REVOCABLE LIVING TRUST AGREEMENT
(Texas – Governed by State Trust Law)
TABLE OF CONTENTS
- Document Header & Recitals
- Definitions
- Establishment, Funding, Revocation & Amendment
- Lifetime Distributions
- Post-Death Distributions
- Trustees: Appointment, Succession & Resignation
- Trustee Powers
- Fiduciary Duties & Standards of Care
- Risk Allocation
- Accounting, Records & Tax Matters
- Default & Remedies
- Dispute Resolution
- General Provisions
- Execution Block
Schedules
[// GUIDANCE: Bracketed text must be customized for each client; remove GUIDANCE comments before final execution.]
1. DOCUMENT HEADER & RECITALS
1.1 Title.
This Revocable Living Trust Agreement (the “Agreement” or “Trust”) is made effective as of [EFFECTIVE DATE] (the “Effective Date”).
1.2 Parties.
(a) Settlor/Grantor: [SETTLOR FULL LEGAL NAME] (“Settlor”), a resident of [COUNTY], Texas.
(b) Initial Trustee: [TRUSTEE FULL LEGAL NAME] (“Trustee”).
1.3 Recitals.
A. Settlor desires to create a revocable trust under the Texas Trust Code (Texas Property Code Title 9, Subtitle B) for the management and disposition of Settlor’s property.
B. Trustee is willing to accept appointment and administer the Trust in accordance with this Agreement.
C. The parties intend that this Agreement constitute a valid and enforceable trust instrument under Texas law.
2. DEFINITIONS
For purposes of this Agreement, capitalized terms have the meanings set forth below. Terms defined in the singular include the plural and vice-versa.
“Accounting Period” – Each calendar year ending December 31, unless otherwise stated.
“Beneficiary” – Any person or entity entitled to distributions under Articles 4 or 5.
“Code” – The Internal Revenue Code of 1986, as amended.
“Incumbent Trustee” – The individual or entity then serving as Trustee.
“Permitted Transferee” – Any transferee expressly identified in Article 5.
“Trust Assets” – All property held by the Trustee from time to time, including additions and accretions.
“Trust Estate” – Same as Trust Assets.
[// GUIDANCE: Add, delete, or refine definitions to suit the dispositive scheme.]
3. ESTABLISHMENT, FUNDING, REVOCATION & AMENDMENT
3.1 Creation. Settlor hereby establishes the Trust by transferring to Trustee the property described on Schedule A, receipt of which Trustee acknowledges.
3.2 Additional Property. Settlor or any third party may transfer additional property to the Trust at any time, and such property shall be held as part of the Trust Assets without need for further acceptance.
3.3 Revocation & Amendment.
(a) Settlor reserves the continuing and unconditional right to revoke or amend this Agreement, in whole or in part, by a signed, written instrument delivered to the Incumbent Trustee.
(b) Revocation shall not affect (i) any properly completed disposition made prior to the Trustee’s actual receipt of the revocation instrument, or (ii) Trustee’s right to reimbursement or indemnity under Article 9 for actions taken before such receipt.
3.4 Termination. The Trust shall terminate upon the final distribution of all Trust Assets in accordance with Article 5 or earlier as otherwise provided herein or at law.
4. LIFETIME DISTRIBUTIONS
4.1 Discretionary Distributions to Settlor. During Settlor’s lifetime, Trustee shall distribute to or for the benefit of Settlor so much of the net income and principal as Settlor may request in writing.
4.2 Incapacity of Settlor. If Settlor is adjudicated incapacitated or, in the written opinion of two licensed physicians, is unable to manage property, Trustee may, in Trustee’s sole discretion, distribute income or principal for Settlor’s health, education, maintenance, and support (“HEMS” standard).
[// GUIDANCE: Consider adding powers-of-attorney coordination language.]
5. POST-DEATH DISTRIBUTIONS
5.1 Administrative Trust. Upon Settlor’s death, the Trust shall become irrevocable and shall be administered as an administrative trust for payment of:
(a) Settlor’s enforceable debts;
(b) Legally enforceable expenses of last illness and funeral; and
(c) Estate, inheritance, and similar taxes attributable to Settlor’s estate.
5.2 Dispositive Plan. After satisfaction of Section 5.1, Trustee shall distribute the remaining Trust Assets as follows:
(a) Specific Gifts.
(i) [BENEFICIARY NAME] – [DESCRIPTION OR %] of the Trust Assets.
(ii) …
(b) Residuary Trust Share. The balance (“Residuary Trust”) shall be distributed outright to [PRIMARY RESIDUARY BENEFICIARY], or if such beneficiary fails to survive Settlor by 30 days, then to [CONTINGENT BENEFICIARIES] per stirpes.
[// GUIDANCE: Add sub-trusts for minor beneficiaries, special-needs provisions, GST planning, etc.]
6. TRUSTEES: APPOINTMENT, SUCCESSION & RESIGNATION
6.1 Acceptance. By executing this Agreement, the Initial Trustee accepts the office of Trustee and the fiduciary duties imposed herein and at law.
6.2 Resignation. An Incumbent Trustee may resign by 30 days’ written notice to:
(a) Settlor, if living and not incapacitated; or
(b) the Qualified Beneficiaries (as defined by Tex. Prop. Code §111.004(12)).
6.3 Removal.
(a) Settlor, while not incapacitated, may remove any Trustee by written instrument delivered to such Trustee.
(b) After Settlor’s death or incapacity, a court of competent jurisdiction located in [SETTLOR’S COUNTY] may remove a Trustee for cause under the Texas Trust Code.
6.4 Successor Trustees.
(a) Designated Successors. If the office of Trustee becomes vacant, the following persons shall succeed in the order listed: [NAME 1], [NAME 2], then [CORPORATE TRUSTEE].
(b) Default Appointment. If no designated successor is able and willing to serve, the Qualified Beneficiaries may unanimously appoint a successor; lacking unanimity, any interested party may petition the state probate court.
6.5 Co-Trustees. If co-trustees are serving, decisions shall be made by majority vote; however, any co-trustee may act unilaterally in emergencies to preserve Trust Assets.
7. TRUSTEE POWERS
Subject to fiduciary duties under applicable law, Trustee may exercise all powers granted to trustees under the Texas Trust Code, including but not limited to:
(a) Invest and reinvest Trust Assets in any kind of property or investment;
(b) Exchange, partition, or rent real property;
(c) Borrow money and pledge Trust Assets;
(d) Employ and rely on advisers, including accountants, appraisers, and attorneys;
(e) Manage entities, vote securities, and participate in reorganizations;
(f) Make allocations between income and principal pursuant to the Texas Uniform Principal and Income Act;
(g) Merge separate trusts having substantially identical terms;
(h) Distribute assets in cash or in kind, pro rata or non-pro rata, without liability for equality of value;
(i) Execute all instruments necessary to carry out these powers.
8. FIDUCIARY DUTIES & STANDARDS OF CARE
8.1 Duty of Loyalty. Trustee shall administer the Trust solely in the interests of the Beneficiaries. Any self-dealing transaction must comply with Tex. Prop. Code §113.053 or a court order.
8.2 Prudent Investor Rule. Trustee shall invest and manage Trust Assets as a prudent investor would, consistent with Tex. Prop. Code §117.004 et seq.
8.3 Duty to Inform & Report. Trustee shall keep Qualified Beneficiaries reasonably informed and shall provide annual written statements within 120 days after each Accounting Period.
9. RISK ALLOCATION
9.1 Indemnification. To the extent permitted by law, Trustee and its officers, directors, members, employees, and agents (“Indemnitees”) shall be indemnified and held harmless out of the Trust Assets from and against any loss, liability, or expense, including reasonable attorneys’ fees (“Losses”), incurred by any Indemnitee arising from the administration of the Trust, except Losses resulting from the Indemnitee’s willful misconduct or gross negligence.
9.2 Limitation of Liability. No Indemnitee shall be personally liable for any act or omission in connection with the administration of the Trust except for willful misconduct or gross negligence. Recovery by any claimant shall be limited to the Trust Assets.
9.3 Insurance. Trustee may maintain liability insurance payable from Trust Assets covering acts or omissions of the Trustee.
9.4 Force Majeure. Trustee shall not be liable for failure to perform duties when such failure is due to events beyond reasonable control, including but not limited to war, natural disasters, or governmental restrictions.
10. ACCOUNTING, RECORDS & TAX MATTERS
10.1 Books & Records. Trustee shall maintain complete and accurate records of all Trust transactions.
10.2 Annual Account. Within 120 days after the end of each Accounting Period, Trustee shall deliver an accounting showing receipts, disbursements, and the assets on hand.
10.3 Tax Reporting. Trustee shall file all required fiduciary income tax returns and other governmental filings, and may make elections under the Code in Trustee’s discretion.
10.4 Tax Identification. The Trust shall use Taxpayer Identification Number [TIN OR “APPLIED FOR”].
11. DEFAULT & REMEDIES
11.1 Events of Default. A breach of fiduciary duty, failure to provide required accountings, or willful violation of this Agreement constitutes a default.
11.2 Notice & Cure. Any Qualified Beneficiary may provide written notice specifying the default. Trustee shall have 30 days to cure, or such longer period as reasonably necessary provided the Trustee commences cure within 30 days and diligently pursues completion.
11.3 Remedies. If a default remains uncured:
(a) Beneficiaries may petition the state probate court for removal, surcharge, or injunctive relief;
(b) The court may award damages, order an accounting, or compel specific performance;
(c) Reasonable attorneys’ fees and costs shall be charged against the Trust Assets unless the court directs otherwise.
12. DISPUTE RESOLUTION
12.1 Governing Law. This Agreement and all disputes arising hereunder shall be governed by the laws of the State of Texas, without regard to its conflict-of-laws principles.
12.2 Forum Selection. Exclusive jurisdiction and venue shall lie in the statutory probate court of [COUNTY], Texas (the “Probate Court”).
12.3 Optional Arbitration. [SELECT ONE: “The parties agree that any dispute may, by mutual written consent, be submitted to binding arbitration administered by the American Arbitration Association,” / “This Section intentionally omitted.”]
12.4 Jury Waiver. In accordance with Texas Probate Code procedures, disputes concerning the administration of a trust are traditionally adjudicated without a jury.
12.5 Injunctive Relief. Nothing in this Article shall impair any party’s right to seek temporary or permanent injunctive relief from the Probate Court to maintain the status quo or protect Trust Assets.
13. GENERAL PROVISIONS
13.1 Amendment & Waiver. Only Settlor may amend this Agreement during Settlor’s lifetime. No waiver shall be effective unless in writing and signed by the waiving party.
13.2 Assignment. Interests in the Trust are non-assignable, non-transferable, and non-alienable, except as expressly provided herein or by law.
13.3 Spendthrift. Beneficiary interests shall be subject to a spendthrift restriction to the maximum extent permitted under Tex. Prop. Code §112.035.
13.4 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 achieve its intent.
13.5 Entire Agreement. This instrument constitutes the entire agreement between Settlor and Trustee regarding the Trust and supersedes all prior writings.
13.6 Counterparts & Electronic Signatures. This Agreement may be executed in counterparts and delivered electronically; all counterparts together constitute one instrument.
14. EXECUTION BLOCK
IN WITNESS WHEREOF, Settlor and Trustee have executed this Agreement as of the Effective Date.
Settlor
[SETTLOR NAME], Settlor
Trustee
[TRUSTEE NAME], Trustee
Notary Acknowledgment
State of Texas §
County of [COUNTY] §
On this _ day of _, 20__, before me, the undersigned notary public, personally appeared [SETTLOR NAME] and [TRUSTEE NAME], personally known to me or proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed herein, and acknowledged that they executed the same for the purposes therein contained.
Notary Public, State of Texas
My commission expires: ____
SCHEDULE A
Initial Funding Property
| Asset Description | Title/Account No. | Approx. Value |
|---|---|---|
| [e.g., 123 Main St., Dallas, TX] | [Deed] | $[VALUE] |
| [Checking Account] | [Bank, Acct. ####] | $[VALUE] |
| … | … | … |
SCHEDULE B
Successor Trustee Acceptance
The undersigned hereby accepts appointment as Successor Trustee under the Revocable Living Trust Agreement dated [EFFECTIVE DATE] and agrees to administer the Trust in accordance with its terms and applicable law.
[SUCCESSOR TRUSTEE NAME]
Date: ______
[// GUIDANCE:
1. Consider adding a certification of trust for third-party reliance.
2. Review property transfer documentation (e.g., deeds, assignment forms) to complete funding.
3. Coordinate with estate-planning counsel for tax clauses (QTIP, GST) if needed.
4. Confirm that execution formalities meet local recording or title company requirements when real property is included.]
Prepared for attorney review. This template is provided for informational purposes only and does not constitute legal advice.