IRREVOCABLE TRUST
THIS IS A TRUST AGREEMENT dated September , 2011, between of Garden City, New York (the "Grantor") and the Grantor's brother, of Anchorage, Alaska, of Brooklyn, New York, and the Grantor's son , as Initial Trustees (collectively, the "Trustees").[OBJ:ILIT 1000]
WHEREAS, the Grantor desires to create a trust; and[OBJ:ILIT 1001]
WHEREAS, the Trustee is willing to accept the trust hereby created and covenants to discharge faithfully the duties of a Trustee hereunder;[OBJ:ILIT 1002]
NOW, THEREFORE, the Grantor hereby transfers property described on Schedule A hereto annexed, to the Trustee, IN TRUST, and the Trustee agrees to accept the property and to hold, manage and distribute the property under the terms of this Agreement.[OBJ:ILIT 1003]
ARTICLE I
Trust Name
This Agreement and the trust hereunder may be referred to as the Trust of 2011.[OBJ:ILIT 1004]
ARTICLE II
Lifetime Trust
A. During The Grantor's Life. During the Grantor's life, the Trustee shall administer the trust (the "Lifetime Trust") pursuant to this paragraph:[OBJ:ILIT 1005]
1. The Trustee shall distribute as much of the net income and/or principal of the Lifetime Trust as the Trustee (excluding, however, any Interested Trustee) may at any time and from time to time determine to the Grantor's Wife and the Grantor's descendants in such amounts or proportions as the Trustee (excluding, however, any Interested Trustee) may from time to time select, for the health, education, maintenance and support within the meaning of section 2041(b) of the Code of one or more or all of them; provided, however, that during any period that a descendant of the Grantor is eligible to receive or is receiving any Government Benefits or Assistance, distributions to any descendant of mine of such income and principal shall only be made in accordance with the provisions of the Supplemental Needs Trust below, and the descendant for whom such distribution would be made shall be treated as the Beneficiary of a Supplemental Needs Trust hereunder; and provided, further, that during the first five (5) years following the initial transfer to this trust, distributions may only be made to the Grantor’s granddaughter, , and for any purpose. [OBJ:ILIT 1007]
2. Any net income not so distributed shall be accumulated and annually added to principal. [OBJ:ILIT 1008]
B. Separate Trusts for GST Purposes. Although this Article speaks in terms of a single Lifetime Trust, the Lifetime Trust may instead be held as two trusts under the circumstances outlined in this paragraph if the Trustee (excluding, however, any Interested Trustee) in the Trustee's absolute discretion determines to do so.[OBJ:ILIT 1010]
1. The Trustee may hold as much of the property of the Lifetime Trust as the Trustee shall determine in the exercise of discretion as a separate trust ("the GST Exempt Trust") and hold the balance of the trust property in another separate trust ("the GST Non-Exempt Trust"). The GST Exempt Trust and the GST Non-Exempt Trust shall have identical terms but shall be accounted for as separate trusts for which investments and distributions need not be the same. The Grantor anticipates this will be done in such manner that the GST Exempt Trust will have a zero inclusion ratio with respect to the Grantor and the Grantor's Wife as transferors for Federal generation-skipping transfer tax purposes (to the extent either or both of them may be considered a transferor of property held under this Article for such purposes).[OBJ:ILIT 1011]
2. When additions are made to the Lifetime Trust, the Trustee may wait until there is sufficient information concerning what GST exemption has been allocated to the addition before allocating the added property to the GST Exempt Trust or the GST Non-Exempt Trust.[OBJ:ILIT 1013]
3. The Trustee (excluding, however, any Interested Trustee) is also authorized in the Trustee's absolute discretion to transfer property from the GST Non-Exempt Trust to the GST Exempt Trust. Without limiting the Trustee's discretion, the Grantor anticipates this will be done in conjunction with the allocation of additional GST exemption to the property. If the GST Non-Exempt Trust has more than one GST transferor and is therefore treated as separate trusts for GST purposes, then a transfer from the GST Non-Exempt Trust shall be deemed to come pro rata from such separate trusts comprised in the GST Non-Exempt Trust, unless the Trustee shall identify it in some other fashion. If the GST Exempt Trust also has more than one GST transferor, the transferred property shall be added to the separate trust for GST purposes having the same transferor.[OBJ:ILIT 1014]
4. The authority conferred by this Article to create separate GST Exempt and GST Non-Exempt Trusts may be exercised without any special notation on the trust records.[OBJ:ILIT 1015]
5. If no Trustee (other than an Interested Trustee) serves, or if it is established that no such division has ever been accomplished, all property contributed hereto shall be deemed to be GST Exempt, whether or not GST exemption is actually allocated to the property contributed hereunder.
C. End of Lifetime Trust. Upon the Grantor's death, if the Grantor is survived by the Grantor's Wife, any property of the Lifetime Trust that is included in the Grantor's gross estate shall be distributed to the Trustee of the Marital Trust under this Agreement, to be disposed of under the terms of that trust and any property of the Lifetime Trust that is not included in the Grantor's gross estate shall be distributed to the Trustee of the Family Trust hereunder, to be disposed of under the terms of that trust. Upon the Grantor's death, if the Grantor is not survived by the Grantor's Wife, the property of the Lifetime Trust shall be set aside and divided, separately as to any GST Non-Exempt Trust and as to any GST Exempt Trust, into per stirpital shares for the Grantor's then-living descendants, and each share so set aside for a descendant shall be distributed to the Trustee of a Descendant's Separate Trust to be held as a separate trust and to be disposed of under the terms of the Descendants' Separate Trusts under this Agreement, the descendant for whom the share is set aside to be the Beneficiary of his or her own Descendant's Separate Trust. [OBJ:ILIT 1016]
ARTICLE III
Family Trust
Property that is to be held as the Family Trust shall be held under this Article and all references to "Family Trust" shall be to the trusts held under this Article.[OBJ:ILIT 1018]
A. Separate Trusts for GST Purposes. If property passes to the Family Trust from separate GST Exempt and GST Non-Exempt Trusts of the Lifetime Trust, then the Family Trust shall likewise be held in separate GST Exempt and GST Non-Exempt Trusts. In that event, without limiting the Trustee's discretion, the Grantor suggests that no distributions be made from the GST Exempt Trust until the GST Non-Exempt Trust is exhausted, unless there is a compelling reason to do so.[OBJ:ILIT 1019]
B. During Wife's Life. The following provisions shall apply during the Grantor's Wife's life:[OBJ:ILIT 1020]
1. The Trustee shall distribute to one or more of the Grantor's Wife and the Grantor's descendants as much of the net income and principal of the trust as the Trustee (excluding, however, any Interested Trustee) may at any time and from time to time determine, in such amounts or proportions as the Trustee (excluding, however, any Interested Trustee) may from time to time select, for the health, education, maintenance and support within the meaning of section 2041(b) of the Code of one or more or all of them; provided, however, that during any period that a descendant of the Grantor is eligible to receive or is receiving any Government Benefits or Assistance, distributions to any descendant of mine of such income and principal shall only be made in accordance with the provisions of the Supplemental Needs Trust below, and the descendant for whom such distribution would be made shall be treated as the Beneficiary of a Supplemental Needs Trust hereunder; provided, however, that the Trustees (other than any Interested Trustee) may convert all or any portion of this trust on a temporary or permanent basis to one that will pay to the Grantor’s spouse a unitrust amount equal to 4% of the annual value of the trust..[OBJ:ILIT 1033]
2. Any net income not so distributed shall be accumulated and annually added to principal.[OBJ:ILIT 1034]
3. Without limiting the Trustee's discretion, the Grantor suggests that no distribution of income or principal be made to the Grantor's Wife until the principal of the Marital Trust is exhausted, unless there is a compelling reason to do so.[OBJ:ILIT 1035]
4. Without limiting the Trustee's discretion, the Trustee may consider the needs of the Grantor's Wife as more important than the needs of the Grantor's descendants or any other beneficiary.[OBJ:ILIT 1038]
C. Upon Wife's Death. Upon the death of the Grantor's Wife, the property then held in the Family Trust shall be:[OBJ:ILIT 1039]
1. distributed to one or more of the Grantor’s parents’ descendants and any widow or widower of a descendant of them on such terms as the Grantor's Wife may appoint by a Will or other signed writing that is acknowledged before a notary public specifically referring to this power of appointment; or, in default of appointment or insofar as an appointment is not effective;[OBJ:ILIT 1040]
2. set aside and divided, separately as to any GST Non-Exempt Trust and as to any GST Exempt Trust, into per stirpital shares for the Grantor's then-living descendants, and each share so set aside for a descendant shall be distributed to the Trustee of a Descendant's Separate Trust to be held as a separate trust and to be disposed of under the terms of the Descendants' Separate Trusts under this Agreement, the descendant for whom the share is set aside to be the Beneficiary of his or her own Descendant's Separate Trust.[OBJ:ILIT 1048]
ARTICLE IV
Descendants' Separate Trusts
Property that is to be held in a Descendant's Separate Trust or the Descendants' Separate Trusts shall be held under this Article and all references to the "Descendant's Separate Trust" or the "Descendants' Separate Trusts" shall be to the trusts held under this Article. [OBJ: STD SEPT 1000]
A. During The Beneficiary's Life. The following provisions shall apply during the Beneficiary's life: [OBJ: STD SEPT 1001]
1. The Trustee shall distribute to any one or more of the Beneficiary and the Beneficiary's descendants as much of the net income and principal of the trust as the Trustee (excluding, however, any Interested Trustee) may at any time and from time to time determine, in such amounts or proportions as the Trustee (excluding, however, any Interested Trustee) may from time to time select, for any purpose; provided, however, that during any period that a descendant of mine is eligible to receive or is receiving any Government Benefits or Assistance, distributions to the Beneficiary or any descendant of the Beneficiary of such income and principal shall only be made in accordance with the provisions of the Supplemental Needs Trust, and the Beneficiary or any descendant of the Beneficiary shall be treated as the Beneficiary of a Supplemental Needs Trust hereunder. [OBJ: STD SEPT 1017]
2. Any net income not so distributed shall be accumulated and annually added to principal. [OBJ: STD SEPT 1018]
3. Without limiting the Trustee's discretion, the Trustee may consider the needs of the Beneficiary as more important than the needs of the Beneficiary's descendants or of any other beneficiary. [OBJ: STD SEPT 1042]
4. Without limiting the Trustee's discretion, the Grantor suggests that no distribution of principal be made from any trust for a Beneficiary that is exempt from Federal generation-skipping transfer tax ("GST Exempt Trust") until the principal of any trust that is not exempt from Federal generation-skipping transfer tax ("GST Non-Exempt Trust") for that Beneficiary is exhausted, unless there is a compelling reason to do so. [OBJ STD SEPT 1043]
B. Upon Beneficiary's Death. Upon the Beneficiary's death, the property then held in his or her Descendant's Separate Trust shall be distributed as follows: [OBJ: STD SEPT 104830]
1. distributed to such one or more persons out of a class composed of the Grantor's descendants (other than the Beneficiary) and surviving spouses of such descendants on such terms as the Beneficiary may appoint by a Will or other signed writing that is acknowledged before a notary public specifically referring to this power of appointment, provided that anyone other than the Grantor's descendants may be given only an interest in the income of a trust under an appointment which must be in further trust and no interest in or power over principal; or, in default of appointment or insofar as an appointment is not effective; [OBJ: STD SEPT 104833]
2. With respect to the GST-Non-Exempt Trust, distributed pursuant to the Paragraph of this article titled "Special Provisions for GST Non-Exempt Trust;" and [OBJ: STD SEPT 104834]
3. With respect to the GST Exempt Trust, set aside and divided into per stirpital shares for the Beneficiary's descendants then living or, if there is no descendant of the Beneficiary then living and if the Beneficiary was a grandchild or more remote descendant of the Grantor, for the descendants then living of the Beneficiary's nearest ancestor who was a descendant of the Grantor, with descendants then living or, if there is no such descendant then living or if the Beneficiary was a child of the Grantor, for the Grantor's descendants then living, the share so set aside for a descendant to be distributed to the Trustee of the Descendants' Separate Trusts, to be held as a separate trust to be disposed of under the terms of this Article, the descendant for whom the share is set aside to be the Beneficiary of his or her own Descendant's Separate Trust. [OBJ: STD SEPT 104835]