Here is a sample Living Trust for an individual. It will illustrate some of the principles explained on the previous pages.
This sample is not meant to suggest how you should provide for the handling of your estate. It is only an example, and would not be suitable for you. You should pay special attention to the provisions regarding the distribution of your estate upon your death. Each person will have unique needs and desires in that regard.
The information provided is not intended as legal advice to you. Please consult your attorney.
The John G. Sample Living Trust
1. Declaration
1.1. This trust declaration is made by John G. Sample ("John") who is referred to in this document as "the Trustor" or "the trustee", depending upon the context. The term "trustee" as used in this trust also refers to each successor trustee who is serving as a trustee of a trust created under this document.
1.1.1. For reference purposes, the following information applies:
1.1.2. Name of Trust - The John G. Sample Living Trust
1.1.3. Date established - _______________
1.1.4. Trustor/Trustee - John G. Sample
2. The Trust Estate
2.1. The property described in the attached Schedule Of Initial Assets, any property hereafter transferred to the Trust that is created by this trust document, and the income and proceeds attributable to any and all of such property shall constitute the trust estate (sometimes hereinafter referred to as the "Trust estate") that shall be held in trust, administered, and distributed in accordance with the terms of this trust document.
2.2. The Trust estate shall initially be comprised of the property described in the Schedule Of Initial Assets that is attached hereto and hereby made a part of this trust document. The property described in said schedule was the Trustor's property at the time that it was transferred to this Trust.
2.3. All property that is initially or becomes hereafter a part of the Trust estate shall retain its character as joint property, as community property, or as separate property, as the case may be, despite the transfer of the property to this Trust.
2.4. Notwithstanding any other provisions of this document, during the lifetime of the Trustor, the trustee shall not have powers beyond those granted under California law.
3. Rights Reserved to Trustor
3.1. The Trustor or any other person may make transfers of property to the trustee during John's lifetime or by Will. That additional property shall become part of the trust estate upon written acceptance of it by the trustee.
3.2. During the Trustor's lifetime, the trust may be revoked, in whole or in part.
3.3. During the Trustor's lifetime, the trust may be amended, in whole or in part, by the Trustor in writing.
3.4. The revocation or amendment of a trust created under this document shall be effective only if made in a writing that is signed by the person or persons having the power of revocation or amendment and delivered to the trustee. An exercise of the power of amendment substantially affecting the duties, rights, and liabilities of the trustee shall be effective only if agreed to by the trustee in writing.
4. Distributions During the Trustor's Life
4.1. So long as the Trustor is living, the trustee shall pay the net income of the trust or apply for the Trustor's benefit the entire net income from the trust property, in monthly or other convenient installments (but not less often than annually) as the Trustor and the trustee may agree from time to time.
4.2. So long as the Trustor is living, the trustee shall pay trust principal, at any time, to the Trustor or apply for the Trustor's benefit so much of the principal of the trust property as the trustee deems proper for the comfort, welfare and happiness of the Trustor or Trustors.
4.3. All decisions of the trustee regarding payments, if any, are within the trustee's discretion and shall be final and incontestable by anyone.
4.4. So long as the Trustor is living, the Trustor shall have the right to withdraw any amount of the trust principal, at any time or times, by delivering a signed writing to the trustee.
5. Distributions After Trustor's Death
5.1. After the death of the Trustor, upon receipt by the trustee of a written statement from the personal representative of the deceased Trustor's estate (if any) requesting that the trustee pay death taxes, debts and expenses (as defined in Article Eight), with respect to assets of any trust under this document or other taxable property transfers, the trustee shall pay out of the trust estate, either directly or to the personal representative, any amounts requested by the personal representative for those purposes, or shall be authorized to make such payments directly if there is no personal representative. The trustee may rely upon the personal representative's statement, or his or her own discretion if there is none, and shall not be liable for any act or omission by the personal representative in protesting or failing to protest the legality, propriety or amount of the death taxes, debts or expenses. The trustee shall not pay death taxes, debts, and expenses or other obligations of the deceased Trustor or the deceased Trustor's estate from proceeds of insurance policies on the deceased Trustor's life if making those payments would be the sole cause of the proceeds being includable in the deceased Trustor's gross estate for federal tax purposes and tax consequences would thereupon result.
5.2. Whenever the trustee is directed to divide any part of the trust estate or distribute trust assets upon the death of Trustor, the trustee may, in the trustee's discretion, defer actual division or distribution for a period not exceeding six (6) months after Trustor's death. The ability of the trustee to delay division or distribution shall not affect the vesting of interests in the respective shares, which shall be as of the date of death.
5.3. Upon Trustor's death, the trustee shall distribute the following gifts:
5.3.1. My record collection to Ron Thompson;
5.3.2. My Lalique crystal to Nancy Holmby
5.4. If the person named to receive property specified in this section predeceases Trustor, the gift that was to have been distributed to that donee shall be distributed to the remaining surviving donees, or to the donee's then-living issue if he or she is not living.
5.5. Upon the death of the Trustor, after the distributions above described are provided for, this trust shall terminate and the remainder shall be distributed as follows:
5.5.1. One-half to my mother, Marsha Sample;
5.5.2. one-quarter to my brother James Sample;
5.5.3. one quarter to AIDS Healthcare,. Inc.
5.6. If he does not survive Trustor by at least 30 days, then his share shall go to the survivor(s) or to the American Red Cross, if no survivors.
5.7. If none of the above named beneficiaries survive me, I direct that my estate be distributed according the California law as it then exists.
5.8. All contributions to the Trust Estate and/or distributions set forth herein shall be subject to the written instructions of the Trustor, entered in the document entitled Trust Minutes, which is signed and dated by the Trustor and which is hereby incorporated by reference herein.
5.9. Notwithstanding the provisions of subparagraph a potential beneficiary shall be ineligible to receive (on or after the death of the Trustor) any of the assets of the Trust if that potential beneficiary:
5.9.1. Contests this trust document (or the Trust that is created by this trust document or any trust that may be created under this trust document) or the Will (or any codicil of said Will) of the Trustor,
5.9.2. Attacks any of their provisions or tries to impair or invalidate any of their provisions, or, conspires with or voluntarily assists any person or organization in doing any of the act(s) described in Subparagraph 5.9.1;
5.10. For purposes of Subparagraph 5.9, the term "potential beneficiary" includes any person or organization who is a beneficiary under the Will (or any codicil of said Will) of the Trustor, who is a beneficiary of the this trust document (or any amendment thereto), who is an heir of the Trustor, or who is any other person claiming under any one or more of such beneficiaries or heirs.
5.11. Notwithstanding the provisions of Subparagraph 5.9, the Trustee may, in the sole discretion of the Trustee, relieve any person or organization of an ineligibility imposed on the person or organization by said Subparagraph 5.9 in the event that such person or organization promptly abandons the conduct condemned by said Subparagraph on written request of the Trustee, or if so doing would further the intent of the Trustor.
6. Office Of Trustee
6.1. Upon the death of the Trustor, or if before that time the Trustor resigns as trustee, is removed pursuant to judicial procedure, becomes incompetent (as defined in Paragraph Eight), or for any reason fails or ceases to act as trustee, James Sample shall become the successor trustee. If said successor trustee resigns as trustee, is removed pursuant to judicial procedure, becomes incompetent (as defined in Paragraph 8.5), or for any reason fails or ceases to act as trustee, then Barney Simpson shall become the successor trustee.
6.2. No bond shall be required of any individual who serves as trustee under this document.
6.3. Any trustee may resign at any time, without giving a reason for the resignation, by delivering a written instrument to any other trustee then acting, to the Trustor if living and if none then exists, to the beneficiaries of this trust. A resignation shall be effective upon the delivery of the written instrument.
6.4. The total compensation of all individuals who are trustees under this document, for fiduciary services rendered, shall be 2% of the average annual fair market value of the trust assets. The total amount shall be prorated for any partial year. Each individual co-trustee shall be entitled to a pro rata share of the total compensation. The trustee may pay these fees from the funds of the trust as an expense of trust administration without court order.
7. Powers of Trustee
7.1. In order to carry out the purposes of this trust, the trustee shall have all of the powers enumerated herein and, except as limited by any provision of this document, all powers now or hereafter granted to a trustee by law. Except as limited by a more specific provision of this document, the trustee shall have the power to:
7.1.1. Sell, exchange, transfer, convey, lease without limitation as to term, borrow upon, and hypothecate all or any part of the trust property;
7.1.2. Retain, maintain, repair, divide, partition, improve and otherwise manage any trust property;
7.1.3. Insure trust property against damage or loss, and against liability with respect to third persons, at the expense of the trust, with the carriers and coverages that the trustee deems advisable;
7.1.4. Enforce the rights of the trust with respect to any mortgage, deed of trust, pledge, or similar security device held in trust; enforce, at a foreclosure sale (whether judicial or not) or other sale, the rights of the trust in secured property; make bids upon and purchase, at trust expense, any property that is subject to security device; and accept a deed in lieu of foreclosure as full or complete satisfaction of the secured debt;
7.1.5. Commence or defend, at the expense of the trust, legal actions relating to the trust or any trust property as the trustee deems advisable;
7.1.6. Compromise, submit to arbitration, settle, or release (with or without consideration) or otherwise adjust any claims in favor or against the trust;
7.1.7. Hold trust property in the name of a nominee or nominees, with or without disclosing the trust character of such property (including securities in such condition that ownership may pass upon delivery), or in the name of the trustee as trustee;
7.1.8. Exercise any and all rights and powers of an owner of stocks or securities; vote and give proxies; pay assessments or other charges; exercise or not exercise as the trustee deems advisable, subscriptions, conversion rights, or other rights or options that may devolve upon holders of stocks or securities; and enter into shareholder agreements;
7.1.9. Participate in any plans or proceedings for foreclosure or consolidations, merger, liquidation, or other reorganization of any corporation or organization having securities that are held as trust property and, in connection therewith, deposit securities with and transfer title or securities upon the terms that the trustee deems advisable to any protective or other committee established in connection with any such plan or proceeding;
7.1.10. Subdivide and re-subdivide trust real property and sign applications, maps, and other documents incidental thereto; to dedicate trust real property for public purposes, with or without consideration; grant and impose upon trust real property, conditions, covenants, easements, restrictions, rights of way, and other servitude's; borrow against trust real property; and do such other acts as may appear to the trustee advisable in connection with the exercise of any of the powers described in this subparagraph;
7.1.11. Receive additions to the trust from any source at any time;
7.1.12. Borrow money for any trust purpose on such terms and conditions as the trustee deems advisable and obligate the trust to repay the borrowing;
7.1.13. Employ attorneys, investment counsel, accountants, bookkeepers, or other persons to render services regarding all matters pertaining to the trust, and to pay from trust property the reasonable compensation of such persons for their services.
7.2. With respect to any farm or ranch property that is part of the trust estate, the trustee shall have the power to:
7.2.1. Hire a professional farm or ranch manager or management service;
7.2.2. Operate the property on a sharecrop or tenant-farmer basis or by subcontract for farm or ranch services; and
7.2.3. Construct, maintain, abandon, and remove structures, irrigation systems, ditches and other improvements.
7.3. The trustee may retain, manage, and operate any property, business or enterprise (including a sole proprietorship or interest in a general or limited partnership or corporation) received, acquired, or held as trust property pursuant to this document, for so long as the trustee deems advisable. The trustee may incorporate, dissolve, or otherwise change the organization of the business or enterprise, or sell or liquidate any business at a time and subject to the terms and conditions that the trustee deems advisable.
7.4. The trustee, in order to satisfy a pecuniary gift or to distribute or divide trust assets into shares or partial shares, may distribute or divide such assets in kind, or divide trust assets into shares or partial shares, may distribute or divide such assets in kind, or divide undivided interests in such assets, or sell all or any part of such assets and distribute or divide the property in cash, in kind, or partly in cash and partly in kind. Property distributed to satisfy a pecuniary gift under this document shall be valued at its fair market value at the time of distribution.
7.5. If at any time any beneficiary is a minor or it appears to the trustee that any beneficiary is disabled, incompetent, or for any other reason not able to receive payments or make intelligent or responsible use of the payments, then the trustee, in lieu of making direct payments to the beneficiary, may make payments to the beneficiary's conservator or guardian; to the beneficiary's custodian under the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act of any state; to one or more suitable persons as the trustee deems proper, such as a relative of the beneficiary or a person residing with the beneficiary, to be used for the beneficiary's benefit; to any other person, firm or agency for services rendered or to be rendered for the beneficiary's assistance or benefit; or to accounts in the beneficiary's name with financial institutions. The receipt of payments by any of the foregoing shall constitute a full and sufficient acquittance of the trustee for all purposes.
7.6. The trustee shall not be required to render periodic accounts to any person, but shall render accounts at the termination of a trust and upon a change of trustee, to the persons and in the manner required by law.
7.7. Until the trustee receives written notice of any death or other event upon which the right to payments from any trust may depend, the trustee shall incur no liability for disbursements made in good faith to persons whose interests may have been affected by that event.
8. Concluding Provisions
8.1. Unless sooner terminated, each trust created by this instrument shall terminate twenty-one (21) years after the later of the (1) death of the last to die of the issue of children of a Trustor who are living at the death of the surviving Trustor. If a trust is terminated because of the preceding sentence, the trustee shall distribute the trust property outright pro rata, to the persons who are then eligible to receive trust income (or, if there are no such persons, outright in a manner that the trustee believes will give effect to the Trustor's intent in creating the trust).
8.2. If any provision of this instrument is invalid, that provision shall be disregarded and shall not affect any of the other provisions. The remainder shall be interpreted so as to reflect the overall intention of the Trustor.
8.3. The captions appearing in this instrument are for convenience of reference only and shall have no significance in the construction or interpretation of this document.
8.4. Any reference to a Trustor's "heirs" in the dispositive provisions of this instrument shall be construed as referring to those persons who are entitled to that Trustor's property under the laws of intestate succession in effect at the time of the execution of this document.
8.5. For all purposes under this instrument, a person shall be deemed "incompetent" if and for so long as:
8.5.1. A conservator of his or her person or estate duly appointed by a court of competent jurisdiction is serving, or upon certification by two physicians (licensed to practice under the laws of the state where the person is domiciled) that the person is unable to properly care for herself or himself, for his or her person, or for his or her property.
8.5.2. There is a determination by any two of the following persons execute written declarations under penalty of perjury that the trustee does not have sufficient understanding or ability to make or communicate decisions about the principal's property, finances, or personal business:
8.5.2.1. The trustee's treating physician;
8.5.2.2. Pat Robinson
8.5.2.3. Hillary Henderson
8.5.3. The trustee shall promptly attach such two declarations to this instrument. Any person may act in reliance on this instrument with two such declarations attached without liability to the trustee or to any other person regardless of whether the trustee is later determined to have become incapacitated.
8.5.4. No licensed physician designated above who executes a medical opinion of the trustee's incapacity shall be subject to liability because of such execution. The trustee hereby waives any privilege that may apply to release of information included in such medical opinion.
8.6. As used in this document, the term "death taxes, debts, and expenses" shall include the following:
8.7. All estate, inheritance, succession, and similar taxes (including any interest and penalties) that become payable by reason of a Trustor's death or by any person on account of that person's interest in that Trustor's estate, but excluding any federal or state tax imposed on any "generation skipping transfer", and excluding any addition to the federal estate tax for any "excess retirement accumulation" under Internal Revenue Code section 4980A or successor.
8.8. All costs, expenses of litigation, counsel fees, or other charges that the trustee incurs in connection with the determination of the amount of the taxes, interest or penalties referred to in subparagraph (a); and
8.9. Legally enforceable debts, funeral expenses, expenses of last illness, and administration and property expenses.
8.10. California law shall govern the validity, interpretation and administration of any trust created under this instrument, regardless of the domicile of any trustee or beneficiary.
9. Execution
9.1. I certify that I have read the foregoing trust declaration 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 of the trust declaration in all particulars, and as the trustee named in the trust declaration, accept the trust provided for in the declaration.
Executed on _______________________ at ___________________________, California.
Signature:
_____________________________
John G. Sample
(Separate Page)
Schedule of Property Assets
All my property of whatever kind and nature, wherever located and whether acquired before or after creation of this trust.
Acknowledgment
State of California )
County of ____________________)
On this _________________ day of ________________, in the year __________, before me, ________________________________________, the undersigned officer, personally appeared John G. Sample, personally know to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to this instrument, and acknowledged that he/she executed it.
__________________________________
Notary Public
End of Sample