For a discussion of the advantages and disadvantages of the fractional share marital trust, see the introduction. This form is designed for a settlor who will execute a will patterned on form 110: will–Pour-over


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NameFor a discussion of the advantages and disadvantages of the fractional share marital trust, see the introduction. This form is designed for a settlor who will execute a will patterned on form 110: will–Pour-over
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NOTATIONS FOR FORM 201

For a discussion of the advantages and disadvantages of the fractional share marital trust, see the INTRODUCTION. This form is designed for a settlor who will execute a will patterned on FORM 110: WILL–Pour-over.

For community property states: This form assumes that the trust estate will consist soley of settlor’s separate property. If the trust estate will include community property, or if community property will be added to the trust upon the death of the settlor (e.g., community property life insurance proceeds), use FORM 301: REVOCABLE TRUST AGREEMENT–Community Property-Fractional Share Marital.

Certain provisions of this form assume that there is a disinterested party acting as trustee or co-trustee under the agreement. FORMS 210 and 211: REVOCABLE TRUST AGREEMENT–Plural Trustees, operate to preclude a beneficiary who is acting as co-trustee from the exercise of powers which would have adverse tax consequences. A beneficiary should not act as sole trustee where the trustee may accumulate income or pay it to or spray it among a group which includes the beneficiary; see IRC §678(a)(1).



If the settlor is to be the initial trustee of the trust, (i) use the alternate trustee succession provision on page 201-20 and the alternate testimonium provision on page 201-36, and (ii) substitute for the first paragraph:

1 I, JOHN DOE, of_______, _______, as settlor, make this agreement with myself, as trustee, this _____ day of ___________, 20 ____.

If community property state, substitute for first sentence of second paragraph:

2 I hereby transfer to the trustee the property listed in the attached schedule and am causing the trustee to be designated as

beneficiary of the life insurance policies described therein, all of which is my separate property.


If the trust will be funded during settlor’s lifetime and is to have sole responsibility for paying settlor’s death taxes and expenses, (i) revise settlor’s will so his or her estate does not pay those taxes and expenses and (ii) substitute for first paragraph of SECOND:

3 SECOND: Upon my death the trustee shall make the following payments from the trust estate. The trustee shall pay all expenses

of my last illness and funeral, costs of administration including ancillary, costs of safeguarding and delivering devises, claims allowable against my estate (excluding debts secured by real property or life insurance), and unsatisfied pre–residuary devises under my will if my will contains a residuary devise to this trust. The trustee shall also pay all estate and inheritance taxes assessed by reason of my death, including such taxes on property passing outside this agreement, except that the amount, if any, by which the estate and inheritance taxes shall be increased as a result of the inclusion of property in which I may have a qualifying income interest for life or over which I may have a power of appointment shall be paid by the person holding or receiving that property. Such payments, including interest and penalties on any tax, shall be charged against principal or income as provided by applicable state law. The trustee may make payment directly or to the personal representative of my estate, as the trustee deems advisable. The trustee shall make these payments without apportionment or reimbursement. If any part of the Marital Trust hereinafter established does not qualify for the federal estate tax marital deduction because of disclaimer or lack of qualified terminable interest property election, then the amount by which the estate and inheritance taxes assessed by reason of my death are thereby incurred or increased shall be paid from or charged against that nonmarital part.

If it is desired to reserve apportionment rights for death taxes generated not only by marital trusts but also by other property passing outside the revocable trust, substitute for first paragraph of SECOND:
4 SECOND: Upon my death, if I have no probate estate, or to the extent that the cash and readily marketable assets in the principal

of the residue of my probate estate are insufficient, the trustee shall make the following payments from the trust estate. The trustee shall pay the expenses of my last illness and funeral, costs of administration including ancillary, costs of safeguarding and delivering devises, claims allowable against my estate (excluding debts secured by real property or life insurance), and pre–residuary devises under my will if my will contains a residuary devise to this trust. Except as hereinafter provided, the trustee shall also pay the estate and inheritance taxes and generation-skipping taxes on direct skips which are assessed by reason of my death, including such taxes on property passing outside this agreement. Such payments, including interest and penalties on any tax, shall be charged against principal or income as provided by applicable state law. The trustee may make payment directly or to the personal representative of my estate, as the trustee deems advisable. The trustee shall make these payments without apportionment or reimbursement or charging any direct


201-0
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FORM 201
REVOCABLE TRUST AGREEMENT
One Settlor
-Fractional Share Marital


TRUST AGREEMENT

I, JOHN DOE, of _______, _______, as settlor, make this agreement with NORTHERN TRUST [insert full legal name of applicable NORTHERN TRUST bank throughout the instrument], of _______, _______, as trustee, this _______ day of __________________, 20_____.

I hereby transfer to the trustee the property listed in the attached schedule and am causing the trustee to be designated as beneficiary of the life insurance policies described therein. That property, the proceeds of those policies, all additional property received by the trustee from any person by will or otherwise, and all investments and reinvestments thereof, are herein collectively referred to as the “trust estate” and shall be held upon the following trusts:


DIRECTED PAYMENTS
FIRST: During my lifetime the trustee shall pay so much or all of the income and principal of the trust estate to me or otherwise as I direct.


DISABILITY
If at any time or times I shall be unable to manage my affairs, the trustee may use such sums from the income and principal of the trust estate as the trustee deems necessary or advisable for the health and maintenance in reasonable comfort of myself and any person dependent upon me, or for any other purpose the trustee considers to be for my best interests.

For purposes of this agreement, I shall be considered to be unable to manage my affairs if I am under a legal disability or by reason of illness or mental or physical disability am unable to give prompt and intelligent consideration to financial matters. The determination as to my inability at any time shall be made by ___________ and my physician, or the survivor of them, and the trustee may rely upon written notice of that determination.

Any excess income of the trust shall be added to principal.


TAXES – EXPENSES

SECOND: Upon my death, if I have no probate estate, or to the extent that the cash and readily marketable assets in the principal of the residue of my probate estate are insufficient, the trustee shall make the following payments from the trust estate. The trustee shall pay the expenses of my last illness and funeral, costs of administration including ancillary, costs of safeguarding and delivering devises, claims allowable against my estate (excluding debts secured by real property or life insurance), and pre–residuary devises under my will if my will contains a residuary devise to this trust. The trustee shall also pay the estate and inheritance taxes assessed by reason of my death, including such taxes on property passing outside this agreement, except that the amount, if any, by which the estate and inheritance taxes shall be increased as a result of the inclusion of property in which I may have a qualifying income interest for life or over which I may have a power of appointment shall be paid



© 2014, Northern Trust Corporation 201-1




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skip property. If any part of the Marital Trust hereinafter established does not qualify for the federal estate tax marital deduction because of disclaimer or lack of qualified terminable interest property election, then the amount by which the estate and inheritance taxes assessed by reason of my death are thereby incurred or increased shall be paid from or charged against that nonmarital part.

The trustee shall not pay death taxes caused by:

  1. Property over which I may have a power of appointment,

  2. Property in which I may have a qualifying income interest for life, unless for generation-skipping tax purposes the property has an inclusion ratio of zero and is treated as if the qualified terminable interest property election had not been made,

  3. Property constituting a direct skip for generation-skipping tax purposes which is caused by a disclaimer or which is from a trust not created or appointed by me,

  4. _____________________________________________________ , and

[ List additional property passing outside the instrument
against which tax apportionment rights should be asserted. ]

  1. _____________________________________________________ .

The person holding or receiving the above-described property shall pay, either directly or to the trustee, the amount, if any, by which the death taxes are increased as a result of the taxation of that property. If two or more properties cause an increase in a tax, the increase shall be allocated among the properties in proportion to their respective taxable values.

If there may be after-born children, add to THIRD:

5 I intend by this agreement to provide for all my children, including any hereafter born or adopted.

If special gifts of money are desired, add the following after THIRD and renumber the succeeding articles:

6 FOURTH: Upon my death the trustee shall distribute from the principal of the trust estate:

  1. $5,000 to my sister, JANE DOE, of , , if she is then living;

  2. $2,500 to the OLD PEOPLE’S HOME, of , , if then in existence; and

  3. $5,000 to each of my grandchildren who is then living; if a grandchild is a minor, payment may be made for the benefit of the grandchild to a custodian under a Uniform Transfers or Gifts to Minors Act.

No interest or share of income shall be paid on these distributions. The balance of the trust estate which remains after the foregoing distributions have been made or provided for shall be held and disposed of as hereinafter provided.
FORM 201 (continued)



© 2014, Northern Trust Corporation 201-3
by the person holding or receiving that property. Such payments, including interest and penalties on any tax, shall be charged against principal or income as provided by applicable state law. The trustee may make payment directly or to the personal representative of my estate, as the trustee deems advisable. The trustee shall make these payments without apportionment or reimbursement. If any part of the Marital Trust hereinafter established does not qualify for the federal estate tax marital deduction because of disclaimer or lack of qualified terminable interest property election, then the amount by which the estate and inheritance taxes assessed by reason of my death are thereby incurred or increased shall be paid from or charged against that nonmarital part.

Assets or funds otherwise excludable from my gross estate for federal estate tax purposes shall not be used to make the foregoing payments. The trustee’s selection of assets to be sold for that purpose or to satisfy any pecuniary gifts, and the tax effects thereof, shall not be subject to question by any beneficiary.

The trustee shall make such elections and allocations under the tax laws as the trustee deems advisable, without regard to the relative interests of the beneficiaries and without liability to any person. No adjustment shall be made between principal and income or in the relative interests of the beneficiaries to compensate for the effect of elections or allocations under the tax laws made by the personal representative of my estate or by the trustee.

The balance of the trust estate which remains after the foregoing payments have been made or provided for shall be held and disposed of as hereinafter provided.


FAMILY
THIRD: My wife’s name is MARY DOE, and she is herein referred to as “my wife.” I have three children now living, namely:

JOHN DOE, JR., born _______(date)________;

DOROTHY DOE, born _______(date)________; and

DAVID DOE, born __________(date)________.

FOURTH: As of my death the balance of the trust estate shall be held and disposed of as follows:

  1. If the federal estate tax is in existence at my death, the trustee shall hold and administer the trust estate as provided in the following articles of this agreement.

  2. If the federal estate tax is not in existence at my death, the trustee shall allocate the trust estate as follows:

% to the Marital Trust, if my wife survives me, and

% (or all thereof, if my wife does not survive me) to the

Bypass Trust hereinafter established.


If it is desired to give the marital share outright instead of in trust, (i) substitute the following for FIFTH and (ii) delete or modify all references to Marital Trust throughout the agreement:

7 FIFTH: If my wife survives me, the trustee as of my death shall distribute to her from the trust estate (undiminished to the extent

possible by any estate or inheritance taxes or other charges) a fraction of the trust property of which

  1. the numerator is the smallest amount which will result in the least possible aggregate of federal and state estate taxes that will be payable by reason of my death, and

  2. the denominator is the federal estate tax value of the assets included in my gross estate which became (or the proceeds, investments or reinvestments of which became) trust property.

In determining the amount of the numerator the trustee shall assume that none of the Bypass Trust qualifies for a federal estate tax deduction. This distribution shall carry with it a proportionate part of the income of the trust estate from the date of my death to the date of distribution.

For purposes of the preceding paragraph, the trust property is all property in the trust estate, including any property added thereto by my will, which was not paid pursuant to the preceding articles of this agreement and which would qualify for the federal estate tax marital deduction if it were distributed outright to my wife. For purposes of this agreement, my wife shall be deemed to have survived me if the order of our deaths cannot be proved.

Any part of this distribution disclaimed by my wife shall be added to or used to fund the Bypass Trust. The disclaimer shall not preclude my wife from receiving benefits from the disclaimed property in the Bypass Trust, but my wife shall not have any power to appoint the portion of the Bypass Trust attributable to the disclaimed property.
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