IRREVOCABLE TRUST AGREEMENT

State of California

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Effective Date: [__/__/____]

Settlor/Grantor: [________________________________] ("Settlor")
Address: [________________________________]

Initial Trustee: [________________________________] ("Trustee")
Address: [________________________________]

Trust Name: The [________________________________] Irrevocable Trust (the "Trust")

Principal Place of Administration: [________________________________] County, California

[// GUIDANCE: The Settlor and initial Trustee should generally NOT be the same person for an irrevocable trust designed to remove assets from the Settlor's taxable estate. If the Settlor is also Trustee, estate inclusion under IRC § 2036 or § 2038 may result. Consult tax counsel.]

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TABLE OF CONTENTS

Article	Title
1	Definitions
2	Creation and Funding of Trust
3	Irrevocability
4	Trust Purpose and Type Election
5	Crummey Withdrawal Powers
6	Generation-Skipping Transfer Tax Provisions
7	Irrevocable Life Insurance Trust (ILIT) Provisions
8	Grantor Trust Provisions
9	Administration and Distribution Standards
10	Spendthrift Protection
11	Trust Protector — CUDTA
12	Digital Assets — RUFADAA
13	Trustees and Successor Trustees
14	Trustee Powers
15	Trustee Compensation
16	Notification Requirements
17	No-Contest Clause
18	Perpetuities Savings Clause
19	Proposition 19 Property Tax Disclosure
20	Tax Matters and Reporting
21	Representations and Warranties
22	Default, Removal, and Remedies
23	Dispute Resolution
24	General Provisions
25	Execution and Notary Acknowledgment

Schedules:
- Schedule A — Initial Trust Property
- Schedule B — Beneficiary Designations
- Exhibit 1 — Certification of Trust (Cal. Prob. Code § 18100.5)

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ARTICLE 1. DEFINITIONS

For purposes of this Agreement, the following capitalized terms have the meanings set forth below:

1.1 "Accounting Period" means the twelve-month period ending each December 31, unless the Trustee, in the Trustee's discretion, adopts a different fiscal year in accordance with applicable tax law.

1.2 "Applicable Law" means the California Probate Code, California Revenue and Taxation Code, the Internal Revenue Code of 1986 as amended (the "Code" or "IRC"), applicable Treasury Regulations, California common law of trusts, and any other controlling federal or state law.

1.3 "Beneficiary" means each person identified on Schedule B or who otherwise becomes entitled to distributions under this Agreement, including any Crummey Withdrawal Right holder.

1.4 "Code" or "IRC" means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute.

1.5 "Contribution" means any transfer of property to the Trust by the Settlor or any other person.

1.6 "Crummey Withdrawal Right" means the right of a Beneficiary to withdraw property from the Trust as provided in Article 5.

1.7 "GST Exemption" means the generation-skipping transfer tax exemption under IRC § 2631.

1.8 "GST Tax" means the generation-skipping transfer tax imposed by IRC §§ 2601-2663.

1.9 "Grantor Trust" means a trust treated as owned by the Settlor for federal and California income tax purposes under IRC §§ 671-679.

1.10 "HEMS Standard" means distributions limited to the Beneficiary's health, education, maintenance, and support, as those terms are interpreted under IRC §§ 2041 and 2514.

1.11 "Inclusion Ratio" means the fraction described in IRC § 2642(a) that determines the applicable rate of GST Tax.

1.12 "Investment Advisor" means any person appointed pursuant to Section 14.5 to direct the Trustee as to investments.

1.13 "Skip Person" means a person defined as a skip person under IRC § 2613.

1.14 "Non-Skip Person" means a person who is not a Skip Person.

1.15 "Trust" means the irrevocable trust created by this Agreement.

1.16 "Trust Estate" means all property, tangible and intangible, real and personal, held from time to time by the Trustee under this Agreement, together with all income, appreciation, and accretions thereon.

1.17 "Trust Director" means the person appointed under Article 11 with powers of direction pursuant to the California Uniform Directed Trust Act (Cal. Prob. Code §§ 16600-16632).

1.18 "Trust Protector" means the person appointed under Article 11 to exercise specified non-fiduciary powers.

1.19 "Trustee" means the Initial Trustee, any successor trustee, and any co-trustee serving under this Agreement.

[// GUIDANCE: Add or modify definitions to match the specific design of the trust. If the Trust will not include ILIT, GST, or Crummey provisions, remove corresponding defined terms.]

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ARTICLE 2. CREATION AND FUNDING OF TRUST

2.1 Creation. The Settlor hereby irrevocably transfers, assigns, and delivers to the Trustee the property described on Schedule A (the "Initial Trust Property"), to hold, manage, invest, and distribute under the terms of this Agreement. The Trust is created pursuant to Cal. Prob. Code §§ 15200-15212.

2.2 Additional Contributions. The Settlor or any other person may make additional irrevocable Contributions to the Trust at any time, with the Trustee's consent. Each such Contribution shall become part of the Trust Estate and shall be administered in accordance with this Agreement. The Trustee shall provide written notice of each Contribution to all Crummey Withdrawal Right holders as required by Article 5.

2.3 Acceptance. The Trustee accepts the Trust Estate and agrees to hold, administer, and distribute it in accordance with this Agreement and Applicable Law.

2.4 Trust Purpose. The primary purposes of the Trust are:

(a) To provide for the Beneficiaries in accordance with Article 9;

(b) To achieve estate, gift, and generation-skipping transfer tax efficiencies;

(c) To protect Trust assets from the claims of creditors and from unnecessary depletion;

(d) To hold and manage life insurance policies on the Settlor's life, if applicable under Article 7; and

(e) Such other lawful purposes as may be consistent with this Agreement.

2.5 Situs. The situs of the Trust for all purposes shall be the State of California. The Trust shall be governed by and construed under California law.

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ARTICLE 3. IRREVOCABILITY

3.1 Express Irrevocability. Pursuant to Cal. Prob. Code § 15400, a trust is revocable unless expressly made irrevocable. This Trust is expressly and unconditionally declared to be irrevocable. Neither the Settlor nor any other person shall have any power, right, or authority to alter, amend, revoke, or terminate this Agreement or any provision hereof, except as specifically provided in this Agreement or by court order pursuant to Cal. Prob. Code §§ 15403-15414.

3.2 No Retained Powers. Except as expressly provided in Article 8 (Grantor Trust Provisions), the Settlor retains no right to:

(a) Alter, amend, or revoke any provision of this Trust;

(b) Control or direct the disposition of Trust assets;

(c) Remove or replace the Trustee (except as provided in Article 13);

(d) Receive distributions from the Trust; or

(e) Otherwise exercise any power that would cause inclusion of the Trust Estate in the Settlor's gross estate under IRC §§ 2036, 2037, or 2038.

[// GUIDANCE: If the Settlor retains a swap power under Article 8 for intentionally defective grantor trust (IDGT) status, that specific power must be carefully documented to avoid estate inclusion. Confirm with tax counsel that retained powers will not trigger IRC § 2036 or § 2038.]

3.3 Limited Judicial Modification. To the extent permitted by Cal. Prob. Code §§ 15403-15414, the Trustee, Trust Protector, or any Beneficiary may petition the Superior Court of California sitting in probate to modify administrative or ministerial provisions of the Trust if continuation without modification would defeat or substantially impair the Trust's purposes. Any such modification shall not alter the dispositive terms of this Trust without the court's determination that doing so is consistent with the Settlor's intent.

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ARTICLE 4. TRUST PURPOSE AND TYPE ELECTION

[// GUIDANCE: Select all applicable trust types below. The Settlor and counsel should check each box that applies to the specific design of this Trust. Multiple selections are permissible.]

4.1 Trust Type. This Trust is designed to function as (check all that apply):

☐ Irrevocable Life Insurance Trust (ILIT) — Article 7 applies
☐ Intentionally Defective Grantor Trust (IDGT) — Article 8 applies
☐ Dynasty/Generation-Skipping Trust — Article 6 applies
☐ Irrevocable Trust for Minors — Article 9 supplemental minor provisions apply
☐ Supplemental Needs Trust — separate supplemental needs provisions attached
☐ Qualified Personal Residence Trust (QPRT) — separate QPRT addendum attached
☐ Spousal Lifetime Access Trust (SLAT) — separate SLAT addendum attached
☐ Charitable Remainder Trust — separate CRT addendum attached
☐ Other: [________________________________]

4.2 Primary Tax Objectives. The primary transfer tax objectives are (check all that apply):

☐ Remove assets from Settlor's gross estate (IRC §§ 2036-2038)
☐ Leverage gift tax annual exclusion via Crummey Withdrawal Rights (IRC § 2503(b))
☐ Allocate GST Exemption to shelter trust from GST Tax (IRC §§ 2601-2663)
☐ Remove life insurance proceeds from Settlor's estate (IRC § 2042)
☐ Achieve grantor trust status for income tax purposes (IRC §§ 671-679)
☐ Other: [________________________________]

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ARTICLE 5. CRUMMEY WITHDRAWAL POWERS

[// GUIDANCE: This Article is essential to qualify Contributions as present-interest gifts eligible for the gift tax annual exclusion under IRC § 2503(b). The Crummey power converts what would otherwise be a future-interest gift into a present interest. See Crummey v. Commissioner, 397 F.2d 82 (9th Cir. 1968). Every Contribution must be followed by timely written notice to all withdrawal-right holders. Failure to provide proper notice may cause the IRS to disallow the annual exclusion.]

5.1 Grant of Withdrawal Right. Upon each Contribution to the Trust, each Beneficiary listed on Schedule B who is designated as a Crummey Withdrawal Right holder shall have the right to withdraw from the Trust an amount equal to the lesser of:

(a) Such Beneficiary's pro rata share of the Contribution; or

(b) The gift tax annual exclusion amount in effect for the calendar year of the Contribution under IRC § 2503(b) (which is $19,000 per donee for 2025 and 2026, as indexed for inflation).

[// GUIDANCE: For married Settlors electing gift-splitting under IRC § 2513, the withdrawal right may be up to $38,000 per Beneficiary per year ($19,000 x 2 for 2025/2026). Confirm gift-splitting election on Form 709.]

5.2 Written Notice to Beneficiaries. The Trustee shall, within five (5) business days of receiving a Contribution, deliver written notice to each Crummey Withdrawal Right holder (and to the legal guardian or parent of any minor Beneficiary) specifying:

(a) The date and amount of the Contribution;

(b) The Beneficiary's withdrawal amount;

(c) The date on which the Withdrawal Period (defined below) begins and ends;

(d) The manner in which the Beneficiary may exercise the withdrawal right (written demand delivered to the Trustee); and

(e) A statement that the withdrawal right will lapse if not exercised within the Withdrawal Period.

5.3 Withdrawal Period. Each Beneficiary's withdrawal right shall be exercisable for a period of thirty (30) days following the Beneficiary's receipt of the written notice described in Section 5.2 (the "Withdrawal Period").

[// GUIDANCE: Some practitioners use 45 or 60 days. The period must be long enough to constitute a meaningful right. The IRS has challenged periods shorter than 30 days. If the Contribution is made in December, ensure the Withdrawal Period extends past year-end only if the trust instrument so provides.]

5.4 Exercise of Withdrawal Right. A Beneficiary may exercise the withdrawal right by delivering a signed, written demand to the Trustee during the Withdrawal Period. The Trustee shall satisfy the demand from the Contribution, in cash or in kind, within ten (10) business days.

5.5 Lapse of Withdrawal Right — 5 and 5 Power Rule.

(a) General Lapse. If a Beneficiary does not exercise the withdrawal right during the Withdrawal Period, the withdrawal right shall lapse, but only to the extent of the greater of:

(i) Five Thousand Dollars ($5,000); or

(ii) Five percent (5%) of the aggregate value of the Trust Estate at the time of the lapse.

(b) Tax Treatment of Lapse. Under IRC § 2514(e), the lapse of a general power of appointment is treated as a release (and thus a taxable transfer) only to the extent the property subject to the lapsed power exceeds the greater of $5,000 or 5% of the trust assets from which the power could have been satisfied. This is known as the "5 and 5 rule."

(c) Hanging Power Provision. To the extent a Beneficiary's withdrawal right exceeds the amount that may lapse without adverse gift or estate tax consequences under the 5 and 5 rule, such excess withdrawal right shall NOT lapse but shall continue as a subsisting, cumulative withdrawal right that carries over from year to year. This "hanging" power shall lapse only in future years to the extent the 5 and 5 safe harbor permits, until the entire hanging power has lapsed.

[// GUIDANCE: The hanging power prevents the lapse of large Crummey withdrawal rights from being treated as a taxable gift by the beneficiary. Without this provision, a beneficiary's lapsed withdrawal right in excess of the 5-and-5 amount could be treated as a transfer subject to gift and estate tax under IRC §§ 2514 and 2041. The hanging power is particularly important for trusts with many beneficiaries or large annual contributions.]

5.6 Minor Beneficiaries. If a Crummey Withdrawal Right holder is a minor, the withdrawal right may be exercised by the minor's parent or legal guardian on the minor's behalf. The Trustee shall deliver the notice required by Section 5.2 to the minor's parent or legal guardian.

5.7 Withdrawal Rights Independent of Beneficial Interest. A person may hold a Crummey Withdrawal Right without having any other beneficial interest in the Trust. The Settlor may designate additional Crummey Withdrawal Right holders by written instrument delivered to the Trustee.

5.8 No Obligation to Withdraw. No Beneficiary or Crummey Withdrawal Right holder shall be under any obligation to exercise a withdrawal right, and the failure to exercise such right shall not create any liability.

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ARTICLE 6. GENERATION-SKIPPING TRANSFER TAX PROVISIONS

[// GUIDANCE: The GST tax (IRC §§ 2601-2663) applies to transfers that skip a generation, including transfers to grandchildren and more remote descendants. The GST exemption is $15,000,000 per individual for 2026 (as increased by the One Big Beautiful Bill Act). Proper allocation of the GST exemption is critical to avoiding a flat 40% GST tax rate. Consult a tax advisor to ensure correct allocation on IRS Form 709 or Form 706.]

6.1 GST Exemption Allocation. The Settlor (or the Settlor's executor, if applicable) is authorized and directed to allocate the Settlor's available GST Exemption to Contributions made to this Trust to the maximum extent possible, with the objective of achieving an Inclusion Ratio of zero (0) for the Trust or applicable portion thereof.

6.2 Inclusion Ratio. The Trustee shall use commercially reasonable efforts to maintain an Inclusion Ratio of zero (0) for the Trust (or for any GST-Exempt Trust created hereunder). The Trustee shall cooperate with the Settlor and the Settlor's tax advisor to ensure proper GST Exemption allocation on all applicable tax returns.

6.3 Division into GST-Exempt and Non-Exempt Trusts. If the Settlor's available GST Exemption is insufficient to achieve a zero Inclusion Ratio for the entire Trust, the Trustee shall, at the direction of the Settlor (or the Settlor's tax advisor), divide the Trust into two separate trusts:

(a) GST-Exempt Trust. A separate trust funded with an amount equal to the Settlor's remaining GST Exemption, which shall have an Inclusion Ratio of zero (0). This trust shall be identified as the "[________________________________] GST-Exempt Trust."

(b) Non-Exempt Trust. A separate trust funded with the balance of the Trust Estate, which shall have an Inclusion Ratio of one (1). This trust shall be identified as the "[________________________________] Non-Exempt Trust."

Both trusts shall be administered under the terms of this Agreement, except that distributions from the GST-Exempt Trust shall be made in a manner designed to minimize or avoid GST Tax, and distributions from the Non-Exempt Trust shall be made in a manner that minimizes overall transfer tax burden.

6.4 Definitions for GST Tax Purposes.

(a) Skip Person means any natural person assigned to a generation that is two or more generations below the generation of the Settlor (e.g., grandchildren and more remote descendants), or a trust in which all beneficiaries are Skip Persons, as defined in IRC § 2613(a).

(b) Non-Skip Person means any person who is not a Skip Person, as defined in IRC § 2613(b).

(c) Taxable Distribution means any distribution from the Trust to a Skip Person (other than a taxable termination or a direct skip), as defined in IRC § 2612(b).

(d) Taxable Termination means the termination of an interest in property held in trust if, after the termination, only Skip Persons hold interests in the trust, as defined in IRC § 2612(a).

6.5 Trustee GST Tax Elections. The Trustee is authorized to:

(a) Make or consent to any GST Exemption allocation, including automatic allocation elections and opt-out elections under IRC § 2632;

(b) Make the reverse QTIP election under IRC § 2652(a)(3) if applicable;

(c) File IRS Form 709 (United States Gift Tax Return) or IRS Form 706 (United States Estate Tax Return) as necessary to report and allocate the GST Exemption;

(d) Determine the fair market value of Trust assets for GST Exemption allocation purposes; and

(e) Take any other action necessary or advisable to minimize the GST Tax imposed on the Trust.

6.6 Distribution Priority for GST-Exempt Trust. Whenever possible, the Trustee should make distributions first from the Non-Exempt Trust and preserve the GST-Exempt Trust for distributions to or for the benefit of Skip Persons and their descendants.

[// GUIDANCE: The GST provisions should be reviewed annually by a qualified tax advisor because exemption amounts are subject to indexing, and legislative changes may alter the GST framework. The One Big Beautiful Bill Act (2025) permanently set the exemption at $15,000,000 for 2026, indexed for inflation.]

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ARTICLE 7. IRREVOCABLE LIFE INSURANCE TRUST (ILIT) PROVISIONS

[// GUIDANCE: This Article applies only if the Trust is designated as an ILIT in Article 4.1. If not applicable, this entire Article may be deleted. ILIT provisions must be carefully structured to avoid incidents of ownership under IRC § 2042, which would cause life insurance death benefit proceeds to be included in the Settlor's gross estate.]

7.1 Applicability. This Article 7 applies only if the Trust is designated as an Irrevocable Life Insurance Trust (ILIT) under Section 4.1. If this Article does not apply, the remaining Articles of this Agreement shall be interpreted without reference to life insurance provisions.

7.2 Trust as Owner and Beneficiary of Life Insurance.

(a) The Trustee shall be the owner and beneficiary of all life insurance policies on the life of the Settlor that are transferred to or acquired by the Trust (collectively, "Policies").

(b) The Trustee shall apply for, own, maintain, and hold all incidents of ownership in the Policies. The Settlor shall have absolutely no incidents of ownership in any Policy held by the Trust, including but not limited to the right to:

(i) Change the beneficiary designation;

(ii) Surrender, cancel, or assign any Policy;

(iii) Borrow against any Policy or pledge it as collateral;

(iv) Select settlement options; or

(v) Exercise any other right constituting an incident of ownership under IRC § 2042.

7.3 Incidents of Ownership Disclaimer. The Settlor hereby expressly disclaims and relinquishes any and all incidents of ownership in any Policy held by this Trust, whether as trustee, beneficiary, or otherwise. The Settlor shall not serve as Trustee of this Trust while any Policy on the Settlor's life is held by the Trust.

[// GUIDANCE: Under IRC § 2042(2), if the insured decedent possesses any "incidents of ownership" at death, the entire proceeds are included in the decedent's gross estate. The Settlor must have no power to change beneficiaries, surrender the policy, assign the policy, or pledge it for a loan.]

7.4 Premium Payment Procedures.

(a) The Settlor (or any other person) shall make Contributions to the Trust in amounts sufficient to pay premiums on the Policies.

(b) Upon receiving a Contribution, the Trustee shall provide Crummey Withdrawal Right notices as required by Article 5.

(c) After the Withdrawal Period has expired, the Trustee shall use the Contribution (to the extent not withdrawn) to pay premiums on the Policies.

(d) The Trustee shall maintain a reasonable cash reserve for incidental expenses before directing premium payments.

7.5 Three-Year Lookback Rule Warning.

WARNING (IRC § 2035): If the Settlor transfers an existing life insurance policy to this Trust and dies within three (3) years of the transfer date, the entire death benefit proceeds will be included in the Settlor's gross estate under IRC § 2035(a), negating the estate tax benefits of the ILIT. To avoid this risk, it is strongly recommended that the Trustee apply for and acquire a new policy on the Settlor's life rather than having the Settlor transfer an existing policy.

[// GUIDANCE: If an existing policy is being transferred, advise the Settlor of the three-year lookback risk and consider whether survivorship (second-to-die) life insurance or other strategies may mitigate this risk. Document the transfer date for compliance monitoring.]

7.6 Policy Replacement and Exchange Authority. The Trustee shall have authority to:

(a) Surrender, exchange, or replace any Policy held by the Trust, including executing a tax-free exchange under IRC § 1035;

(b) Convert term insurance to permanent insurance;

(c) Reduce, increase, or modify coverage amounts;

(d) Exercise policy loan provisions;

(e) Apply for additional policies on the Settlor's life or on the life of any other insurable person, provided such acquisition is consistent with the purposes of the Trust; and

(f) Exercise any option, election, or right under any Policy.

7.7 Death Benefit Collection and Management.

(a) Upon the death of the insured, the Trustee shall promptly file claims for all death benefit proceeds, cooperate with insurance carriers, and take all steps necessary to collect the proceeds.

(b) The Trustee shall invest and manage death benefit proceeds as part of the Trust Estate in accordance with Article 14 and the Uniform Prudent Investor Act (Cal. Prob. Code §§ 16045-16054).

(c) The Trustee shall distribute or hold the death benefit proceeds in accordance with the distribution provisions of Article 9 and Schedule B.

7.8 No Obligation to Maintain Insurance. If the Trust does not have sufficient assets to pay premiums on a Policy, the Trustee shall notify all Beneficiaries and shall have no obligation to pay premiums from non-Trust sources. The Trustee may allow a Policy to lapse if, in the Trustee's judgment, maintaining the Policy is not in the best interest of the Beneficiaries.

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ARTICLE 8. GRANTOR TRUST PROVISIONS

[// GUIDANCE: An Intentionally Defective Grantor Trust (IDGT) is treated as owned by the Settlor for income tax purposes under IRC §§ 671-679, but is excluded from the Settlor's estate for estate tax purposes. This achieves a "freeze" — the Settlor pays income taxes on trust income (an additional tax-free gift), while the Trust assets appreciate outside the estate. The grantor trust provisions in this Article must be carefully coordinated with the irrevocability provisions of Article 3 and the no-retained-powers provisions of Section 3.2 to avoid estate inclusion under IRC §§ 2036-2038.]

8.1 Grantor Trust Election. (Select one):

☐ Intentionally Defective Grantor Trust. This Trust is intended to be treated as a Grantor Trust for federal and California income tax purposes under IRC §§ 671-679. The provisions of Sections 8.2 through 8.6 shall apply.

☐ Non-Grantor Trust. This Trust is intended to be treated as a non-grantor trust for federal and California income tax purposes. Sections 8.2 through 8.6 shall NOT apply, and the Trust shall obtain its own taxpayer identification number upon creation.

8.2 Intentional Defect — Power of Substitution (Swap Power).

(a) Pursuant to IRC § 675(4)(C), the Settlor reserves the power, exercisable in a nonfiduciary capacity and without the approval or consent of any person acting in a fiduciary capacity, to reacquire any property held by the Trust by substituting other property of equivalent value.

(b) The Trustee shall have the duty to verify that any property substituted by the Settlor is of equivalent value to the property reacquired. The Trustee may engage a qualified independent appraiser at the Trust's expense to determine equivalent value.

(c) This power shall not be construed as a power to alter, amend, or revoke the Trust, and shall not cause the Trust Estate to be included in the Settlor's gross estate under IRC § 2036, § 2037, or § 2038.

[// GUIDANCE: The swap power under IRC § 675(4)(C) is the most commonly used intentional defect. Rev. Rul. 2008-22 confirmed that a swap power held in a nonfiduciary capacity will not cause estate inclusion under IRC § 2036 if the trustee has a fiduciary obligation to ensure equivalent value. The power must be exercisable only in a nonfiduciary capacity.]

8.3 Additional Intentional Defect Options. (Select any additional defects, if applicable):

☐ IRC § 675(1): Power to deal with Trust for less than adequate consideration (exercisable only with consent of an adverse party)

☐ IRC § 675(2): Power to borrow from the Trust without adequate interest or security

☐ IRC § 675(3): Actual borrowing of Trust assets without adequate interest or security, where the loan is not repaid before the beginning of the taxable year

☐ IRC § 676: Power to revoke held by a non-adverse party (limited to specific sub-trust)

☐ IRC § 677(a): Income distributable to or accumulated for the Settlor's spouse

[// GUIDANCE: Selecting multiple defects may provide redundancy, but each must be analyzed for estate inclusion risk. IRC § 675(4)(C) (swap power) is the safest and most common choice. Consult tax counsel before selecting additional defects.]

8.4 Toggle Provision — Conversion from Grantor to Non-Grantor Trust.

(a) The Settlor (or, if the Settlor is deceased or incapacitated, the Trust Protector) may at any time release or relinquish the power described in Section 8.2 by delivering a signed, written notice to the Trustee (a "Toggle Notice").

(b) Upon delivery of a Toggle Notice, the Trust shall cease to be a Grantor Trust, and the Trustee shall:

(i) Obtain a new Employer Identification Number (EIN) from the Internal Revenue Service;

(ii) File all required federal and state income tax returns for the Trust as a separate taxable entity; and

(iii) Notify all Beneficiaries of the change in tax status.

(c) Once the grantor trust status has been relinquished, it may not be reinstated except by court order or by the Trust Protector exercising powers under Article 11.

[// GUIDANCE: The toggle provision allows flexibility to "turn off" grantor trust status if the Settlor no longer wishes to bear the income tax burden. This commonly occurs when the Settlor faces cash flow issues or when the estate tax benefit of paying income tax has diminished. The toggle is a one-way switch unless the Trust Protector reinstates grantor trust status by granting a new IRC § 675 power.]

8.5 Tax Reporting During Grantor Trust Status. While the Trust is a Grantor Trust:

(a) The Trust shall use the Settlor's Social Security Number as its taxpayer identification number;

(b) All income, deductions, and credits of the Trust shall be reported on the Settlor's individual income tax returns (IRS Form 1040);

(c) The Trustee shall furnish the Settlor with all information necessary to prepare the Settlor's tax returns; and

(d) The Settlor's payment of income taxes attributable to Trust income shall not be treated as an additional Contribution to the Trust for gift tax purposes.

8.6 Tax Reporting After Conversion to Non-Grantor Trust. Upon conversion to non-grantor trust status:

(a) The Trust shall obtain and use its own EIN;

(b) The Trustee shall file IRS Form 1041 (U.S. Income Tax Return for Estates and Trusts) and California Form 541 (California Fiduciary Income Tax Return) annually; and

(c) Trust income distributed to Beneficiaries shall be reported on Schedule K-1 and included in each Beneficiary's individual income.

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ARTICLE 9. ADMINISTRATION AND DISTRIBUTION STANDARDS

9.1 Beneficiaries. The Beneficiaries of this Trust, their respective interests, and the distribution standards applicable to each are set forth on Schedule B.

Primary Beneficiary(ies): [________________________________]
Date(s) of Birth: [__/__/____]

Contingent/Residual Beneficiary(ies): [________________________________]
Date(s) of Birth: [__/__/____]

9.2 Mandatory Distributions. (Select one or more, as applicable):

☐ All Net Income: The Trustee shall distribute all net income of the Trust, at least annually, to [________________________________].

☐ Unitrust Amount: The Trustee shall distribute [____]% of the net fair market value of the Trust Estate, valued annually, to [________________________________].

☐ No Mandatory Distributions: All distributions shall be discretionary.

9.3 Discretionary Distributions. The Trustee may, in the Trustee's sole and absolute discretion, distribute income and/or principal to or for the benefit of any Beneficiary for:

☐ HEMS Standard — health, education, maintenance, and support, as those terms are defined and limited under IRC §§ 2041 and 2514;

☐ Broad Discretion — the Beneficiary's best interests, taking into account the Beneficiary's other resources and income;

☐ Specific Purposes: [________________________________]

[// GUIDANCE: If the Trustee is a Beneficiary, use the HEMS standard to avoid estate inclusion under IRC §§ 2041 and 2514. Broad discretion should be reserved for independent (non-beneficiary) Trustees.]

9.4 Distributions for Minor Beneficiaries. For any Beneficiary under age [____], the Trustee may:

(a) Make distributions directly to the Beneficiary's parent or legal guardian;

(b) Apply distributions directly for the Beneficiary's benefit (e.g., payments to schools, medical providers, landlords); or

(c) Establish a custodial account under the California Uniform Transfers to Minors Act (Cal. Prob. Code §§ 3900-3925).

9.5 Staggered Distribution Schedule. (Optional — check if applicable):

☐ The Trust shall terminate and be distributed as follows:

• [____]% of the Trust Estate at age [____]
• [____]% of the remaining Trust Estate at age [____]
• Balance of Trust Estate at age [____]

9.6 Termination. Unless earlier terminated by operation of law or the Perpetuities Savings Clause in Article 18, the Trust shall terminate upon the occurrence of the earliest of:

(a) The death of the last surviving Beneficiary named on Schedule B;

(b) [________________________________] (specific date or event); or

(c) The exhaustion of the Trust Estate.

Upon termination, the remaining Trust Estate shall be distributed outright to the then-living Beneficiaries, per stirpes, in the proportions set forth on Schedule B.

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ARTICLE 10. SPENDTHRIFT PROTECTION

[// GUIDANCE: California Probate Code §§ 15300-15309 govern spendthrift provisions. Spendthrift clauses are generally enforceable in California for third-party trusts (trusts created by someone other than the beneficiary), but they are subject to important statutory exceptions. Self-settled spendthrift trusts (where the Settlor is a Beneficiary) are NOT protected under California law. See Cal. Prob. Code § 15304.]

10.1 General Spendthrift Restriction. To the maximum extent permitted by Applicable Law, no Beneficiary shall have any right or power to anticipate, pledge, assign, sell, transfer, alienate, or encumber the Beneficiary's interest in the Trust, whether voluntarily or involuntarily, and no such interest shall be subject to the claims of any creditor, spouse, former spouse, or other person, or to legal process, prior to actual distribution to the Beneficiary. (Cal. Prob. Code § 15300.)

10.2 No Self-Settled Trust Protection. If the Settlor is also a Beneficiary of this Trust, the spendthrift provisions of this Article shall not apply to the Settlor's interest, and the Settlor's creditors may reach the maximum amount that may be distributed to or for the Settlor's benefit. (Cal. Prob. Code § 15304.)

[// GUIDANCE: California does not recognize self-settled asset protection trusts. If the Settlor is a Beneficiary, consult counsel regarding the effectiveness of the spendthrift clause as to the Settlor's interest.]

10.3 Statutory Exceptions to Spendthrift Protection. Notwithstanding Section 10.1, the spendthrift provisions of this Trust are subject to the following exceptions under California law, and the Trustee shall comply with court orders enforcing these exceptions:

(a) Support Judgments (Cal. Prob. Code § 15305). A court may order the Trustee to satisfy a money judgment against a Beneficiary for support of the Beneficiary's child, spouse, or former spouse, from present or future distributions to which the Beneficiary is entitled or that the Trustee has determined to make.

(b) Restitution for Felony Victims (Cal. Prob. Code § 15305.5). A judgment creditor who has a judgment for restitution based on a Beneficiary's felony conviction, or for damages arising from conduct for which the Beneficiary was convicted of a felony, may reach the Beneficiary's interest in the Trust.

(c) Public Support Reimbursement (Cal. Prob. Code § 15306). A state or local public entity that has provided support to a Beneficiary or the Beneficiary's spouse or minor children may obtain reimbursement from the Trust to the extent authorized by law.

(d) 25% Creditor Access (Cal. Prob. Code § 15306.5). After a court determination that the spendthrift provision should not be enforced, a judgment creditor may reach up to twenty-five percent (25%) of any payment that would otherwise be made to the Beneficiary, to the extent that the payment exceeds the amount necessary for the education and support of the Beneficiary.

(e) Surplus Income (Cal. Prob. Code § 15307). A judgment creditor may reach any amount to which the Beneficiary is entitled under this Agreement, or that the Trustee has determined to pay to the Beneficiary, that is in excess of the amount necessary for the education and support of the Beneficiary.

10.4 Trustee Compliance with Court Orders. If the Trustee receives a court order requiring payment from the Trust pursuant to any of the exceptions in Section 10.3, the Trustee shall comply with such order, but the Trustee shall first provide written notice to the affected Beneficiary and shall, if appropriate and in the best interests of all Beneficiaries, contest or seek modification of such order at Trust expense.

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ARTICLE 11. TRUST PROTECTOR — CALIFORNIA UNIFORM DIRECTED TRUST ACT

[// GUIDANCE: The California Uniform Directed Trust Act (CUDTA), Cal. Prob. Code §§ 16600-16632, effective January 1, 2024, provides a statutory framework for trust directors and trust protectors. Under CUDTA, a "trust director" is a person (other than a trustee) who is granted a "power of direction" over some aspect of trust administration. The trust protector provisions below utilize the CUDTA framework.]

11.1 Appointment of Trust Protector. The Settlor hereby appoints:

Trust Protector: [________________________________]
Address: [________________________________]

If the above-named Trust Protector is unable or unwilling to serve, the following successor shall serve:

Successor Trust Protector: [________________________________]

11.2 Trust Protector as Trust Director Under CUDTA. The Trust Protector shall serve as a "trust director" within the meaning of Cal. Prob. Code § 16603(f) and shall exercise the powers of direction granted herein.

11.3 Powers of the Trust Protector. The Trust Protector shall have the following powers, exercisable in the Trust Protector's sole and absolute discretion:

(a) Trustee Appointments: Power to remove any Trustee (other than a Trustee who is a Beneficiary) and to appoint successor Trustees;

(b) Trust Modifications: Power to modify administrative and ministerial provisions of this Trust to respond to changes in tax law, state law, or the Beneficiaries' circumstances, provided such modifications do not alter the dispositive provisions in a manner inconsistent with the Settlor's intent;

(c) Trust Situs: Power to change the situs of the Trust to another state or jurisdiction;

(d) Grantor Trust Toggle: Power to reinstate or release grantor trust powers under Article 8;

(e) Decanting: Power to decant the Trust into a new trust for the benefit of one or more Beneficiaries, to the extent permitted by Applicable Law;

(f) Tax Elections: Power to direct the Trustee regarding GST Tax elections and allocations;

(g) Resolve Ambiguities: Power to interpret ambiguous provisions of this Agreement in a manner consistent with the Settlor's intent;

(h) Add or Remove Beneficiaries: Power to add charitable beneficiaries or remove Beneficiaries (other than the Settlor or the Settlor's spouse) if necessary for tax or legal compliance; and

(i) Other Powers: [________________________________]

11.4 Nonfiduciary Powers. To the maximum extent permitted by Cal. Prob. Code § 16606, the following powers of the Trust Protector are exercisable in a nonfiduciary capacity and are not subject to fiduciary duties:

(a) Powers to appoint or remove a Trustee or Trust Director (Cal. Prob. Code § 16606(b));

(b) Powers of appointment held by the Trust Protector as a Beneficiary (Cal. Prob. Code § 16606(d)); and

(c) Powers specifically designated as nonfiduciary in this Agreement.

11.5 Directed Trustee Liability. When acting in accordance with the Trust Protector's exercise of a power of direction, the Trustee shall be a "directed trustee" within the meaning of Cal. Prob. Code § 16603(b) and shall not be liable for the Trust Protector's breach of trust in exercising or failing to exercise a power of direction, except for the Trustee's own willful misconduct. (Cal. Prob. Code § 16621.)

11.6 Trust Protector Compensation. The Trust Protector shall be entitled to reasonable compensation for services rendered, payable from the Trust Estate, in an amount agreed upon with the Trustee or, absent agreement, as determined by the court.

11.7 Trust Protector Not a Trustee. The Trust Protector shall not be deemed a Trustee and shall not have any duty or liability beyond those expressly set forth in this Article 11 and under the CUDTA.

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ARTICLE 12. DIGITAL ASSETS — RUFADAA

[// GUIDANCE: The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), Cal. Prob. Code §§ 870-884, as amended by SB 1458 (effective January 2025), governs a fiduciary's access to digital assets. The user's direction in the trust instrument takes priority over default provider terms of service (but is subordinate to the user's own direction via an online tool provided by the custodian).]

12.1 Definitions. For purposes of this Article:

(a) "Digital Asset" means an electronic record in which an individual has a right or interest, including but not limited to email accounts, social media accounts, domain names, digital photographs and videos, digital music and media libraries, online financial accounts (including cryptocurrency wallets and exchanges), cloud storage, software licenses, loyalty program accounts, and any other electronically stored information. (Cal. Prob. Code § 870(h).)

(b) "Catalogue of Electronic Communications" means information that identifies each person with which a user has had an electronic communication, the time and date of the communication, and the electronic address of each person. (Cal. Prob. Code § 870(b).)

(c) "Content of Electronic Communications" means the substance of an electronic communication. (Cal. Prob. Code § 870(e).)

12.2 Trustee Authority Over Digital Assets. The Settlor hereby grants the Trustee full authority to access, manage, control, continue, transfer, and terminate any Digital Asset of the Settlor that is transferred to or held by the Trust, including but not limited to:

(a) Accessing the content of electronic communications and the catalogue of electronic communications associated with Trust-held accounts;

(b) Managing, copying, distributing, deleting, or preserving digital files, data, and records;

(c) Managing and continuing domain name registrations, website hosting, and social media accounts transferred to the Trust;

(d) Accessing, managing, and transferring cryptocurrency, digital tokens, non-fungible tokens (NFTs), and other blockchain-based assets;

(e) Licensing, selling, or transferring software, digital media, and intellectual property rights; and

(f) Taking any other action with respect to Digital Assets as the Trustee deems necessary or appropriate.

12.3 Consent to Disclosure. To the extent permitted by Cal. Prob. Code § 873, the Settlor hereby consents to the disclosure of the content of electronic communications to the Trustee. This consent is intended to constitute a "direction" under Cal. Prob. Code § 871(a)(1), which takes precedence over a custodian's default terms of service.

[// GUIDANCE: Under RUFADAA, a user's direction in an online tool (e.g., Google Inactive Account Manager, Facebook Legacy Contact) takes precedence over the trust instrument. Advise the Settlor to review and update online tool designations to be consistent with this Trust.]

12.4 Digital Asset Inventory. The Settlor is encouraged to maintain a current inventory of Digital Assets, including account names, URLs, and access credentials, in a secure location known to the Trustee. The Trustee shall make reasonable efforts to locate and manage Digital Assets upon the Settlor's incapacity or death.

12.5 Fiduciary Duty Regarding Digital Assets. The Trustee's management of Digital Assets shall be subject to the same fiduciary duties applicable to all other Trust property, including the duty of loyalty, the duty of prudent administration, and the duty to preserve and protect Trust assets.

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ARTICLE 13. TRUSTEES AND SUCCESSOR TRUSTEES

13.1 Initial Trustee. The initial Trustee of this Trust is [________________________________], who accepts the office by executing this Agreement.

13.2 Standard of Care. The Trustee shall administer the Trust with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims. (Cal. Prob. Code § 16040.)

13.3 Resignation. A Trustee may resign by giving at least thirty (30) days' written notice to the Trust Protector (if serving), the Settlor (if living), and all adult, competent Beneficiaries then entitled to receive income or principal.

13.4 Removal. A Trustee may be removed by:

(a) The Trust Protector, in the Trust Protector's sole discretion (Section 11.3(a));

(b) A unanimous vote of adult, competent Beneficiaries then entitled to receive income or principal, for breach of trust, incapacity, or other good cause; or

(c) Court order pursuant to Cal. Prob. Code § 15642.

13.5 Successor Trustees. If the initial Trustee ceases to serve for any reason, the following persons shall serve as successor Trustee, in the order listed:

First Successor Trustee: [________________________________]

Second Successor Trustee: [________________________________]

Third Successor Trustee: [________________________________]

If no named successor is able or willing to serve, the Trust Protector shall appoint a successor. If no Trust Protector is serving, a majority of adult, competent Beneficiaries may appoint a successor Trustee who is an independent person or a corporate fiduciary.

13.6 Acceptance of Successor Trustee. A successor Trustee shall accept the office by executing a written Acceptance of Trust, whereupon title to the Trust Estate shall vest in the successor without further conveyance or transfer.

13.7 Co-Trustees. If more than one Trustee is serving:

(a) A majority of the co-Trustees may act for all on any matter;

(b) Any co-Trustee may delegate ministerial acts to another co-Trustee; and

(c) If co-Trustees are unable to agree, the matter shall be referred to the Trust Protector for resolution or, if no Trust Protector is serving, to the court.

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ARTICLE 14. TRUSTEE POWERS

14.1 Incorporation of Statutory Powers. The Trustee shall have all powers granted by Cal. Prob. Code §§ 16220-16249, as amended, in addition to those expressly granted herein.

14.2 Specific Powers. Without limiting the foregoing, the Trustee may:

(a) Invest in any form of property or investment, including but not limited to equities, fixed income, real estate, mutual funds, exchange-traded funds, hedge funds, private equity, derivatives, options, futures, digital assets, and interests in business entities, all in accordance with the Uniform Prudent Investor Act (Cal. Prob. Code §§ 16045-16054);

(b) Retain any property received by the Trust, whether or not it would otherwise be a prudent investment;

(c) Sell, exchange, or lease any Trust property on terms the Trustee deems advisable;

(d) Borrow money and encumber Trust assets as security;

(e) Engage professionals including attorneys, accountants, investment advisors, financial planners, real estate agents, and other agents and experts, and pay their reasonable fees from the Trust Estate;

(f) Delegate investment functions to a qualified investment advisor in accordance with Cal. Prob. Code § 16052;

(g) Vote securities and participate in mergers, reorganizations, and other corporate actions;

(h) Distribute in kind by making distributions in cash or in kind, or partly in each, and allocate specific assets to different shares or trusts;

(i) Establish reserves for taxes, assessments, expenses, and contingencies;

(j) Settle claims for or against the Trust, compromise disputes, and submit matters to arbitration;

(k) Make tax elections including all elections available under the Code, California Revenue and Taxation Code, and any other applicable tax law; and

(l) Perform any other act that a prudent person would perform for the purposes of the Trust.

14.3 Investment Advisor. The Trustee may appoint an Investment Advisor whose written directions shall, if the appointment and trust instrument so state, relieve the Trustee of liability for investment decisions made pursuant to those directions, subject to the provisions of the CUDTA (Cal. Prob. Code §§ 16600-16632).

14.4 Decanting. To the extent permitted by Cal. Prob. Code § 19510 et seq. or other applicable law, the Trustee may distribute all or part of the Trust assets to a new trust for the benefit of one or more Beneficiaries on terms that are consistent with the purposes of this Trust.

14.5 Environmental Powers. The Trustee shall have authority to inspect, monitor, remediate, and take any other action regarding environmental contamination on Trust property, and to purchase environmental liability insurance, all at Trust expense.

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ARTICLE 15. TRUSTEE COMPENSATION

[// GUIDANCE: Cal. Prob. Code § 15681 provides that if the trust instrument does not specify compensation, the Trustee is entitled to "reasonable compensation under the circumstances." Courts consider factors including the trust estate size, complexity, time spent, and the Trustee's expertise. If the trust instrument does specify compensation, the court may still adjust it under Cal. Prob. Code § 15682 if the specified amount is unreasonably low or high.]

15.1 Compensation. (Select one):

☐ Specified Fee Schedule: The Trustee shall receive compensation as set forth on Schedule B, Section II (Fee Schedule).

☐ Reasonable Compensation: The Trustee shall receive reasonable compensation as determined under Cal. Prob. Code § 15681, taking into account the following factors:

(a) The gross value of the Trust Estate;

(b) The complexity of Trust administration, including the nature and variety of Trust assets;

(c) The time and effort required;

(d) The Trustee's professional qualifications and expertise;

(e) The results achieved by the Trustee; and

(f) Customary fees charged by corporate fiduciaries in the same geographic area for comparable services.

☐ Corporate Fiduciary Fee Schedule: The corporate fiduciary Trustee shall receive compensation in accordance with its published fee schedule in effect at the time services are rendered, as amended from time to time.

☐ No Compensation: The Trustee shall serve without compensation.

15.2 Reimbursement. In addition to compensation, the Trustee shall be reimbursed from the Trust Estate for all reasonable expenses properly incurred in the administration of the Trust, including but not limited to legal fees, accounting fees, investment advisory fees, tax preparation costs, insurance premiums, and costs of litigation.

15.3 Court Review. Notwithstanding any provision of this Article, the court retains jurisdiction under Cal. Prob. Code § 15682 to fix or modify Trustee compensation upon petition by any interested person.

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ARTICLE 16. NOTIFICATION REQUIREMENTS

[// GUIDANCE: Cal. Prob. Code § 16061.7 imposes mandatory notification requirements when a revocable trust or portion thereof becomes irrevocable (typically upon the Settlor's death), or when there is a change of Trustee of an irrevocable trust. These notification duties are independent of the general duty to report and account under Cal. Prob. Code §§ 16060-16064.]

16.1 Notification Upon Irrevocability Event. If any portion of this Trust becomes irrevocable by reason of the Settlor's death or any other event, the Trustee shall, within sixty (60) days of such event, serve written notification on each of the following:

(a) Each Beneficiary of the Trust who is entitled to receive income or principal;

(b) Each heir of the Settlor (as determined under Cal. Prob. Code § 21103); and

(c) Any other person entitled to notification under Cal. Prob. Code § 16061.7.

16.2 Contents of Notification. The notification shall contain the information required by Cal. Prob. Code § 16061.7(e)-(h), including but not limited to:

(a) The identity of the Settlor and the date the Trust was executed;

(b) The name and mailing address of each Trustee;

(c) The address of the principal place of Trust administration;

(d) A statement that the recipient is entitled to receive a copy of the terms of the Trust; and

(e) The following notice of the 120-day contest period:

"You may not bring an action to contest the trust more than 120 days from the date this notification by the trustee is served upon you or 60 days from the date on which a copy of the terms of the trust is delivered to you during that 120-day period, whichever is later."

16.3 Notification Upon Change of Trustee. Upon any change in the identity of the Trustee of this irrevocable Trust, the successor Trustee shall serve notification in accordance with Cal. Prob. Code § 16061.7(f) within sixty (60) days of accepting office.

16.4 Method of Service. Notification shall be served by personal delivery or by mail to the last known address of each person entitled to notice.

16.5 Annual Accounting. In addition to the notifications required above, the Trustee shall provide annual written accountings to each current Beneficiary within sixty (60) days after the close of each Accounting Period, in accordance with Cal. Prob. Code §§ 16060-16064. Any Beneficiary may waive the right to receive an accounting in writing.

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ARTICLE 17. NO-CONTEST CLAUSE

[// GUIDANCE: California Probate Code §§ 21310-21315 strictly limit enforcement of no-contest (in terrorem) clauses. A no-contest clause is enforceable ONLY in three situations: (1) a direct contest brought without probable cause; (2) a pleading challenging a transfer on the ground it was not the transferor's property at the time (only if expressly provided); and (3) a creditor's claim filing (only if expressly provided). No-contest clauses are strictly construed.]

17.1 No-Contest Provision. If any Beneficiary, directly or indirectly, commences or participates in any of the following actions without probable cause, such Beneficiary shall be treated as having predeceased the Settlor without surviving issue, and the Beneficiary's entire interest in the Trust shall be forfeited:

(a) A direct contest of this Trust or any provision hereof (Cal. Prob. Code § 21311(a)(1));

(b) A pleading in any court challenging any transfer of property on the grounds that it was not the transferor's property at the time of the transfer (Cal. Prob. Code § 21311(a)(2)); and

(c) The filing of a creditor's claim or prosecution of an action based on a creditor's claim against the Trust Estate (Cal. Prob. Code § 21311(a)(3)).

17.2 Probable Cause Safe Harbor. Notwithstanding Section 17.1, this no-contest clause shall NOT be enforced against any Beneficiary who brings a contest with probable cause. For purposes of this Section, probable cause exists if, at the time of filing the contest, the facts known to the contestant would cause a reasonable person to believe there is a reasonable likelihood that the requested relief will be granted after an opportunity for further investigation or discovery. (Cal. Prob. Code § 21311(b).)

17.3 Permitted Actions. The following actions shall NOT constitute a contest under this Article:

(a) Any action to interpret or enforce the terms of this Trust in good faith;

(b) Any action brought by a fiduciary in the fiduciary's representative capacity;

(c) A petition under Cal. Prob. Code § 17200 for instructions or other relief regarding Trust administration; and

(d) Any action to enforce a claim described in Section 10.3 (spendthrift exceptions).

17.4 Strict Construction. This no-contest clause shall be strictly construed in accordance with Cal. Prob. Code § 21312.

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ARTICLE 18. PERPETUITIES SAVINGS CLAUSE

[// GUIDANCE: California follows the Uniform Statutory Rule Against Perpetuities (USRAP) under Cal. Prob. Code § 21205. A nonvested property interest is valid if it either (a) must vest or terminate within 21 years after the death of a life in being at creation, or (b) actually vests or terminates within 90 years of creation. The 90-year period provides a safe harbor.]

18.1 Savings Clause. Notwithstanding any other provision of this Agreement, if any interest in the Trust would otherwise violate the Rule Against Perpetuities as codified in Cal. Prob. Code § 21205, such interest shall vest or terminate no later than ninety (90) years after the date of this Agreement (the "Perpetuities Date").

18.2 Mandatory Termination. If any portion of the Trust Estate remains in trust on the Perpetuities Date, the Trustee shall, within a reasonable time thereafter, distribute the remaining Trust Estate outright to the Beneficiaries then entitled to receive income therefrom, in the proportions in which they are entitled to income, or if no such Beneficiaries are then living, to the Settlor's then-living descendants, per stirpes.

18.3 Reformation. If any provision of this Agreement is determined by a court to violate the Rule Against Perpetuities, the court shall reform such provision to the minimum extent necessary to comply with Cal. Prob. Code § 21220, in a manner that most closely approximates the Settlor's intent.

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ARTICLE 19. PROPOSITION 19 PROPERTY TAX DISCLOSURE

WARNING — CALIFORNIA PROPOSITION 19 (Cal. Rev. & Tax. Code § 63.2):

Effective February 16, 2021 (for intergenerational transfers), Proposition 19 significantly changed the rules governing property tax reassessment for transfers of real property. The following disclosures are critical to any transfer of California real property to this irrevocable Trust:

19.1 A transfer of real property to an irrevocable trust generally constitutes a change in ownership that triggers property tax reassessment to current fair market value under Cal. Rev. & Tax. Code § 61(h), unless an exclusion applies.

19.2 Under Proposition 19, the parent-child and grandparent-grandchild exclusions from reassessment (formerly under Proposition 58/193) have been substantially limited. Exclusions are now available ONLY for a "family home" (principal residence) or family farm, and ONLY if the transferee uses the property as the transferee's principal residence within one year of transfer AND files for the homeowners' exemption. Even then, if the property's current fair market value exceeds the factored base year value by more than $1,000,000, only the excess is excluded from reassessment.

19.3 Transfers of real property other than a family home or family farm to an irrevocable trust for the benefit of children or grandchildren will be reassessed to current fair market value at the time of transfer or upon the triggering event.

19.4 The Settlor is strongly advised to consult with a California real estate attorney and a tax advisor before transferring any California real property to this irrevocable Trust.

[// GUIDANCE: Proposition 19 is one of the most significant changes to California property tax law in decades. Before any real property transfer to this Trust, perform a detailed analysis of the property tax impact. Consider whether the real property should be held outside the irrevocable trust or whether alternative estate planning strategies should be employed.]

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ARTICLE 20. TAX MATTERS AND REPORTING

20.1 Tax Identification. See Article 8 for provisions governing the use of the Settlor's Social Security Number during grantor trust status and the requirement to obtain an EIN upon conversion to non-grantor trust status.

20.2 Tax Filings. The Trustee shall timely prepare or cause to be prepared and filed all required federal, state, and local tax returns, including but not limited to:

(a) IRS Form 1041 (or information reporting via the Settlor's Form 1040, during grantor trust status);

(b) California Form 541 (California Fiduciary Income Tax Return);

(c) IRS Form 709 (United States Gift Tax Return), to the extent the Trustee is responsible for reporting Contributions and GST Exemption allocations; and

(d) Any other return required by Applicable Law.

20.3 Tax Payments. The Trustee shall pay all taxes attributable to the Trust from the Trust Estate, unless the Trust is a Grantor Trust and the Settlor is responsible for paying income taxes under Article 8.

20.4 Tax Elections. The Trustee is authorized to make any and all tax elections available under the Code, Treasury Regulations, and Applicable Law, including but not limited to:

(a) Elections regarding fiscal year;

(b) Elections under IRC § 643(e) regarding the tax treatment of in-kind distributions;

(c) Elections under IRC § 663(b) regarding the 65-day rule;

(d) GST Exemption allocation elections under IRC § 2632; and

(e) Any other election the Trustee deems advisable.

20.5 Tax Reimbursement. If the Settlor pays income taxes attributable to Trust income during grantor trust status, the Trustee may (but is not required to) reimburse the Settlor from the Trust Estate for such taxes. Any such reimbursement shall not be treated as a distribution for purposes of this Agreement.

[// GUIDANCE: The decision whether to include a tax reimbursement clause requires careful analysis. A mandatory reimbursement clause may cause estate inclusion under IRC § 2036. A discretionary reimbursement clause is generally safer, but check current IRS guidance and state law.]

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ARTICLE 21. REPRESENTATIONS AND WARRANTIES

21.1 Settlor Representations. The Settlor represents and warrants that:

(a) The Settlor has full legal capacity and authority to create this Trust and to transfer the Initial Trust Property;

(b) The property transferred to the Trust is free and clear of undisclosed liens, encumbrances, and security interests;

(c) Execution of this Agreement does not violate any court order, agreement, or legal obligation;

(d) The Settlor understands that this Trust is irrevocable and that the Settlor will permanently relinquish ownership and control of the transferred property; and

(e) The Settlor has been advised to seek independent legal and tax counsel before executing this Agreement.

21.2 Trustee Representations. The Trustee represents and warrants that:

(a) The Trustee is qualified and willing to serve in a fiduciary capacity;

(b) The Trustee will administer the Trust in good faith and in accordance with Applicable Law and this Agreement;

(c) The Trustee is not currently suspended, removed, or otherwise disqualified from fiduciary service by any court; and

(d) The Trustee has no conflict of interest that has not been disclosed to the Settlor and the Beneficiaries.

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ARTICLE 22. DEFAULT, REMOVAL, AND REMEDIES

22.1 Events of Default. The following constitute a breach of trust:

(a) Material violation of the terms of this Agreement;

(b) Self-dealing not authorized by this Agreement or Applicable Law;

(c) Failure to provide required accountings or notifications within ninety (90) days after written demand;

(d) Failure to prudently invest or manage the Trust Estate;

(e) Incapacity, prolonged absence, or neglect of duties; and

(f) Commission of a felony or an act of moral turpitude.

22.2 Notice and Cure. Unless immediate relief is necessary to prevent substantial harm to the Trust Estate, a written notice specifying the alleged breach and a thirty (30) day cure period shall precede any petition for removal, surcharge, or damages.

22.3 Remedies. Remedies available to the Beneficiaries or the Trust Protector include:

(a) Removal and surcharge of the Trustee;

(b) Appointment of a temporary or permanent successor Trustee;

(c) Injunctive or other equitable relief;

(d) Requiring the Trustee to account; and

(e) Recovery of reasonable attorneys' fees and costs from the Trustee personally (and not from the Trust Estate) to the extent the breach was caused by the Trustee's gross negligence, willful misconduct, or bad faith.

22.4 Indemnification. The Trust Estate shall indemnify and hold harmless the Trustee from any claim, loss, liability, or expense (including attorneys' fees) arising from the proper administration of the Trust, except to the extent such claim arises from the Trustee's gross negligence, willful misconduct, or bad faith. The Trustee may purchase fiduciary liability insurance with premiums payable from the Trust Estate.

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ARTICLE 23. DISPUTE RESOLUTION

23.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflicts-of-laws principles.

23.2 Exclusive Forum. The Superior Court of the State of California sitting in probate in [________________________________] County shall have exclusive jurisdiction over all proceedings concerning the Trust.

23.3 Mediation. Before commencing any litigation or arbitration, the parties shall attempt to resolve any dispute through mediation administered by [________________________________] or another qualified mediator agreed upon by the parties. The costs of mediation shall be paid from the Trust Estate.

23.4 Optional Arbitration. If permissible under Cal. Prob. Code § 17200 and applicable case law, the parties may agree in a separate, signed writing to submit any dispute to binding arbitration administered by [________________________________] under its then-current rules. Unless all parties consent, this clause does not limit the probate court's jurisdiction.

23.5 Attorneys' Fees. In any proceeding concerning this Trust, the court may award reasonable attorneys' fees and costs to the prevailing party, payable from the Trust Estate or from the non-prevailing party, as the court deems just.

23.6 Jury Trial Waiver. Trust matters in California probate court are ordinarily tried without a jury; accordingly, no jury waiver is required.

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ARTICLE 24. GENERAL PROVISIONS

24.1 Amendment. Because this Trust is irrevocable, no amendment is permitted except:

(a) By the Trust Protector as provided in Article 11;

(b) By court order under Cal. Prob. Code §§ 15403-15414; or

(c) As otherwise expressly authorized by this Agreement.

24.2 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force. The court shall reform any invalid provision to the minimum extent necessary to effectuate the Settlor's intent.

24.3 No Assignment. Except as expressly provided herein, no party may assign any rights or obligations under this Agreement.

24.4 Entire Agreement. This Agreement, together with all Schedules and Exhibits, constitutes the entire agreement among the parties concerning the Trust and supersedes all prior agreements or understandings, whether written or oral.

24.5 Counterparts and Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original. Signatures transmitted electronically (e.g., via PDF or a secure electronic signature platform compliant with Cal. Civ. Code §§ 1633.1-1633.17) shall be effective.

24.6 Headings. Headings and the Table of Contents are for convenience only and shall not affect interpretation.

24.7 Gender and Number. Words of one gender include all genders; words of the singular include the plural, and vice versa.

24.8 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their heirs, personal representatives, successors, and assigns.

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ARTICLE 25. EXECUTION AND NOTARY ACKNOWLEDGMENT

IN WITNESS WHEREOF, the Settlor and the Trustee have executed this Irrevocable Trust Agreement as of the Effective Date first written above.

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SETTLOR/GRANTOR

Signature: __________________________________

Printed Name: [________________________________]

Date: [__/__/____]

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TRUSTEE

Signature: __________________________________

Printed Name: [________________________________], as Trustee

Date: [__/__/____]

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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT — SETTLOR

(Cal. Civ. Code § 1189)

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of [________________________________]

On [__/__/____], before me, [________________________________], Notary Public, personally appeared [________________________________], who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: __________________________________
(Seal)

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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT — TRUSTEE

(Cal. Civ. Code § 1189)

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of [________________________________]

On [__/__/____], before me, [________________________________], Notary Public, personally appeared [________________________________], who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: __________________________________
(Seal)

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SCHEDULE A — INITIAL TRUST PROPERTY

The following property is transferred to the Trust as of the Effective Date:

Cash:
- $[________________________________]
- Account Number (last 4 digits): [____]
- Financial Institution: [________________________________]

Marketable Securities:
- Description: [________________________________]
- Account Number (last 4 digits): [____]
- Brokerage/Financial Institution: [________________________________]
- Approximate Value: $[________________________________]

Real Property:

[// GUIDANCE: Before transferring California real property, review Article 19 (Proposition 19 Disclosure) regarding property tax reassessment consequences. A grant deed transferring real property to the Trust should be prepared and recorded separately.]

• Legal Description: [________________________________]
• Property Address: [________________________________]
• County: [________________________________]
• Assessor's Parcel Number: [________________________________]
• Approximate Fair Market Value: $[________________________________]

Life Insurance Policies (if ILIT — Article 7 applies):
- Insurer: [________________________________]
- Policy Number: [________________________________]
- Type (Term/Whole Life/Universal): [________________________________]
- Face Amount/Death Benefit: $[________________________________]
- Policy Owner (must be Trust): [________________________________]
- Beneficiary (must be Trust): [________________________________]

[// GUIDANCE: If the Settlor is transferring an existing policy, note the IRC § 2035 three-year lookback rule (Article 7.5). Record the date of transfer for compliance monitoring.]

Digital Assets (if Article 12 applies):
- Description: [________________________________]
- Platform/Exchange: [________________________________]
- Approximate Value: $[________________________________]

Other Assets:
- Description: [________________________________]
- Approximate Value: $[________________________________]

Total Approximate Value of Initial Trust Property: $[________________________________]

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SCHEDULE B — BENEFICIARY DESIGNATIONS

Section I. Beneficiary Information

Primary Beneficiary(ies):

Name	Date of Birth	Relationship	Share/Interest	Crummey Rights Holder
[________________________________]	[__/__/____]	[________________]	[____]%	☐ Yes ☐ No
[________________________________]	[__/__/____]	[________________]	[____]%	☐ Yes ☐ No
[________________________________]	[__/__/____]	[________________]	[____]%	☐ Yes ☐ No

Contingent/Residual Beneficiary(ies):

Name	Date of Birth	Relationship	Share/Interest	Crummey Rights Holder
[________________________________]	[__/__/____]	[________________]	[____]%	☐ Yes ☐ No
[________________________________]	[__/__/____]	[________________]	[____]%	☐ Yes ☐ No

Additional Crummey Withdrawal Right Holders (if any):

Name	Date of Birth	Relationship
[________________________________]	[__/__/____]	[________________]

Section II. Fee Schedule (if applicable)

[// GUIDANCE: Complete this section only if "Specified Fee Schedule" is selected in Article 15.1.]

☐ Annual Trustee Fee: $[________________________________] or [____]% of Trust Estate value

☐ Transaction-Based Fees:
- Real Estate Transaction: $[________________________________]
- Securities Transaction: $[________________________________]
- Tax Return Preparation: $[________________________________]

☐ Corporate Fiduciary: Fee schedule of [________________________________] as published and in effect at the time of service.

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EXHIBIT 1 — CERTIFICATION OF TRUST

(Pursuant to Cal. Prob. Code § 18100.5)

CERTIFICATION OF TRUST

The undersigned, being all of the currently acting Trustee(s) of the Trust identified below, hereby certify the following under penalty of perjury under the laws of the State of California:

1. Trust Name: The [________________________________] Irrevocable Trust

2. Date of Execution: [__/__/____]

3. Settlor(s): [________________________________]

4. Currently Acting Trustee(s):

Name	Address
[________________________________]	[________________________________]

5. Revocability: This Trust is irrevocable.

6. Taxpayer Identification Number: [________________________________]

7. Signature Authority: (Select one):

☐ All currently acting Trustees must sign to exercise powers of the Trustee.

☐ Any one currently acting Trustee may sign to exercise powers of the Trustee.

☐ A majority of currently acting Trustees may sign to exercise powers of the Trustee.

8. Powers of Trustee: The Trustee has the powers set forth in Cal. Prob. Code §§ 16220-16249 and such additional powers as are set forth in Article 14 of the Trust Agreement, including but not limited to the power to sell, exchange, lease, borrow, invest, and manage Trust property.

9. Trust Has Not Been Revoked, Modified, or Amended in any manner that would cause the representations contained in this Certification to be incorrect.

10. This Certification is being signed by all currently acting Trustees of the Trust.

[// GUIDANCE: Under Cal. Prob. Code § 18100.5, a Certification of Trust may be provided to third parties in lieu of a copy of the entire Trust Agreement. The Certification SHALL NOT contain the dispositive provisions of the Trust. Third parties may rely on the Certification in good faith.]

TRUSTEE SIGNATURE(S):

Signature: __________________________________
Printed Name: [________________________________]
Date: [__/__/____]

Signature: __________________________________
Printed Name: [________________________________]
Date: [__/__/____]

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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT — CERTIFICATION OF TRUST

(Cal. Civ. Code § 1189)

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of [________________________________]

On [__/__/____], before me, [________________________________], Notary Public, personally appeared [________________________________], who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: __________________________________
(Seal)

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SOURCES AND REFERENCES

California Statutes

• Cal. Prob. Code §§ 15200-15212 — Trust Creation and Validity
• Cal. Prob. Code § 15400 — Irrevocability / Revocability of Trusts
• Cal. Prob. Code §§ 15300-15309 — Spendthrift Restrictions and Exceptions
• Cal. Prob. Code § 15681 — Trustee Compensation
• Cal. Prob. Code § 16061.7 — Notification by Trustee
• Cal. Prob. Code §§ 16600-16632 — California Uniform Directed Trust Act (CUDTA)
• Cal. Prob. Code §§ 870-884 — RUFADAA Digital Assets
• Cal. Prob. Code § 18100.5 — Certification of Trust
• Cal. Prob. Code § 21205 — Uniform Statutory Rule Against Perpetuities (90 Years)
• Cal. Prob. Code §§ 21310-21315 — No-Contest Clauses
• Cal. Rev. & Tax. Code § 63.2 — Proposition 19 Implementation
• Cal. Civ. Code § 1189 — Notary Acknowledgment Form

Federal Statutes and Authorities

• IRC §§ 2503(b)-(c) — Gift Tax Annual Exclusion
• IRC § 2514 — Lapse of Powers of Appointment (5 and 5 Rule)
• IRC §§ 2601-2663 — Generation-Skipping Transfer Tax
• IRC § 2042 — Life Insurance Incidents of Ownership
• IRC § 2035 — Three-Year Lookback Rule
• IRC §§ 671-679 — Grantor Trust Rules
• IRC § 675 — Power of Substitution / Swap Power
• Crummey v. Commissioner, 397 F.2d 82 (9th Cir. 1968)
• Rev. Rul. 2008-22 — Swap Power and Estate Inclusion

2025-2026 Exemption Amounts

• Gift Tax Annual Exclusion: $19,000 per donee (2025 and 2026)
• Lifetime Estate/Gift Tax Exemption: $13,990,000 (2025); $15,000,000 (2026)
• GST Tax Exemption: $13,990,000 (2025); $15,000,000 (2026)
• GST Tax Rate: 40% (flat rate)
• IRS — Gift and Estate Tax Exemption Amounts for 2026

SB 1458 — Digital Assets Update

• SB 1458 — Expanded RUFADAA (Effective January 2025)

One Big Beautiful Bill Act (2025)

• Federal Estate, Gift, and GST Tax Provisions