Nuptial Agreement Forms And Lists For Estate Planners (Page 6 of 6) in pdf

64 | The Practical Lawyer

June 2016

E. Sample List of Estate Planning Provisions for Nuptial Agreements

• Life Insurance. John agrees to obtain a minimum of Two Million Dollars ($2,000,000) of 20-year

term life insurance within six months after the marriage of the parties. John shall pay for the policy and

maintain the policy in good standing during the full 20-year term of the policy or until death or divorce,

if earlier. Jane shall be named as the beneficiary of the life insurance policy or the policy may be placed

into an irrevocable life insurance trust of which Jane is the trustee and which provides for her primary

benefit during her lifetime and for the benefit of any children of John and Jane. Jane must consent in

writing to the terms of any such life insurance trust.

• Revocable Trusts. For purposes of this Agreement, property owned by a party through his or her

revocable trust (living trust) shall maintain its character as Non-Marital, Marital, Co-Owned, or Com-

munity Property. The character of property owned through a revocable trust shall not be affected by

such ownership unless the parties expressly so agree in writing.

• Marital Trust. Upon John’s death, the Trustee shall distribute the sum of $3,000,000 to the Marital

Trust, of which Jane shall be the sole beneficiary, and which shall be subject to the following terms:

(i) Commencing upon John’s death, the trustee shall pay annually to Jane during her lifetime, in con-

venient installments, at least quarterly, the greater of the following: (a) all of the income of the Marital

Trust (as provided under the applicable principal and income act or laws for the Marital Trust); or (b)

four percent (4%) of the fair market value of the Marital Trust (such value to be determined in each

taxable year for the Marital Trust based on the fair market value of the Marital Trust on the first day of

such taxable year, with the amount prorated for any partial year). The distributions to Jane under this

paragraph shall not be reduced by any charges (including, but not limited to, expenses, costs, fees, com-

pensation, taxes, interests and penalties) that would otherwise be permitted as charges against income

under the applicable principal and income act or laws for the Marital Trust . The trustee shall distribute

to Jane such amounts of principal of the Marital Trust as the trustee deems advisable for Jane’s support

in reasonable comfort and health. The trustee may consider other income and resources available to

Jane, but the trustee will give priority to Jane’s support in reasonable comfort and health over conserva-

tion of principal.

(ii) The Marital Trust will either be a trust that can qualify as “qualified terminable interest property

trust” under Section 2056(b)(7) of the Code or a trust under Section 2056(b)(5) of the Code, presuming

that there is a federal estate tax in effect at the time of Margaret’s death.

(iii) During Jane’s lifetime, the trustee of the Marital Trust shall be a corporate trustee authorized un-

der the laws of the United States or any State thereof. John shall select the initial corporate trustee, and

such trustee may be removed by Jane and replaced with another corporate trustee.

(iv) John shall have the right to choose the beneficiaries of the principal and income remaining at

Jane’s death.

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