IRREVOCABLE TRUST AGREEMENT

(Established Under Delaware Law)

[// GUIDANCE: This template is drafted to comply with Title 12 of the Delaware Code (the “Delaware Trust Act”). Counsel should confirm conformity with the most current statutory text before final execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Creation and Funding
   3.2 Trust Purpose
   3.3 Irrevocability
   3.4 Dispositive Provisions
   3.5 Spendthrift Protection
   3.6 Trust Protector
   3.7 Trustee Powers
   3.8 Tax Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

1.1 Title and Parties
This Irrevocable Trust Agreement (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

(a) [SETTLOR LEGAL NAME], an individual whose principal residence is [ADDRESS] (“Settlor”); and

(b) [TRUSTEE LEGAL NAME], a [individual/corporate] qualified trustee under 12 Del. C. § 3301 (“Trustee”).

1.2 Recitals
A. Settlor desires to create an irrevocable trust for the benefit of the Beneficiaries (defined below) and to transfer certain property to the Trustee subject to the terms of this Agreement.
B. Trustee is willing to accept the Trust Assets (defined below) and to administer them in accordance with the terms herein and applicable law.
C. This Agreement is intended to be irrevocable and to be governed by the laws of the State of Delaware, including the Delaware Trust Act.

1.3 Consideration
The mutual covenants herein constitute full and sufficient consideration.

2. DEFINITIONS

For ease of reference, capitalized terms have the following meanings:

“Accounting Period” – Each fiscal year of the Trust or such other period selected by the Trustee for reporting purposes.

“Beneficiary” – Each person or entity identified in Schedule A, together with any successor or additional beneficiary who becomes entitled to distributions under this Agreement.

“Delaware Trust Act” – Title 12 of the Delaware Code, Chs. 33–35, as amended.

“Distribution Committee” – A committee, if any, appointed under Section 3.4.4 to direct Trustee regarding discretionary distributions.

“Grantor Trust Rules” – Sections 671–679 of the Internal Revenue Code of 1986, as amended (the “Code”).

“Internal Revenue Code” or “Code” – The United States Internal Revenue Code of 1986, as amended.

“Qualified Trustee” – A person or entity meeting the requirements of 12 Del. C. § 3806.

“Trust” – The irrevocable trust created by this Agreement, known as “[FORMAL TRUST NAME]”.

“Trust Assets” – All property transferred to the Trustee under Section 3.1 and all additions and accretions thereto.

“Trust Protector” – The person(s) appointed under Section 3.6 vested with the powers enumerated therein.

“Trustee” – The individual or corporate fiduciary identified in Section 1.1(b) and any successor appointed in accordance with this Agreement.

3. OPERATIVE PROVISIONS

3.1 Creation and Funding

3.1.1 Establishment. Settlor hereby establishes the Trust pursuant to 12 Del. C. § 3303 and delivers to Trustee the property described in Schedule B (the “Initial Trust Assets”).
3.1.2 Additional Contributions. Additional property may be added at any time by Settlor or any third party with Trustee’s written consent.

3.2 Trust Purpose

The Trust is created to:
(a) hold, invest, and manage the Trust Assets;
(b) provide for the health, education, maintenance, and support of the Beneficiaries; and
(c) achieve such transfer-tax and asset-protection objectives as may be available under applicable law.

3.3 Irrevocability

3.3.1 No Power to Revoke. The Trust is irrevocable. Settlor expressly waives any right or power, whether alone or in conjunction with others, to alter, amend, revoke, or terminate the Trust.
3.3.2 Limited Amendments by Trust Protector. The Trust may be amended solely by the Trust Protector under Section 3.6.2 to (i) correct scrivener’s errors, (ii) maintain tax qualification, or (iii) respond to changes in applicable law, provided such amendment does not confer any beneficial interest on the Settlor.

[// GUIDANCE: Delaware allows broad modification powers so long as the instrument grants them (12 Del. C. § 3303(b)).]

3.4 Dispositive Provisions

3.4.1 Mandatory Income Distributions. Beginning on the first Distribution Date after the Effective Date, Trustee shall distribute [all/net] income, less expenses, [quarterly/annually] to the Beneficiaries per Schedule A.
3.4.2 Discretionary Principal Distributions. Trustee may distribute principal for a Beneficiary’s health, education, maintenance, or support (“HEMS”) in Trustee’s sole and absolute discretion.
3.4.3 Termination. Unless earlier terminated pursuant to Section 6.3, the Trust shall terminate upon the earliest of:
(a) the death of the last surviving Beneficiary; or
(b) the date [XX] years from the Effective Date, to the extent permitted by 12 Del. C. § 503.
3.4.4 Distribution Committee (Optional). Settlor may, by separate instrument, appoint a Distribution Committee of at least [three] members, a majority of whom must be disinterested within the meaning of Code § 672(c).

3.5 Spendthrift Protection

The interest of any Beneficiary shall not be subject to voluntary or involuntary transfer, assignment, pledge, alienation, or attachment prior to actual receipt, consistent with 12 Del. C. § 3536.

3.6 Trust Protector

3.6.1 Appointment. [NAME/INITIAL PROTECTOR] is appointed Trust Protector.
3.6.2 Powers. Subject to Section 3.3.2, the Trust Protector may:
(a) remove and replace any Trustee;
(b) expand or restrict investment powers;
(c) resolve any deadlock of a Distribution Committee; and
(d) amend this Agreement to maintain tax advantages.
3.6.3 Fiduciary Capacity. Unless expressly stated, the Trust Protector acts in a non-fiduciary capacity.

3.7 Trustee Powers

3.7.1 Statutory Powers. Trustee shall have all powers granted under 12 Del. C. § 3325, as expanded or limited herein.
3.7.2 Specific Powers. Without limitation, Trustee may:
(a) invest in any type of property without regard to diversification;
(b) appoint investment advisers or directed trustees;
(c) borrow on behalf of the Trust and pledge Trust Assets;
(d) hold assets in nominee name; and
(e) determine income and principal allocations.

[// GUIDANCE: Confirm corporate trustee compliance with 12 Del. C. § 3312 (delegation) when delegating investment functions.]

3.8 Tax Provisions

3.8.1 Grantor vs. Nongrantor Status. The Trust shall be treated as [SELECT: “a grantor trust / a nongrantor trust”] under the Grantor Trust Rules.
3.8.2 Tax Reporting. Trustee shall file all required federal and state tax returns and provide K-1s or other statements to Beneficiaries.
3.8.3 Tax Reimbursement Clause (Optional). To prevent inclusion in Settlor’s gross estate, any tax reimbursement discretion must be exercised by an independent Trustee.

4. REPRESENTATIONS & WARRANTIES

4.1 Settlor
(a) Authority. Settlor has full legal capacity to execute and deliver this Agreement.
(b) Title. Upon funding, Settlor conveys good and marketable title to the Trust Assets, free of liens except as disclosed in Schedule C.

4.2 Trustee
(a) Qualification. Trustee is a Qualified Trustee and has obtained all required licenses and approvals.
(b) No Conflict. Execution of this Agreement does not violate any governing document or fiduciary duty of the Trustee.

4.3 Survival. All representations and warranties survive the execution of this Agreement and remain in effect until final distribution of the Trust Assets.

5. COVENANTS & RESTRICTIONS

5.1 Settlor Covenants
(a) No Reacquisition. Settlor shall not reacquire, directly or indirectly, any Trust Assets.
(b) Further Assurances. Settlor will execute any additional documents necessary to vest title in Trustee.

5.2 Trustee Covenants
(a) Fiduciary Compliance. Trustee shall administer the Trust in good faith and in accordance with this Agreement and the Delaware Trust Act.
(b) Accounting. Trustee shall provide annual statements within [90] days of fiscal year-end.

5.3 Notice Obligations
Trustee shall notify the Trust Protector and Beneficiaries of any significant litigation, tax audit, or potential liability within [30] days.

6. DEFAULT & REMEDIES

6.1 Events of Default
(a) Trustee’s failure to provide required accountings within the period specified in Section 5.2(b);
(b) Breach of fiduciary duty as determined by final, non-appealable order of a court of competent jurisdiction;
(c) Trustee insolvency or resignation without qualified successor.

6.2 Cure Period
Trustee has [30] days after written notice by the Trust Protector to cure any default under Section 6.1(a) or (b).

6.3 Remedies
(a) Removal and Replacement. Upon uncured default, the Trust Protector may remove the Trustee and appoint a successor.
(b) Injunctive Relief. Courts of competent jurisdiction may issue temporary or permanent injunctive relief to protect Trust Assets.
(c) Surcharge. Trustee may be surcharged to the extent of any losses proximately caused by its breach.

7. RISK ALLOCATION

7.1 Indemnification of Trustee

To the fullest extent permitted by 12 Del. C. § 3585, the Trust shall indemnify, defend, and hold harmless the Trustee, its affiliates, and their respective officers, directors, and employees (“Indemnified Parties”) from any and all claims, liabilities, and expenses arising out of the Trustee’s good-faith administration of the Trust, except for losses resulting from willful misconduct or gross negligence.

7.2 Limitation of Liability

Liability of the Trustee and any Indemnified Party, however arising, shall be limited to the Trust Assets; no personal or corporate assets of such parties shall be subject to satisfaction of any judgment.

7.3 Insurance

Trustee may, at Trust expense, procure fiduciary liability insurance covering the Indemnified Parties.

7.4 Force Majeure

No party shall be liable for failure to perform due to events beyond its reasonable control, including acts of God, war, terrorism, or changes in law.

8. DISPUTE RESOLUTION

8.1 Governing Law
This Agreement and all rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict-of-law principles.

8.2 Exclusive Jurisdiction
Any proceeding arising under or relating to this Agreement shall be brought exclusively in the Court of Chancery of the State of Delaware sitting in and for [New Castle/Kent/Sussex] County, or, if such court lacks subject-matter jurisdiction, in the Delaware Superior Court or Delaware Probate Court.

8.3 Optional Arbitration
[ARBITRATION PROVISION—SELECT “INCLUDE” OR “OMIT”]
IF “INCLUDE”:
(a) Mandatory Arbitration. Any dispute not resolved within [60] days of written notice shall be finally settled by confidential arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules.
(b) Seat and Law. The seat of arbitration shall be Wilmington, Delaware. Judgment on the award may be entered in any court of competent jurisdiction.
(c) Injunctive Relief Carve-Out. Notwithstanding this clause, a party may seek provisional injunctive relief in a Delaware court to preserve the status quo.

8.4 Jury Waiver
The parties acknowledge that jury trials are not available in Delaware trust administration proceedings; accordingly, no waiver clause is necessary.

9. GENERAL PROVISIONS

9.1 Amendment and Waiver
Except as provided in Section 3.3.2, this Agreement may not be amended or waived except by written instrument executed by the Trust Protector and, if adversely affected, the Trustee or the affected Beneficiary.

9.2 Assignment
No party may assign or delegate its rights or duties under this Agreement except as expressly permitted herein.

9.3 Successors and Assigns
This Agreement binds and benefits the parties and their respective successors and permitted assigns.

9.4 Severability
Any provision held invalid or unenforceable shall be severed and the remainder of this Agreement shall remain in full force; the invalid provision shall be reformed to best effectuate the parties’ intent.

9.5 Integration
This Agreement, together with Schedules A–C, constitutes the entire agreement of the parties with respect to the subject matter and supersedes all prior discussions.

9.6 Counterparts; Electronic Signatures
This Agreement may be executed in counterparts, each of which is deemed an original, and all of which constitute one instrument. Signatures delivered electronically or by DocuSign, pdf, or similar means are binding.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, Settlor and Trustee have executed this Agreement as of the Effective Date.

ACKNOWLEDGMENT (Notary)

State of Delaware
County of [__]

On this ___ day of __, 20, before me, the undersigned Notary Public, personally appeared [SETTLOR LEGAL NAME] and [TRUSTEE LEGAL NAME], proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to this instrument, and acknowledged that they executed the same for the purposes therein contained.

Notary Public
My Commission Expires: _____

SCHEDULE A – BENEFICIARIES

SCHEDULE B – INITIAL TRUST ASSETS

(description, account numbers, estimated fair market value)

SCHEDULE C – DISCLOSED LIENS OR ENCUMBRANCES

(if none, state “None”)

[// GUIDANCE: Counsel should add state inheritance tax or federal generation-skipping transfer tax language as needed, and confirm that the duration selected in Section 3.4.3 complies with Delaware’s statutory Rule Against Perpetuities opt-out provisions.]