IRREVOCABLE TRUST AGREEMENT
(Indiana-Law Governed)
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Creation of Trust & Funding
3.2 Purpose & Intent
3.3 Irrevocability - Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
IRREVOCABLE TRUST AGREEMENT (the “Agreement”) is entered into and effective as of [EFFECTIVE DATE] (the “Effective Date”) by and among:
• [SETTLOR LEGAL NAME], an individual residing at [ADDRESS] (“Settlor”);
• [TRUSTEE LEGAL NAME], a [STATE] [individual/corporation/bank] with an address at [ADDRESS] (“Trustee”); and
• The persons identified herein as Beneficiaries.
Recitals
A. Settlor desires to establish an irrevocable trust under the laws of the State of Indiana for the benefit of the Beneficiaries.
B. Trustee is willing to accept the trusteeship and to hold, manage, and distribute the Trust Estate in accordance with this Agreement and Indiana Code Title 30, Article 4 (the “Indiana Trust Code”).
C. The parties desire to set forth their respective rights, duties, and obligations with respect to the Trust.
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:
2. DEFINITIONS
For ease of reference, capitalized terms are defined alphabetically below. Defined terms include the singular and plural and any gender, unless otherwise indicated.
“Accounting Period” – Each calendar year ending December 31, unless Trustee selects another fiscal year.
“Affiliate” – Any person or entity that, directly or indirectly, controls, is controlled by, or is under common control with a party.
“Agreement” – This Irrevocable Trust Agreement, including all amendments, schedules, and exhibits.
“Arbitration Rules” – The Commercial Arbitration Rules of the American Arbitration Association then in effect.
“Beneficiaries” – The persons or entities listed on Schedule A, as the same may be updated pursuant to Section 3.4.
“Code” – The Internal Revenue Code of 1986, as amended.
“Contingent Beneficiary” – A Beneficiary who becomes eligible to receive distributions only upon the occurrence of a condition precedent stated herein.
“Distribution Committee” – Any committee appointed under Section 5.3 to advise Trustee regarding discretionary distributions.
“Effective Date” – The date first written above, or, if assets are transferred subsequently, the date when initial Trust Property is transferred, whichever is later.
“Fiduciary” – Has the meaning set forth in Ind. Code § 30-4-1-2(6).
“Force Majeure Event” – Section 7.4 defines.
“Indiana Trust Code” – Ind. Code tit. 30, art. 4, as amended from time to time.
“Person” – Any natural person, corporation, partnership, trust, limited liability company, association, governmental authority, or other entity.
“Required Notice” – Written notice delivered in accordance with Section 9.5.
“Settlor” – Defined in Section 1.
“Trust” – The irrevocable trust created hereby.
“Trust Estate” – All property transferred to or otherwise acquired by Trustee under this Agreement, including all substitutes, additions, accretions, accumulated income, and reinvestments thereof.
“Trustee” – Defined in Section 1, and any successor trustee appointed in accordance with Section 5.5.
[// GUIDANCE: Add additional defined terms as needed for specialized assets (e.g., “Closely-Held Stock,” “Digital Assets”).]
3. OPERATIVE PROVISIONS
3.1 Creation of Trust & Funding
3.1.1 Establishment. Settlor hereby irrevocably transfers, assigns, and delivers to Trustee the property described in Schedule B (the “Initial Contribution”) to hold in trust, subject to the terms of this Agreement. Additional property may be added only as provided in Section 3.1.4.
3.1.2 Name. The Trust shall be known as the “[CUSTOM TRUST NAME]” (the “Trust”).
3.1.3 Acceptance. Trustee accepts the Trust on the terms herein and acknowledges receipt of the Initial Contribution.
3.1.4 Additional Contributions. With Trustee’s written consent, any Person may transfer property to the Trust, provided such property becomes part of the Trust Estate and is subject to this Agreement.
[// GUIDANCE: For life-insurance funded trusts, attach policy assignments in Exhibit 1.]
3.2 Purpose & Intent
(a) Provide for the health, education, maintenance, and support of the Beneficiaries;
(b) Facilitate long-term family wealth preservation and asset protection;
(c) Minimize federal and state transfer taxes; and
(d) Shield Trust assets from Beneficiaries’ creditors to the fullest extent permitted by law, including Indiana’s spendthrift provisions.
3.3 Irrevocability
3.3.1 No Revocation. This Trust is irrevocable. Settlor expressly waives all rights, whether under common law or statute, to revoke, amend, or terminate this Agreement, except as expressly permitted in Section 3.3.3.
3.3.2 No Reversionary Interest. Except as provided in Section 8.2 (Reimbursement for Taxes), no portion of the Trust Estate shall revert to Settlor.
3.3.3 Limited Modifications.
(a) Trustee may, without court approval, merge, consolidate, or decant the Trust into a new trust for the same Beneficiaries to:
i. comply with changes in tax law;
ii. preserve asset-protection features; or
iii. enhance administrative efficiency.
(b) Any such action must comply with applicable Indiana law and shall not increase any Beneficiary’s current beneficial interest.
[// GUIDANCE: Indiana’s decanting statute (Ind. Code § 30-4-3-36) permits this flexibility.]
3.3.4 Spendthrift. The interest of each Beneficiary is subject to a spendthrift trust under Ind. Code § 30-4-3-2; no Beneficiary may voluntarily or involuntarily transfer, assign, or encumber such interest, and no creditor may reach it prior to actual receipt.
3.4 Beneficiaries
3.4.1 Primary and Contingent Beneficiaries are listed on Schedule A.
3.4.2 Trustee shall maintain an up-to-date register of Beneficiaries.
4. REPRESENTATIONS & WARRANTIES
4.1 Settlor. Settlor represents and warrants that:
(a) Settlor has full legal capacity and authority to execute and deliver this Agreement and to transfer the property described in Schedule B;
(b) The property so transferred is free of liens, claims, or encumbrances, except as disclosed in Schedule B; and
(c) Execution, delivery, and performance of this Agreement do not violate any court order or contract to which Settlor is a party.
4.2 Trustee. Trustee represents and warrants that:
(a) Trustee is duly qualified and, if an entity, in good standing under applicable law;
(b) Trustee has taken all actions necessary to authorize acceptance of the trusteeship;
(c) Trustee has not been suspended or removed as a fiduciary by any court; and
(d) Trustee shall administer the Trust in good faith and in accordance with the Indiana Trust Code and this Agreement.
4.3 Survival. The representations and warranties in this Section 4 survive the execution of this Agreement.
5. COVENANTS & RESTRICTIONS
5.1 Trustee’s Standard of Care. Trustee shall act as a prudent person familiar with the duties of a trustee, exercising reasonable care, skill, and caution.
5.2 Powers of Trustee. Subject to Section 5.1 and except as otherwise expressly limited, Trustee shall have all powers granted to trustees under the Indiana Trust Code, including power to:
(a) invest and reinvest Trust Estate assets, using modern portfolio theory;
(b) retain non-income-producing assets;
(c) borrow money and encumber Trust assets;
(d) participate in partnerships, LLCs, and corporations;
(e) compromise, arbitrate, or litigate claims;
(f) employ and rely on advice of professionals;
(g) allocate receipts and expenses between income and principal; and
(h) perform all acts necessary for proper administration.
[// GUIDANCE: Indiana recognizes delegation of investment functions (Ind. Code § 30-4-3-33). Consider naming an Investment Advisor.]
5.3 Distribution Discretion.
(a) Mandatory Distributions. None, unless expressly stated in Schedule C.
(b) Discretionary Distributions. Trustee may distribute to or for the benefit of any Beneficiary such amounts as Trustee deems advisable for health, education, maintenance, and support (“HEMS”), considering other available resources.
(c) Distribution Committee. Settlor may appoint a Distribution Committee to make non-fiduciary distribution recommendations.
5.4 Trustee Compensation & Expenses. Trustee is entitled to:
(a) reasonable compensation consistent with market rates; and
(b) reimbursement from the Trust Estate for properly incurred expenses.
5.5 Successor Trustee.
(a) Resignation. Trustee may resign by giving 30 days’ Required Notice to Settlor (if living) and all adult Beneficiaries.
(b) Removal. A majority of adult income Beneficiaries may remove Trustee for cause (as defined in Schedule D) and appoint a qualified successor.
(c) Vacancy. If no successor is designated, a court of competent jurisdiction sitting in probate in [COUNTY], Indiana shall appoint one.
5.6 Notice & Information Rights. Trustee shall provide an annual written accounting within 90 days after each Accounting Period and, upon reasonable request, furnish trust-related information to Beneficiaries as required under Ind. Code § 30-4-5-12.
6. DEFAULT & REMEDIES
6.1 Events of Default.
(a) Trustee’s breach of fiduciary duty, willful misconduct, or gross negligence;
(b) Failure to provide required accountings within 60 days after written demand;
(c) Insolvency or legal incapacity of Trustee.
6.2 Cure Period. Trustee shall have 30 days after receipt of Required Notice to cure an Event of Default, if curable.
6.3 Remedies.
(a) Removal and replacement of Trustee;
(b) Injunctive relief from the [SPECIFIED COUNTY] Probate Court;
(c) Surcharge and monetary damages limited to the Trust Estate;
(d) Attorneys’ fees and costs as additional Trust expenses.
7. RISK ALLOCATION
7.1 Indemnification. Trustee, and each director, officer, employee, or agent thereof (each, an “Indemnitee”), shall be indemnified and held harmless out of the Trust Estate against all claims, liabilities, and expenses arising out of administration of the Trust, except to the extent resulting from the Indemnitee’s fraud, bad faith, or willful misconduct.
7.2 Limitation of Liability. No Indemnitee shall be personally liable to any Beneficiary for any act or omission performed in good faith and in accordance with this Agreement, and the sole source of recovery shall be the Trust Estate.
7.3 Insurance. Trustee may obtain fiduciary liability insurance, premiums of which shall be paid from the Trust Estate.
7.4 Force Majeure. Trustee is excused from performance of non-monetary obligations during, and to the extent caused by, events beyond Trustee’s reasonable control (“Force Majeure Event”), including acts of God, war, terrorism, pandemics, governmental action, or supply-chain disruption. Trustee shall give prompt Required Notice and use commercially reasonable efforts to mitigate.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement and the Trust shall be governed by and construed in accordance with the laws of the State of Indiana, without regard to conflict-of-laws principles.
8.2 Forum Selection; Exclusive Jurisdiction. The probate/superior court of competent jurisdiction sitting in [COUNTY], Indiana shall have exclusive jurisdiction over all matters relating to the Trust (“Designated Court”).
8.3 Arbitration (Optional).
(a) Election. [CHECK ONE] ☐ Arbitration Elected ☐ Arbitration Not Elected
(b) Scope. If elected, any dispute other than (i) requests for injunctive relief under Section 6.3(b) or (ii) matters subject to mandatory court supervision shall be resolved by confidential, binding arbitration in [CITY], Indiana, before a single arbitrator appointed under the Arbitration Rules.
(c) Judgment. Judgment on an arbitral award may be entered in any court of competent jurisdiction.
8.4 Jury Trial Waiver. To the extent a civil proceeding is filed in the Designated Court, the parties waive the right to a jury trial, consistent with Ind. Trial Rule 38 and public-policy limitations on probate jury trials.
8.5 Injunctive Relief. Notwithstanding any other provision, the Designated Court may issue temporary, preliminary, or permanent injunctive relief to enforce this Agreement and protect Trust assets.
9. GENERAL PROVISIONS
9.1 Amendment & Waiver. Except as expressly permitted in Section 3.3.3, this Agreement may not be amended or waived. Any permissible amendment must be in a writing executed by Trustee and, if required, the party whose rights are affected.
9.2 Assignment. No party may assign rights or delegate duties hereunder except as expressly allowed (e.g., successor Trustee). Any prohibited assignment is void.
9.3 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the parties and their 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 invalid provision shall be reformed to the minimum extent necessary to achieve its intended purpose.
9.5 Notices. All notices must be in writing and delivered (i) personally, (ii) by certified U.S. mail, return receipt requested, (iii) by nationally recognized overnight courier, or (iv) by secure electronic delivery with proof of receipt, to the addresses set forth in the preamble (or as updated by Required Notice). Notice is effective upon receipt or refusal.
9.6 Integration. This Agreement constitutes the entire agreement among the parties with respect to the Trust and supersedes all prior agreements or understandings relating thereto.
9.7 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which is deemed an original, and all of which constitute one instrument. Signatures delivered by PDF, facsimile, or compliant e-signature platform shall be deemed originals.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the parties have executed this Irrevocable Trust Agreement as of the Effective Date.
Settlor:
[SETTLOR LEGAL NAME]
Date: _______
Trustee:
[TRUSTEE LEGAL NAME]
Title (if entity): ___
Date: _____
[OPTIONAL] Trust Protector:
[TRUST PROTECTOR NAME]
Date: _______
STATE OF __ )
) SS:
COUNTY OF __ )
On this _ day of __, 20__, before me, a Notary Public, personally appeared [SETTLOR NAME] and [TRUSTEE NAME], known to me (or satisfactorily proven) to be the persons whose names are subscribed to the foregoing instrument, and acknowledged that they executed the same for the purposes therein contained.
Notary Public
My commission expires: ____
SCHEDULE A – BENEFICIARIES
[List of Primary and Contingent Beneficiaries, dates of birth, and relationship to Settlor]
SCHEDULE B – INITIAL CONTRIBUTION
[Detailed description of cash, securities, insurance policies, real estate, or other property]
SCHEDULE C – MANDATORY DISTRIBUTIONS (IF ANY)
[Describe required distributions, e.g., tuition payments, milestones]
SCHEDULE D – “CAUSE” FOR TRUSTEE REMOVAL
- Fraud, embezzlement, or misappropriation of Trust assets
- Felony conviction involving dishonesty
- Willful or grossly negligent breach of fiduciary duty
- Persistent failure to render accountings within 120 days after due
[// GUIDANCE: Customize schedules thoroughly; attach valuation statements and tax basis data for contributed assets.]
END OF DOCUMENT