Irrevocable Generation Skipping (Dynasty) Trust Agreement For Benefit of

Trustor's Children and Grandchildren

This trust agreement is made on ________________________________ (date),

between _______________________________________________ (Grantor) and who
resides at ________________________________________________________________
________________________________________________________________________
___________________________________ (street address, city, county, state, zip code),
the Grantor, and __________________________________________________(Trustee)
located at _______________________________________________________________
________________________________________________________________________
___________________________________ (street address, city, county, state, zip code),
the Trustee.
The Grantor, in consideration of the agreements and undertakings set forth below
made and assumed by the Trustee, and other valuable consideration, does assign, convey,
and set over to the Trustee and the Trustee's successors the property listed and described
in Schedule A, which is attached and incorporated herein by reference. The Trustee is
authorized to and agrees that it will receive and hold that property and such additional
property as may be transferred, assigned, or bequeathed to the Trustee from time to time
by any person or organization, to become a part of the principal of the trust created by
this Agreement, and all investments and reinvestments of the same and income for the
uses and trusts set forth below.
1.

Initial Distribution
The Trustee shall promptly distribute ______________________ (e.g., $5,000)
from the principal of the trust estate to each of Grantor's grandchildren who shall then be
living, subject to postponement of possession as provided below.
2.

Division into Trusts For Children

After making or providing for the foregoing distributions, the Trustee shall
promptly divide the trust estate into equal trusts to provide one trust for each child of the
Grantor who is either then living or then deceased, leaving one or more descendants then
living. Each trust shall be held and disposed of as provided below.
3.

Childrens Trusts
If a child survives the Grantor, then commencing with the death of the Grantor
the Trustee shall pay the income from his or her trust in convenient installments, at least
quarterly, to the child during his or her lifetime. The Trustee may also pay to the child
such sums from the principal of his or her trust as the Trustee deems necessary or
advisable from time to time for his or her health and maintenance in reasonable comfort,
considering his or her income from all sources known to the Trustee.
4.

Division into Shares for Grandchildren

On the death of a child or on the death of the Grantor if the child is not then
living, the Trustee shall divide the child's trust into equal shares to create one share for
each then living child of the child (referred to as a grandchild) and one share for the then
living descendants, collectively, of each deceased child of the child (referred to as a
deceased grandchild), or if there is no descendant of the child living at his or her death,
the Trustee shall distribute the child's trust per stirpes to the then living descendants of
the Grantor, subject to postponement of possession as provided below, except that each
portion otherwise distributable for whom a share of the trust estate is then held under this
Agreement shall be added to that share. Each share created for the descendants of a
deceased grandchild shall be distributed per stirpes to such descendants, subject to
postponement of possession as provided below. Each share created for a living
grandchild shall be held as a separate trust and disposed of as provided below.
5.

Trust of Grandchildren
The income from a grandchild's share shall be paid in convenient installments, at
least quarterly, to the grandchild until complete distribution of the share or his or her
prior death. The Trustee may also pay to the grandchild such sums from the principal of
his or her share as the Trustee deems necessary or advisable from time to time for his or
her health, maintenance in reasonable comfort, education (including postgraduate
education), and best interests, considering the income of the grandchild from all sources
known to the Trustee.
6.

Right of Withdrawal
After creation of a grandchild's share and after the grandchild has reached the age
of _________ (e.g., 25) years, he or she may withdraw any part or all of his or her share
at any time or times. The Trustee shall make payment without question on the
grandchild's written request. The right of withdrawal shall be a privilege which may be
exercised only voluntarily and shall not include an involuntary exercise.
7.

Power of Appointment
If a grandchild dies before receiving his or her share in full, then on the
grandchild's death the principal and any accrued and undistributed income of his or her
share shall be held in trust or distributed to or in trust for such appointee or appointees
(including the estate of the grandchild), with such powers and in such manner and
proportions as the grandchild may appoint by his or her will making specific reference to
this power of appointment.
8.

Distribution to Descendants
On the death of a grandchild any part of the principal and accrued and
undistributed income of his or her share not effectively appointed shall be distributed per
stirpes to his or her then living descendants, or if none, then per stirpes to the then living
descendants of the grandchild's parent who was a child of the Grantor, or if also none,
then per stirpes to Grantor's then living descendants, subject to postponement of
possession as provided below, except that each portion otherwise distributable to a
descendant for whom a share of the trust estate is then held shall be added to that share.

9.

Distributions to Minors
Each share of the trust estate which is distributable to a descendant who has not
reached the age of ________ (e.g., 21) years shall immediately vest in the descendant, but
the Trustee shall (a) establish a custodianship for the descendant under a Uniform
Transfers (or Gifts) to Minors Act, or (b) retain possession of the share as a separate trust
until the descendant reaches the age of _______ (e.g., 21) years, meanwhile paying to or
for the benefit of the descendant so much or all of the income and principal of the share
as the Trustee deems necessary or advisable from time to time for his or her health,
maintenance in reasonable comfort, education (including postgraduate), and best
interests, and adding to principal any income not so paid.
10.

Payments to Minors or Incompetents

If income or discretionary amounts of principal become payable to a minor or to a
person under legal disability or to a person not adjudicated incompetent but who, by
reason of illness or mental or physical disability, is in the opinion of the Trustee unable
properly to manage his or her affairs, then such income or principal shall be paid or
expended only in such of the following ways as the Trustee deems best: (a) to the
beneficiary directly; (b) to the legally appointed guardian or conservator of the
beneficiary; (c) to a custodian for the beneficiary under a Uniform Transfers (or Gifts) to
Minors Act; (d) by the Trustee directly for the benefit of the beneficiary; and (e) to an
adult relative or friend in reimbursement for amounts properly advanced for the benefit of
the beneficiary.
11.

Spendthrift Provisions
The interests of beneficiaries in principal or income shall not be subject to the
claims of any creditor, any spouse for alimony or support, or others, or to legal process,
and may not be voluntarily or involuntarily alienated or encumbered. This provision shall
not limit the exercise of any power of appointment.
12.

Accrued and Undistributed Income

Income received after the last income payment date and undistributed at the
termination of any estate or interest shall, together with any accrued income, be paid by
the Trustee as income to the persons entitled to the next successive interest in the
proportions in which they take that interest.
13.

Common Fund and Merger of Trusts

For convenience of administration or investment, the Trustee may hold the several
trusts as a common fund, dividing the income proportionately among them, assign
undivided interests to the several trusts, and make joint investments of the funds
belonging to them. The Trustee may consolidate any separate trust with any other trust
with similar provisions for the same beneficiary or beneficiaries.
14.

Powers of Trustee
A.
The Trustee may retain any property (including stock of any corporate
Trustee under this Agreement or of a parent or affiliate company) originally constituting

the trust or subsequently added to it, although not of a type, quality, or diversification
considered proper for trust investments.
B.
The Trustee shall have power to invest and reinvest the trust property in
bonds, stocks, notes, or other property, real or personal, suitable for the investment of
trust funds; to register property in the name of a nominee without restriction; to vote in
person or by general or limited proxy, or refrain from voting, any corporate securities for
any purpose, except that any security as to which the Trustee's possession of voting
discretion would subject the issuing company or the Trustee to any law, rule, or
regulation adversely affecting either the company or the Trustee's ability to retain or vote
company securities, shall be voted as directed by the Grantor if living, otherwise by the
beneficiaries then entitled to receive or have the benefit of the income from the trust; to
lease (for any period of time though commencing in the future or extending beyond the
term of the trust), sell, exchange, mortgage, or pledge any or all of the trust property as
the Trustee deems proper; to borrow from any lender, including a Trustee individually; to
employ agents, attorneys and proxies; to compromise, contest, prosecute or abandon
claims; to divide or distribute in cash or in kind, or partly in each, or in undivided
interests or in different assets or disproportionate interests in assets, to value the trust
property for such purposes, and to sell any property in order to make division or
distribution; and to deal with, purchase assets from, or make loans to, the fiduciary of any
trust made by the Grantor or any member of the Grantor's family or a trust or estate in
which any beneficiary under this Agreement has an interest, though a Trustee under this
Agreement is such a fiduciary.
C.
The Trustee is authorized to establish out of income and credit to principal
reasonable reserves for depreciation, obsolescence and depletion.
D.
The Trustee may transfer the situs of any trust property to any other
jurisdiction as often as the Trustee deems it advantageous to the trust, appointing a
substitute Trustee to itself to act with respect to it. In connection with that the Trustee
may delegate to the substitute Trustee any or all of the powers given to the Trustee,
which may elect to act as advisor to the substitute Trustee and shall receive reasonable
compensation for so acting. The Trustee may remove any acting substitute Trustee and
appoint another, or reappoint itself, at will.
15.

Annual Account and Compensation

The Trustee shall render an account of its receipts and disbursements at least
annually to the Grantor if living, otherwise to each adult income beneficiary. The Trustee
shall be reimbursed for all reasonable expenses incurred in the management and
protection of the trust and shall receive fair compensation for its services. The Trustee's
regular compensation shall be charged against income during the Grantor's lifetime and
subsequently half against income and half against principal, except that the Trustee shall
have full discretion at any time or times to charge a larger portion or all against income
without being limited to circumstances specified by state law.
16.

Discretionary Termination

If at any time a trust under this Agreement has a market value as determined by
the Trustee of ________________ (i.e., $50,000) or less, the Trustee may in its discretion
terminate the trust and distribute the trust property proportionately to the persons then
entitled to receive or have the benefit of the income from that trust.
17.

Rule Against Perpetuities

No trust created by this Agreement, or by the exercise of a power of appointment,
shall continue for more than ______ (e.g., 21) years after the death of the last to die of the
Grantor and the beneficiaries in being at the death of the Grantor. Any property still held
in trust at the expiration of that period shall immediately be distributed to the persons
then entitled to receive or have the benefit of the income from that trust in the proportions
in which they are entitled, or if their interests are indefinite, then in equal shares.
18.

Trustee Provisions
A.
Any Trustee may resign at any time by written notice to the Grantor if
living, otherwise to each beneficiary then entitled to receive or have the benefit of the
income from the trust. In case of the resignation, refusal, or inability to act of any
Trustee, the Grantor if living, otherwise the beneficiary or a majority in interest of the
beneficiaries then entitled to receive or have the benefit of the income from the trust, may
appoint a successor Trustee.
B.
Every successor Trustee shall have all the powers given the originally
named Trustee. No successor Trustee shall be personally liable for any act or omission of
any predecessor. With the approval of the Grantor if living, otherwise of the beneficiary
or a majority in interest of the beneficiaries then entitled to receive or have the benefit of
the income from the trust, a successor Trustee may accept the account rendered and the
property received as a full and complete discharge to the predecessor Trustee without
incurring any liability for so doing.
C.
The parent, guardian, or conservator of a beneficiary under disability shall
receive notice and have authority to act for the beneficiary under this Section.
D.
No Trustee wherever acting shall be required to give bond or surety or be
appointed by or account for the administration of any trust to any court.
19.

Exercise of Power of Appointment

In disposing of any trust property subject to a power to appoint by will, the
Trustee may rely on an instrument admitted to probate in any jurisdiction as the will of
the donee or may assume that he or she died intestate if the Trustee has no notice of a will
within _______________ (e.g., three) months after his or her death.
20.

Generation-Skipping Taxes
A.
If the Trustee considers that any distribution from a trust under this
Agreement other than pursuant to a power to withdraw or appoint is a taxable distribution
subject to a generation-skipping tax payable by the distributee, the Trustee shall augment

the distribution by an amount which the Trustee estimates to be sufficient to pay the tax
and shall charge the same against the trust to which the tax relates.
B.
If the Trustee considers that any termination of an interest in or power
over trust property is a taxable termination subject to a generation-skipping tax, the
Trustee shall pay the tax from the trust property to which the tax relates, without
adjustment of the relative interests of the beneficiaries. If the tax is imposed in part by
reason of trust property and in part by reason of other property, the Trustee shall pay that
portion which the value of the trust property bears to the total property taxed, taking into
consideration deductions, exemptions, and other factors which the Trustee deems
pertinent.
21.

Governing Law
This Agreement and trust are specifically created as a ______________________
_________________________ (name of state) agreement and trust and the construction,
validity, and effect of this Agreement and the rights and duties of the beneficiaries and
the Trustee shall at all times be governed exclusively by the laws of
______________________________________ (name of state).
22.

Counterparts
This Agreement may be executed in any number of counterparts, any one of
which shall constitute the agreement between the parties.
23.

Construction
Unless the context requires otherwise, all words used in this instrument in the
singular number shall extend to and include the plural. All words used in the plural
number shall extend to and include the singular; and all words used in any gender shall
extend to and include all genders.
24.

No Bond or Surety
No Trustee under this Agreement shall be required to give or file any bond or
other security or surety of any kind, nor shall any Trustee be personally liable except for
willful malfeasance or bad faith.
The parties have executed this Agreement on the day and year first above written.
__________________________________________
Trustee
By: ______________________________________
(Name and Office in Corporation)
__________________________________________
Grantor

(Acknowledgments before Notary Public)

(Attach schedule)