Joint Revocable Living Trust for Alabama

This joint revocable living trust is made between _____________ of _____________, _____________ and _____________ of _____________, _____________ (each a "Grantor") who create this instrument in mutual consideration of the following covenants and undertakings:

  1. Trust Name. This trust will be known as (hereinafter, the "Living Trust").
  2. Living Trust. Upon the execution of this Living Trust, Grantors declare that they have or will assign, transfer, and deliver to Trustees all of their interest in the property described in the Schedule A - Jointly-Held Trust Property, Schedule B - _____________'s Separately-Held Trust Property, and Schedule C - _____________'s Separately-Held Trust Property, each attached hereto and incorporated herein by reference (the "Trust Property"). The terms "disbursements," "distributions," and "gifts" are used interchangeably to mean the shares to which beneficiaries are entitled or may become entitled to from the Trust Property. Trustees hereby acknowledge receipt of the Trust Property and agree to hold the Trust Property in trust, according to this Living Trust.
  3. Purpose. The purpose of this Living Trust is to establish a trust to receive and manage assets for the benefit of Grantors during Grantors' lifetimes and to further manage and distribute the assets of the trust upon the death of Grantors in accordance with the terms stated herein. As such, the Grantors' interests and well-being are considered the primary purpose of this Living Trust. The Trustees will accordingly manage the trust in order to preserve the value of Trust Property and, secondarily, to grow and generate profits from Trust Property without assuming unreasonable risk that unduly compromises its value.
  4. Funding of Trust. Grantors will fund the Living Trust with assets transferred by either or both Grantors at the time of creating this Trust or any time thereafter. The Living Trust may also receive property from any person or entity acting under the authority granted to that person or entity by Grantors. Furthermore, the Living Trust may receive assets pursuant to the terms of either Grantor's last will and testament. Any and all such property properly received by the Living Trust in accordance with this instrument will hereinafter be referred to as "Trust Property," as itemized on Schedule A, attached hereto and hereby incorporated by reference.
  5. Character of Trust Property. All Trust Property held in this Living Trust will retain its original character as either jointly or separately held property while both Grantors are living. If at any time this Living Trust is revoked, Trustees will distribute the Trust Property listed in Schedule A to each Grantor according to his or her respective ownership prior to transferring the property to the Living Trust or otherwise as agreed by Grantors.
  6. Amendment and Revocation. Grantors expressly reserve the power during their lifetime to (i) revoke this instrument, in whole or in part, at any time by a written instrument delivered to Trustees or by any manner allowed by law, and (ii) to alter, amend, or modify this instrument at any time and from time to time by a written instrument without the consent of any beneficiary. The powers reserved to Grantors under this paragraph are personal to the Grantors and will not be assigned or extended to any other person, including by a conservator, a guardian, the personal representative of the Grantors' estate, or any beneficiary named herein unless the Grantors specifically grant a power to revoke or amend this Living Trust in a power of attorney. Upon death of both Grantors, this instrument shall become irrevocable.
  7. Trustees
    1. Initial Trustee(s). The initial Trustee ("Trustee") of this Living Trust is designated as:
    2. Successor Trustee. In the event that the initial Trustee is unavailable or no longer able to serve for any reason, the successor Trustee of this Living Trust is designated as:
    3. Second Successor Trustee. In the event that the successor Trustee is unavailable or otherwise no longer able to serve for any reason, the second successor Trustee of this Living Trust is designated as:
    4. Terminology. In this Living Trust, the term "Trustee" includes successor Trustees serving as Trustee of this trust. The singular "Trustee" also includes the plural.
    5. Change of Trustee. In the event that a Trustee should become unavailable or otherwise no longer able to serve for any reason, and no co-Trustee remains to serve at that time, then the next designated successor Trustee(s) will serve.
    6. Resignation of Trustee. Any Trustee in office may resign upon 30 days by signing a notice of resignation. The resignation must be delivered to the person or institution who is to serve as the next successor Trustee.
    7. Removal of Trustees. As a matter of convenience to Grantors and the beneficiaries of any of the trusts created hereunder, Grantors reserve the right to remove any Trustee at any time during Grantors' lifetimes. Such right of removal must be exercised by giving written notice to such Trustee and to the remaining Trustee or Trustees, if any, and, upon the acceptance by the remaining or successor Trustee or Trustees and the transfer of the Trust Property or any portion thereof, as the case may be, the removed Trustee will cease to be a Trustee of any such trust hereunder.
    8. Power to Appoint Successor Trustee. In the event that any Trustee resigns or is unable or unwilling to serve during Grantors' lifetimes, Grantors may name additional or replacement Trustees. After Grantors' deaths, if no one named in this Living Trust as a successor Trustee is willing or able to serve as Trustee, or if the last successor Trustee named by Grantors resigns, the last acting Trustee may appoint a successor Trustee and may require the posting of a reasonable bond, to be paid from the Trust Property. The appointment must be made in writing, signed by Trustee, and notarized. If for some reason no Trustee exists to name a successor Trustee, the Court having probate jurisdiction over Grantors' estate will name the successor Trustee.
    9. Bond. All Trustees named herein or in accordance with this Living Trust will not be required to serve with bond.
    10. Compensation. If Trustee is an individual, then Trustee must serve without compensation but with reimbursement for reasonable and ordinary expenses. Nevertheless, if Trustee is an attorney or an accountant, then Trustee will be entitled to compensation for such professional services rendered to the trust. If Trustee is a banking or other business entity, it will be entitled to customary and reasonable compensation in rendering services to the estate.
    11. Liability of Trustee. With respect to the exercising or non-exercising of discretionary powers granted by this Living Trust, Trustee will not be liable for actions taken in good faith. Such actions will be binding on all persons interested in the Trust Property.
  8. Trustee's Management Powers and Duties
    1. Representation. Any person or entity serving as a Trustee under this Living Trust is empowered to act for or represent this Living Trust in any transaction concerning the Living Trust. Any Trustee serving hereunder, or third party transacting with a Trustee, may transact on behalf of or with the Trust using the following identifier: John Doe, as trustee of , dated month day, year.
    2. Powers Under State Law. Trustee has all authority and powers allowed or conferred on a trustee under state law, subject to Trustee's fiduciary duty to Grantors and the beneficiaries. Furthermore, no entity dealing with Trustee will be required to investigate or confirm Trustee's authority to enter into any transaction or to administer the application of the proceeds of any transaction.
    3. Specified Powers. Trustee's powers include, but are not limited to:
      1. The power to sell Trust Property, to borrow money, and to encumber Trust Property, including trust real estate, by mortgage, deed of trust, or other method.
      2. The power to manage trust real estate as if Trustee was the absolute owner of it, including the power to lease (even if the lease term may extend beyond the period of any trust) or grant options to lease the property, to make repairs or alterations, and to insure against loss.
      3. The power to sell or grant options for the sale or exchange of any Trust Property, including stocks, bonds, debentures, and any other form of security or security account, at public or private sale for cash or on credit.
      4. The power to invest Trust Property in every kind of property and every kind of investment, including, but not limited to, bonds, debentures, notes, mortgages, stock options, futures and stocks, and including buying on margin.
      5. The power to receive additional property from any source and to administer such additional property as a portion of the appropriate trust hereunder, provided that Trustee will not be required to receive such additional property without his or her consent unless such property is transferred to Trustee by Grantors or devised or bequeathed to Trustee in his or her capacity as Trustee.
      6. The power to employ and pay reasonable fees to accountants, lawyers, or investment experts for information or advice relating to the Living Trust.
      7. The power to deposit and hold trust funds in both interest-bearing and non-interest-bearing accounts.
      8. The power to deposit funds in bank or other accounts uninsured by FDIC coverage.
      9. The power to enter into electronic funds transfer or safe deposit arrangements with financial institutions.
      10. The power to continue any business of Grantors.
      11. The power to vote shares of stock owned by any trust created hereunder at shareholder's meetings in person or by special, limited, or general proxy, with or without power of substitution.
      12. The power to institute or defend legal actions concerning this Living Trust or Grantors' affairs.
      13. The power to compromise, adjust, arbitrate, sue on or defend, or otherwise deal with and settle claims in favor of or against any trust established hereunder as Trustee may deem advisable, and the decision of Trustee will be conclusive between Trustee and the beneficiaries of any such trust in the absence of fraud, bad faith or gross negligence of Trustee.
      14. The power to commingle assets by (a) acquiring, receiving, holding, and retaining the principal of any or all trusts created hereunder undivided until division becomes necessary in order to make a distribution, or (b) holding, managing, investing, reinvesting, and accounting for the several shares or parts of shares by appropriate entries in the books of account maintained by Trustee and to allocate to each share or part of a share its proportionate part of all receipts and expenses, provided that this subparagraph will not defer the vesting in possession of any share or part of a share of the Trust Property.
      15. The power to employ and compensate persons deemed by the Trustee as advisable or necessary in the administration of any trust created hereunder including, but not limited to, agents, accountants, brokers, attorneys-in-fact, attorneys-at-law, real estate managers, rental agents, appraisers, and investment counsel and other professional advisers as may be required or desired in managing, protecting and investing the property of any such Trust Property.
      16. The power to carry such insurance coverage including, but not limited to, public liability, fire, rent, title, or casualty insurance for such hazards and in such amounts, either in stock companies or in mutual companies, as Trustee may deem advisable.
      17. The power to execute any documents necessary to administer any trust created by this Living Trust.
      18. The power to diversify investments, including authority to decide that some or all of the Trust Property need not produce income.
      19. The power to maintain reasonable reserves for depreciation and for amortization and obsolescence.
      20. The power to deal in every way with Grantors' estate or any trust established by Grantors, including, but not limited to, the purchase from, the sale to, the exchange of property with Grantors' estate or any trust established by Grantors or the making of loans thereto, either secured or unsecured and either interest-free or at such rates of interest as Trustee may determine.
      21. The power to perform all other acts necessary for the proper management, investment, and distribution of the property of any trust created hereunder.
    4. Accountings. Trustee will, after the death of both Grantors, provide a semi-annual accounting to all competent adult beneficiaries detailing the transactions, if any, of any trust created hereunder. Such accountings will not be required to be audited, although Trustee may, in his or her sole discretion, cause an audit to be performed from time to time.
  9. Distributions During the Joint Lives of the Grantors. During the lives of the Grantors, Trustee will distribute as much of the corpus of Trust Property (whether capital or interest) as the Trustee may determine is necessary for support and maintenance in reasonable comfort. Such payments will be paid to the Grantors at least annually. Income accruing in or paid into trust accounts will be deemed as paid to the Grantors. At any time, the Grantors may change the amount of the payments by providing written notice to Trustee.
  10. Incapacity of Grantors
    1. Change of Trustees. In the event that Grantors are co-Trustees and one Grantor becomes physically or mentally incapacitated, whether or not a court has declared such Grantor incompetent or in need of a conservator or guardian, then the other Grantor will remain as the sole Trustee, if competent. In the event that a Grantor-Trustee becomes physically or mentally incapacitated and there is no co-Trustee serving at that time, then the next named successor Trustee will become Trustee.
    2. Determining Incapacity. The decision as to whether a Grantor is incapacitated, for purposes of this instrument, will be made by the person or persons to whom that Grantor has given a written power to make healthcare decisions for him or her, with the concurring opinion of at least one physician who has examined that Grantor during the two-month period immediately preceding the date on which the determination is being made. If such Grantor has not given any such written power to make healthcare decisions to anyone, this decision will be made by _____________. If Trustee is unable, after making reasonable efforts, to obtain a written opinion from _____________, Trustee may request an opinion from such Grantor's primary physician and may rely on that opinion. Trustee will, if necessary, ask the decision maker to state, in writing, an opinion as to whether or not such Grantor is able to continue serving as Trustee, if applicable. Trustee may rely on that written opinion when determining whether or not to begin serving as Trustee.
      1. "Incapacitated" means the inability to make informed decisions in the ordinary course of business because of advanced age, illness, or other causes.
    3. Use of Trust Funds While Incapacitated. While a Grantor is incapacitated, Trustee will use any amount of trust income or Trust Property necessary for such Grantor's proper health care, support, maintenance, comfort, and welfare, in accordance with such Grantor's accustomed manner of living. Any income not spent for the benefit of such Grantor will be accumulated and added to the Trust Property. Income will be paid to an incapacitated Grantor at least annually. Income accruing in or paid to trust accounts will be deemed to have been paid to such Grantor.
    4. Regaining Capacity. The Trustee will manage the trust until an incapacitated Grantor is again able to manage his or her affairs. The determination of a Grantor's capacity to again manage this trust will be made in the manner specified in this section.
  11. Terms of Property Distribution
    1. Uniform Transfers to Minors Act. All distributions are subject to any provision in this Living Trust that creates a child's subtrust or a custodianship under the Uniform Transfers to Minors Act.
    2. Surviving the Grantor. A beneficiary must survive its respective Grantor for at least 30 days to receive property under this Living Trust. As used in this Living Trust, to "survive" means to be alive or in existence as an organization.
    3. Encumbrances and Liens. All personal and real property left through this Living Trust will pass subject to any encumbrances or liens placed on the property as security for the repayment of a loan or debt.
    4. Allocation of Assets. On any distribution from the Trust Property, whether it be an ordinary distribution or one of principal, or a final distribution, Trustee may apportion and allocate the assets of the trust estate in cash and partly in kind in Trustee's discretion. The valuation, whether based on an appraisal or not, made by Trustee will be binding on the beneficiaries.
    5. Miscellaneous Distribution Procedures. If there is no named beneficiary still living to receive a gift, Trustee will distribute the net income to the lineal descendants of the beneficiary. If any beneficiary dies and is not survived by lineal descendants, that beneficiary's share will go first to any other beneficiaries of the same gift, and if none, to increase all other gifts pro-rata, unless this Living Trust provides otherwise. If property is left to two or more beneficiaries to share, they will share it equally unless this Living Trust provides otherwise.
  12. Payment to Minors or Incompetents
    1. Unless otherwise stated, Trustee may distribute Trust Property distributable to a minor or incompetent beneficiary as follows:
      1. To the guardian of the minor or incompetent or his or her estate;
      2. To any adult person with whom the minor or incompetent resides and who has the care, custody, or control of the minor or incompetent;
      3. To a custodian of the minor or incompetent under the Uniform Transfers to Minors Act;
      4. May defer payment of such property until the minor reaches the age of majority, as defined by his or her state of residence;
      5. May distribute all or part of a bequest to a beneficiary younger than 18 years, if it is in the best interest of that beneficiary. This may include an allowance in such amount as he or she may see fit from time to time to the minor. No bond will be required for such payments; or
      6. May put the assets into a trust in favor of such beneficiary and to be administered by Trustee, without bond or other undertaking, to hold and administer such property for the benefit of such person until such person attains the age of majority, to invest or reinvest such property, to collect the income therefrom, and, after deducting therefrom all charges properly allocatable thereto, to pay to or apply to the use and benefit of such person so much of the net income as, in Trustee's sole discretion, is deemed appropriate and to accumulate for the benefit of such person any income not so paid or applied. Trustee is authorized to pay to or apply to the use and benefit of such person so much of the principal amount of such person's property and accumulations as is deemed appropriate in the sole discretion of Trustee. Any remaining principal and income will be paid to such person when he or she attains the age of majority.
  13. Priority of Distributions. If at any time that a disbursement is triggered under this Living Trust the value of the Trust Property is insufficient to satisfy the entirety of the distributions specified hereunder, the Trustee will determine the priority of specific distributions in the Trustee's absolute and sole discretion.
  14. Liquidation of Trust. If at any time the total of the principal and income of the Living Trust or a subtrust within it becomes diminished to such extent that only insignificant sums of money may be disbursed, then Trustee, in his or her absolute discretion, may close out such trust or subtrust by paying the proportionate shares of each beneficiary to them. Trustee will at that time deliver a final accounting to each beneficiary. Upon payment, Trustee will be discharged from all further duties regarding such trust.
  15. Merging of Similar Trusts. Notwithstanding any provision contained herein to the contrary, Trustee (including any successor Trustee or Trustees) will have the power to merge any trust created under this instrument with any other trust or trust created by Grantors if the terms of any such trust or trusts are substantially similar and held for the primary benefit of the same persons.
  16. Severance of Trusts. With respect to any trust created hereunder, Trustee may sever from such trust and hold, administer, and distribute as a separate trust hereunder, upon all the terms and conditions set forth herein, such portion of the trust as Trustee, in his or her sole discretion, may deem advisable.
  17. Powers Concerning Insurance Policies
    1. Reservation of Powers by Grantors. Notwithstanding any provision contained herein to the contrary, Grantors reserve the right, without the consent or approval of Trustee (including any successor Trustee or Trustees), to sell, assign, or hypothecate any policy or policies of insurance that are owned by Grantors and held by Trustee hereunder; to exercise any option or privilege granted by such policy or policies including, but not limited to, the right to change the beneficiary of such policy or policies; to borrow against the cash value of such policy or policies; and to receive all payments, dividends, surrender values, benefits, and privileges of any kind that may accrue on account of such policy or policies during Grantors' lifetimes. Trustee will deliver to Grantors (or to the owner if owned by someone other than Grantors) any policy or policies held hereunder upon Grantors' written request or the written request of such other owner, as the case may be. Trustee, if named as the beneficiary of any such policy or policies, will join in the execution of assignments thereof upon Grantors' written request or the written request of such other owner. It is expressly understood and agreed that Trustee will have no responsibility for the payment of premiums or other charges due on any policy or policies held hereunder during Grantors' lifetimes.
    2. Settlement of Claims. Trustee (including any Successor Trustee or Trustees) will use his or her best efforts to collect any sums due and payable under any insurance policy or policies held hereunder, but will not be required to institute legal proceedings until indemnified. Upon Grantors' deaths, the successor Trustee may elect any mode of settlement permitted by the terms and provisions of any insurance policy or policies on Grantors' lives, wherein such policy or policies designate the successor Trustee as beneficiary, that the successor Trustee, in their sole discretion, may believe to be in the best interest of the beneficiaries of the trusts created under this instrument. The successor Trustee may, without the order of any court, compromise and adjust claims arising out of any policy or policies held hereunder with respect to any amounts payable to the successor Trustee upon such terms and conditions as the successor Trustee may deem reasonable, and the decision of Trustee will be binding and conclusive upon all interested persons.
  18. Spendthrift Provision. Except as otherwise provided herein or by law, no power of appointment created hereunder will be subject to involuntary exercise, and no interest of any beneficiary in the income or principal of any gift created hereunder will be subject to assignment, alienation, pledge, attachment, or claims of creditors, including claims for alimony or support, until the same is distributed to such beneficiary or beneficiaries.
  19. Perpetuities Period. Notwithstanding anything to the contrary herein contained, any trusts created by this agreement will cease and terminate 21 years after the death of the last surviving beneficiary and all issue of the beneficiaries living at the date of this agreement. At that time, Trustee will close out such trust by paying a proportionate share to each beneficiary and will deliver a final accounting to each beneficiary. Upon payment, Trustee will be discharged from all further duties.
  20. Gifts Given to a Beneficiary During Grantors' Lifetimes. Gifts given to a beneficiary by Grantors during Grantors' lifetime which are provided by this Living Trust to be given to that same beneficiary upon Grantors' deaths will satisfy the corresponding distribution provided by this Living Trust.
  21. Grantors' Right to Homestead Tax Exemption. If Grantors' principal residence is held in trust, Grantors have the right to possess and occupy it for life, rent-free and without charge except for taxes, insurance, maintenance, and related costs and expenses. This right is intended to give Grantors a beneficial interest in the property and to ensure that Grantors do not lose eligibility for a state homestead tax exemption for which they otherwise qualify.
  22. Fiduciary Conflicts of Interest. No Trustee may be disqualified from serving as or taking any action as Trustee solely because that same person (or a related individual or entity) is conducting business with the trust or otherwise dealing with the trust estate or a beneficiary in another capacity (e.g. as an officer, director, partner, shareholder or co-owner of a trust business or asset). Trustee may take action in these circumstances free of any per se rule that prohibits conflicts of interest, so long as any action on behalf of the Living Trust taken by such Trustee with a conflict of interest is taken in good faith, with reasonable care, and on terms comparable to those obtainable from third parties.
  23. Notice of Events. Until Trustee receives notice of any death, birth, marriage, or other event on which the right to receive distributions is based, Trustee may incur no liability for any disbursements or distributions made in good faith. This clause will not prevent Trustee from seeking restitution of any payments made in error in his discretion.
  24. Change of Situs. Trustee may, at any time and from time to time, as he or she may deem advisable, in his or her sole discretion, for the benefit or security of any trust created hereunder, or any portion thereof, remove (or decline to remove) all or any portion of the property or the situs of administration thereof from one jurisdiction to another jurisdiction and elect that the laws of such other jurisdiction will thereafter govern the same to such extent as may be necessary or desirable, and, thereupon, the courts of such other jurisdiction will have the power to effectuate the purposes of the trusts created hereunder to such extent. This power of removal will be a continuing power that may be exercised any number of times including further removal or change of location of property or situs of administration. The determination of Trustee as to any such removal or change of situs will be binding and conclusive on all individuals interested or claiming to be interested in any trust created hereunder.
  25. Liability for Acts of Predecessors. No successor Trustee or Trustees will be personally liable for any act or failure to act of a predecessor Trustee. With the approval of the individual or individuals who may approve the accounts of Trustee, a successor Trustee may accept the account furnished, if any, and the property delivered by or for a predecessor Trustee without liability for so doing, and such acceptance will be a full and complete discharge to the predecessor Trustee.
  26. Certificate of Trust. A certificate or abstract of trust duly signed by a Trustee and acknowledged before a notary public will serve as conclusive evidence of the facts stated in such certificate for all persons and purposes regarding the terms of this Living Trust.
  27. Severability of Clauses. If any provision of this Living Trust is ruled unenforceable, then such determination will not impair the validity of the remaining provisions of this instrument.
  28. Definitions
    1. The terms "child," "children," "descendants," and "issue" include children legally adopted and the lawful descendants of such adoptees.
    2. The term "person" means and includes an individual, a corporation, a partnership, an association, a trust, an estate, or any other legal entity or organization.
    3. The term "Living Trust" includes any provisions added by valid amendment.
    4. The term "trust" includes any subtrust created within this instrument.
    5. The term "subtrust" means a trust derived from another trust.
    6. The term "Trustee" includes the initial Trustees and any successor Trustees serving as Trustee of this Living Trust. The singular "Trustee" also includes the plural where applicable.
    7. The term "Trust Property" means all assets and property, whether real, personal, or mixed, that are received and held by Trustee under this instrument as part of a trust created according to this instrument at any given time.
    8. The terms "disbursements," "distributions," and "gifts" are used interchangeably to mean the shares to which beneficiaries are entitled to from the trust and/or subtrusts created according to this instrument at any given time.
  29. Governing Law. This Living Trust will be governed by _____________ law.
  30. Interpretation and Captions. Wherever the context so requires, words used herein in one gender will be applicable to all genders, words used in the singular include the plural, and words used in the plural include the singular. The use of captions is for reference only and is not meant to govern or affect the interpretation of any part of this Living Trust.
  31. Counterparts. This instrument may be executed in one or more copies, and any copy so executed will be considered an original. Moreover, anyone may rely upon a copy, certified by a notary public, to be a true copy of this instrument (and of the writings, if any, endorsed thereon or attached thereto) to the same effect as if it were an original copy, and anyone may rely upon any statement of fact certified by a Trustee hereunder.
  32. Effective Date. This Living Trust is effective as of the date that this instrument is signed.

Certification of Grantors

By signing below, I certify that I have read this Living Trust and that it correctly states the terms and conditions under which the Trust Property is to be held, managed, and disposed of by Trustee, and I approve the Living Trust.

Signed: _____________________________     Dated: ______________

_____________, Grantor

Signed: _____________________________     Dated: ______________

_____________, Grantor

NOTARY ACKNOWLEDGMENT




State of _____________

SS.

County of _____________

On _______________ (date), before me, personally appeared _____________ and _____________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to within the attached _____________ and _____________ Joint Revocable Living Trust acknowledging to me that he/she/they executed the same in his/her/their authorized capacity(ies) and that by affixing his/her/their signature(s) on the instrument so executed the instrument.

I certify under PENALTY OF PERJURY that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Print: ________________________     My Commission Expires: ________________________

Sign: ________________________       [Affix seal]

NOTARY PUBLIC

SCHEDULE A

JOINTLY-HELD TRUST PROPERTY



This SCHEDULE A - JOINTLY-HELD TRUST PROPERTY is incorporated into The _____________ and _____________ Joint Revocable Living Trust. At the time of execution of this Living Trust, "Jointly-Held Trust Property" includes the following assets, and such property may hereafter be added to or subtracted from according to the Grantors' wishes:

Grantor Initials: ______ Grantor Initials: ______

SCHEDULE B

_____________________'S SEPARATELY-HELD TRUST PROPERTY



This SCHEDULE B - _____________'S SEPARATELY-HELD TRUST PROPERTY is incorporated into The _____________ and _____________ Joint Revocable Living Trust. At the time of execution of this Living Trust, "_____________'s Separately-Held Trust Property" includes the following assets, and such property may hereafter be added to or subtracted from according to the Grantors' wishes:

Grantor Initials: ______ Grantor Initials: ______

SCHEDULE C

_____________________'S SEPARATELY-HELD TRUST PROPERTY



This SCHEDULE C - _____________'S SEPARATELY-HELD TRUST PROPERTY is incorporated into The _____________ and _____________ Joint Revocable Living Trust. At the time of execution of this Living Trust, "_____________'s Separately-Held Trust Property" includes the following assets, and such property may hereafter be added to or subtracted from according to the Grantors' wishes:

Grantor Initials: ______ Grantor Initials: ______

Instructions for Your Joint Revocable Living Trust



Next Steps

Review Your Living Trust

If you find any issues, you can easily make changes on LegalNature's website or by downloading and editing the document in Microsoft Word. Then simply print and proceed to the next step.

Sign and Notarize

In order for your living trust to be executed properly, you must sign it in front of a notary public and then have it officially notarized.

Complete Related Documents

Included with your living trust is a Notice of Assignment and a Certificate of Trust. The Notice of Assignment is used to evidence the transfer of any property you listed that is untitled—as in, without official title paperwork—into the trust. In some states, like New York, this is required; whereas in other states this is simply a recommended formality. If making a joint living trust, both Grantors will need to complete a form. The Certificate of Trust is used to show a financial institution or other organization that you have created a trust while keeping the rest of the information in your trust document private. It will need to be completed by hand and then notarized. It is best to make multiple copies.

Transfer Property to Your Trust

Transferring property into your trust is crucial. Without doing this, your trust will not be properly funded and your property will remain outside of the trust. All untitled property will be handled by the Notice of Assignment. Any property that has a title should be transferred to the Trustee to hold in the name of the trust. This includes stocks, bonds, real estate, and bank accounts. A common format for the transfer language is "Joe Smith, as trustee of Joe Smith Revocable Living Trust u/a/d [DATE]." You may use the Certificate of Trust as evidence of the trust's existence.

Distribute Copies and Add Useful Information

Give a copy of your completed living trust document to your successor Trustee; this will make it easier for the Trustee to take control when the time comes. It may also be good to compile all relevant information about trust property and beneficiaries for your trust bundle.

Periodically Review and Update

At this point the hard work is done! It is important to review your living trust from time to time to ensure everything still reflects your circumstances. Do not forget that you can continually add and remove property from your trust.

Funding Your Revocable Living Trust

Depending on the type of asset, the process for transferring can vary. Below is a short guide to varying types of assets. Please be aware that the process can vary from state to state and by the institution that holds the asset. Additional assets can also be added to your revocable living trust at a later date. Listed below are the most common assets transferred into a revocable living trust.

Real Estate

In most cases, the transfer of real estate must be evidenced in writing. This normally is done through a transfer deed—either a quit claim deed or general warranty deed. The deed will witness the transfer of the real estate from the Grantor's name into the trust name.

If the property is still subject to a mortgage or any other debt, this will not normally affect the transfer of the property to a trust. You should check with your lender to ensure that there are not any restrictions and to find out what the procedure for updating records is.

In the event the real estate is covered by any type of insurance, such as title or property insurance, the Grantor should check his or her coverage with the insurance company. Not all policies allow for or cover property under a voluntary transfer of title.

Stocks and Bonds

If the stocks and bonds are held in a brokerage account, normally only the name on the account needs to be changed. However, if the Grantor holds the security certificates, these will need to be transferred into the name of the revocable living trust.

Bank, Savings, and Other Accounts

In most cases, simply the name on the account needs to be changed. You should contact the relevant institution to obtain the relevant procedure.

Personal Property

Personal property, also known as tangible property, is usually property that does not have any title attached to it, such as jewelry or antiques. This property is transferred to the trust simply by listing it in the revocable living trust as "Trust Property." The transfer of this property is further evidenced through the completion of the Notice of Assignment.

Property Character

For the purposes of a joint revocable living trust, property can have one of two characteristics: it can either be separately held or jointly held. Separately-held property is legally owned by only one of the partners. This means that one partner has title to the property, while the other party has absolutely no claim to it. An example of this would be a car that was purchased before marriage where the title is in the purchasing partner's name.

Jointly-held property is property in which both partners have some form of ownership. In the simplest form this would be property that both partners legally own. An example of this is a house purchased after marriage where both partners are on the title deed. There are three basic forms of joint ownership: tenancy in common, joint tenancy with right of survivorship, and tenancy by the entirety.

Community Property

The confusion between jointly- and separately-held property is further confounded when dealing with what is known as community property. There are nine states that automatically apply community property rules. Community property is essentially marital property that is considered equally owned, despite which partner holds title. The community property rules apply to all property and income that either partner acquires during the marriage, with the exception of specific gifts given to one spouse or inheritances.

Even though there are only nine states that automatically enforce community property rules, most non-community property states (also known as common law states) do have provisions for when community property is brought from a community property state to a non-community property state. Real estate always applies the rules of the state it is located in, regardless of where the owners live.

Distribution of Trust Property Upon the First Death of a Grantor

When making a joint revocable living trust, one of the biggest decisions to make is what happens to trust property when the first of the Grantors passes away. LegalNature's joint revocable living trust provides options to either vest all trust property to the surviving Grantor or to split the joint revocable living trust into two separate subtrusts. Both options have their pros and cons, and deciding between each option will be determined by the priorities of the Grantors. If all trust property is vested to the surviving Grantor, the trust will remain revocable and changeable in its entirety. In other words, the trust will continue on in the same manner as when both Grantors were living, allowing the surviving Grantor to amend the trust and add or remove trust property as he or she chooses.

Some of the downfalls of the first option are as follows: it cannot be guaranteed that the deceased Grantor's wishes are carried out, the Grantors may not get the full advantage of tax relief, and it will not maximize protection from creditors.

If the second option is chosen, the trust will be split into separate subtrusts. The deceased Grantor's subtrust will become irrevocable, while the surviving Grantor's subtrust will remain revocable until death. These subtrusts will consist of each Grantor's respective separately-held property and shares of jointly-held property. This option allows each Grantor to ensure that their wishes are fulfilled. This may be the best option if a Grantor has familial connections, such as children, that are not shared with the other Grantor.

Capital Gains and Step-Up Basis

When funding the joint revocable living trust, it is worth taking capital gains tax and the discount provided by step-up basis into consideration. Capital gains tax is calculated on the difference between the value of property at the time of acquisition and the market value when the property is disposed of. The IRS provisions allow for an increase, or stepping-up, of the value of the property at acquisition, or basis, at the time of death of one of the Grantors. How the step-up rule applies varies depending on how the property was held prior to death. For separately-held property, a full step-up value is applied, meaning when the property is transferred, the current market value of the property will be considered the basis for capital gains purposes. For jointly-held property there are two outcomes:

For non-community jointly-held property the step-up basis is only applied to the deceased's shares of the jointly-held property. For example, imagine a house was jointly purchased for $100,000 and at the time of death it was worth $200,000. While both Grantors are living, capital gains tax would be applied to $100,000—the total rise in value. After transfer through the trust, $50,000, being the deceased's share, will be disregarded. This means the house will have a basis of $150,000, and capital gains tax would be payable on the difference between $150,000 and the amount the house is sold for.

In community property states the step-up is more generous. The basis is stepped-up to the current value at the time of the deceased's passing. Using the above example, the capital gains tax basis would become the full $200,000.

Subtrusts for Your Spouse and Children

Our joint revocable living trust also gives you the nifty option of creating a subtrust for your children. This subtrust will kick in upon the death of the Grantors and will provide for your children's health, support, and education during their lives. This helps ensure that the money you give them will last and continue to accrue interest and dividends while the Trustee has it invested. The Trustee will still have the option to give all of the money to them should there be an emergency or other important reason.

Avoiding Probate and Estate Taxes

Note that any testamentary trust (a trust created in your will that goes into effect at death) will be probated before the trust is created. Also, if your estate will be larger than the current federal estate exemption amount—$5,450,000 (as of 2016, set to rise to $5,490,000 in 2017)—then your estate will be subject to federal estate tax. In which case, it is also a good idea to try to use trusts to ensure your money goes where you want it to go after you are gone.

A joint revocable living trust can aid Grantors in avoiding estate tax by choosing to divide the trust at the time one of the Grantors passes away. By dividing the trust into two separate trusts, each trust receives the maximum exemption. The newly-created trusts can still be used to benefit the Surviving Grantor.

Posting Bond

A bond may be posted as insurance in case your Trustee acts dishonestly or imprudently with your trust property. The bond payment will come out of your trust property to cover any losses. However, this is usually a small price to pay to ensure the trust property is safe. Requiring a bond is not an insult to the Trustee. Think of it more as an insurance policy that will protect you from mishap. A bond is therefore recommended if the trust can afford it.

Supplementary Legal Documents

Certificate of Trust

As previously mentioned, the trust authorizes Trustees to create and sign a Certificate of Trust, also known as an Abstract of Trust. The purpose of a Certificate of Trust is to prove the existence of a trust without disclosing its private details. Most states have enacted laws that govern the use of Certificates of Trust, requiring third-party organizations to accept a certificate as long as it complies with state requirements.

Although there may be some slight variations depending upon state law, a Certificate of Trust normally comprises the following sections:

  • Name and date of the creation of the trust
  • Names of the Grantors of the trust
  • Names and addresses of current and successor Trustees
  • A list of the Trustees' powers. This is normally an exact copy of the language used in the actual trust.
  • A declaration stating that the trust is revocable and naming who has the power to revoke the trust
  • A declaration as to how many Trustees are required to exercise the powers of the trust
  • The trust's tax ID number. This may be either the Grantors' Social Security Number or a separate Employer Identification Number if one has been applied for.
  • A statement as to how trust assets should be titled

It is best practice that all Trustees sign the Certificate of Trust and that the document is notarized.

Notice of Assignment

A Notice of Assignment is used to officially evidence the transfer of property from a Grantor to a trust. Each Grantor should complete their own notice. Some property, such as cars, houses, or shares, have titles that can be changed to show new ownership; however, other items, such as art, jewelry, or antiques, do not, even though their value can be high. The use of a Notice of Assignment officially witnesses the transfer of untitled property to avoid doubt and lower the possibility of any future conflict.

While a Notice of Assignment is not required in every state, it is still advisable that you complete the notice. The document should list all property being added to the trust and should be signed and notarized. In the event that any untitled property is added to the trust at a later date, a new Notice of Assignment should be made for that property.

Certificate of Trust



Pursuant to Alabama Code Section 19-38-1013

The undersigned hereby declare(s) the following to be true and correct:

  1. The _________________________________________________________ (Trust Name) is currently in existence and was created on _______________________ (Date).
  2. The grantor(s)/trustor(s)/settlor(s) of the trust are as follows:

    Name:_________________________

    Name:_________________________
  3. The current acting trustee(s) of the trust is(are):

    Name:_________________________

    Address:__________________________________________________________

    Name:________________________

    Address:__________________________________________________________
  4. The successor trustee(s) of the trust is(are):

    Name:_________________________

    Address:__________________________________________________________

    Name:________________________

    Address:__________________________________________________________
  5. The trustee(s) of the trust have the following powers, a verbatim reproduction of provisions of the Trust Agreement:
    1. Representation. Any person or entity serving as a Trustee under this Living Trust is empowered to act for or represent this Living Trust in any transaction concerning the Living Trust. Any Trustee serving hereunder, or third party transacting with a Trustee, may transact on behalf of or with the Trust using the following identifier: John Doe, as trustee of The _____________ and _____________ Joint Revocable Living Trust, dated month day, year.
    2. Powers Under State Law. Trustee shall have all authority and powers allowed or conferred on a trustee under state law, subject to Trustee's fiduciary duty to Grantors and the beneficiaries. Furthermore, no entity dealing with Trustee shall be required to investigate or to confirm Trustee's authority to enter into any transaction or to administer the application of the proceeds of any transaction.
    3. Specified Powers. Trustee's powers include, but are not limited to:
      1. The power to sell Trust Property, and to borrow money, and to encumber Trust Property, including trust real estate, by mortgage, deed of trust, or other method.
      2. The power to manage trust real estate as if Trustee were the absolute owner of it, including the power to lease (even if the lease term may extend beyond the period of any trust) or grant options to lease the property, to make repairs or alterations, and to insure against loss.
      3. The power to sell or grant options for the sale or exchange of any trust property, including stocks, bonds, debentures, and any other form of security or security account, at public or private sale for cash or on credit.
      4. The power to invest Trust Property in every kind of property and every kind of investment, including but not limited to bonds, debentures, notes, mortgages, stock options, futures and stocks, and including buying on margin.
      5. The power to receive additional property from any source and to administer such additional property as a portion of the appropriate trust hereunder, provided that Trustee shall not be required to receive such additional property without his or her consent unless such property is transferred to Trustee by Grantor or devised or bequeathed to Trustee in his or her capacity as Trustee.
      6. The power to employ and pay reasonable fees to accountants, lawyers, or investment experts for information or advice relating to the Living Trust.
      7. The power to deposit and hold trust funds in both interest-bearing and non-interest-bearing accounts.
      8. The power to deposit funds in bank or other accounts uninsured by FDIC coverage.
      9. The power to enter into electronic funds transfer or safe deposit arrangements with financial institutions.
      10. The power to continue any business of Grantor.
      11. The power to vote shares of stock owned by any trust created hereunder at shareholder's meetings in person or by special, limited, or general proxy, with or without power of substitution.
      12. The power to institute or defend legal actions concerning this Living Trust or Grantor's affairs.
      13. The power to compromise, adjust, arbitrate, sue on or defend, or otherwise deal with and settle claims in favor of or against any trust established hereunder as Trustee may deem advisable, and the decision of Trustee shall be conclusive between Trustee and the beneficiaries of any such trust in the absence of fraud, bad faith or gross negligence of Trustee.
      14. The power to commingle assets by: acquiring, receiving, holding, and retaining the principal of any or all trusts created hereunder undivided until division becomes necessary in order to make a distribution; holding, managing, investing, reinvesting, and accounting for the several shares or parts of shares by appropriate entries in the books of account maintained by Trustee, and to allocate to each share or part of a share its proportionate part of all receipts and expenses, provided that this subparagraph shall not defer the vesting in possession of any share or part of a share of the Trust Property.
      15. The power to employ and compensate persons deemed by the Trustee as advisable or necessary in the administration of any trust created hereunder including, but not limited to, agents, accountants, brokers, attorneys-in-fact, attorneys-at-law, real estate managers, rental agents, appraisers, and investment counsel and other professional advisers as may be required or desired in managing, protecting and investing the property of any such Trust Property.
      16. The power to carry such insurance coverage including, but not limited to, public liability, fire, rent, title, or casualty insurance for such hazards and in such amounts, either in stock companies or in mutual companies, as Trustee may deem advisable.
      17. The power to execute any documents necessary to administer any trust created by this Living Trust.
      18. The power to diversify investments, including authority to decide that some or all of the Trust Property need not produce income.
      19. The power to maintain reasonable reserves for depreciation and for amortization and obsolescence.
      20. The power to deal in every way with Grantor's estate or any trust established by Grantor, including, but not limited to, the purchase from, the sale to, the exchange of property with Grantor's estate, or any trust established by Grantor, or the making of loans thereto, either secured or unsecured and either interest-free or at such rates of interest as Trustee shall determine.
      21. The power to perform all other acts necessary for the proper management, investment, and distribution of the property of any trust created hereunder.
  6. The trust is revocable, with the following party(ies) having the power to revoke:
    _______________________________________________________________________
  7. The trust (check one) ____ does ____ does not have multiple trustees. If the trust has multiple trustees, the signature of all trustees or of any _____ of the trustees is required to exercise the powers of the trust.
  8. The trust identification number is as follows (check one):
    ___________________ ____Social Security Number ____Employee identification number
  9. Title of the trust assets shall be in the following fashion:
    _______________________________________________________________________

The undersigned trustee(s) hereby declare(s) that the trust has not been revoked, modified, or amended in any manner which would cause the representations contained herein to be incorrect.

Signed: _____________________________     Dated: ______________

Trustee

Signed: _____________________________     Dated: ______________

Trustee

NOTARY ACKNOWLEDGMENT




State of _____________

SS.

County of _____________

On _____________________ (date), before me, personally appeared _________________________________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to within the Certification of Trust executed on __________________, acknowledging to me that he/she/they executed the same in his/her/their authorized capacity(ies) and that by affixing his/her/their signature(s) on the instrument so executed the instrument.

I certify under PENALTY OF PERJURY that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Print: ________________________     My Commission Expires: ________________________

Sign: ________________________       [Affix seal]

NOTARY PUBLIC

Notice of Assignment of Property to Living Trust



I, _____________, the undersigned, and a Grantor of , hereby provide Notice and assign all of my rights, interests, and titles of all property listed on the attached Schedule of Assets of Living Trust in favor of the aforementioned trust.

Signed: _____________________________     Dated: ______________

_____________, Grantor

NOTARY ACKNOWLEDGMENT




State of _____________

SS.

County of _____________

On _____________________ (date), before me, personally appeared _________________________________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to within the Notice of Assignment of Property to Living Trust executed on __________________ (signing date), acknowledging to me that he/she/they executed the same in his/her/their authorized capacity(ies) and that by affixing his/her/their signature(s) on the instrument so executed the instrument.

I certify under PENALTY OF PERJURY that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Print: ________________________     My Commission Expires: ________________________

Sign: ________________________       [Affix seal]

NOTARY PUBLIC

Schedule of Assets of Living Trust



At the time of execution of this Living Trust, _____________'s "Trust Property" includes, without limitation, the following assets, and such Trust Property may hereafter be added to or subtracted from according to the Grantors' wishes:

_____________'s Initials: ______

Notice of Assignment of Property to Living Trust



I, _____________, the undersigned, and a Grantor of , hereby provide Notice and assign all of my rights, interests, and titles of all property listed on the attached Schedule of Assets of Living Trust in favor of the aforementioned trust.

Signed: _____________________________     Dated: ______________

_____________, Grantor

NOTARY ACKNOWLEDGMENT



State of _____________

SS.

County of _____________

On _____________________ (date), before me, personally appeared _________________________________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to within the attached Notice of Assignment of Property to Living Trust executed on __________________, acknowledging to me that he/she/they executed the same in his/her/their authorized capacity(ies) and that by affixing his/her/their signature(s) on the instrument so executed the instrument.

I certify under PENALTY OF PERJURY that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Print: ________________________     My Commission Expires: ________________________

Sign: ________________________       [Affix seal]

NOTARY PUBLIC

Schedule of Assets of Living Trust



At the time of execution of this Living Trust, _____________'s "Trust Property" includes, without limitation, the following assets, and such Trust Property may hereafter be added to or subtracted from according to the Grantors' wishes:

_____________'s Initials: ______

Please note that the language you see here changes depending on your answers to the document questionnaire.

Joint Revocable Living Trust

A joint revocable living trust is used by spouses to secure their assets during their lifetimes and then efficiently transfer those assets upon death. One key advantage is that the assets in the trust will avoid probate court. This saves you from paying court fees and ensures that those assets will be distributed much more quickly.

The spouses retain complete control over the trust assets during their lives. After the trust is created it can be revoked or amended at any time, allowing the spouses to remove the assets from the trust should the need arise.

LegalNature's intuitive form builder guides you through each step of the process, making it easy to understand and giving you a powerful estate planning document you can rely on.

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user guide icon Help Guide

This guide provides an explanation of the key terms and considerations when creating a joint revocable living trust. Here we elaborate on the step-by-step guidance we provide you when answering our document questionnaire.

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checklist icon Checklist

Review the basic steps you will need to follow before and after completing a joint revocable living trust. This includes information on transferring assets into your trust, when to make updates, and which related documents you should complete.

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