Name of Grantor Trust No. 1 Trustees

[Name of grantor]Trust No. 1 Trustees

Original: / ______/ and / ______
Successor(s): / ______/ and / ______

Date of Execution [date]

Trust Contents
1. / Rights Reserved
1.1 Revocable Trust
1.2 Additions and Withdrawals
1.3 Actions on My Behalf
2. / Family
2.1 Spouse
2.2 Children
3. / Distribution During Lifetime
3.1 Income and Principal
4. / Distribution After Death
4.1 Payment of Taxes and Other Items
4.2 Tangible Personal Property
4.3 Trusts for Spouse and for Family
4.4 Distribution to Family
4.5 Alternate Distribution
4.6 Generation-Skipping Transfer Tax
4.7 Use of Other Information
4.8 Beneficiary Under Disability
5. / Trustee
5.1 Successor Trustee
5.2 Resignation by Trustee
5.3 Removal of Trustee
5.4 Action by Trustee
5.5 Miscellaneous Trustee Provisions
6. / Trust Administration
6.1 Powers of Trustee
6.2 Principal Place of Administration
6.3 Trust Registration
6.4 Trustee’s Duty to Inform and Report to Beneficiaries
6.5 Spendthrift Trust
6.6 Miscellaneous Administration Provisions
6.7 Certificate of Trust Existence and Authority
6.8 Trust Provisions Govern MTC
6.9 Waiver by Beneficiary
7. / General Provisions
7.1 Liability of Trustee and Designated Parties; Indemnification of Trustee
7.2 Rule Against Perpetuities
7.3 Power of Appointment Exercise
7.4 Miscellaneous General Provisions
7.5 No Contest Clause
7.6 Business Interests
7.7 Survival Presumptions
7.8 Prior Trust Amended

Index to Defined Terms

1. / Agreement / Opening ¶
2. / Applicable Exclusion Amount / ¶4.3(a)
3. / Child(ren) / ¶2.2
4. / Descendants / ¶7.4(e)
5. / Designated Party / ¶4.3(d)
6. / Discretionary Trust / ¶5.5(i)
7. / Exempt Trust / ¶4.6.
8. / Gross Estate / ¶4.3(a)
9. / GST Tax / ¶4.6
10. / IRC / ¶4.3(a)
11. / MTC / ¶4.3(b)(2)
12. / Nonexempt Trust / ¶4.6
13. / Protected Party / ¶7.1
14. / Qualified Disclaimer / ¶4.3(d)
15. / Qualified Trust Beneficiary / ¶6.4(b)(3)
16. / Spouse / ¶2.1
17. / Support Trust / ¶4.3(b)(2)
18. / Tangible Personal Property / ¶4.2
19. / Taxable Estate / ¶4.3(a)
20. / Trust / Opening ¶
21. / Trustee / Opening ¶

TRUST AGREEMENT[Name of grantor]Trust No. 1

[Alternative 1:]

I, [name of grantor], on [date], sign this Trust Agreement (“Agreement”) with [name of grantor] and [name of grantor’s spouse] as trustees, both of whom, and the survivor of them, and any successor trustee, will be called “Trustee” in this Agreement and referred to in singular neuter pronouns. The trust created by the Agreement is referred to as the “Trust.” Trustee shall hold all property delivered to it, in trust, as follows:

[Alternative 2:]

I, [name of grantor], on [date], sign this Trust Agreement (“Agreement”). I will serve as trustee. As trustee, I will be called, and any successor trustee will be called, “Trustee” in this Agreement and referred to in singular neuter pronouns. The trust created by the Agreement is referred to as the “Trust.” Trustee shall hold all property delivered to it, in trust, as follows:

[Alternative 3:]

I, [name of grantor], on [date], sign this Trust Agreement (“Agreement”) with [name of trustee] as trustee, who, and any successor trustee, will be called “Trustee” in this Agreement and referred to in singular neuter pronouns. The trust created by the Agreement is referred to as the “Trust.” Trustee shall hold all property delivered to it, in trust, as follows:

1. RIGHTS RESERVED

1.1Revocable Trust. I reserve the right to amend or revoke this Agreement, wholly or partly, by a writing signed by me or on my behalf and delivered to Trustee during my life. However, I cannot change materially the duties or compensation of Trustee without its written approval.

1.2Additions and Withdrawals. I reserve the right to add property to, and withdraw property from, the trust.

1.3Actions on My Behalf. My agent under a power of attorney or a conservator appointed for me shall have the right to take the actions specified in ¶1.1 and ¶1.2; provided my power of attorney gives agent or the court gives the conservator, as applicable, the powers specified in ¶1.1 and ¶1.2.

2. FAMILY

2.1Spouse. I am married to [name of grantor’s spouse] (“Spouse”). If our marriage terminates other than by reason of the death of one of us, then this Agreement shall be interpreted as if my Spouse died as of the date of termination of our marriage.

2.2Children. All references in this Agreement to my “Child” or “Children” shall include any child born to my Spouse and me or legally adopted by me after the date of this Agreement. My Children as of the date of this Agreement are: [list names and birth dates].

3. DISTRIBUTION DURING LIFETIME

3.1Income and Principal. During my life, Trustee shall pay all of the net income to me or for my benefit or as I otherwise direct orally or in writing, and Trustee shall pay any part of trust principal as I direct orally or in writing. During any period in which, in Trustee’s opinion, I am incapable of managing my own affairs, Trustee shall pay to or for the benefit of me or my Spouse the net income and principal that Trustee (1) determines is required for our support, comfort, and welfare, in our accustomed manner of living, or for any other purposes Trustee believes to be for our best interests; or (2) is directed by my agent under a power of attorney or by my conservator.

4. DISTRIBUTION AFTER DEATH

4.1Payment of Taxes and Other Items

[Alternative 1 to ¶4.1—no apportionment, taxes paid from residue:]

4.1Payment of Taxes and Other Items. At my death:

(a) To the extent the property of my estate (other than Tangible Personal Property and any property that in Trustee’s judgment does not have a readily realizable market value) is insufficient, Trustee shall pay all estate, inheritance, and other taxes payable as a result of my death, including interest and penalties, but excluding taxes imposed on any generation-skipping transfer of assets that are not part of my estate or of a trust I created.

(b) If a personal representative of my estate is appointed in Michigan, Trustee shall pay to the personal representative of my estate, upon written notice from the personal representative of the amounts required, but only to the extent that the property subject to probate administration is insufficient to satisfy the following: (1) administration expenses of my probate estate; (2) enforceable and timely presented claims of my creditors, including funeral and burial expenses; and (3) homestead, family, and exempt property allowances.

(c) If no personal representative of my estate has been appointed so that the publication and notice requirements with respect to creditors have not been discharged, Trustee shall publish and serve notice to all creditors in the same manner as required by Michigan law. Trustee shall pay all claims allowed by Trustee or a court having jurisdiction.

(d) Trustee may pay all or any part of gifts provided by my will.

[Optional additional ¶4.1(e), Alternative 1; may be used if trust is beneficiary of retirement benefits and client wants to use retirement assets to pay charitable bequests:]

(e) Trustee shall first use the assets from any qualified retirement plan, individual retirement account, or other retirement arrangement subject to the “minimum distribution rules” of IRC 401(a)(9) or other comparable provisions of law to pay any of my bequests specified in this Section 4 to charitable organizations described in IRC 170(c),2055(a), and 2522(a).

[Optional additional ¶4.1(e), Alternative 2; may be used if trust is beneficiary of retirement benefits:]

(e) Notwithstanding any other provision, except as provided in this paragraph, the Trustee may not, on or after September 30 of the year following the year of my death (Designation Date), distribute to or for the benefit of my estate, any charity, or any other nonindividual beneficiary any qualified retirement plan, individual retirement account or other retirement arrangement subject to the minimum distribution rules of IRC 401(a)(9) or other comparable provisions of law (Retirement Benefit). It is my intent that all such retirement benefits held by or payable to this trust on or after the Designation Date be distributed to or held in trust for only individual beneficiaries, within the meaning of IRC 401(a)(9). Accordingly, I direct that such benefits may not be used or applied on or after the Designation Date for payment of my debts, taxes, expenses of administration, or other claims against my estate nor for payment of estate, inheritance, or similar transfer taxes due on account of my death. This paragraph shall not apply to any bequest that is specifically directed to be funded with Retirement Benefits by other provisions of this instrument.

[Alternative 2 to ¶4.1—equitable apportionment:]

4.1Payment of Taxes and Other Items. At my death:

(a) All estate, inheritance, and other taxes payable as a result of my death, including interest and penalties, shall be paid proportionately by the person(s) holding or receiving the property, without regard to whether the property passed under this Agreement. The concept of equitable apportionment shall apply so that any deduction or rate differential attributable to the relation of the holder or recipient of the property includable in my Gross Estate and applied in the computation of those taxes shall enjoy the benefit of the deduction or differential.

(d) Trustee may pay all or any part of gifts provided by my will.

4.2Tangible Personal Property. I have prepared or may prepare a written statement or list, signed by me, to dispose of items of Tangible Personal Property. If I already have not given each item to the person or persons identified in the written statement or list, Trustee shall deliver those items at my death. At my death, Trustee shall deliver free from trust all remaining Tangible Personal Property to my Spouse, or if my Spouse does not survive me, to my Children who survive me and not to the Descendants of any deceased Child, in portions of equal value, divided as they agree, or if they do not agree within a reasonable time, as Trustee determines.

The term “Tangible Personal Property” means personal (not used primarily in a business) boats, books, china, clothing, furnishings, furniture, glass, household items, jewelry, lawn and garden equipment, motor vehicles, personal effects, pictures, recreational items, rugs, silver, works of art, and any other similar items, and includes any insurance on that property. Trustee shall determine which items are within this definition, and the determination shall bind all persons.

If Tangible Personal Property is to be distributed to a minor, Trustee may determine that specific items (e.g., a motor vehicle) are inappropriate for distribution to or retention for a minor, and Trustee may distribute those items, or proceeds from sale of those items, as part of the remaining trust property. Trustee may distribute Tangible Personal Property to a minor, to the minor’s conservator, or to an adult with whom the minor lives, without further liability.

4.3Trusts for Spouse and for Family. At my death, if I do not survive my Spouse:

4.3(a)Division of Property.

[Alternative 1 to ¶4.3(a)—pecuniary credit shelter:]

4.3(a)Division of Property. Trustee shall divide the remaining trust property into two trusts, “Trust A” and “Trust B.”

First, Trustee shall allocate to Trust B an amount of trust property that, when added to the value of my Taxable Estate (other than the remaining trust property), will increase my Taxable Estate (other than the remaining trust property) to the largest amount that, after allowing for (1) the available Applicable Exclusion Amount, (2) any other allowable credits and deductions, and (3) any other charges to principal that are not allowed as deductions in computing my Taxable Estate, will result in no federal estate tax being imposed on my estate. However, Trustee shall not use the maximum state death tax credit if to do so would require an increase in the state death taxes paid. Trustee also shall allocate to Trust B any trust property that is not included in my Gross Estate. As used in this paragraph, (A) “Taxable Estate” means my Gross Estate, as defined in IRC 2031(a) (“Gross Estate”), minus (i) deductions set out in IRC 2053 and 2054 (whether or not claimed) and (ii) any other charges to principal that are not allowed as deductions pursuant to IRC 2053 and 2054; and (B) “Applicable Exclusion Amount” has the meaning ascribed to that term in IRC 2010(c)(2).

Second, Trustee shall allocate to Trust A any remaining trust property.

Trustee shall have authority to allocate property in kind between Trusts A and B, but the values used shall be determined as of the date or dates of allocation. Trustee shall allocate no property or proceeds of sale of any property to Trust A that would not qualify for the marital deduction. Trustee shall pay no taxes from property allocated to Trust A. In carrying out these provisions, Trustee may rely conclusively on written statements of the personal representative of my estate as to the value of property for federal estate tax purposes, the value of property qualifying for the marital deduction, and other information that may be pertinent.

[Alternative 2 to ¶4.3(a)—pecuniary marital deduction:]

4.3(a)Division of Property. Trustee shall divide the remaining property into two trusts, “Trust A” and “Trust B.”

First, Trustee shall allocate to Trust A an amount equal to all remaining trust property minus the sum of (1) the amount of trust property, if any, that, when added to the value of my Taxable Estate (other than the remaining trust property) will increase my Taxable Estate (other than remaining trust property) to the largest amount that, after allowing for (a) the available Applicable Exclusion Amount not used for transfers during lifetime, (b) any other allowable credits and deductions, and (c) any other charges to principal that are not allowed as deductions in computing my Taxable Estate, will result in no federal estate tax being imposed on my estate; and (2) any trust property that is not included in my Gross Estate. However, Trustee shall not use the maximum state death tax credit if to do so would require an increase in the state death taxes paid. As used in this paragraph, (A) “Taxable Estate” means my Gross Estate, as defined in IRC 2031(a) (“Gross Estate”), minus (i) deductions set out in IRC 2053 and 2054 (whether or not claimed) and (ii) any other charges to principal that are not allowed as deductions pursuant to IRC 2053 and 2054; and (B) “Applicable Exclusion Amount” has the meaning ascribed to that term in IRC 2010(c)(2).

Second, Trustee shall allocate to Trust B any remaining trust property.

[Alternative 3 to ¶4.3(a)—fractional share:]

4.3(a)Division of Property. Trustee shall divide the remaining property into two trusts, “Trust A” and “Trust B.”

First, Trustee shall allocate to Trust B a fraction of the remaining trust property. The numerator of the fraction shall be that amount of trust property that, when added to the value of my Taxable Estate (other than the remaining trust property), will increase my Taxable Estate (other than the remaining trust property) to the largest amount that, after allowing for (1) the available Applicable Exclusion Amount not used for transfers made during lifetime, (2) any other allowable credits and deductions, (3) any other charges to principal that are not allowed as deductions in computing my Taxable Estate, and (4) any trust property that is not included in my Gross Estate, will result in no federal estate tax being imposed on my estate. The denominator of the fraction shall be all remaining trust property. However, Trustee shall not use the maximum state death tax credit if to do so would require an increase in the state death taxes paid. As used in this paragraph, (A) “Taxable Estate” means my Gross Estate, as defined in IRC 2031(a) (“Gross Estate”), minus (i) deductions set out in IRC 2053 and 2054 (whether or not claimed) and (ii) any other charges to principal that are not allowed as deductions pursuant to IRC 2053 and 2054; and (B) “Applicable Exclusion Amount” has the meaning ascribed to that term in IRC 2010(c)(2).

Second, Trustee shall allocate to Trust A any remaining trust property.

4.3(b)Spouse’s Trust.

[Alternative 1 to ¶4.3(b)—QTIP trust:]

4.3(b)Spouse’s Trust. Trustee shall hold Trust A for the following purposes:

(1) Income. Trustee shall pay net income to my Spouse until death, at least quarter-annually.

(2) Principal. If net income is insufficient to maintain the standard of living my Spouse and I enjoyed prior to my death, Trustee shall use that portion of principal necessary to enable my Spouse to maintain that standard of living. Trustee may distribute principal only to my Spouse. Trustee shall permit my Spouse to use any real estate held in Trust A rent free. I intend this portion of Trust A to be a “Support Trust” as defined in the Michigan Trust Code (“MTC”), MCL 700.7101 et seq.

[Alternative 1 to ¶4.3(b)(3):]

(3) Residue. At my Spouse’s death, Trustee shall pay the approximate amount of estate, inheritance, and other taxes payable as a result of inclusion of any portion of Trust A in my Spouse’s Taxable Estate, and any taxes then imposed on generation-skipping transfer of property in Trust A, and Trustee shall distribute the remaining property in Trust A to Trust B.

[Alternative 2 to ¶4.3(b)(3):]

(3) Testamentary Limited Power of Appointment. At my Spouse’s death, Trustee shall distribute the remaining property in Trust A to such person or persons, on such conditions and estates, in trust or otherwise, with such powers, in such manner and at such time or times as my Spouse appoints and directs by will specifically referring to this power of appointment, except that this power of appointment may not be exercised in favor of my Spouse, my Spouse’s estate, the creditors of my Spouse, or the creditors of my Spouse’s estate. To the extent my Spouse does not effectively exercise this power of appointment, upon my Spouse’s death Trust A shall be added to Trust B and held and administered as part of Trust B.