Irrevocable Trust

IRREVOCABLE TRUST AGREEMENT

[NEBRASKA UNIFORM TRUST CODE – NEB. REV. STAT. § 30-3801 ET SEQ.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

THIS IRREVOCABLE TRUST AGREEMENT (the “Agreement”) is made and entered into effective as of [EFFECTIVE DATE] (the “Effective Date”), by and among:

1. [SETTLOR NAME], an individual residing at [ADDRESS] (“Settlor”);
2. [TRUSTEE NAME], [individual | Nebraska corporation | Nebraska bank], having its principal place of business at [ADDRESS] (“Trustee”); and
3. The persons identified herein as Beneficiaries (collectively, “Beneficiaries,” and individually, a “Beneficiary”).

Recitals
A. Pursuant to Neb. Rev. Stat. § 30-3801 et seq. (Nebraska Uniform Trust Code, hereinafter “NUTC”), the Settlor desires to create an irrevocable trust (the “Trust”) for the benefit of the Beneficiaries.
B. The Trust is intended to qualify as [select: “a grantor trust” | “a non-grantor trust”] for federal income tax purposes under [26 U.S.C. §§ 671–679].
C. The Trustee is willing to accept the trusteeship and perform the duties herein set forth.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

II. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below. Defined terms appear alphabetically for ease of reference.

“Accounting Period” means each calendar year ending December 31, unless otherwise required by law or elected by the Trustee.
“Applicable Law” means the NUTC, the Internal Revenue Code of 1986, as amended (the “Code”), and all other federal or Nebraska statutes, regulations, and common-law principles governing the Trust.
“Beneficiary” / “Beneficiaries” has the meaning stated in the Document Header and Article III, Section 3.1.
“Corpus” means all property transferred to, held by, or otherwise constituting the Trust, together with reinvestments, accretions, and substitutions thereof.
“Event of Default” has the meaning given in Article VI.
“Person” includes any natural person, trust, estate, partnership, corporation, limited liability company, association, or other entity recognized by law.
“Trustee” means the trustee appointed in this Agreement and any successor appointed in accordance with Article V.

III. OPERATIVE PROVISIONS

3.1 Creation & Funding of Trust
(a) Establishment. Settlor hereby establishes the Trust under Nebraska law and irrevocably transfers, conveys, and assigns to the Trustee the property described in Schedule A (the “Initial Corpus”), to be held, administered, and distributed in accordance with this Agreement.
(b) Additional Contributions. The Trustee may accept additional property from the Settlor or any third party upon written consent of the Trustee.

3.2 Irrevocability
The Trust is irrevocable. Except as expressly permitted under Neb. Rev. Stat. § 30-3859 (modification or termination with court approval) and § 30-3862 (decanting), the Settlor expressly waives and relinquishes any and all rights or powers, whether alone or in conjunction with any other Person, to alter, amend, revoke, or terminate the Trust.

3.3 Beneficiaries; Beneficial Interests
(a) Primary Beneficiaries. [NAME] and [NAME] are designated primary Beneficiaries, each entitled to equal beneficial interests unless otherwise provided herein.
(b) Contingent Beneficiaries. Upon the death of the last surviving primary Beneficiary, the balance of the Corpus shall be distributed [per stirpes | per capita] to the contingent Beneficiaries identified in Schedule B.
(c) Spendthrift Protection. Pursuant to Neb. Rev. Stat. §§ 30-3846 & 30-3847, the interests of Beneficiaries shall be subject to a spendthrift provision; such interests shall not be voluntarily or involuntarily assigned, alienated, pledged, or subjected to the claims of creditors, except as expressly permitted by Applicable Law.

3.4 Trustee Powers & Duties
Subject to the fiduciary duties imposed by the NUTC, the Trustee shall have all powers described in Neb. Rev. Stat. § 30-3881, including, without limitation, the powers to:

1. Buy, sell, exchange, or lease Trust property;
2. Invest and reinvest the Corpus in accordance with the prudent investor rule (Neb. Rev. Stat. § 30-3883);
3. Employ professionals and compensate them from Trust assets;
4. Allocate receipts and disbursements between income and principal; and
5. Make distributions in cash or in kind, pro rata or non-pro rata, without the necessity of creating equal shares.

3.5 Distributions
(a) Mandatory Distributions. [Describe mandatory distributions—e.g., “The Trustee shall distribute net income annually to the Beneficiaries in equal shares.”]
(b) Discretionary Distributions. The Trustee may, in its sole and absolute discretion, distribute to or for the benefit of any Beneficiary so much of the income and/or principal as the Trustee deems necessary for the Beneficiary’s health, education, maintenance, or support (“HEMS Standard”).
(c) Tax Reimbursement. If the Trust is classified as a grantor trust, the Trustee [may | shall] reimburse the Settlor for income taxes paid on Trust income, subject to Rev. Rul. 2004-64.

3.6 Recordkeeping & Reports
The Trustee shall maintain accurate books and records and provide annual written accountings to each Beneficiary in accordance with Neb. Rev. Stat. § 30-38,104.

3.7 Conditions Precedent & Subsequent
The Trustee’s obligations are conditioned upon receipt of the Initial Corpus. A Beneficiary’s interest may terminate upon occurrence of [specified condition—e.g., “conviction of a felony involving moral turpitude”].

IV. REPRESENTATIONS & WARRANTIES

4.1 Settlor
(a) Authority. Settlor has the legal capacity and authority to establish the Trust and to transfer the property comprising the Corpus.
(b) Title. The property transferred pursuant to Schedule A is free and clear of all liens, claims, and encumbrances.

4.2 Trustee
(a) Fiduciary Duty. Trustee acknowledges the fiduciary duties of loyalty and impartiality owed to Beneficiaries under Neb. Rev. Stat. § 30-3868.
(b) Capacity to Act. Trustee possesses all requisite authority to accept the trusteeship and perform this Agreement.

4.3 Survival
All representations and warranties herein shall survive execution of this Agreement and the transfer of any property to the Trust.

V. COVENANTS & RESTRICTIONS

5.1 Affirmative Covenants of Trustee
(a) Compliance. Trustee shall administer the Trust in good faith, in accordance with its terms and Applicable Law.
(b) Tax Filings. Trustee shall file all required federal and state tax returns and pay taxes owed from Trust assets.

5.2 Negative Covenants
Trustee shall not:

1. Commit any act that would constitute self-dealing, except as permitted under Neb. Rev. Stat. § 30-3869;
2. Mortgage, pledge, or otherwise encumber Trust property for the benefit of the Trustee personally; or
3. Use Trust property to satisfy the personal obligations of the Trustee.

5.3 Notice & Cure
If the Trustee breaches any covenant, any Beneficiary may provide written notice specifying the breach. The Trustee shall have thirty (30) days to cure, unless the breach is incapable of cure or constitutes willful misconduct.

VI. DEFAULT & REMEDIES

6.1 Events of Default
An “Event of Default” occurs upon:

1. Trustee’s breach of fiduciary duty resulting in material harm;
2. Trustee’s insolvency, incapacity, or resignation without appointment of a successor;
3. Judicial removal of the Trustee pursuant to Neb. Rev. Stat. § 30-3862.

6.2 Remedies
Upon an Event of Default, the Beneficiaries (acting by majority interest) may:
a. Petition the Lancaster County Court (Probate Division) for removal and appointment of a successor trustee;
b. Seek surcharge or restitution limited to the Corpus, except in cases of fraud or bad faith (see Article VII);
c. Pursue injunctive relief to prevent further harm to the Trust assets.

6.3 Attorneys’ Fees
The prevailing party in any action to enforce this Agreement shall be entitled to recover reasonable attorneys’ fees and costs, payable from the Trust unless the court directs otherwise.

VII. RISK ALLOCATION

7.1 Trustee Indemnification
(a) Standard. The Trust shall indemnify the Trustee against all liabilities, claims, and expenses arising from the Trustee’s good-faith administration of the Trust, except for losses resulting from the Trustee’s fraud, bad faith, or willful misconduct.
(b) Source. Indemnification shall be satisfied solely from the Trust assets; no Beneficiary or Settlor shall be personally liable.

7.2 Limitation of Liability
Except for fraud, bad faith, or willful misconduct, the Trustee’s aggregate liability shall not exceed the total value of the Trust assets.

7.3 Insurance
The Trustee may procure fiduciary liability insurance, the premiums of which shall be paid from the Trust.

7.4 Force Majeure
The Trustee shall not be liable for delays or failures in performance caused by events beyond its reasonable control, including acts of God, war, pandemics, or changes in Applicable Law.

VIII. 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 Nebraska, without regard to its conflict-of-laws principles.

8.2 Forum Selection
Exclusive jurisdiction and venue for all matters relating to the Trust shall lie in the [County Name] County Court, Probate Division, State of Nebraska.

8.3 Optional Arbitration
[OPTIONAL] Any dispute not within the exclusive jurisdiction of the probate court may, upon unanimous written consent of all parties, be submitted to binding arbitration in accordance with the Nebraska Uniform Arbitration Act.

8.4 Jury Waiver
To the extent a jury trial could otherwise be demanded in a proceeding relating to this Trust, the parties waive such right.

8.5 Injunctive Relief
Nothing in this Article shall limit any party’s right to seek temporary, preliminary, or permanent injunctive relief to protect the Corpus.

IX. GENERAL PROVISIONS

9.1 Amendment & Waiver
This Agreement may be modified only by court order or as otherwise permitted under Neb. Rev. Stat. § 30-3859. No waiver of any provision shall be effective unless in writing and signed by the waiving party.

9.2 Assignment
Neither this Agreement nor any interest herein may be assigned by the Trustee or any Beneficiary except as expressly permitted herein or by Applicable Law.

9.3 Successors & Assigns
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

9.4 Severability
If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force, and the court may modify the provision to the minimum extent necessary to render it enforceable.

9.5 Entire Agreement
This Agreement, together with all Schedules, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements or understandings.

9.6 Counterparts; Electronic Signatures
This Agreement may be executed in multiple counterparts, each of which shall be deemed an original. Signatures delivered by electronic means (e.g., DocuSign, PDF) shall be deemed original signatures.

X. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

ACKNOWLEDGMENTS

State of Nebraska )
County of __________ ) ss.

On this ____ day of __________, 20__, before me, the undersigned Notary Public, personally appeared [SETTLOR NAME], known to me or satisfactorily proven to be the person whose name is subscribed to the foregoing instrument, and acknowledged that he/she executed the same for the purposes therein contained.

Notary Public: _______________________
My Commission Expires: _______________

[Repeat acknowledgment for Trustee if required by local recording or institutional policy.]

SCHEDULE A – INITIAL CORPUS

[Detailed description of property being contributed: cash, securities, real estate, etc.]

SCHEDULE B – CONTINGENT BENEFICIARIES

[List names, addresses, and relationship to Settlor]