IRREVOCABLE TRUST AGREEMENT
(“[TRUST NAME]”)
(Governed by the Mississippi Uniform Trust Code, Miss. Code Ann. §§ 91-8-101 et seq.)
TABLE OF CONTENTS
- Document Header
- Definitions
- Creation of Trust & Funding
- Irrevocability; Reserved Powers
- Beneficiaries
- Trustee Provisions
- Distributions
- Tax Administration
- Fiduciary Accounting & Reports
- Trustee Indemnification & Limitation of Liability
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Parties.
• Grantor: [GRANTOR FULL LEGAL NAME], residing at [ADDRESS] (“Grantor”).
• Trustee: [TRUSTEE FULL LEGAL NAME], with principal address at [ADDRESS] (“Trustee”).
• Trust: The trust created herein (the “Trust”).
1.2 Recitals.
A. Grantor desires to create an irrevocable trust to hold and administer certain property for the benefit of the Beneficiaries identified below.
B. Trustee is willing to accept the trusteeship in accordance with the terms set forth herein and under the Mississippi Uniform Trust Code (“MUTC”).
C. Grantor, intending to be legally bound, hereby transfers the property described in Schedule A (the “Trust Estate”) to Trustee, to hold in trust for the purposes and upon the terms set forth below.
1.3 Effective Date.
This Agreement is effective as of [EFFECTIVE DATE] (the “Effective Date”).
1.4 Governing Law & Jurisdiction.
This Agreement and the Trust shall be governed by, and construed in accordance with, the laws of the State of Mississippi, including the MUTC, without regard to conflict-of-laws principles. Exclusive jurisdiction for probate and trust administration matters lies in the [COUNTY] County Chancery Court (the “State Probate Court”).
2. DEFINITIONS
For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below. Terms defined in singular include the plural and vice-versa.
“Accountant” – The independent certified public accountant selected pursuant to Section 8.3.
“Beneficiary” or “Beneficiaries” – Each person or entity identified in Section 5.1 and any successor Beneficiary entitled to distributions.
“Distribution Standard” – The standard set forth in Section 7.1 governing discretionary distributions.
“Incumbent Trustee” – The Trustee then serving, including any successor or Co-Trustee.
“Internal Revenue Code” or “IRC” – The Internal Revenue Code of 1986, as amended.
“Protected Person” – Each Incumbent Trustee, former Trustee, Trust Protector (if any), and any officer, employee, or agent of the foregoing, in their fiduciary and personal capacities.
“Spendthrift Provision” – The restriction on voluntary or involuntary transfer of a Beneficiary’s interest described in Section 5.4.
“Trust Estate” – All property held by Trustee, tangible or intangible, real or personal, and all additions thereto.
[// GUIDANCE: Add or delete definitions to mirror custom drafting. Ensure all defined terms are used consistently.]
3. CREATION OF TRUST & FUNDING
3.1 Transfer of Property. Grantor hereby irrevocably assigns, conveys, and delivers to Trustee the property listed on Schedule A, receipt of which Trustee acknowledges.
3.2 Additional Contributions. With Trustee’s consent, any person may transfer additional property to the Trust, which shall become part of the Trust Estate and be governed by this Agreement.
3.3 Separate Accounting. Trustee may maintain separate accounting records for each class of property or separate share established under Section 5.3.
4. IRREVOCABILITY; RESERVED POWERS
4.1 Irrevocable Trust. This Trust is irrevocable. Except as expressly provided in Section 4.2, Grantor relinquishes all right, power, and authority, whether alone or in conjunction with others, to alter, amend, revoke, or terminate the Trust.
4.2 Limited Reserved Powers.
(a) Power of Appointment. Grantor reserves a testamentary special power of appointment, exercisable solely by specific reference to this power in Grantor’s duly executed last will and testament, to appoint any part or all of the Trust Estate in favor of one or more of the Beneficiaries’ descendants.
(b) Grantor Consent to Trustee Resignation. Grantor’s written consent shall be required for any resignation of Trustee prior to Grantor’s death.
[// GUIDANCE: Delete or tailor reserved powers to avoid grantor-trust status if a non-grantor trust is desired.]
5. BENEFICIARIES
5.1 Primary Beneficiaries. The Primary Beneficiaries are:
• [BENEFICIARY NAME #1], born [DOB];
• [BENEFICIARY NAME #2], born [DOB]; and
• [ETC.]
5.2 Contingent Beneficiaries. If no Primary Beneficiary survives the Grantor, the Contingent Beneficiaries shall be [NAMES].
5.3 Separate Shares. Upon the death of Grantor, Trustee shall divide the Trust Estate into equal separate shares for each then-living Primary Beneficiary.
5.4 Spendthrift Provision. To the maximum extent permitted by Miss. Code Ann. § 91-8-502 and § 91-8-503, a Beneficiary’s interest shall not be subject to voluntary or involuntary transfer, assignment, pledge, alienation, or attachment.
5.5 Beneficiary Information Rights. In accordance with Miss. Code Ann. § 91-8-813:
(a) Mandatory Notices. Trustee shall notify each qualified Beneficiary of Trustee’s acceptance and furnish a copy of this Agreement within sixty (60) days after the Effective Date.
(b) Reports. Trustee shall provide annual reports under Section 9.1.
6. TRUSTEE PROVISIONS
6.1 Acceptance. Trustee accepts the office of trustee and the duties hereunder.
6.2 General Powers. Except as limited herein, Trustee shall have the powers granted by Miss. Code Ann. § 91-8-815, including, without limitation, the power to:
(a) invest and reinvest Trust assets;
(b) sell, lease, or exchange Trust property;
(c) borrow money and encumber Trust property as security; and
(d) employ professionals and delegate duties consistent with § 91-8-807.
6.3 Successor Trustee.
(a) Appointment. If the office of Trustee becomes vacant, [ALTERNATE TRUSTEE] shall serve. If that person is unable or unwilling, the majority of adult Beneficiaries may appoint a successor Trustee.
(b) Vesting of Title. Title to the Trust Estate shall vest in any successor Trustee without the necessity of a conveyance.
6.4 Co-Trustees. Grantor may designate a Co-Trustee by written instrument. Unless expressly stated, each Co-Trustee may act independently.
6.5 Trustee Compensation. Trustee shall be entitled to reasonable compensation in accordance with Miss. Code Ann. § 91-8-708 or as separately agreed in writing.
7. DISTRIBUTIONS
7.1 Discretionary Distributions During Grantor’s Lifetime. Trustee may distribute to or for the benefit of any Primary Beneficiary such amounts from net income or principal as Trustee, in Trustee’s sole and absolute discretion, determines advisable for the Beneficiary’s health, education, maintenance, or support (the “Distribution Standard”).
7.2 Mandatory Distributions After Grantor’s Death. Commencing with the first calendar quarter following Grantor’s death, Trustee shall distribute the net income of each Beneficiary’s separate share at least annually.
7.3 Termination of Separate Share. A Beneficiary’s share shall terminate upon the later of (i) the Beneficiary’s attainment of age [AGE], or (ii) the Beneficiary’s death. Upon termination, the remaining principal shall be distributed outright to such Beneficiary or, if deceased, pursuant to Section 5.2.
7.4 Accumulations. Any undistributed income shall be added to principal.
8. TAX ADMINISTRATION
8.1 Tax Status Election. [SELECT ONE:]
• ☐ Grantor Trust. The Trust shall be treated as a grantor trust pursuant to IRC §§ 671–679.
• ☐ Non-Grantor Trust. The Trust shall be treated as a separate taxable entity under Subchapter J of the IRC.
[// GUIDANCE: Electing non-grantor status may avoid inclusion of Trust assets in Grantor’s estate but could trigger higher compressed trust tax brackets.]
8.2 Tax Returns. Trustee shall file all required federal, state, and local tax returns.
8.3 Allocation of Taxes. Any income taxes attributable to Trust income shall be paid from the Trust Estate unless otherwise required by the IRC.
9. FIDUCIARY ACCOUNTING & REPORTS
9.1 Annual Report. Within ninety (90) days after the close of each fiscal year, Trustee shall provide to each qualified Beneficiary:
(a) a statement of receipts, disbursements, and distributions;
(b) a balance sheet of all Trust assets and liabilities; and
(c) a statement of Trustee fees.
9.2 Interim Report. A Beneficiary may request, not more than quarterly, an interim report; Trustee may charge the reasonable cost of preparation to that Beneficiary’s interest.
10. TRUSTEE INDEMNIFICATION & LIMITATION OF LIABILITY
10.1 Indemnification. To the fullest extent permitted by law, the Trust Estate shall indemnify each Protected Person against any claim, liability, loss, cost, or expense (including reasonable attorneys’ fees) arising from the administration of the Trust, except to the extent caused by such person’s bad faith, reckless indifference, or intentional misconduct.
10.2 Liability Cap. No Protected Person shall be personally liable for any obligation except to the extent of the Trust Estate under such person’s control at the time the liability is enforced.
10.3 Exculpation. A Protected Person who acts in accordance with the Distribution Standard and exercises reasonable care and prudence shall not be liable for any decrease in Trust value.
11. DEFAULT & REMEDIES
11.1 Events of Default. For purposes of this Agreement, each of the following constitutes an Event of Default:
(a) Trustee’s breach of fiduciary duty established by final, non-appealable order of the State Probate Court;
(b) insolvency or incapacity of Trustee; or
(c) failure to provide required reports under Section 9.1 within thirty (30) days after written notice.
11.2 Notice & Cure. The Grantor (if living) or any qualified Beneficiary may give written notice specifying the Event of Default. Trustee shall have thirty (30) days to cure.
11.3 Remedies. Upon uncured default, the State Probate Court may:
(a) compel performance;
(b) enjoin further breaches;
(c) remove or suspend Trustee;
(d) surcharge Trustee; and/or
(e) award attorneys’ fees and costs to the prevailing party.
12. RISK ALLOCATION
12.1 Insurance. Trustee may, but is not required to, insure Trust property against casualty and liability risks.
12.2 Force Majeure. Trustee shall not be liable for loss caused by acts of God, governmental action, war, terrorism, cyber-attack, pandemic, labor unrest, or other events beyond Trustee’s reasonable control.
12.3 Allocation of Expenses. Except as otherwise provided, Trust expenses shall be charged first against income and then against principal.
13. DISPUTE RESOLUTION
13.1 Governing Law. Mississippi law governs all matters arising under this Agreement.
13.2 Venue. The [COUNTY] County Chancery Court has exclusive venue for any judicial proceeding relating to the Trust.
13.3 Arbitration. [ARBITRATION_ELECTION]
• If “ELECTED”: Any dispute not subject to mandatory probate jurisdiction shall be resolved by binding arbitration under the Commercial Rules of the American Arbitration Association.
• If “NOT ELECTED”: This Section 13.3 is intentionally omitted.
13.4 Injunctive Relief. Nothing herein limits a party’s right to seek temporary, preliminary, or permanent injunctive relief from the State Probate Court for Trust enforcement purposes.
13.5 Jury Waiver. To the extent a matter is properly before a court of law and a jury is otherwise available, the parties acknowledge that Mississippi probate proceedings are tried without a jury pursuant to state law.
14. GENERAL PROVISIONS
14.1 Amendments & Reformation. Because the Trust is irrevocable, this Agreement may be modified only (i) by court order under MUTC §§ 91-8-411 through 91-8-416, or (ii) as otherwise permitted by applicable law.
14.2 Severability. If any provision is held invalid, the remaining provisions shall remain in full force, and a court may reform the invalid provision to the minimum extent necessary to achieve Grantor’s intent.
14.3 Assignment. Except as expressly provided, no party may assign its rights or obligations hereunder.
14.4 Integration. This Agreement constitutes the entire understanding among the parties with respect to the Trust and supersedes all prior agreements.
14.5 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and signature pages may be exchanged electronically with the same force and effect as original signatures.
15. EXECUTION BLOCK
IN WITNESS WHEREOF, Grantor and Trustee have executed this Irrevocable Trust Agreement as of the Effective Date.
| Grantor | |
|---|---|
| _______ | Date: ___ |
| [GRANTOR NAME] |
| Trustee | |
|---|---|
| _______ | Date: ___ |
| [TRUSTEE NAME], Trustee |
NOTARY ACKNOWLEDGMENT
State of Mississippi
County of [COUNTY]
On this _ day of _, 20__, before me, the undersigned authority, personally appeared [GRANTOR NAME] and [TRUSTEE NAME], personally known to me or proved 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 – INITIAL TRUST PROPERTY
- [DESCRIPTION OF ASSET #1]
- [DESCRIPTION OF ASSET #2]
- Add additional items as necessary.
[// GUIDANCE:
1. Consult Mississippi counsel for alignment with the latest MUTC amendments.
2. Review federal and state estate and gift tax consequences of any reserved powers (see IRC §§ 2036-2038).
3. Confirm that arbitration clauses do not conflict with mandatory probate jurisdiction.
4. Attach separate Trustee fee schedule if compensation formula is required.
5. If real property is included, consider recording a Memorandum of Trust (Miss. Code Ann. § 91-8-1013) to protect confidentiality while establishing record notice.]