IRREVOCABLE TRUST AGREEMENT

(South Carolina – Court-Ready Template)

[// GUIDANCE: This template is designed for use by licensed attorneys admitted in South Carolina. Do not deploy “as-is” without a full legal review for the specific transaction, tax posture, and client objectives.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Establishment & Irrevocability
   3.2 Trust Property & Funding
   3.3 Trust Purpose
   3.4 Beneficiaries & Beneficial Interests
   3.5 Distributions
   3.6 Spendthrift Protection
   3.7 Trustee Powers & Duties
   3.8 Trustee Compensation & Expenses
   3.9 Records, Reports & Accountings
   3.10 Tax Matters
4. Representations & Warranties
5. Covenants & Restrictions
6. Defaults & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

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

1. [GRANTOR FULL LEGAL NAME], a resident of [COUNTY], South Carolina (“Grantor”); and
2. [TRUSTEE FULL LEGAL NAME], whose address is [ADDRESS] (“Trustee”),

for the benefit of the persons identified herein as Beneficiaries (as defined below).

Recitals

A. Grantor desires to create an irrevocable trust under the laws of the State of South Carolina to hold, administer, and distribute certain property for the exclusive benefit of the Beneficiaries.
B. Trustee is willing to accept the trust and to administer the Trust Estate pursuant to the terms of this Agreement and the South Carolina Trust Code, S.C. Code Ann. §§ 62-7-101 et seq. (the “SCTC”).
C. Grantor delivers to Trustee the property described in Schedule A attached hereto (“Initial Trust Property”) to constitute the initial corpus of the trust.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein, the parties agree as follows:

2. DEFINITIONS

[// GUIDANCE: Modify, add, or delete defined terms to align with the specific drafting objective.]

“Accounting Period” – each calendar year ending December 31, unless the Trustee selects a different fiscal year permitted under applicable law.

“Agreement” – this Irrevocable Trust Agreement, including all Schedules and Exhibits, as amended in accordance with its terms.

“Beneficiary” or “Beneficiaries” – each person or entity listed in Section 3.4 and any successor or contingent beneficiary who becomes entitled to benefits.

“Code” – the Internal Revenue Code of 1986, as amended.

“Grantor” – the person identified in the Document Header who establishes this Trust.

“Income” and “Principal” – as determined under S.C. Code Ann. §§ 62-7-901 et seq. (South Carolina Uniform Principal and Income Act), unless Trustee elects an alternative definition permitted by law.

“Qualified Trustee” – a person meeting the requirements of SCTC § 62-7-703.

“Trust” – the irrevocable trust created by this Agreement, known as the “[NAME OF TRUST]”.

“Trust Estate” – all property, tangible or intangible, real or personal, and all substitutions and additions thereto, subject to this Agreement.

3. OPERATIVE PROVISIONS

3.1 Establishment & Irrevocability

(a) Grantor hereby irrevocably transfers, assigns, and delivers the Initial Trust Property to Trustee, to hold in trust for the purposes set forth herein.

(b) Irrevocability. This Trust is irrevocable. Grantor expressly waives all rights and powers, whether alone or in conjunction with any other person, to alter, amend, revoke, or terminate the Trust, except:
(i) as judicially modified pursuant to SCTC §§ 62-7-410 through 417; or
(ii) through statutory decanting under SCTC § 62-7-816A, in Trustee’s sole discretion.

[// GUIDANCE: If Grantor will retain a limited power of appointment or special tax power, insert here and analyze estate-tax impact.]

3.2 Trust Property & Funding

Grantor may from time to time transfer additional property to the Trust, and others may make contributions if accepted by Trustee. All such property becomes part of the Trust Estate and is subject to this Agreement.

3.3 Trust Purpose

The Trust is established to:
1. Provide for the health, education, maintenance, and support of the Beneficiaries;
2. Facilitate long-term asset protection and prudent investment management; and
3. Achieve estate, gift, and generation-skipping transfer (“GST”) tax efficiencies consistent with relevant provisions of the Code.

3.4 Beneficiaries & Beneficial Interests

(a) Primary Beneficiaries:
• [NAME] – Date of Birth: [MM/DD/YYYY]
• [NAME] – Date of Birth: [MM/DD/YYYY]

(b) Contingent Beneficiaries: as listed on Schedule B.

(c) Beneficiaries’ interests are equitable only; they possess no legal or equitable title to specific Trust assets until distributed.

3.5 Distributions

(a) Mandatory Income (if any). [INSERT – e.g., “Trustee shall distribute all net Income quarterly, per stirpes, to the Primary Beneficiaries.”]

(b) Discretionary Principal. Trustee may, in the Trustee’s sole and absolute discretion, distribute principal for a Beneficiary’s health, education, maintenance, or support (“HEMS Standard”).

(c) Distribution Mechanics. Trustee may pay amounts directly to providers, to the Beneficiary, or apply them for the Beneficiary’s benefit.

(d) Final Distribution. Upon the earlier of (i) the termination date in Section 3.11 or (ii) exhaustion of the Trust Estate, Trustee shall distribute remaining principal and undistributed income outright, per stirpes, to the then-living Beneficiaries.

3.6 Spendthrift Protection

To the maximum extent permitted under SCTC § 62-7-502, the interests of Beneficiaries shall not be subject to voluntary or involuntary transfer, alienation, or attachment by any creditor before actual receipt.

3.7 Trustee Powers & Duties

(a) Powers. In addition to powers granted under this Agreement and SCTC § 62-7-815, Trustee may:
1. Invest and reinvest without regard to diversification, following the South Carolina Prudent Investor Rule (SCTC §§ 62-7-933 et seq.);
2. Employ professionals and delegate investment functions per SCTC § 62-7-807;
3. Lease, sell, or exchange Trust assets;
4. Participate in partnerships, LLCs, or other entities;
5. Decant or merge trusts as permitted by SCTC § 62-7-816A; and
6. Do all acts necessary for proper administration.

(b) Duties. Trustee shall act in good faith, in the interest of the Beneficiaries, and with reasonable care, skill, and caution.

(c) Co-Trustees / Successor Trustees – see Section 5.2.

3.8 Trustee Compensation & Expenses

Trustee is entitled to reasonable compensation consistent with SCTC § 62-7-708 and reimbursement of properly incurred expenses. Compensation schedule is attached as Schedule C or, if absent, shall be that customarily charged by corporate fiduciaries in South Carolina for trusts of similar size and complexity.

3.9 Records, Reports & Accountings

(a) Trustee shall maintain complete and accurate books and records.
(b) Within [NUMBER] days after each Accounting Period, Trustee shall deliver a written accounting to the Beneficiaries and any guardian or legal representative entitled thereto under SCTC § 62-7-813.
(c) Each accounting shall become binding [90] days after delivery unless written objection is delivered to Trustee.

3.10 Tax Matters

(a) Grantor Trust Election. [SELECT: “This Trust is intended to be a grantor trust under Code §§ 671-679; Grantor shall report all income, deductions, and credits on Grantor’s individual return.”] –OR– [SELECT Non-Grantor language.]

(b) Trustee may make, or refrain from making, any elections (including GST exemptions), engage tax advisors, and distribute assets to satisfy income- or transfer-tax liabilities allocable to the Trust or any Beneficiary.

(c) Tax Reimbursement Clause (if grantor trust). Trustee may, but is not required to, reimburse Grantor for income taxes attributable to Trust income, consistent with Rev. Rul. 2004-64.

4. REPRESENTATIONS & WARRANTIES

4.1 Grantor represents that:
(a) Grantor is of legal age, has full capacity, and has not been adjudicated incompetent;
(b) Assets transferred are free of liens except as disclosed on Schedule A; and
(c) Grantor understands that the Trust is irrevocable and relinquishes all ownership rights in the Trust Estate.

4.2 Trustee represents that:
(a) Trustee is eligible to serve pursuant to SCTC § 62-7-703 and has secured any required bond or insurance;
(b) Trustee is not currently suspended, removed, or barred from fiduciary service by any court; and
(c) Trustee will administer the Trust in accordance with this Agreement and the SCTC.

5. COVENANTS & RESTRICTIONS

5.1 Affirmative Covenants of Trustee
(a) Administer the Trust Estate prudently;
(b) Maintain insurance on Trust assets when commercially reasonable;
(c) Provide timely notices and tax documents to Beneficiaries.

5.2 Restrictions
(a) Successor Trustee must be a Qualified Trustee.
(b) Trustee shall not engage in self-dealing except as expressly authorized and disclosed.
(c) Trustee shall obtain Beneficiary consent or court approval before entering transactions that create a conflict of interest.

6. DEFAULTS & REMEDIES

6.1 Events of Default
1. Trustee’s willful misconduct, gross negligence, or material breach of fiduciary duties;
2. Failure to provide accounting within 60 days after written demand;
3. Insolvency or incapacity of Trustee without appointment of a Successor within 30 days.

6.2 Notice & Cure
Beneficiary must give written notice specifying the default. Trustee has 30 days to cure or to commence cure if not reasonably completed within such period.

6.3 Remedies
(a) Petition to the Probate Court of [COUNTY], South Carolina for removal or surcharge;
(b) Injunctive relief to preserve Trust assets;
(c) Attorneys’ fees and costs recoverable from the Trust or Trustee personally, as determined by the Court.

7. RISK ALLOCATION

7.1 Indemnification of Trustee
Trustee shall be indemnified from the Trust Estate for any liability, expense, or claim (including reasonable attorneys’ fees) incurred in good-faith administration, except for acts of willful misconduct or gross negligence.

7.2 Limitation of Liability
The sole source of recovery against Trustee for actions taken in a fiduciary capacity shall be limited to the Trust Estate; no personal liability shall attach absent a final court determination of willful misconduct or gross negligence.

7.3 Insurance
Trustee may procure fiduciary liability insurance and pay premiums from the Trust Estate.

8. DISPUTE RESOLUTION

8.1 Governing Law
This Agreement, and all rights and obligations hereunder, shall be governed by and construed under the laws of the State of South Carolina, without regard to conflict-of-law rules.

8.2 Forum Selection
Exclusive jurisdiction and venue for all judicial proceedings relating to this Trust shall lie in the Probate Court of [COUNTY], South Carolina.

8.3 Arbitration [OPTIONAL]
[CHOOSE ONE]
□ Arbitration Elected. All disputes shall be resolved by binding arbitration in [CITY], South Carolina, under the Commercial Arbitration Rules of the American Arbitration Association.
□ Arbitration Not Elected.

8.4 Jury Waiver
Not applicable—probate matters in South Carolina are tried without a jury unless otherwise permitted by statute.

8.5 Injunctive Relief
Nothing herein shall limit the right of any party to seek provisional or injunctive relief in the Probate Court to enforce Trust terms or protect Trust assets.

9. GENERAL PROVISIONS

9.1 Amendment & Waiver
This Trust is irrevocable; amendments are prohibited except as expressly permitted in Section 3.1(b). Any waiver must be in a signed writing and shall not constitute a continuing waiver.

9.2 Assignment
No party may assign rights or delegate obligations under this Agreement except as provided herein or by law.

9.3 Successors & Assigns
This Agreement binds and benefits the parties and their lawful successors.

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 original intent.

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

9.6 Counterparts; Electronic Signatures
This Agreement may be executed in counterparts, each of which is deemed an original and all of which constitute one instrument. Electronic signatures and notarizations are deemed originals for all purposes to the extent permitted by S.C. Code § 26-6-10 et seq. (South Carolina Uniform Electronic Transactions Act).

10. EXECUTION BLOCK

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

GRANTOR

[GRANTOR FULL LEGAL NAME]

Date: _______

TRUSTEE

[TRUSTEE FULL LEGAL NAME], Trustee

Date: _______

WITNESSES

NOTARY ACKNOWLEDGMENT

State of South Carolina )
County of _______ )

On this ___ day of _, 20_, before me, the undersigned Notary Public, personally appeared ________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s) executed the instrument.

Notary Public for South Carolina
My Commission Expires: _______

SCHEDULE A – INITIAL TRUST PROPERTY

[Attach detailed list of assets transferred to Trust]

SCHEDULE B – CONTINGENT & REMAINDER BENEFICIARIES

[Insert names, relationships, and allocation percentages]

SCHEDULE C – TRUSTEE COMPENSATION SCHEDULE

[Insert fee schedule or reference governing document]

[// GUIDANCE: Include additional schedules as needed for disclosure of liens, valuation statements, life insurance policies, or closely-held business interests.]