[TRUST NAME]
Irrevocable Trust Agreement
(Governed by Louisiana Law)
[// GUIDANCE: This template is drafted to comply with the Louisiana Trust Code (“LTC”) and is formatted for immediate attorney customization. Replace all bracketed placeholders and tailor optional provisions to the particular facts of the matter. Where alternative language is offered, select and delete the inapplicable option.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Parties
This Irrevocable Trust Agreement (the “Agreement”) is made and entered into effective as of [EFFECTIVE DATE] (the “Effective Date”) by and among:
a. [SETTLOR FULL LEGAL NAME], an individual domiciled in the Parish of [PARISH], State of Louisiana (“Settlor”);
b. [TRUSTEE FULL LEGAL NAME], [an individual / a Louisiana banking institution] having its principal place of business at [ADDRESS] (“Trustee”); and
c. The persons identified herein as beneficiaries (each, a “Beneficiary,” and collectively, the “Beneficiaries”).
1.2 Recitals
A. Settlor desires to create an irrevocable trust under the LTC to hold, manage, and distribute certain property for the benefit of the Beneficiaries.
B. Trustee is willing to accept the trust estate and administer it in accordance with the terms and conditions set forth herein.
C. The parties intend that this trust be treated as [a grantor / non-grantor] trust for federal and Louisiana income tax purposes.
D. All acts necessary to create a valid Louisiana trust—namely execution before two (2) witnesses and a Louisiana notary public—shall be satisfied contemporaneously with the execution of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, Settlor irrevocably transfers, assigns, and delivers to Trustee the property described in Schedule A attached hereto (the “Trust Estate”), to be held, administered, and distributed as follows:
2. DEFINITIONS
For purposes of this Agreement, capitalized terms shall have the meanings set forth below. Defined terms appear in bold italics the first time they are used.
“Accounting Period” – Each calendar year ending December 31, or such other fiscal year as Trustee may select.
“Adult Beneficiary” – Any Beneficiary who has attained the age of majority under Louisiana law.
“Applicable Law” – The Louisiana Trust Code, federal tax law, and any other law or regulation that governs the validity, construction, and administration of this Trust.
“Disinterested Person” – An individual who is not (i) a Beneficiary, (ii) a related or subordinate party to Settlor within the meaning of § 672(c) of the Internal Revenue Code, or (iii) employed by or related to Trustee.
“Qualified Appointee” – Any person or entity eligible to receive Trust Estate assets pursuant to a valid exercise of a power of appointment granted herein.
[Add additional definitions as required by the specific trust design.]
3. OPERATIVE PROVISIONS
3.1 Irrevocability
3.1.1 Settlor expressly waives and relinquishes any and all rights to revoke, amend, or terminate this Trust, except as expressly provided in Section 3.1.3.
3.1.2 Neither Settlor nor any other person shall hold or exercise a power that would cause inclusion of the Trust Estate in Settlor’s gross estate beyond the limited powers reserved herein.
3.1.3 Administrative Modifications. Trustee may, without affecting the substantive dispositive provisions, amend this Agreement (i) to comply with changes in Applicable Law, (ii) to secure favorable tax treatment, or (iii) to correct scrivener’s errors, provided that any such amendment shall not enlarge Trustee’s compensation or reduce any Beneficiary’s vested interest without court approval.
3.2 Trust Estate & Contributions
Settlor hereby delivers to Trustee the property listed on Schedule A, receipt of which Trustee acknowledges. Additional property may be contributed to the Trust Estate at any time by Settlor or any third party with Trustee’s consent, provided such contributions are accepted in writing by Trustee.
3.3 Dispositive Provisions
3.3.1 Income Distributions. During Settlor’s lifetime, Trustee shall distribute all net income [quarterly / annually / in Trustee’s discretion] to [PRIMARY INCOME BENEFICIARY].
3.3.2 Principal Distributions. Trustee may, in its sole and absolute discretion, distribute principal to or for the health, education, maintenance, or support of any Beneficiary.
3.3.3 Termination & Remainder. Upon the earlier of (a) the death of the last living Beneficiary, or (b) the date twenty-one (21) years after the death of the last survivor of Settlor’s descendants alive on the Effective Date, Trustee shall distribute the remaining Trust Estate to the then-living descendants of Settlor, per stirpes.
[// GUIDANCE: Louisiana has abolished the common-law Rule Against Perpetuities; however, tax considerations may warrant a limiting provision.]
3.4 Trustee Powers
Except as limited herein, Trustee shall have all powers granted under the LTC, including, without limitation, the powers to invest, reinvest, sell, lease, borrow against, and otherwise manage Trust Estate assets.
3.5 Accounting & Information Rights
3.5.1 Trustee shall maintain complete and accurate books and records.
3.5.2 Within ninety (90) days after each Accounting Period, Trustee shall deliver a written accounting to each Adult Beneficiary.
3.5.3 Each Adult Beneficiary may, upon reasonable notice, inspect Trust records during normal business hours.
4. REPRESENTATIONS & WARRANTIES
4.1 Settlor
a. Settlor has full legal capacity and title to convey the Trust Estate free and clear of liens;
b. Execution of this Agreement does not violate any court order, contract, or Applicable Law; and
c. Assets transferred are Settlor’s [separate / community] property.
4.2 Trustee
a. Trustee has authority to serve and to accept the Trust Estate;
b. Trustee is not disqualified under Applicable Law; and
c. Trustee shall faithfully discharge its duties in accordance with this Agreement and the LTC.
4.3 Survival – The representations and warranties shall survive execution and continue for the duration of the Trust.
5. COVENANTS & RESTRICTIONS
5.1 Settlor Covenants
Settlor shall execute any instruments and take all actions reasonably requested by Trustee to perfect title to the Trust Estate.
5.2 Trustee Covenants
a. Fiduciary Standard – Trustee shall act with the prudence and care of a professional fiduciary.
b. Tax Reporting – Trustee shall timely file all required federal and Louisiana tax returns.
c. Confidentiality – Trustee shall keep Trust matters confidential except as required by law or this Agreement.
5.3 Negative Covenants
Trustee shall not:
i. Engage in any act of self-dealing prohibited by the LTC or the Internal Revenue Code;
ii. Commingle Trust assets with non-trust assets; or
iii. Make distributions that would subject the Trust to generation-skipping transfer tax without consulting tax counsel.
6. DEFAULT & REMEDIES
6.1 Events of Default
a. Willful misconduct, fraud, or gross negligence by Trustee;
b. Failure of Trustee to render an accounting within thirty (30) days after written demand;
c. Breach of fiduciary duty determined by a court of competent jurisdiction.
6.2 Notice & Cure
Beneficiaries shall provide written notice specifying the default. Trustee shall have thirty (30) days to cure the default unless such default is incapable of cure.
6.3 Remedies
a. Removal and replacement of Trustee;
b. Surcharge against Trustee limited as set forth in Section 7.2;
c. Injunctive relief to prevent further breach;
d. Recovery of reasonable attorneys’ fees and costs by the prevailing party.
7. RISK ALLOCATION
7.1 Indemnification of Trustee
The Trust Estate shall indemnify and hold Trustee harmless from and against any claim, loss, or liability arising out of the administration of the Trust, except to the extent caused by Trustee’s willful misconduct or gross negligence.
7.2 Limitation of Liability
Trustee’s liability to all persons, including Beneficiaries, shall be limited to the value of the Trust Estate; Trustee shall not be personally liable for any obligations of the Trust.
7.3 Insurance
Trustee may obtain fiduciary liability insurance, the premiums of which shall be paid from the Trust Estate.
7.4 Force Majeure
Trustee shall not be liable for failure to perform obligations where such failure is caused by acts of God, natural disasters, governmental actions, or other events beyond Trustee’s reasonable control.
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 Louisiana, without regard to its conflict-of-laws rules.
8.2 Forum Selection
The courts having probate jurisdiction in [PARISH] Parish, Louisiana shall have exclusive jurisdiction over all proceedings concerning the Trust, except as provided in Section 8.3.
8.3 Arbitration (Optional)
[OPTION 1 – OMIT ENTIRE SECTION]
[OPTION 2 – INSERT]
Any dispute that is not required to be heard exclusively in probate court shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 Jury Waiver
To the extent a matter is triable in civil court, the parties knowingly and voluntarily waive the right to a trial by jury.
8.5 Injunctive Relief
Nothing herein shall limit any party’s right to seek temporary, preliminary, or permanent injunctive relief to enforce the terms of this Trust.
9. GENERAL PROVISIONS
9.1 Amendment & Waiver
Except as expressly permitted in Section 3.1.3, this Agreement may not be amended or waived. No waiver shall be deemed a waiver of subsequent breaches.
9.2 Assignment
No Beneficiary may voluntarily or involuntarily transfer, assign, or encumber any interest in the Trust Estate, and all such interests shall be subject to a spendthrift restriction.
9.3 Successors & 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 invalid provision shall be reformed to the minimum extent necessary to effectuate the parties’ intent.
9.5 Entire Agreement
This Agreement, together with Schedule A and any ancillary instruments, constitutes the entire agreement of the parties regarding the subject matter hereof.
9.6 Counterparts; Electronic Signatures
This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. Signatures delivered via electronic means shall be deemed original for all purposes.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, Settlor and Trustee have executed this Irrevocable Trust Agreement on the Effective Date first above written.
| SETTLOR | [SETTLOR NAME] | Date: ______ |
| TRUSTEE | [TRUSTEE NAME] | Date: ______ |
WITNESSES
1. ____
2. ____NOTARY PUBLIC
Sworn to and subscribed before me this ___ day of ____, 20__, in the Parish of [PARISH], State of Louisiana.
Notary Public
Notary ID No.: __
My commission expires: _____
Schedule A – Initial Trust Property
[Detailed description of assets transferred to the Trust.]
[// GUIDANCE: Review Louisiana Civil Code art. 2338 et seq. if community property is involved, confirm gift-splitting treatment for federal gift tax, and ensure compliance with IRC §§ 671–679 for grantor trust planning.]