REVOCABLE LIVING TRUST AGREEMENT
(North Dakota – Governed by State Trust Law)
DOCUMENT HEADER
Agreement Date: [DATE]
Settlor/Grantor: [SETTLOR FULL LEGAL NAME], of [ADDRESS] (“Settlor”)
Initial Trustee: [INITIAL TRUSTEE NAME], of [ADDRESS] (“Trustee”)
Trust Name: “The [SETTLOR SURNAME] Revocable Living Trust” (“Trust”)
Recitals
A. Settlor desires to establish a revocable living trust pursuant to the laws of the State of North Dakota for the management, conservation, and disposition of the Trust Estate (as defined below).
B. Trustee is willing to hold, administer, and distribute the Trust Estate in accordance with the terms of this Agreement.
C. The Trust is intended to qualify as a grantor trust under §§ 671-679 of the Internal Revenue Code, with Settlor treated as the owner for income-tax purposes.
For good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:
TABLE OF CONTENTS
- Definitions
- Creation, Revocability & Funding
- Rights Reserved by Settlor
- Administration During Settlor’s Lifetime
- Administration Upon Settlor’s Incapacity
- Distribution at Settlor’s Death
- Trustee Powers
- Trustee Duties & Standards of Care
- Successor Trustee Provisions
- Liability, Indemnification & Insurance
- Compensation, Accounting & Reports
- Risk Allocation & Remedies
- Dispute Resolution & Governing Law
- General Provisions
- Execution & Acknowledgment
[// GUIDANCE: Insert page numbers and automate cross-references prior to finalization.]
1. DEFINITIONS
For ease of reference, capitalized terms are defined alphabetically below; they apply equally to singular and plural forms.
“Accounting Period” – Each calendar year, or such shorter period ending on termination of the Trust or a change of Trustee.
“Beneficiary” – Any person or entity presently or prospectively entitled to distributions of income or principal.
“Code” – The Internal Revenue Code of 1986, as amended.
“Disability” / “Disabled” – Settlor is unable to manage Settlor’s affairs, as certified by two licensed physicians or by court order.
“Governing Law” – The substantive and procedural laws of the State of North Dakota relating to trusts, without regard to conflict-of-laws principles.
“Notice” – Written notice delivered in person, by certified mail (return receipt requested), or by nationally recognized overnight courier.
“Permissible Distributions” – Distributions the Trustee, in its discretion, may make for health, education, maintenance, or support (“HEMS”).
“Successor Trustee” – Any person or institution that becomes Trustee under Article 9.
“Trust Estate” – All property, tangible or intangible, transferred to or otherwise acquired by the Trustee, and all additions, substitutions, and accumulations thereto.
“Trustee” – The Initial Trustee and any Successor Trustee then serving.
2. CREATION, REVOCABILITY & FUNDING
2.1 Creation
Settlor hereby creates the Trust, to be held, managed, and distributed in accordance with this Agreement and North Dakota Century Code Title 59 (Uniform Trust Code) and other applicable law.
2.2 Revocability
This Trust is revocable. Settlor may amend or revoke this Agreement, in whole or in part, by a written instrument signed by Settlor and delivered to the Trustee during Settlor’s lifetime. Oral amendments are ineffective.
2.3 Initial Funding
Concurrently with execution, Settlor assigns, conveys, and transfers to Trustee the property described on Schedule A attached hereto and incorporated herein. Additional property may be added at any time by Settlor or any other person with Trustee’s consent.
[// GUIDANCE: Use separate deeds, assignments, or beneficiary designation forms to complete transfers; absence of a recorded deed or re-titling may thwart estate-tax and probate objectives.]
2.4 Acceptance by Trustee
Trustee acknowledges receipt of the initial Trust Estate and accepts the duties imposed.
3. RIGHTS RESERVED BY SETTLOR
3.1 Income Rights – During Settlor’s lifetime while not Disabled, income shall be distributed to or for the benefit of Settlor at least annually.
3.2 Principal Rights – Principal may be distributed to Settlor at any time upon Settlor’s written request.
3.3 Powers Retained – Settlor retains:
a) Power to direct investments;
b) Power to add or withdraw property;
c) Power to change Beneficiaries;
d) All other powers conferred on a Settlor by N.D. law unless expressly waived.
4. ADMINISTRATION DURING SETTLOR’S LIFETIME
4.1 Investment Standard – Trustee shall invest pursuant to the prudent investor rule.
4.2 Taxes – Trustee shall pay from income or principal all taxes attributable to the Trust Estate and shall provide Settlor with necessary information returns.
4.3 Recordkeeping – Books and records shall be kept in accordance with generally accepted accounting principles.
5. ADMINISTRATION UPON SETTLOR’S INCAPACITY
5.1 Determination of Disability – Disability shall be established by certificates of two independent physicians or by court order.
5.2 Distributions – While Settlor is Disabled, Trustee shall apply income and principal for Settlor’s health, education, maintenance, and support.
5.3 Guardian Coordination – If a guardian or conservator is appointed, Trustee shall cooperate but shall not be subject to the guardian’s control absent court order.
5.4 Restoration of Capacity – Upon written certification of Settlor’s regained capacity, full rights under Article 3 are restored.
6. DISTRIBUTION AT SETTLOR’S DEATH
6.1 Administrative Expenses – Trustee shall first pay all enforceable debts, funeral expenses, last illness costs, and estate or inheritance taxes attributable to the Trust Estate.
6.2 Specific Gifts – Trustee shall distribute the following specific gifts free of trust:
• [DESCRIPTION & BENEFICIARY]
• [DESCRIPTION & BENEFICIARY]
[// GUIDANCE: List tangible personal property gifts in a separate memorandum referenced herein for ease of amendment.]
6.3 Residuary Trust Estate – The balance shall be held, managed, and distributed as follows:
a) [REVOCABLE INSERTION: Family Trust for spouse, generation-skipping trust, charitable remainder, etc.]
b) [PLACEHOLDER FOR PERCENTAGE OR FORMULA DISTRIBUTION AMONG BENEFICIARIES]
6.4 Contingent Beneficiaries – If no Beneficiary survives as provided, the Trust Estate shall be distributed to Settlor’s heirs at law, determined as of Settlor’s death.
7. TRUSTEE POWERS
Subject to Article 8, Trustee shall have, without court order, all powers granted to trustees under North Dakota law, including but not limited to:
7.1 Invest, reinvest, and retain assets;
7.2 Buy, sell, lease, or mortgage real or personal property;
7.3 Borrow money and pledge Trust assets;
7.4 Execute documents and perform acts necessary to administer the Trust;
7.5 Employ professionals (and pay them from the Trust Estate);
7.6 Allocate receipts and disbursements between income and principal;
7.7 Form entities or hold assets through entities when advantageous;
7.8 Distribute property in cash or in kind, pro rata or non-pro rata, without the need to equalize in kind.
[// GUIDANCE: Incorporate the broadest possible powers to minimize future court intervention while retaining fiduciary constraints.]
8. TRUSTEE DUTIES & STANDARDS OF CARE
8.1 Fiduciary Duty – Trustee shall administer the Trust solely in the interests of the Beneficiaries, exercising reasonable care, skill, and caution.
8.2 Impartiality – When multiple Beneficiaries exist, Trustee shall act impartially, taking into account the differing interests.
8.3 Bond – Trustee shall serve without bond unless all adult Beneficiaries unanimously request otherwise in writing or a court orders a bond.
8.4 Co-Trustees – If more than one Trustee serves, a majority may act; a dissenting Trustee is not liable for the acts of the majority if the dissent is timely recorded.
8.5 Delegation – Trustee may delegate investment and administrative functions consistent with the prudent investor rule.
9. SUCCESSOR TRUSTEE PROVISIONS
9.1 Order of Succession
a) First Successor Trustee: [FIRST SUCCESSOR NAME & ADDRESS]
b) Second Successor Trustee: [SECOND SUCCESSOR NAME & ADDRESS]
c) Vacancy – If no named Successor is able or willing to serve, a majority of the adult Beneficiaries may appoint a Successor Trustee; lacking such appointment, the state probate court having forum-selection jurisdiction shall appoint.
9.2 Resignation – A Trustee may resign upon 30 days’ Notice to Settlor (if living) and all adult Beneficiaries.
9.3 Removal – Settlor (if living and competent) may remove a Trustee at any time by written Notice; after Settlor’s death or incapacity, a court of competent jurisdiction or unanimous adult Beneficiaries may remove a Trustee for cause.
9.4 Transfer of Assets – A resigning or removed Trustee shall transfer all Trust property, records, and authority to the Successor Trustee within 30 days.
9.5 Continuity – Successor Trustees shall have all rights, powers, and duties of the original Trustee, with full title vested in them upon acceptance.
10. LIABILITY, INDEMNIFICATION & INSURANCE
10.1 Limited Liability – All liability of Trustee to Beneficiaries is limited to the Trust Estate; no Trustee shall be personally liable except for losses resulting from Trustee’s willful misconduct or gross negligence.
10.2 Indemnification – Trustee is entitled to indemnification and reimbursement from the Trust Estate for any expense, liability, or loss (including attorney fees) incurred in good-faith administration of the Trust.
10.3 Insurance – Trustee may purchase fiduciary liability insurance, payable from the Trust Estate, naming Trustee and any Successor Trustee as insureds.
11. COMPENSATION, ACCOUNTING & REPORTS
11.1 Compensation – Trustee shall be paid reasonable compensation in accordance with [PUBLISHED FEE SCHEDULE / HOURLY RATE / PERCENTAGE] or as agreed with the adult Beneficiaries.
11.2 Accounting – Trustee shall provide an annual written accounting within 90 days after the close of each Accounting Period and upon a change of Trustee or termination of the Trust.
11.3 Objection Period – Beneficiaries have 180 days after receipt of an accounting to deliver written objections; failure to object constitutes approval.
12. RISK ALLOCATION & REMEDIES
12.1 Events of Default – A “Default” occurs if Trustee materially breaches fiduciary duties or fails to comply with a mandatory direction in this Agreement and does not cure within 30 days after Notice.
12.2 Remedies – Upon Default, Beneficiaries may:
a) Seek injunctive relief in the forum-selection court;
b) Surcharge Trustee to the extent of the Trust Estate;
c) Remove or suspend Trustee;
d) Recover attorney fees and costs incurred in enforcing the Trust.
12.3 Force Majeure – Trustee is excused from performance for delays or failures caused by events beyond reasonable control (e.g., natural disasters, government action, or systemic banking failures).
13. DISPUTE RESOLUTION & GOVERNING LAW
13.1 Governing Law – This Agreement and all Trust matters are governed by the laws of the State of North Dakota, without regard to conflict-of-laws principles.
13.2 Forum Selection – The state probate court for [COUNTY], North Dakota, shall have exclusive jurisdiction over all proceedings concerning the Trust, subject to Section 13.3.
13.3 Optional Arbitration – If all interested parties (Trustee and all adult Beneficiaries) execute a written arbitration election, any dispute may be submitted to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Judgment on the award may be entered in the forum-selection court.
13.4 No Jury Waiver – Consistent with North Dakota constitutional principles and the metadata directive, the right to a jury trial is preserved except where arbitration is elected.
13.5 Injunctive Relief – Nothing herein limits the ability of Trustee or any Beneficiary to seek temporary, preliminary, or permanent injunctive relief to enforce the terms of this Trust.
14. GENERAL PROVISIONS
14.1 Amendment & Revocation – As set forth in Article 2, Settlor may amend or revoke during lifetime. After Settlor’s death, this Agreement is irrevocable.
14.2 Spendthrift – Except as otherwise provided by mandatory law, the interest of any Beneficiary is not subject to voluntary or involuntary transfer, assignment, or attachment.
14.3 Severability – If any provision is unenforceable, the remaining provisions shall be enforced to the maximum extent permissible.
14.4 Merger – This Agreement constitutes the entire agreement regarding the Trust and supersedes prior oral or written communications.
14.5 Headings – Headings are for convenience only and do not affect interpretation.
14.6 Counterparts & Electronic Signatures – This Agreement may be executed in counterparts and by electronic signature, each of which is deemed an original.
14.7 Rule Against Perpetuities – Notwithstanding any other provision, the Trust shall terminate no later than 21 years after the death of the last surviving descendant of Settlor who was living on the Agreement Date, unless North Dakota law permits a longer period. Upon such termination, the Trust Estate shall be distributed to the then-beneficiaries, per capita.
15. EXECUTION & ACKNOWLEDGMENT
IN WITNESS WHEREOF, the Settlor and Trustee have executed this Revocable Living Trust Agreement as of the Agreement Date first written above.
| _______ | _______ |
|---|---|
| [SETTLOR NAME], Settlor | [TRUSTEE NAME], Trustee |
NOTARY ACKNOWLEDGMENT
State of North Dakota )
County of [COUNTY] )
This instrument was acknowledged before me on [DATE] by [SETTLOR NAME] and [TRUSTEE NAME].
Notary Public
My Commission Expires: ____
SCHEDULE A
(Initial Trust Property)
- [TITLE AND DESCRIPTION OF REAL PROPERTY]
- [ACCOUNT # – FINANCIAL INSTITUTION]
- [List of tangible personal property, securities, partnership interests, etc.]
[// GUIDANCE: Attach additional schedules for real property legal descriptions, beneficiary designations, or assignments of partnership/LLC interests as required.]