IRREVOCABLE TRUST AGREEMENT
(Iowa – Chapter 633A Iowa Trust Code)
[// GUIDANCE: This template is drafted for use by Iowa-licensed counsel. Review carefully for client-specific tax, Medicaid, and estate-planning objectives before execution.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Creation and Funding
3.2 Irrevocability
3.3 Trust Purpose and Duration
3.4 Dispositive Provisions
3.5 Trustee Powers and Duties - Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
IRREVOCABLE TRUST AGREEMENT (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
• [SETTLOR LEGAL NAME], an individual residing at [ADDRESS] (“Settlor”); and
• [TRUSTEE LEGAL NAME], whose principal mailing address is [ADDRESS] (“Trustee”).
RECITALS
A. Settlor desires to create an irrevocable trust governed by the Iowa Trust Code, Iowa Code § 633A.1101 et seq., to hold, administer, and distribute the property described herein for the benefit of the Beneficiaries defined below.
B. Trustee is willing to accept the trusteeship and to administer the Trust under the terms of this Agreement.
C. Adequate and lawful consideration is acknowledged by the parties hereto.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:
2. DEFINITIONS
For ease of reference, capitalized terms have the following meanings:
“Accounting” – A written report of Trust income, expenses, assets, liabilities, and distributions prepared in accordance with Iowa Code § 633A.4213.
“Administrative Trustee” – A Trustee appointed solely to perform administrative functions.
“Beneficiary” – Each person or entity listed in Schedule A or otherwise qualifying under Section 3.4.
“Code” – The Internal Revenue Code of 1986, as amended.
“Distribution Date” – The date on which principal or income is required or permitted to be distributed under Section 3.4.
“Trust” – The irrevocable trust created under this Agreement, known as the [TRUST NAME].
“Trust Assets” – All property transferred to and held by the Trust, together with all additions, substitutions, proceeds, and reinvestments thereof.
“Trust Protector” – The person, if any, appointed under Section 3.5(j) with the limited powers therein described.
[// GUIDANCE: Add or delete defined terms to fit the transaction.]
3. OPERATIVE PROVISIONS
3.1 Creation and Funding
(a) Establishment. Settlor hereby irrevocably transfers, assigns, and delivers to Trustee the property listed on Schedule B (the “Initial Corpus”), receipt of which Trustee acknowledges, to be held in trust under this Agreement.
(b) Additional Contributions. Additional property may be added by Settlor or any third party at any time, provided that all such contributions are irrevocable and subject to the terms of this Agreement.
3.2 Irrevocability
(a) No Revocation or Amendment. This Trust is intended to be and shall be irrevocable. Settlor shall have no power, whether alone or in conjunction with any other person, to alter, amend, revoke, or terminate this Agreement, except as may be expressly permitted under Iowa Code § 633A.6301 (judicial modification) or successor provisions.
(b) Limited Administrative Amendments. Trustee, with the written consent of the Trust Protector (if any), may amend purely administrative provisions if, in Trustee’s reasonable judgment, such amendment (i) is necessary to maintain compliance with governing law, or (ii) minimizes taxes without materially diminishing any Beneficiary’s interests.
3.3 Trust Purpose and Duration
(a) Purpose. The primary purpose of the Trust is to (i) hold and protect assets for the Beneficiaries, (ii) provide for management by a fiduciary in accordance with the prudent investor rule (Iowa Code § 633A.4302), and (iii) achieve estate, gift, and generation-skipping transfer tax efficiencies.
(b) Duration. Unless sooner terminated under applicable law, the Trust shall terminate upon the earlier of:
(1) Thirty (30) years after the Effective Date; or
(2) Complete distribution of the Trust Assets.
Upon termination, Trustee shall distribute all remaining Trust Assets outright to the then-living Beneficiaries per stirpes.
3.4 Dispositive Provisions
(a) Income Distributions. Beginning on the Effective Date, Trustee shall distribute net income at least annually to or for the benefit of the Beneficiaries in such shares as Trustee, in Trustee’s sole discretion, deems advisable for health, education, maintenance, or support (“HEMS Standard”).
(b) Principal Distributions. Trustee may distribute principal to Beneficiaries for extraordinary HEMS needs.
(c) Mandatory Termination Distribution. On the Trust’s termination, Trustee shall distribute remaining principal as follows: [INSERT DETAILED SCHEME OR PLACEHOLDERS].
(d) Spendthrift Clause. No Beneficiary shall have the power to anticipate, encumber, or transfer any interest in the Trust, and such interests shall not be subject to creditor claims, to the maximum extent permitted by Iowa Code § 633A.2301.
3.5 Trustee Powers and Duties
Subject to fiduciary duties imposed by Iowa law, Trustee shall have the following powers (non-exclusive):
(a) Investment. Invest and reinvest Trust Assets in any property Trustee deems prudent, including non-traditional assets, without regard to diversification, consistent with Iowa Code § 633A.4302.
(b) Delegation. Delegate investment functions in accordance with Iowa Code § 633A.4303.
(c) Discretionary Distributions. Exercise discretion regarding distributions under Section 3.4.
(d) Tax Matters. Make tax elections, allocate receipts and expenditures between principal and income, and engage advisors.
(e) Accounting. Provide annual Accountings to each current Beneficiary and to any remainder Beneficiary who requests it in writing, consistent with Iowa Code § 633A.4213(2).
(f) Compensation. Receive reasonable compensation and reimbursement of expenses from the Trust Assets.
(g) Removal & Resignation. Trustee may resign upon sixty (60) days’ written notice to Settlor (if living) and the Beneficiaries. A majority in interest of the adult Beneficiaries may remove a Trustee, with or without cause, and appoint a successor Trustee.
(h) Successor Trustee. A successor Trustee shall succeed to all rights, powers, and duties of the predecessor without further act.
(i) Co-Trustees. If more than one Trustee serves, decisions shall be by majority vote unless otherwise provided.
(j) Trust Protector. Settlor hereby appoints [PROTECTOR NAME] (or such person’s successor) as Trust Protector with the limited powers to (i) consent to amendments under Section 3.2(b), (ii) remove or appoint Trustees, and (iii) resolve ambiguities. The Trust Protector is not a fiduciary unless expressly so stated.
4. REPRESENTATIONS & WARRANTIES
4.1 Settlor.
(a) Authority. Settlor has full legal capacity to execute and deliver this Agreement and to transfer the Initial Corpus free of liens.
(b) Ownership. Title to each asset transferred is good and marketable.
4.2 Trustee.
(a) Acceptance. Trustee accepts the office of trustee and agrees to perform in good faith.
(b) Qualification. Trustee is not disqualified from serving under Iowa Code § 633A.4402.
[// GUIDANCE: Insert additional representations (e.g., corporate trustee authority) as needed.]
5. COVENANTS & RESTRICTIONS
5.1 Trustee Covenants. Trustee shall:
(a) Administer the Trust exclusively in the interest of the Beneficiaries;
(b) Act impartially among Beneficiaries;
(c) Keep adequate books and records;
(d) File all required federal and Iowa tax returns.
5.2 Beneficiary Covenants. Each Beneficiary, by accepting distributions, covenants not to challenge the Trust’s validity, except on grounds of Trustee breach of fiduciary duty.
5.3 Notice & Cure. A party asserting breach shall give written notice specifying the breach and allow thirty (30) days to cure before seeking judicial relief.
6. DEFAULT & REMEDIES
6.1 Events of Default.
(a) Trustee’s willful misconduct, gross negligence, or fraudulent act;
(b) Material breach of fiduciary duty unremedied after notice under Section 5.3;
(c) Failure to provide required Accounting within ninety (90) days after written demand.
6.2 Remedies. Upon an Event of Default, any Beneficiary may:
(a) Petition the Iowa probate court for removal of Trustee and appointment of a successor;
(b) Seek surcharge or other equitable relief;
(c) Obtain injunctive relief to prevent dissipation of Trust Assets.
6.3 Attorneys’ Fees. The prevailing party in any proceeding arising under this Agreement shall be entitled to reasonable attorneys’ fees and costs, payable from the Trust Assets unless the court directs otherwise.
7. RISK ALLOCATION
7.1 Indemnification of Trustee. Except for acts involving willful misconduct or gross negligence, Trustee (and its agents) shall be indemnified and held harmless out of the Trust Assets against any claim or liability incurred in good-faith administration of the Trust.
7.2 Limitation of Liability. Trustee’s liability to any person for any act or omission shall be limited to the value of the Trust Assets at the time of judgment, and in no event shall extend to Trustee’s separate assets.
7.3 Insurance. Trustee may purchase fiduciary liability insurance with premiums payable from the Trust.
7.4 Force Majeure. Trustee shall not be liable for failure to perform arising from events beyond its reasonable control, including but not limited to natural disasters, acts of war, pandemics, or changes in law that materially affect administration.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement and all disputes hereunder shall be governed by and construed in accordance with the laws of the State of Iowa, without regard to conflict-of-law principles.
8.2 Exclusive Jurisdiction. The Iowa probate court having jurisdiction over the county where the principal place of administration is located shall have exclusive jurisdiction over all proceedings relating to this Trust.
8.3 Optional Arbitration. Notwithstanding Section 8.2, the parties may agree in writing, after a dispute arises, to submit such dispute to binding arbitration under the Iowa Uniform Arbitration Act. Absent such post-dispute agreement, arbitration shall not be mandated.
8.4 Jury Waiver. To the extent a jury trial might otherwise be available in any proceeding under this Agreement, each party knowingly and voluntarily waives any right to a jury, consistent with Iowa Code § 633.33.
8.5 Injunctive Relief. Nothing herein shall limit any party’s right to seek temporary, preliminary, or permanent injunctive relief to enforce fiduciary duties or prevent waste of Trust Assets.
9. GENERAL PROVISIONS
9.1 Amendment and Waiver. Except as expressly permitted by Section 3.2(b), no amendment or waiver shall be effective unless in a writing signed by Trustee and, where required, the Trust Protector and approved by the probate court if required by law.
9.2 Assignment. No party may assign rights or delegate duties under this Agreement except as expressly permitted herein or by court order.
9.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns.
9.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the court shall construe the Agreement to effectuate its purposes.
9.5 Integration. This Agreement constitutes the entire understanding between the parties and supersedes all prior agreements regarding the subject matter hereof.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original. Signatures transmitted electronically (e.g., PDF, DocuSign) shall be deemed originals.
9.7 Headings. Section headings are for convenience only and do not affect interpretation.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the parties hereto have executed this Irrevocable Trust Agreement as of the Effective Date.
SETTLOR:
[SETTLOR LEGAL NAME]
TRUSTEE:
[TRUSTEE LEGAL NAME], Trustee
[// GUIDANCE: If a corporate trustee, add title block and certification of authority.]
ACKNOWLEDGMENT (Notary)
State of Iowa )
County of __ ) SS
On this _ day of _, 20____, before me, the undersigned, a Notary Public in and for said State, personally appeared [SETTLOR NAME] and [TRUSTEE NAME], to me known to be the identical persons who executed the foregoing instrument, and acknowledged that they executed the same as their voluntary act and deed.
Notary Public in and for the State of Iowa
My commission expires: ___
SCHEDULE A
List of Beneficiaries
1. [NAME, DATE OF BIRTH]
2. …
SCHEDULE B
Initial Corpus
1. [DESCRIPTION OF ASSET] – [$VALUE]
2. …
[// GUIDANCE: Attach additional schedules for life insurance policies, closely-held business interests, or real estate legal descriptions as needed.]