption Trust.”

2. Survivor’s Trust

         A. The Survivor’s Trust shall consist of the surviving spouse’s separate property that is a
            part of the trust estate and the surviving spouse’s interest in the Settlors’ community
            estate included in or added to the trust estate in any manner, including any
            undistributed or accrued income on it.

         B. In addition, if the surviving spouse survives the deceased spouse for a period of one
            hundred eighty (180) days, the Trustee shall distribute to the Survivor’s Trust the
            minimum dollar amount (if any) necessary as a marital deduction to eliminate (or
            reduce to the extent possible) any federal estate and gift tax at the deceased spouse’s
            death, taking account of:

                  i. All deductions taken in determining the estate tax payable by reason of the
                     deceased spouse’s death;

                  ii. The net value of all other property, whether or not it is given under this
                      Instrument and whether it passes at the time of the deceased spouse’s death or
                      has passed before the deceased spouse’s death to or in trust for the surviving
                      spouse, so that it is included in the deceased spouse’s gross estate and
                      qualifies for the federal estate tax marital deduction; and

                  iii. All credits allowed for federal estate tax purposes, other than any credit
                       allowable under Internal Revenue Code Section 2011, to the extent the credits
                       exceed any state death taxes payable without regard to the availability of such
                       credits, provided no credit shall be taken into account in determining the size
                       of the Survivor’s Trust if such credit shall result in the disallowance of the
                       marital deduction.

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3. Exemption Trust

         A. The Exemption Trust shall consist of the balance of the trust estate.

         B. The Trustee shall satisfy the amount so determined in cash or in kind, or partly in
            each, and shall allocate to the Survivor’s Trust only assets of the deceased spouse
            contributed or added to the trust that are eligible for the federal estate tax marital
            deduction.

         C. Assets allocated in kind shall be deemed to satisfy this amount on the basis of their
            net fair market values as finally determined for federal estate tax purposes.

         D. Assets qualifying for the federal estate tax marital deduction shall be transferred to
            the Survivor’s Trust only to the extent that the transfer reduces the federal estate tax
            otherwise payable by reason of the deceased spouse’s death.

         E. No assets for which a credit for foreign death taxes is allowed under the federal estate
            tax law applicable to the deceased spouse’s estate shall be allocated to the Survivor’s
            Trust, unless that estate contains insufficient other property to fully fund the
            Survivor’s Trust.

         F. The Trustee shall select property to satisfy the pecuniary amount constituting the
            Survivor’s Trust so that any appreciation or depreciation that has occurred in the
            value of this property between the applicable valuation date and the date of allocation
            shall be fairly apportioned between the Survivor’s Trust and the Exemption Trust.

         G. If, pursuant to Section 2518 of the Internal Revenue Code, as amended from time to
            time, the surviving spouse disclaims all or a portion of the interest of the deceased
            spouse in an asset in the Exemption Trust, that which is disclaimed shall be
            distributed outright or held in trust for the remainder beneficiary or beneficiaries in
            the manner provided in Article IX governing distribution of the Exemption Trust
            upon the death of the surviving spouse.

4. Contingent Disclaimer Trust

         A. If, pursuant to Section 2518 of the Internal Revenue Code, as amended from time to
            time, the surviving spouse disclaims all or a portion of the interest of the deceased
            spouse in an asset passing to the surviving spouse other than an asset in the
            Exemption Trust, the portion disclaimed shall be allocated to the Contingent
            Disclaimer Trust, to be managed and distributed as provided herein.


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         B. If the surviving spouse disclaims all or a portion of an interest in the Contingent
            Disclaimer Trust, the portion disclaimed by the surviving spouse shall be distributed
            outright or held in trust as provided herein governing the distribution of the
            Exemption Trust upon the death of the surviving spouse.

5. Savings Clause

     A. It is the Settlors’ intention to have the Survivor’s Trust qualify for the marital deduction
        under Internal Revenue Code Section 2056 and the regulations pertaining to that section
        or any corresponding or substitute provisions applicable to the trust estate.

     B. In no event shall the Trustee take any action or have any power that will impair the
        marital deduction, and all provisions regarding the marital trust shall be interpreted to
        conform to this primary objective.


                      VIII PAYMENT OF TAXES, DEBTS, AND EXPENSES.

1. Upon death of a Settlor, the Trustee shall follow the directions of the personal representative
   of the husband’s or wife’s probate estate, as the case may be, regarding the payment of any
   death taxes, debts, and other valid claims and expenses, which are enforceable against the
   husband’s or wife’s respective estate.

2. If there are no such directions from a personal representative, the Trustee, in the Trustee’s
   discretion, has the authority to pay the Settlor’s debts outstanding at the time of his or her
   death which are not barred by the statute of limitations, statute of frauds, or any other
   provision of law. Such debts may include valid death taxes and other governmental charges
   imposed under the laws of the United States or any state or country by reason of such death;
   the last illness and funeral expenses of the Settlor; attorneys’ fees; and other costs incurred in
   administering the deceased Settlor’s estate.

3. The Trustee is authorized to accomplish the foregoing in the exercise of its discretion by
   direct payment, loans to the executor of a Settlor’s estate and purchase of assets from a
   Settlor’s estate or any other reasonable method. Any long term debt shall ordinarily be paid
   in accordance with its terms unless the Trustee determines otherwise. In the exercise of the
   Trustee’s discretion, the Trustee shall be limited only as follows:

         A. If the surviving spouse disclaims any property given to him or her outright or in trust,
            the amount of any increase in federal or state death taxes that results from such
            disclaimer shall be paid out of the disclaimed property;

         B. Upon the death of the first Settlor to die, direct or indirect payment of the foregoing
            debts, expenses and taxes shall be made only from the Exemption Trust, provided
            however that community property debts shall be paid one-half (1/2) out of the

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              Exemption trust and one-half (1/2) out of the surviving Settlor’s community property
              or separate property interest in the Survivor’s Trust and not out of the marital
              deduction share allocated to the Survivor’s Trust;

         C. Upon the death of the surviving Settlor, direct or indirect payment of the foregoing
            debts, expenses and taxes shall be made only from the Survivor’s Trust;

         D. The Trustee shall not utilize funds exempt from taxation to pay taxes, and under no
            circumstances shall be required to utilize any payments which are exempt from estate
            taxation under Section 2039 of the Internal Revenue Code for purposes of paying
            debts, funeral expenses, expenses of administration, taxes, or any other obligation of
            the Settlor’s estate;

         E. In any filing of tax returns by or with the consent of the Trustee, the Trustee may
            elect to utilize deductions as deductions against income or deductions from estate and
            inheritance taxes. No beneficiary shall be entitled to apportionment or reimbursement
            because of such elections, but the Trustee may make adjustments if the Trustee deems
            it appropriate in its discretion.


        IX DISPOSITION OF TANGIBLE PERSONAL PROPERTY AT DEATH OF
                                SETTLORS.

1. At the death of the first Settlor to die, the Trustee shall distribute the tangible personal
   property, including household goods, furniture, furnishings, personal automobiles, jewelry,
   furs, paintings, and books, together with any insurance thereon, to the surviving Settlor.

2. At the death of the surviving Settlor, the Trustee shall distribute such items to the Settlors’
   children then living in equal shares as they may agree, or as the Trustee shall determine if
   they do not agree.

3. If no child of the Settlors is then living, these items shall be distributed with the remainder of
   the trust estate.

4. Settlors request but do not direct that the recipient distribute such items in accordance with a
   memorandum (if any) left by the Settlors at their respective deaths.


                       X DISTRIBUTIONS ON FIRST SETTLOR’S DEATH.

1. Deceased Spouse’s Expenses

On the deceased spouse’s death, the Trustee shall abide by the directions set forth in Section V
with respect to payment of debts, taxes and expenses of a deceased Settlor.

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2. Interim Disposition and Administration

Following the death of the first Settlor to die and until such time as the separate trusts as required
under this Instrument are established, the net income of the entire trust estate shall be paid to or
applied for the benefit of the surviving Settlor.

3. Payment of Principal and Income of Survivor’s Trust

         A. From the time of the deceased spouse’s death, the Trustee shall pay to or apply for the
            benefit of the surviving spouse the net income of the Survivor’s Trust in quarterly or
            more frequent installments.

         B. If the Trustee considers such income to not be sufficient, the Trustee shall also pay to
            or apply for the benefit of the surviving spouse any sums from the principal of the
            Survivor’s Trust that the Trustee, in the Trustee’s discretion, considers necessary for
            the surviving spouse’s proper health, support, maintenance and education. In addition,
            the Trustee shall pay the surviving spouse as much of the principal of the Survivor’s
            Trust as he or she shall request in writing.

4. Distribution of Principal and Income of Exemption Trust

    A. The Exemption Trust shall be administered and distributed on the terms set forth in this
       paragraph.

    B. If the surviving spouse survives the deceased spouse by a period of one hundred eighty
       (180) days:

              i. The Trustee shall pay to the surviving spouse or apply for his or her benefit, in
                 quarterly or more frequent installments during his or her lifetime, all of the net
                 income of the Exemption Trust; and

              ii. The Trustee (other than the surviving spouse) shall also pay to or apply for the
                  benefit of the surviving spouse as much of the principal of the trust as the Trustee
                  believes appropriate for the surviving spouse’s health, education, support and
                  maintenance, taking account the standard of living enjoyed by the husband and
                  wife during their joint lifetimes and to the extent the Trustee deems appropriate,
                  other resources and means of support reasonably available to the surviving spouse
                  and known to the Trustee.

              iii. Husband and wife request, but do not direct, that all principal payments for the
                   surviving spouse shall first be made out of the Survivor’s Trust until it is
                   exhausted, and thereafter out of the Exemption Trust.


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              iv. However, the Trustee may, in its discretion, elect not to exhaust the Survivor’s
                  Trust if such exhaustion would constitute an undue hardship on the surviving
                  spouse.

5. Distribution of Principal and Income of Contingent Disclaimer Trust

    A. On the deceased spouse’s death, the Trustee (other than the surviving spouse as Trustee)
       shall pay to or apply for the benefit of the surviving spouse the net income of the
       Contingent Disclaimer Trust in quarterly or more frequent installments.

    B. If the Trustee considers the income insufficient, the Trustee shall also pay to or apply for
       the benefit of the surviving spouse all sums from principal as the Trustee, in the Trustee’s
       discretion, considers necessary for the surviving spouse’s health, education, support and
       maintenance, taking into consideration other resources available to the surviving spouse
       both within and outside the trust estate.

6. Residence

     A. If the surviving spouse requires the use of the principal residence used by the husband
        and wife during their joint lifetimes, such residence may be allocated in whole or in part
        to the Survivor’s Trust, or to the Exemption Trust.

     B. The allocation decision shall be made by the Trustee in its discretion after considering all
        the facts and circumstances then existing.

     C. During the lifetime of the surviving Settlor, he or she shall be entitled to use and occupy
        of such home (or of another home of substantially similar quality and comfort which
        may be acquired to replace such home) free of any obligation to pay rent to the trust.


                                  XI DEATH OF SURVIVING SPOUSE.

1. Surviving Spouse Holds General Power of Appointment Over Survivor’s Trust

On the surviving spouse’s death, the Trustee shall distribute any remaining balance of the
Survivor’s Trust including principal and accrued or undistributed income, to one or more persons
and entities, including the surviving spouse’s own estate, and on any terms and conditions, either
outright or in trust, and in any proportion that the surviving spouse shall appoint by will or
codicil specifically referring to and exercising this power of appointment.



2. Termination of Survivor’s Trust


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On the surviving spouse’s death, if and to the extent that the surviving spouse shall not have
effectively disposed of all property of the trust estate of the Survivor’s Trust through a valid and
effective exercise of a power of appointment, all of the remaining assets of the Survivor’s Trust
shall thereafter follow the disposition of the Exemption Trust.

3. Surviving Spouse’s Expenses

On the surviving spouse’s death, the Trustee shall follow the directions given in Section V herein
above with regard to the surviving spouse’s expenses.

4. Termination of Contingent Disclaimer Trust

On the surviving spouse’s death, all of the remaining assets of the Contingent Disclaimer Trust
shall thereafter follow the disposition of the Exemption Trust.

5. Distribution of Exemption Trust

         A. The Exemption Trust shall terminate upon the death of the surviving spouse.

         B. At such event, the Trustee shall divide the Exemption Trust into as many equal shares
            as there are children of the husband and wife then living and children of the husband
            and wife then deceased with descendants then living. The Trustee shall allocate one
            (1) such equal share to each living child and one (1) such equal share to each group
            composed of the then living descendants of a deceased child.

         C. Each share allocated to a living child shall be distributed outright.

         D. Each share allocated to a group composed of the then living descendants of a
            deceased child shall be distributed by right of representation.

         E. In the event, however, that no child of the Settlors survives them, the Trustee shall
            allocate and distribute the trust estate by right of representation as of the first
            generation of descendants surviving the Settlors; that is, the trust estate shall be
            divided into as many equal shares as there are living members of the nearest
            generation of issue then living and deceased members of that generation who leave
            issue then living, each living member of the nearest generation of issue then living
            receiving one share and the share of each deceased member of that generation who
            leaves issue then living being divided in the same manner among his or her then
            living issue.

         F. If at any time before full distribution of the trust estate both Settlors and all the
            Settlors’ issue/beneficiaries are deceased and no other disposition of the property is
            directed by this Instrument, the remaining portion of the trust shall then be
            distributed, one-half (1/2) to the legal heirs of the husband, and one-half (1/2) to the

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              legal heirs of the wife, the identity and respective shares of those heirs to be
              determined in all respects as though the death of the husband or wife, as the case may
              be, had occurred immediately following the event requiring distribution, and shall be
              determined according to the laws of succession of the State of
              ___________________ then in force relating to separate property not acquired from a
              parent, grandparent, or previously deceased spouse.

6. Notice to Beneficiaries

    A. Upon the death of a Settlor, the Trustee shall, and any other person or entity may, give
       notice to beneficiaries of their interest in the trust (which may be subject to a survivorship
       period).

    B. In appropriate circumstances if a beneficiary is a charity, the ___________ [Comment:
       INSERT STATE] Attorney General shall be given notice.

    C. No one giving notice under this provision shall be liable to the trust, Trustee, or to any
       beneficiary, and the trust shall hold harmless and indemnify any person or entity so
       giving notice.


                                            XII NAME OF TRUST.

The trusts created in this instrument may be referred to collectively as THE __________ INTER-
VIVOS REVOCABLE TRUST.

                                   [SIGNATURE PAGE TO FOLLOW]


IN WITNESS WHEREOF, each of Trustee and Settlor has caused this Instrument to be
executed on this __________ day of _______________________, 20_____.


TRUSTEE                                                  TRUSTEE

Date: ______________                                     Date: ______________

_____________________________                            _____________________________
[Comment: PRINT NAME BELOW                               [Comment: PRINT NAME BELOW
SIGNATURE]                                               SIGNATURE]




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I certify that I have read the foregoing Instrument and that it correctly states the terms and
conditions under which the trust estate is to be held, managed, and disposed of by the Trustee. I
approve this Instrument in all particulars and request that the Trustee execute it.

SETTLOR                                                  SETTLOR

Date: ______________                                     Date: ______________

_____________________________                            _____________________________
[Comment: PRINT NAME BELOW                               [Comment: PRINT NAME BELOW
SIGNATURE]                                               SIGNATURE]




             CERTIFICATE OF ACKNOWLEDGEMENT OF NOTARY PUBLIC
                        STATE OF _______________________


           [Comment: INSERT APPROPRIATE LANGUAGE FOR YOUR STATE]




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                                                  SCHEDULE A


                                      THE _________ LIVING TRUST


         A. That certain real property located at ______________________________,
            ___________________ with APN # ___________________, and more commonly
            described as:

         B. __________________ dollars ($____________)


ACCEPTED BY TRUSTEE

Date:             _____________________________

Signature:        _____________________________

Date:             _____________________________

Signature:        _____________________________




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DOCUMENT INFO
Description: This is a legal document that determines how a married couple's property is to be managed and distributed during their lifetime and also upon death. This particular trust is created by a married couple in a community property state. This trust is revocable and designates the spouse that survives longer as the beneficiary in order to avoid estate and gift taxes, but this agreement can easily be customized to provide for different beneficiaries. This document can be used by married couples in community property states that want to designate each other as beneficiaries for distribution upon the death of one spouse.
This document is also part of a package Estate Planning for Married with Adult Children 6 Documents Included