REVOCABLE LIVING TRUST AGREEMENT
(“[TRUST NAME] REVOCABLE TRUST”)
This Revocable Living Trust Agreement (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [GRANTOR FULL LEGAL NAME], residing at [GRANTOR ADDRESS] (“Grantor,” “Settlor,” or “Trustor”), and [INITIAL TRUSTEE FULL LEGAL NAME], residing at [TRUSTEE ADDRESS] (the “Initial Trustee”).
Grantor desires to create a revocable trust pursuant to Minn. Stat. ch. 501C (the Minnesota Uniform Trust Code) and other applicable Minnesota law (collectively, “Minnesota Trust Law”), and Trustee is willing to accept the trust on the terms hereof.
TABLE OF CONTENTS
- Recitals
- Definitions
- Creation and Revocability of Trust
- Funding and Assignment of Assets
- Rights Reserved to Grantor
- Administrative Provisions
- Dispositive Provisions
- Trustee Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
- Schedule A – Initial Trust Property
- Schedule B – Successor Trustee Acceptance
[// GUIDANCE: Update Table of Contents after final edits and pagination.]
1. RECITALS
1.1 Grantor is the sole owner of the property described in Schedule A and may from time to time transfer additional property to the Trust.
1.2 Grantor desires to retain the unrestricted power to revoke, amend, or terminate this Trust during Grantor’s lifetime.
1.3 Trustee agrees to hold, administer, and distribute the Trust Estate pursuant to the terms of this Agreement and Minnesota Trust Law.
2. DEFINITIONS
For ease of reference, the following capitalized terms have the meanings set forth below. Terms defined in the singular include the plural and vice-versa.
“Accounting Period” – The calendar year or such other fiscal period selected by Trustee.
“Arbitration Rules” – The Commercial Arbitration Rules of the American Arbitration Association in effect on the date arbitration is demanded.
“Beneficiary” – Any person or entity entitled to receive distributions from the Trust Estate, whether present, future, vested, or contingent.
“Dispositive Event” – Grantor’s death, incapacity, or such other event expressly triggering distributions.
“Grantor” – The person identified in the preamble; includes any Substitute Grantor that may arise under Article 7.
“Probate Court” – The [NAME OF MINNESOTA COUNTY] Probate Court, or any successor with jurisdiction over trusts.
“Successor Trustee” – Any person or institution appointed pursuant to Section 6.5.
“Trust Estate” – All property, tangible or intangible, held from time to time by Trustee under this Agreement.
“Trustee” – The Initial Trustee, any Successor Trustee, Co-Trustee, or additional trustee appointed in accordance with this Agreement.
[// GUIDANCE: Add or delete defined terms as needed for the client’s dispositive scheme.]
3. CREATION AND REVOCABILITY OF TRUST
3.1 Creation. Grantor hereby creates the “[TRUST NAME] Revocable Trust” (the “Trust”) pursuant to Minn. Stat. §§ 501C.0101 et seq., declares that the Trust is revocable, and transfers to Trustee the property listed on Schedule A and any subsequently assigned property.
3.2 Revocation and Amendment.
(a) During Grantor’s lifetime and competency, Grantor may revoke or amend this Trust in whole or in part by (i) a written instrument signed by Grantor and delivered to Trustee, or (ii) any other method permitted by Minn. Stat. § 501C.0602.
(b) Upon revocation, Trustee shall promptly transfer the Trust Estate to Grantor, subject to payment of expenses properly chargeable to the Trust.
3.3 Termination. The Trust shall terminate upon the later of (a) complete distribution of the Trust Estate, or (b) the expiration of any period required by applicable law.
4. FUNDING AND ASSIGNMENT OF ASSETS
4.1 Initial Funding. Concurrently with execution, Grantor assigns, conveys, and delivers to Trustee the property described in Schedule A.
4.2 Subsequent Transfers. Grantor or any other person may transfer additional property to the Trust by (a) written assignment, (b) deed or other conveyance, (c) beneficiary designation naming the Trust, or (d) any method recognized under Minnesota Trust Law.
4.3 Title and Registration. Trustee shall hold record title to Trust assets in the name “[TRUST NAME] Revocable Trust, dated [EFFECTIVE DATE], [TRUSTEE NAME], Trustee.”
4.4 Non-Probate Assets. Life insurance, retirement accounts, and other non-probate assets may be made payable to the Trust by beneficiary designation without violating spend-thrift or other restrictions.
[// GUIDANCE: Attach separate assignment documents for tangible personal property, real estate deeds, and business interests.]
5. RIGHTS RESERVED TO GRANTOR
5.1 Beneficial Enjoyment. Grantor shall have unrestricted use and benefit of all Trust income and principal during Grantor’s lifetime.
5.2 Management Powers. Grantor may direct Trustee regarding investment strategy or may serve concurrently as Trustee without affecting the validity of this Trust.
5.3 Power of Appointment. Grantor reserves a general testamentary power of appointment exercisable by a valid will or trust codicil specifically referring to this power.
5.4 Incapacity of Grantor. If Grantor is adjudicated incapacitated by a court of competent jurisdiction, the Trust shall become irrevocable until Grantor regains capacity or dies.
6. ADMINISTRATIVE PROVISIONS
6.1 Trustee Powers. Subject to fiduciary obligations and Minn. Stat. § 501C.0801 et seq., Trustee may exercise all powers customarily held by trustees, including without limitation to:
(a) buy, sell, or exchange assets;
(b) borrow and pledge Trust assets;
(c) invest in any kind of property, real or personal;
(d) employ and compensate agents and professionals.
6.2 Bond. No Trustee shall be required to post bond or other security unless a court specifically orders otherwise.
6.3 Accounting & Reports. Trustee shall provide annual written accountings to the current income Beneficiaries within 60 days after the close of each Accounting Period and upon termination of the Trust.
6.4 Compensation. Trustee is entitled to reasonable compensation in accordance with Minn. Stat. § 501C.0708 or such written fee schedule as the parties agree.
6.5 Vacancy and Appointment of Successor Trustee.
(a) Order of Succession: [SUCCESSOR TRUSTEE #1], then [SUCCESSOR TRUSTEE #2], then such person as appointed by a majority of the adult Beneficiaries or the Probate Court.
(b) Acceptance. A Successor Trustee shall accept the trusteeship by executing Schedule B and delivering it to the outgoing Trustee or, if none, to the adult Beneficiaries.
(c) Resignation. A Trustee may resign (i) by 30-days’ written notice to Grantor (if living) and all Qualified Beneficiaries, or (ii) with court approval.
(d) Removal. Grantor, while competent, may remove any Trustee by written notice. After Grantor’s incapacity or death, a majority of adult Beneficiaries may petition the Probate Court for removal per Minn. Stat. § 501C.0706.
6.6 Co-Trustees. Co-Trustees shall act unanimously unless otherwise provided; a dissenting Co-Trustee shall not be liable for actions taken without the Trustee’s consent if the dissent is promptly recorded in writing.
6.7 Spendthrift. Except as otherwise provided by law, the interest of any Beneficiary is not subject to voluntary or involuntary transfer, assignment, or attachment.
7. DISPOSITIVE PROVISIONS
[// GUIDANCE: The following is a common framework. Adjust percentages, ages, and contingent takers.]
7.1 Grantor’s Lifetime. Distributions of income and principal shall be made to or for the benefit of Grantor in Grantor’s sole discretion (if acting as Trustee) or Trustee’s discretion.
7.2 Upon Grantor’s Death. After payment of debts, expenses, and taxes:
(a) Family Trust Share – []% to the “Family Trust” for spouse and descendants;
(b) Charitable Share – []% to the charities listed in Section 7.5;
(c) Residuary – Balance to descendants per stirpes.
7.3 Family Trust Terms. Income and principal may be distributed for health, education, maintenance, and support (“HEMS”) of the beneficiaries. Trust terminates when the youngest descendent attains age [AGE].
7.4 Trusts for Minor Beneficiaries. Property distributable to a minor shall be retained in a separate trust until the beneficiary attains age [AGE], at which time principal and accrued income shall be distributed outright.
7.5 Charitable Beneficiaries.
(a) [CHARITY #1], EIN [__], located at [ADDRESS] – []%
(b) [CHARITY #2], EIN [__], located at [ADDRESS] – []%
7.6 Lapse or Disclaimer. Any portion that lapses or is disclaimed shall be added to the Residuary.
8. TRUSTEE REPRESENTATIONS & WARRANTIES
8.1 Authority. Trustee represents that Trustee is legally competent and has full authority to accept the trusteeship and perform obligations herein.
8.2 No Conflict. Trustee warrants that acceptance of this Trust does not violate any agreement or court order binding on Trustee.
8.3 Compliance. Trustee warrants ongoing compliance with Minnesota Trust Law and any applicable federal statutes governing fiduciaries.
8.4 Survival. The representations and warranties in this Article survive Trustee’s resignation or removal.
9. COVENANTS & RESTRICTIONS
9.1 Investment Duties. Trustee covenants to invest and manage Trust assets in good faith and in compliance with the Minnesota Prudent Investor Act (Minn. Stat. § 501C.0901 et seq.).
9.2 Duty of Impartiality. Trustee shall act impartially among Beneficiaries unless this Agreement clearly manifests a contrary intention.
9.3 Notice of Material Events. Trustee shall provide written notice to all Qualified Beneficiaries of (a) any change in Trustee, (b) commencement of any litigation involving the Trust Estate, or (c) any material change in investment policy.
9.4 Prohibited Transactions. Trustee shall not engage in self-dealing or transactions prohibited under Minn. Stat. § 501C.0802 without court approval or unanimous written consent of all adult Beneficiaries.
10. DEFAULT & REMEDIES
10.1 Events of Default. Each of the following constitutes a “Trustee Default”:
(a) Breach of fiduciary duty resulting in material loss;
(b) Failure to provide required accountings within 90 days after written demand;
(c) Misappropriation or commingling of Trust assets;
(d) Conviction of a felony involving dishonesty.
10.2 Notice & Cure. Beneficiaries must provide written notice specifying the alleged Default. Trustee has 30 days to cure, except no cure period applies to misappropriation or felony conviction.
10.3 Remedies. Upon a Trustee Default that is not timely cured, Beneficiaries may (a) remove Trustee, (b) surcharge Trustee personally, (c) obtain injunctive relief to prevent further harm, and/or (d) seek any other remedy available under Minnesota Trust Law.
10.4 Attorneys’ Fees & Costs. A prevailing party in any action to enforce this Agreement or remedy a Default is entitled to recover reasonable attorneys’ fees and expenses, chargeable against the Trust Estate except where the prevailing party is Trustee and the court finds Trustee acted in bad faith.
11. RISK ALLOCATION
11.1 Indemnification of Trustee. To the fullest extent permitted by law, Trustee (including former and successor trustees) shall be indemnified from the Trust Estate against any claim, liability, or expense, except to the extent arising from Trustee’s bad faith, willful misconduct, or gross negligence (“Excluded Conduct”).
11.2 Limitation of Liability. Trustee’s liability is limited to Trust assets; no Trustee shall be personally liable for any obligation of the Trust, except for Excluded Conduct.
11.3 Insurance. Trustee may purchase fiduciary liability insurance payable from Trust assets if commercially reasonable.
11.4 Force Majeure. Trustee is excused from performance for delays beyond Trustee’s reasonable control, including acts of God, war, epidemic, or governmental action (“Force Majeure”). Upon cessation of the Force Majeure event, Trustee shall resume performance promptly.
12. DISPUTE RESOLUTION
12.1 Governing Law. This Agreement and all matters arising hereunder shall be governed by, and construed in accordance with, the laws of the State of Minnesota (without regard to conflict-of-laws principles).
12.2 Forum Selection. The parties submit to the exclusive jurisdiction of the [NAME OF MINNESOTA COUNTY] Probate Court for any proceeding concerning the Trust, subject to Section 12.3.
12.3 Optional Arbitration.
(a) Election. Any Beneficiary or Trustee may elect binding arbitration by giving written notice within 30 days after service of a petition or complaint.
(b) Procedure. Arbitration shall be before a single arbitrator with trust-law expertise, administered pursuant to the Arbitration Rules.
(c) Injunctive Relief. A party may seek provisional injunctive relief from the Probate Court pending appointment of the arbitrator.
12.4 Jury Waiver. To the extent a matter is ever tried outside probate, the parties knowingly waive any right to a jury trial on claims relating to the Trust or this Agreement.
[// GUIDANCE: Probate matters in Minnesota are generally heard without a jury; clause included for belt-and-suspenders protection.]
13. GENERAL PROVISIONS
13.1 Amendment & Waiver. Except as otherwise provided herein, this Agreement may be amended only by a writing signed by Grantor (while living and competent) and delivered to Trustee. No waiver shall be deemed continuing unless so stated in writing.
13.2 Assignment. Beneficiaries may not assign, transfer, or encumber their interests, except as expressly permitted herein or required by law.
13.3 Successors & Assigns. This Agreement binds and benefits the parties and their respective heirs, personal representatives, successors, and permitted assigns.
13.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the court is authorized to reform the Agreement to effectuate Grantor’s intent.
13.5 Entire Agreement. This instrument constitutes the entire agreement of the parties concerning the Trust and supersedes all prior agreements, whether oral or written.
13.6 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically or by facsimile are deemed original for all purposes.
14. EXECUTION BLOCK
IN WITNESS WHEREOF, the parties hereto have executed this Revocable Living Trust Agreement as of the Effective Date.
Grantor / Settlor:
[GRANTOR NAME]
Initial Trustee:
[TRUSTEE NAME], Trustee
STATE OF MINNESOTA )
) ss.
COUNTY OF ___ )
On this ___ day of __, 20, before me personally appeared _______, known to me to be the person(s) who executed the foregoing instrument and acknowledged the same to be his/her/their free act and deed.
Notary Public
My Commission Expires: ___
[// GUIDANCE: Minnesota does not require notarization for trust validity, but it is strongly recommended to facilitate recording of trust affidavits and real property deeds.]
15. SCHEDULE A – INITIAL TRUST PROPERTY
- Checking Account No. ____ at [BANK NAME]
- Real Property located at [ADDRESS], legally described as:
[INSERT LEGAL DESCRIPTION] - Brokerage Account No. ____ at [BROKERAGE]
- All Grantor’s tangible personal property as set forth in a separate “Assignment of Tangible Personal Property,” dated contemporaneously herewith.
16. SCHEDULE B – SUCCESSOR TRUSTEE ACCEPTANCE
The undersigned hereby accepts appointment as Successor Trustee of the “[TRUST NAME] Revocable Trust,” dated [EFFECTIVE DATE], and agrees to administer the Trust in accordance with its terms and Minnesota Trust Law.
[SUCCESSOR TRUSTEE NAME]
Date: _________
[// GUIDANCE:
1. Customize dispositive provisions (Article 7) to fit the client’s estate plan.
2. Review local recording requirements if trust will hold Minnesota real estate (e.g., certificate of trust per Minn. Stat. § 501C.1013).
3. Consider separate “Pour-Over Will” and durable power of attorney to coordinate with this Trust.
4. Have client execute deeds, assignments, and beneficiary designations promptly after signing to fully fund the Trust.]