Irrevocable Trust

IRREVOCABLE TRUST AGREEMENT

(Alaska – Draft Template)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Creation, Funding & Irrevocability
4. Beneficial Interests & Distributions
5. Trustee Provisions
6. Representations & Warranties
7. Covenants & Restrictions
8. Default, Removal & Remedies
9. Risk Allocation
10. Dispute Resolution
11. General Provisions
12. Execution Block

1. DOCUMENT HEADER

1.1 Title & Parties

THIS IRREVOCABLE TRUST AGREEMENT (“Agreement”) is made and entered into as of [EFFECTIVE DATE] (“Effective Date”) by and among:

a. [SETTLOR LEGAL NAME], an individual whose mailing address is [ADDRESS] (“Settlor”);
b. [TRUSTEE LEGAL NAME], whose mailing address is [ADDRESS] (“Trustee”); and
c. [OPTIONAL: TRUST PROTECTOR NAME], whose mailing address is [ADDRESS] (“Trust Protector”), if any.

1.2 Recitals

A. Settlor desires to create an irrevocable trust under the laws of the State of Alaska for the benefit of the persons identified herein.
B. Trustee is willing to accept the trust and hold, administer, and distribute the Trust Estate pursuant to the terms of this Agreement.
C. Settlor has transferred or contemporaneously transfers to Trustee the property described in Schedule A (the “Initial Corpus”) in consideration of Trustee’s undertakings herein.

1.3 Governing Law & Situs

This Trust shall be governed by and construed in accordance with the laws of the State of Alaska (“Governing Law”). The situs shall be [COUNTY], Alaska, and the Trust shall be administered primarily in Alaska.

2. DEFINITIONS

The following terms, when capitalized, have the meanings set forth below. Definitions apply equally to singular and plural forms. Section cross-references are to this Agreement unless otherwise indicated.

“Accounting Period” – Each calendar year ending December 31, or shorter period required by law.
“Agreement” – This Irrevocable Trust Agreement, inclusive of all schedules and exhibits.
“Beneficiary” – Each person or entity so designated under Section 4.1, together with any successor or remainder beneficiary.
“Disability” – A physical or mental condition rendering an individual unable to manage his or her financial affairs, as evidenced by (i) written certification of two licensed physicians, or (ii) a court order.
“Distribution Standard” – The discretionary standard stated in Section 4.3.
“Fiduciary” – Trustee, any Co-Trustee, Successor Trustee, and, when acting in a fiduciary capacity, the Trust Protector.
“Gross Negligence” – A conscious, voluntary act or omission in reckless disregard of a legal duty and of the consequences to Beneficiaries.
“Initial Corpus” – The property transferred to Trustee under Section 1.2(C).
“Trust” – The irrevocable trust created by this Agreement, to be known as the “[TRUST NAME]”.
“Trust Estate” – All property held from time to time by Trustee, together with income and proceeds therefrom.
“Trust Protector” – The person designated in Section 5.10 with the powers therein.

3. CREATION, FUNDING & IRREVOCABILITY

3.1 Creation. Settlor hereby establishes the Trust as an irrevocable trust under Alaska law, and Trustee hereby accepts the same on the terms herein.

3.2 Funding. The Trust shall be funded by:
a. The Initial Corpus; and
b. Any additional property subsequently transferred to Trustee by Settlor or any other person and accepted by Trustee (“Additional Contributions”).

3.3 Irrevocability. This Trust is irrevocable. Settlor expressly relinquishes all rights and powers, whether alone or in conjunction with others, to alter, amend, revoke, or terminate this Trust, except as specifically provided in Section 5.10 (Trust Protector Powers).

3.4 Tax Characterization.
a. Election. Settlor (or Trustee, if Settlor is deceased or incapacitated) may elect to treat the Trust as a “grantor trust” or “non-grantor trust” for federal income tax purposes by timely filing appropriate returns and statements.
b. Tax Liabilities. Taxes attributable to Trust income shall be paid (i) by Settlor if the Trust is treated as a grantor trust, or (ii) from the Trust Estate if the Trust is a non-grantor trust.
c. Alaska Tax Considerations. Alaska currently imposes no state individual income tax; nevertheless, Trustee shall monitor legislative changes and make necessary filings in any jurisdiction where the Trust has nexus.

3.5 Spendthrift & Creditor Protection. Except as otherwise mandated by law, no Beneficiary may sell, assign, anticipate, encumber, or otherwise transfer any beneficial interest before payment or delivery of that interest by Trustee, and such interests shall not be subject to attachment, garnishment, execution, or other legal or equitable process, as and to the extent permitted under AS 34.40.110 (restricting transfers of trust interests).

4. BENEFICIAL INTERESTS & DISTRIBUTIONS

4.1 Beneficiaries. The Beneficiaries are:
a. [PRIMARY BENEFICIARY NAME(S)], collectively the “Primary Beneficiaries”; and
b. Upon the death of the last surviving Primary Beneficiary, the lineal descendants of such Beneficiary, per stirpes, as “Remainder Beneficiaries.”

4.2 Rights to Information.
a. Mandatory Reporting. Trustee shall provide each adult Beneficiary annual accounts within 90 days after each Accounting Period, consistent with Trustee's duty to inform and account to beneficiaries under AS 13.36.080.
b. Restricted Disclosure. Settlor directs that minors and incapacitated Beneficiaries receive information only through their legal guardians.
c. Opt-Out. A Beneficiary may waive in writing the right to receive accounts, consistent with Alaska law.

4.3 Distribution Standard. Trustee may, in Trustee’s sole and absolute discretion, distribute to or for the benefit of any Primary Beneficiary so much of the net income and principal as Trustee deems advisable for the Beneficiary’s health, education, maintenance, or support (“HEMS Standard”). Undistributed income shall be added to principal.

4.4 Mandatory Termination. The Trust shall terminate on the earliest to occur of:
a. One thousand (1,000) years from the Effective Date, pursuant to Alaska's statutory rule against perpetuities (AS 34.27.051), which supersedes the common-law Rule Against Perpetuities in this state (AS 34.27.075); or
b. Complete distribution of the Trust Estate.
Upon termination, Trustee shall distribute the remaining Trust Estate to the then-living Remainder Beneficiaries, per stirpes.

5. TRUSTEE PROVISIONS

5.1 Acceptance. By executing this Agreement, Trustee accepts the office of Trustee and the Trust Estate.

5.2 General Powers. Trustee shall have all powers attached to the office of trustee, the general powers, and the specific powers granted to fiduciaries under Alaska law (AS 13.36.105, AS 13.36.107, and AS 13.36.109), including, without limitation, the powers to invest, reinvest, vote securities, and employ agents and professionals.

5.3 Investment Standard. Trustee shall invest and manage the Trust Estate as a prudent investor, taking into account the purposes, terms, distribution requirements, and other circumstances of the Trust, in accordance with the Alaska Uniform Prudent Investor Act (AS 13.36.225 and AS 13.36.230).

5.4 Discretionary Distributions. Trustee’s exercise of discretion under Section 4.3 shall be conclusive and not subject to challenge absent clear and convincing evidence of bad faith.

5.5 Delegation. Trustee may delegate investment or administrative functions to qualified professionals, provided Trustee exercises reasonable care in selecting, instructing, and monitoring delegates, consistent with AS 13.36.270 (delegation of investment and management functions).

5.6 Trustee Compensation. Trustee is entitled to reasonable compensation commensurate with services rendered, paid from the Trust Estate, and reimbursement of properly incurred expenses, subject to review under AS 13.36.055.

5.7 Bond. No bond or other security shall be required of Trustee unless ordered by a court of competent jurisdiction, consistent with AS 13.36.085.

5.8 Successor Trustees.
a. Resignation. Trustee may resign upon 30 days’ written notice to Settlor (if living), the Beneficiaries, and any co-Trustees, or with court approval, as permitted by the trust instrument under AS 13.36.074 (which otherwise directs notice to the qualified beneficiaries and co-trustees).
b. Vacancy. If a vacancy occurs, the following order of succession applies: [NAME FIRST SUCCESSOR TRUSTEE], then [NAME SECOND SUCCESSOR TRUSTEE], consistent with the order of priority for filling a vacancy in trusteeship under AS 13.36.073.
c. Appointment Mechanism. In the absence of an eligible named successor, the Trust Protector shall appoint a qualified individual or corporate trustee having a principal place of business in Alaska.

5.9 Co-Trustees. Where more than one Trustee is serving, any two may act, and unanimous action is not required unless the Trust Protector directs otherwise in writing, consistent with AS 13.36.072 (co-trustees; majority decision).

5.10 Trust Protector Powers (Optional). Consistent with AS 13.36.370, the Trust Protector may:
a. Remove and replace Trustees;
b. Amend administrative provisions to maintain tax or asset-protection objectives;
c. Approve trustee accountings; and
d. Resolve ambiguities by written directive binding on Trustee.
The Trust Protector is NOT a fiduciary unless expressly stated herein.

6. REPRESENTATIONS & WARRANTIES

6.1 Settlor. Settlor represents and warrants that:
a. Settlor has full legal capacity to execute and deliver this Agreement and to transfer the property constituting the Initial Corpus;
b. The Initial Corpus is free and clear of all liens, claims, and encumbrances; and
c. Execution of this Agreement does not violate any court order or contractual obligation binding on Settlor.

6.2 Trustee. Trustee represents and warrants that:
a. Trustee is legally qualified to act as trustee under Alaska law;
b. Trustee has reviewed this Agreement and agrees to administer the Trust Estate in accordance with its terms; and
c. Trustee shall maintain fiduciary liability insurance in the minimum amount of [COVERAGE AMOUNT] during its tenure.

6.3 Survival. The representations and warranties set forth in this Section 6 survive the execution and delivery of this Agreement and continue for the duration of the Trust.

7. COVENANTS & RESTRICTIONS

7.1 Settlor Covenants. Settlor covenants not to seek, directly or indirectly, to amend, revoke, or terminate the Trust, except as permitted under Section 5.10.

7.2 Trustee Covenants. Trustee shall:
a. Maintain accurate books and records;
b. Provide accounts as required under Section 4.2;
c. File all requisite tax returns;
d. Keep Trust assets segregated from non-Trust assets; and
e. Comply with any lawful direction of the Trust Protector consistent with this Agreement.

7.3 Beneficiary Covenants. Each Beneficiary, by accepting benefits hereunder, agrees not to challenge the validity or enforceability of this Agreement except for alleged bad faith or Gross Negligence by a Fiduciary.

7.4 Notice & Cure. Before initiating any proceeding alleging Trustee breach, a Beneficiary must give written notice specifying the alleged breach and allow Trustee 60 days to cure.

8. DEFAULT, REMOVAL & REMEDIES

8.1 Events of Default. The following constitute Events of Default:
a. Trustee’s willful misconduct, bad faith, or Gross Negligence;
b. Material breach of fiduciary duties unremedied after the cure period in Section 7.4;
c. Trustee bankruptcy or insolvency;
d. Trustee’s legal incapacity; or
e. A court’s final determination that Trustee has engaged in self-dealing.

8.2 Remedies. Upon an Event of Default, any Interested Party (Settlor, Trust Protector, or Beneficiary) may:
a. Petition the Superior Court for the State of Alaska for removal of Trustee and appointment of a Successor Trustee, consistent with AS 13.36.076 (removal of trustee) and AS 13.36.035(a) (court jurisdiction over internal affairs of trusts);
b. Seek restitution, surcharge, or other equitable relief; and
c. Obtain injunctive relief to preserve Trust assets.

8.3 Costs & Fees. A prevailing Fiduciary shall be indemnified from the Trust Estate for reasonable attorneys’ fees and costs unless the court determines the Fiduciary acted in bad faith or with Gross Negligence.

9. RISK ALLOCATION

9.1 Indemnification of Trustee.
a. Scope. Trustee and its agents are indemnified, to the fullest extent permitted by law and payable solely from the Trust Estate, against all claims, liabilities, and expenses arising out of administration of the Trust, except to the extent arising from Trustee’s bad faith or Gross Negligence.
b. Procedure. Trustee may advance expenses, obtaining a written undertaking to repay such advances if ultimately found not entitled to indemnity.

9.2 Limitation of Liability. No Fiduciary shall be liable for any action taken or omitted in good faith and in accordance with this Agreement. In any event, any liability of a Fiduciary shall be limited to the value of the Trust Estate.

9.3 Insurance. Trustee shall maintain fiduciary liability insurance as provided in Section 6.2(c).

9.4 Force Majeure. No party shall be liable for failure to perform caused by events beyond its reasonable control, including but not limited to natural disasters, changes in law, strikes, or government actions, provided diligent efforts are undertaken to resume performance.

10. DISPUTE RESOLUTION

10.1 Governing Law. The laws of the State of Alaska govern all questions arising under this Agreement without regard to conflict-of-laws principles.

10.2 Forum Selection. Alaska's court system is unified and has no separate probate court or probate division; the Superior Court is the trial court of general jurisdiction and has exclusive jurisdiction over proceedings concerning the internal affairs of trusts under AS 13.36.035(a). Any judicial proceeding concerning this Trust shall be brought exclusively in the Superior Court for the State of Alaska, [JUDICIAL DISTRICT / COUNTY].

10.3 Arbitration (Optional).
a. Election. The Trust Protector may, by written notice to all Interested Parties, elect binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association.
b. Scope. Arbitration shall cover any dispute other than a petition to modify, terminate, or interpret this Agreement, which shall remain within the exclusive jurisdiction of the Superior Court under AS 13.36.035(a).
c. Injunctive Relief. A party may seek provisional or injunctive relief from the Superior Court to preserve the status quo pending arbitration.

10.4 Jury Waiver. To the extent a matter is heard in court, the parties acknowledge that jury trials are unavailable in probate proceedings under Alaska law and expressly waive any right thereto.

10.5 Specific Performance & Injunctive Relief. The Superior Court shall have authority to issue temporary, preliminary, and permanent injunctive relief to enforce the terms of this Trust.

11. GENERAL PROVISIONS

11.1 Amendment & Reformation. This Agreement may not be amended except by written instrument executed by the Trust Protector solely for (i) administrative corrections, or (ii) to maintain tax qualification or asset-protection objectives, and only to the extent permitted by Alaska law.

11.2 Assignment. No party may assign rights or delegate obligations under this Agreement except as expressly provided.

11.3 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the parties’ respective heirs, legal representatives, successors, and permitted assigns.

11.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall be given effect to the maximum extent permissible.

11.5 Entire Agreement. This Agreement, together with all schedules and written amendments executed in accordance herewith, constitutes the entire agreement of the parties with respect to the subject matter hereof.

11.6 Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which is deemed an original, and all of which together constitute one instrument. Electronic signatures are deemed original signatures for all purposes.

11.7 Headings. Section headings are for convenience only and do not affect interpretation.

12. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Irrevocable Trust Agreement effective as of the date first written above.

SETTLOR:

_______________________________
[SETTLOR NAME]

STATE OF ALASKA )
) ss.
[COUNTY] )

On this ____ day of __________, 20__, before me, the undersigned Notary Public, personally appeared [SETTLOR NAME], known to me or satisfactorily proven to be the individual who executed the foregoing instrument, and acknowledged that he/she executed the same for the purposes therein contained.

_______________________________
Notary Public
My Commission Expires: __________

TRUSTEE:

_______________________________
[TRUSTEE NAME], Trustee

STATE OF ALASKA )
) ss.
[COUNTY] )

On this ____ day of __________, 20__, before me, the undersigned Notary Public, personally appeared [TRUSTEE NAME], known to me or satisfactorily proven to be the individual who executed the foregoing instrument, and acknowledged that he/she executed the same for the purposes therein contained.

_______________________________
Notary Public
My Commission Expires: __________

TRUST PROTECTOR (if any):

_______________________________
[TRUST PROTECTOR NAME], Trust Protector

STATE OF ALASKA )
) ss.
[COUNTY] )

On this ____ day of __________, 20__, before me, the undersigned Notary Public, personally appeared [TRUST PROTECTOR NAME], known to me or satisfactorily proven to be the individual who executed the foregoing instrument, and acknowledged that he/she executed the same for the purposes therein contained.

_______________________________
Notary Public
My Commission Expires: __________

SCHEDULE A – INITIAL CORPUS

[Insert detailed description of property transferred to Trustee, e.g., cash, securities, real property legal description, etc.]