Appendix Form #1

• Author: Jerold I. Horn
• Profession: Lawyer
• Pages: 613-645

613

Appendix Form #1

[Revocable Trust. Settlor is a widower. Creates (i) GST-exempt, dynasty-style trusts and

(ii) GST-nonexempt, management-style trusts until stated ages. Use the variables that are

marked “1” to include (i) dynasty-style trusts that serve as receptacles for GST-exempt,

appointed property which was subject to the common-law Rule Against Perpetuities at

the death of the creator of the exercised powers of appointment and (ii) management-

style trusts until stated ages for GST-nonexempt, appointed property which was subject

to the common-law Rule Against Perpetuities at the death of the creator of the exercised

powers of appointment. Use the variables that are marked “2” if the variables that are

marked “1” are not used. Use the variable that is marked “3” to accommodate quali-

cation for Code Section 2032A. Use the variable that is marked “4” to accommodate

interests in qualied plans of deferred compensation and individual retirement accounts.

Declaration of Trust

Made November 1, 2017.

Article I

Purpose

I, JOHN A. SMITH, of Peoria, Illinois, transfer to myself, as Trustee, ten dollars

and other consideration, and, as Trustee, I shall administer this property, together

with any additions and changes, according to this instrument.

Article II

Disposition During My Life

During my life, the Trustee shall administer the trust estate as provided in this

Article.

Section 2.01. Revocable Trust. The Trustee shall set the trust estate apart, in a sepa-

rate trust to be known as the “Revocable Trust” and to be administered as provided

in this Section.

(A) Distributions. The Trustee shall pay to me so much or all, if any, of the

trust estate as I direct at any time and from time to time.

(B) During Inability. During any time I am unable to exercise the power

granted in subsection (A) of this Section or the Trustee believes I am unable

to manage my affairs, the Trustee shall pay to me so much or all, if any, of

the trust estate as the Trustee determines to be necessary or advisable from

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time to time, considering resources otherwise available, to provide for my

health, education and support in the manner of living to which accustomed.

(C) Gifts.

(1) During the time described in subsection (B) of this Section, the

Trustee shall pay to any one or more of my descendants, without any duty

of equalization, so much or all, if any, of the trust estate as the Independent

Trustee in its sole and absolute discretion determines to be advisable from

time to time for me to make (i) gifts that are excludable (because of Sec-

tion 2503(b) of the Code including, without limitation, because of Section

2503(c) of the Code and rights to withdraw) from the total amount of my

gifts under the Code and (ii) gifts that because of Section 2503(e) of the

Code are not treated as transfers by gift for purposes of Chapter 12 of the

Code. If the United States gift tax is not in effect, the preceding sentence

shall apply as if the United States gift tax as it last existed were in effect.

(2) The Trustee shall pay to my attorney in fact, for the attorney in fact to

make gifts and qualied transfers (dened in Section 2503(e) of the Code)

on my behalf according to specic authority in the power of attorney, so

much or all, if any, of the trust estate as, upon the basis of specic author-

ity in the power of attorney and specic reference to the Revocable Trust

in the power of attorney, the attorney in fact directs the Trustee to pay.

(D) Termination. Unless sooner terminated by distribution or expenditure

according to the foregoing, the Revocable Trust shall terminate upon my

death, and the Trustee shall administer the trust estate of the Revocable Trust

according to the subsequent provisions of this instrument.

Article III

Disposition Upon My Death

Upon my death, the Trustee shall administer the trust estate as provided in this

Article.

Section 3.01. Charges and Taxes. The Trustee shall pay the expenses of my last

illness and funeral, costs of administration with respect to property wherever sit-

uated passing under my Will or this instrument or otherwise and other proper

charges against my estate. The Trustee also shall pay the estate and inheritance

taxes (including any interest and penalty) that are payable because of my death and

that, absent any direction by my personal representative to the Trustee, my Will

directs my personal representative to pay from my estate. The Trustee shall make

the payments in such amounts, if any, as my estate is insufcient (assuming sat-

isfaction in full of all preresiduary legacies and devises) and, additionally, in such

615Appendix Form #1

amounts, if any, as my personal representative directs according to my Will. The

Trustee shall make the payments directly or to my personal representative, subject

to any apportionment or reimbursement that is not waived by my Will but other-

wise without apportionment or reimbursement, from principal of the trust estate

as an expense of administration. Notwithstanding anything to the contrary, the

Trustee shall not use for payment any property that, if the United States estate tax

is in effect at my death, is excluded from my gross estate for purposes of determin-

ing the United States estate tax payable because of my death.

Section 3.02. Family Trust. The Trustee shall set apart, in a separate trust to be

known as the “Family Trust” and to be administered as provided in this Section,

the remainder of the trust estate (after satisfaction of all dispositions and payments

under prior provisions of this instrument).

(A) Division into Portions. The Trustee shall divide the trust estate of the

Family Trust into two portions, to be known, respectively, as “Portion One”

and “Portion Two.”

(1) Portion One.

(a) Portion One shall consist of a fractional portion of the trust

estate of the Family Trust of which I am the transferor for generation-

skipping tax purposes and that passes to the Trustee of the Family

Trust upon my death. The numerator of the fraction is the amount

(if any) of my GST exemption that is unallocated immediately before

my death. The denominator is the value (for purposes of determining

the United States estate tax payable because of my death) of the trust

estate of the Family Trust of which I am the transferor for generation-

skipping tax purposes.

(b) Notwithstanding the preceding portion of this subsection (1), if

the United States generation-skipping tax is not in effect at my death,

Portion One shall consist of such of the trust estate of the Family Trust

as is attributable to property that I contributed.

(2) Portion Two. Portion Two shall consist of the balance (if any) of the

trust estate of the Family Trust.

(B) Administration of Portions. The Trustee shall administer Portion One as

provided in Section 3.03. The Trustee shall administer Portion Two as pro-

vided in Section 3.04.

Section 3.03. Portion One. The Trustee shall set apart Portion One of the Family

Trust, in a separate trust to be known as the “Portion One Family Trust” and to be

administered as provided in this Section. Upon my death, the Trustee shall divide

the trust estate of the Portion One Family Trust into shares, and set the shares

apart, on a per stirpital basis with respect to my descendants who then are living.