Section 4.9 Form—Inter Vivos Marital Deduction Trust

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Trust Agreement Containing Pecuniary Marital Deduction Formula; Qualifying Trust A as a Qualified Terminal Trust; Nonqualifying Trust B for the Benefit of the Spouse; and Descendants Credit Shelter Trust

Trust Agreement

Parties to Trust Agreement

This Agreement is made __________, 20___, between John Doe of Kansas City, Missouri, as Grantor under this Trust Agreement, and John Doe as the initial Trustee. John Doe is referred to herein either as “Grantor” or “Trustee,” depending on the context.

Introduction

Grantor is creating a revocable trust for the purposes set forth in this Agreement. Grantor, therefore, is transferring to the Trustee the property listed in the attached schedule. The Trustee shall hold the property and any other property that the Trustee may acquire from Grantor or from other people, all of which is collectively referred to as the “trust,” in trust, upon the following terms:

Article I

Distribution of Trust Property

A. Distribution During Life of Grantor

While Grantor is living, the Trustee shall pay to Grantor any net income of the trust and property or sums of money from the principal of the trust that Grantor may from time to time request, without limitation as to the amounts of or the reasons for those withdrawals of income or principal. The Trustee shall accumulate the net income of the trust not so requested by Grantor and shall add it to the principal of the trust at such times as the Trustee shall determine.

B. Distribution of Tangible Personal Property Upon Death of Grantor

Upon Grantor’s death, the Trustee shall distribute all of the tangible personal property of the trust to Grantor’s spouse, Jane Doe, if Grantor’s spouse survives Grantor. If Grantor’s spouse does not survive Grantor, the Trustee shall distribute those items of tangible personal property of the trust that are described in the most recent list signed by Grantor and dated after the date of this Trust Agreement to Grantor’s survivors named in the list. To the extent that the list does not dispose of all the tangible personal property that is an asset of the trust at the date of Grantor’s death (or if the list is not found within thirty days after Grantor’s death), the Trustee shall distribute the property to Grantor’s children who survive Grantor as equally as is practical, having regard for each child’s preferences. If, however, the Trustee shall determine that distributing any of the property to Grantor’s children is undesirable or impractical, the Trustee shall sell the property and add the proceeds to the rest of the trust.

C. Division of Rest of Property Upon Death of Grantor

Upon Grantor’s death, the Trustee shall divide the rest of the principal and any undistributed net income of the trust (together with any other property to which the Trustee may be entitled by reason of Grantor’s death and less any taxes, debts, expenses, or other obligations payable by the Trustee as a result of Grantor’s death) into two shares, determined as follows:

1. Trust A

The first share (to be created only if Grantor’s spouse, Jane Doe, survives Grantor), called “Trust A,” shall be in an amount equal to all property to be divided into shares, reduced by the lesser of:

· the maximum amount that will avoid any federal estate tax being due in Grantor’s estate; or

· the maximum amount that will avoidany state death tax being due in Grantor’s estate.

In determining this amount, any property of Trust A that Grantor’s Personal Representative shall not elect to have qualify for the federal marital deduction (if applicable), along with any property of Trust A disclaimed by Grantor’s spouse, shall be disregarded. Any property of Trust A so disclaimed by Grantor’s spouse shall become a part of Trust B. If applicable, final federal estate tax values shall be used in determining the amount of Trust A. Assets shall be allocated to Trust A using the basis of such assets as determined for federal income tax purposes, provided that Trust A shall be satisfied with property fairly representative of appreciation or depreciation in value of all property available for allocation to Trust A, this appreciation or depreciation to be determined from the federal income tax basis of the assets. There shall be allocated to each trust its proportionate share of all income from the date of Grantor’s death, including any income collected by the Personal Representative of Grantor’s estate and transferred to the Trustee. Trust A shall not be reduced by any death taxes.

2. Trust B

The second share, called “Trust B,” shall consist of that property that is not included in Trust A, or, if Grantor’s spouse does not survive Grantor, it shall consist of all the property.

D. Distribution of Trust A

The Trustee shall distribute Trust A as follows:

1. Distribution During Life of Spouse

While Grantor’s spouse is living, the Trustee shall pay to Grantor’s spouse, at least quarter annually, all the net income of Trust A.

2. Distribution Upon Death of Spouse

Upon the death of Grantor’s spouse:

· The Trustee shall distribute the principal and undistributed net income of Trust A to, or in trust for, those people among Grantor’s descendants and the spouses of Grantor’s descendants (including the surviving spouse of any deceased descendant), in those amounts or proportions designated by specific reference to this power in the last Will of Grantor’s spouse.

· If this power of appointment is not effectively or fully exercised by Grantor’s spouse, that part or all of the principal and undistributed net income of Trust A not so appointed by Grantor’s spouse shall be added to and disposed of as a part of Trust B, under all the terms that pertain to it, provided, however, that the Trustee, if legally obligated so to do, shall pay out of that portion of Trust A for which a marital deduction is allowed in Grantor’s estate to the Personal Representative of the estate of Grantor’s spouse (or shall pay directly) the death taxes due as a result of the inclusion of the value of the principal of Trust A in Grantor’s spouse’s gross estate as well as any penalties or interest attributable to the additional taxes. The Trustee may rely on the amount certified to the Trustee by the Personal Representative of Grantor’s spouse’s estate as being the correct amount of the taxes, and the Trustee shall not be obligated to verify the computation as to the taxes so attributable to the principal of this Trust A. The Trustee may defer the termination of Trust A until any federal and state taxes are determined.

3. Marital Deduction Protective Provision for Trust A

Grantor’s Personal Representative or the Trustee, as the case may be, may elect to have the value of Trust A qualify for the federal estate tax marital deduction, in whole or in part, in Grantor’s estate. Without limiting this discretion, Grantor expects that the necessary election will be made for all of Trust A. To the extent that such election is made, the property in Trust A shall be available for the marital deduction. Therefore, anything herein to the contrary notwithstanding, with respect to that portion of Trust A as to which such election shall have been made:

· During the lifetime of Grantor’s spouse, the Trustee shall not, without the consent of Grantor’s spouse, retain beyond a reasonable time any property that is unproductive or invest in unproductive property.

· No power or discretion granted to the Trustee by any other provision of this Agreement shall be exercised or exercisable by the Trustee, except to the extent and in the manner consistent with the allowance of the marital deduction, and any question pertaining to Trust A shall be resolved accordingly.

4. Reverse Qualified Terminable Interest Property Generation-Skipping Transfer Tax Exemption Provision

If there is GST (generation-skipping transfer) tax in effect at the time of Grantor’s death, and if there is remaining any part of Grantor’s GST tax exemption after allocations to transfers made during Grantor’s lifetime, and to transfers under Grantor’s Will and under this trust other than to that part or all of Trust A that has been elected to qualify for the marital deduction, then before the allocation of the remaining GST exemption, the Trustee may set aside assets qualified for the marital deduction having a value equal to the remaining GST exemption. The assets so set aside shall constitute an additional Trust A separate and distinct from the original Trust A, which original Trust A shall be composed of the assets not so set aside. Property allocated to the additional Trust A shall be at the value of the property at the date of allocation. The original Trust A and the additional Trust A shall each receive their proportionate share of any accumulated net income. The additional Trust A shall be governed by all the provisions governing the original Trust A, provided that any discretionary distributions of principal to Grantor’s spouse shall first be made from the original Trust A. Grantor’s Personal Representative or the Trustee shall elect to have Grantor treated as “transferor” for GST tax purposes as to the additional Trust A, and the remaining GST exemption shall be allocated thereto. Any death taxes due by the Trustee hereunder, as a result of the subsequent death of Grantor’s spouse, in connection with the assets of the original Trust A or the additional Trust A, shall be paid out of the assets of the original Trust A (if possible) to the extent that Grantor’s spouse has not otherwise provided for the payment of these taxes.

E. Distribution of Trust B

The Trustee shall distribute Trust B as follows:

1. During Life of Spouse

While Grantor’s spouse is living, the Trustee shall pay to Grantor’s spouse, as preferred beneficiary, part or all of the net income of Trust B as the Trustee shall determine is advisable to provide for the support and medical care of Grantor’s spouse. The Trustee shall pay to any one or more of Grantor’s descendants, from time to time...