Appendix Form #15

• Author: Jerold I. Horn
• Profession: Lawyer
• Pages: 825-849

825

[Irrevocable Trust. Settlor is married. Designed to hold insurance on life of settlor. Crum-

mey powers. Contingent payment of taxes. Creates contingent QTIP, credit-shelter-style

trust for surviving spouse and management-style trusts for children until stated ages.]

Irrevocable Trust Agreement

Made November 1, 2017.

Article I

Purpose

I, KENNETH N. JAMES, of Peoria, Illinois, transfer to BEATRICE E. JAMES, of

Peoria, Illinois, as Trustee, ten dollars and other consideration. The Trustee agrees

to 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. Lifetime Trust. The Trustee shall set the trust estate apart, in a sepa-

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

in this Section.

(A) Distributions. The Trustee shall pay to any one or more of my wife and

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, considering or not considering

resources otherwise available, for any purpose or reason whatsoever, includ-

ing the termination of the trust.

(B) Right to Withdraw. Notwithstanding any other provision of this instru-

ment, the Trustee shall pay to each person (the “donee”) who is my wife or a

descendant of mine so much or all, if any, of the trust estate as the donee has

a right to withdraw according to paragraph (1) and directs in writing before

the right lapses according to paragraph (3).

(1)

(a) Whenever I make a contribution to the Trustee, my wife shall

have the right to withdraw so much of the trust estate as has a value

Appendix Form #15

826 Appendix Form #15

equal to the value of the contribution to such extent as the contribution,

if given outright to my wife, would be excluded (according to Section

2503(b) of the Code) from my taxable gifts for purposes of determining

United States gift tax.

(b) Whenever any donor makes a contribution to the Trustee,

each donee (other than my wife, if I am the donor) shall have the right

to withdraw so much of the trust estate as has a value equal to the

value of the contribution to such extent as the contribution exceeds

any right to withdraw that the contribution generates according to

(a) and, if given outright to the donee and gifts were split to the

maximum extent according to Section 2513(a) of the Code, would

be excluded (according to Section 2503(b) of the Code) from taxable

gifts for purposes of determining United States gift tax; provided,

the value that the donee shall have a right to withdraw because of

the contribution shall not exceed the product of (I) the value of the

contribution to such extent as the contribution exceeds any right to

withdraw that the contribution generates according to (a) and (II) a

fraction of which the numerator is the value that the donee would

have a right to withdraw because of the contribution if this provisory

clause were absent and of which the denominator is the sum of the

numerators that result from the application of this sentence sepa-

rately to each of the respective donees.

Notwithstanding the preceding portion of this paragraph (1), the donor by

direction delivered to the Trustee before or with any particular contribu-

tion may increase (to such extent as all rights to withdraw arising because

of the contribution do not exceed the contribution) or decrease or elimi-

nate any right to withdraw that, absent the direction, would arise because

of the contribution.

(2) No donee at any particular time shall have the right to withdraw

from any property subject to withdrawal any amount greater than (i) (a)

the amount (determined without regard to this sentence) that the donee

then can withdraw from the property divided by (b) the amount (deter-

mined without regard to this sentence) that all donees then can withdraw

from the property, multiplied by (ii) the value of the property at such time.

I intend that (i) each contribution shall qualify for an annual exclusion as a

present interest for purposes of determining United States gift tax to such

extent (if any) as the contribution generates rights to withdraw according

to subsection (1) of this subsection (B), (ii) I shall have no power that would

cause inclusion of any of the trust estate in my gross estate for purposes of