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13813

Estate Planning
Bootcamp

THIS MATERIAL IS PRESENTED WITH THE UNDERSTANDING THAT THE
PUBLISHER AND THE AUTHORS DO NOT RENDER ANY LEGAL, ACCOUNTING OR
OTHER PROFESSIONAL SERVICE. IT IS INTENDED FOR USE BY ATTORNEYS
LICENSED TO PRACTICE LAW IN VIRGINIA. BECAUSE OF THE RAPIDLY
CHANGING NATURE OF THE LAW, INFORMATION CONTAINED IN THIS
PUBLICATION MAY BECOME OUTDATED. AS A RESULT, AN ATTORNEY USING
THIS MATERIAL MUST ALWAYS RESEARCH ORIGINAL SOURCES OF AUTHORITY
AND UPDATE INFORMATION TO ENSURE ACCURACY WHEN DEALING WITH A
SPECIFIC CLIENT'S LEGAL MATTERS. IN NO EVENT WILL THE AUTHORS, THE
REVIEWERS, OR THE PUBLISHER BE LIABLE FOR ANY DIRECT, INDIRECT, OR
CONSEQUENTIAL DAMAGES RESULTING FROM THE USE OF THIS MATERIAL. THE
VIEWS EXPRESSED HEREIN ARE NOT NECESSARILY THOSE OF THE VIRGINIA
LAW FOUNDATION.

© 2013 Virginia Law Foundation. All rights reserved.
These materials may be shared only with those who are authorized to attend, view, or listen to
the associated seminar

ABOUT THE SPEAKERS
William L. Babcock, Jr., William L. Babcock, Jr., PC / Alexandria
William L. Babcock, Jr. graduated from Bowdoin College in Brunswick, Maine in 1969 and
from the George Washington University School of Law, with honors, in 1972. He is rated “AV”
by Martindale-Hubbell. He has been listed in The Best Lawyers in America; The Washington
DC Area’s Best Lawyers published by the Washington Post; and in the Washingtonian
Magazine’s top one percent of lawyers in the region in the 2008 through 2012 editions. Mr.
Babcock has been a faculty participant at Virginia State Bar continuing legal education seminars
on topics such as “Handling Problem Assets,” “Ethical Issues in Advising a Fiduciary,” “Tax
Saving Trusts” and “Irrevocable Life Insurance Trusts.” Mr. Babcock was a member of the
Disciplinary Committee of the Virginia State Bar for Alexandria from 1992 through 1998
(Secretary 1993-1994, Chair 1994-1995). He served on the Virginia State Bar Standing
Committee on Lawyer Discipline from 2002 to 2008 (Chair 2006-2008). Mr. Babcock is a
member of the Alexandria Bar Association, the Virginia State Bar (Trusts & Estates section), and
a Fellow of the Virginia Law Foundation.
Community service by Mr. Babcock has included serving on the Hospice Cup Sponsor’s
Committee for the Hospice of Northern Virginia, assisting the Alexandria Seaport Foundation,
coaching youth soccer, serving as President of the Friends of the Torpedo Factory Arts Center, as
a director of the Jubilee Support Foundation in Adams Morgan, as Chair of the Governance
Committee of the Advisory Board of the Alexandria Community Trust and helping cook dinners
at the Carpenter’s Shelter with the Christ Church outreach program. He is a member of the
Leadership Washington Class of 1991.

John T. Midgett, Midgett & Preti, PC / Virginia Beach
John T. Midgett is a Principal in the Law Firm of Midgett & Preti PC. His practice is
concentrated in the related areas of estate planning, administration and taxation, estate litigation
and family business planning.
Mr. Midgett is a graduate of the University of Virginia, where he attained a Bachelor of Arts
degree, with Distinction in 1975. He is a 1978 graduate of the T. C. Williams School of Law at
the University of Richmond, where he was a member of the Law Review.
Mr. Midgett is a former instructor for the estate planning and administration programs at
Tidewater Community College and is dynamic and nationally known speaker on topics relating
to estate planning, taxation, probate, elder law, and family businesses. Mr. Midgett has also
written and lectured to other attorneys, accountants, and trust officers in the related areas of
estate planning, taxation and administration for the continuing education required in the various
professions.
In addition to his practice and speaking schedule, Mr. Midgett is actively involved in the
Virginia Bar Association Trusts & Estates Section (Secretary 2013-2015), the Hampton Roads
Estate Planning Council (President 2010-2011), the National Academy of Elder Law Attorneys,
and the Duke University Estate Planning Council. Mr. Midgett served as Chair of the Trusts &
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Estates Section of the Virginia State Bar in 2008-2009, and is a Past President of the Hampton
Roads Gift Planning Council. In May, 2006 he was elected by the Board of Directors of the
National Association of Estate Planners & Councils as an Accredited Estate Planner®. Mr.
Midgett has been rated as “AV” in the areas of estate planning and administration, the highest
designation available to attorneys in the Martindale-Hubbell® Law Directory. Mr. Midgett has
been named to Virginia Business Magazine’s Legal Elite, a Virginia “Super Lawyer” and has
been included in the 2006-2013 editions of The Best Lawyers in America®, and was named 2013
“Lawyer of the Year” for Trusts & Estates Litigation for the Hampton Roads area. He is a
Fellow in the American College of Trust and Estate Planning Counsel.
Mr. Midgett has been married to his wife Barbra for 38 years. They have two children, Kristin
and Ryan. On his rare free days, Mr. Midgett enjoys acoustic guitar, golf, and has been known
to dabble in photography and calligraphy.

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TABLE OF CONTENTS

I. William L. Babcock, Jr.
I.

OUTLINE ......................................................................................................................... I-1

II.

FIRST APPOINTMENT .................................................................................................. I-7
A.
1st appointment letter............................................................................................ I-7
B.
Estate Planning Questionnaire ............................................................................ I-10
C.
Assets, Liabilities and Income worksheet for single client – no trust ................ I-15
D.
Assets, Liabilities and Income worksheet for single client – trust ..................... I-16
E.
Assets, Liabilities and Income worksheet for married client – no trust.............. I-17
F.
Assets, Liabilities and Income worksheet for married client – trust................... I-18
G.
Assets, Liabilities and Income worksheet for partnered client – no trust ........... I-19
H.
Assets, Liabilities and Income worksheet for partnered client – trust ................ I-20
I.
Potential Fiduciaries............................................................................................ I-21

III.

DISABILITY DOCUMENTS ....................................................................................... I-22
A.
Durable Financial Power of Attorney ................................................................. I-22
B.
Advance Medical Directive ................................................................................ I-30
C.
Health Care Power of Attorney........................................................................... I-35

IV.

WILLS ........................................................................................................................... I-38
A.
Will for married client – outright gifts ................................................................ I-38
B.
Will for married client – outright to spouse, trusts for children ......................... I-49
C.
Will for married client – trusts for spouse and children ..................................... I-70

V.

REVOCABLE TRUSTS ................................................................................................ I-94
A.
Pour-over Will for revocable Trust ..................................................................... I-94
B.
Trust for married client – outright gifts ............................................................ I-103
C.
Trust for married client – marital trust created ................................................. I-116
D.
Trust for married client – family and marital trusts created ............................. I-140

VI.

DRAFTS LETTER, WORKSHEETS AND MEMORANDA .................................... I-169
A.
Letter forwarding draft documents ................................................................... I-169
B.
Married client – Assets worksheet ($1,230,000) .............................................. I-171
C.
Married client – Illustration ($1,230,000)......................................................... I-172
D.
Married client – Federal tax illustration ($1,230,000) ...................................... I-173
E.
Single client – Assets worksheet ($3,220,000) ................................................. I-174
F.
Single client – Illustration ($3,220,000) ........................................................... I-175
G.
Single client – Federal tax illustration ($3,220,000)......................................... I-176
H.
Married client – Assets worksheet ($6,210,000) .............................................. I-177
I.
Married client – Illustration ($6,210,000)......................................................... I-178
v

J.
K.
L.

Married client – Federal tax trust illustration ($6,210,000) .............................. I-179
Married client – Income worksheet .................................................................. I-180
Trusts for Descendants “Operating Manual” .................................................... I-181

VII.

FINAL LETTERS AND ENCLOSURES ................................................................... I-185
A.
Letter enclosing signed documents and instructions ........................................ I-185
B.
Memorandum – Gift of Tangible Personal Property – single client ................. I-191
C.
Memorandum – Gift of Tangible Personal Property – Married client.............. I-194
D.
Retirement Account Beneficiary Designation form ......................................... I-197
E.
Memo – Information and Instructions for Administering a Revocable (Living)
Trust .................................................................................................................. I-198
F.
Certification of Trust......................................................................................... I-204

VIII.

DEED TO TRUSTEE AND REMINDER LETTER ................................................... I-205
A.
Deed to Trustee ................................................................................................. I-205
B.
Reminder letter.................................................................................................. I-209

II. John T. Midgett
IX.

OUTLINES ......................................................................................................................II-1
A.
Will & Trusts Outline ..........................................................................................II-1
B.
Ethics Outline.....................................................................................................II-90

X.

ADDENDUMS ............................................................................................................II-183
A.
Client Asset Information ..................................................................................II-183
B.
Engagement Agreement ...................................................................................II-195
C.
When to Use a Will ..........................................................................................II-197
D.
Simple Will ......................................................................................................II-201
E.
Pour-Over Will.................................................................................................II-211
F.
Codicil ..............................................................................................................II-220
G.
Single RLT .......................................................................................................II-224
H.
Joint Revocable Trust ......................................................................................II-246
I.
Married Trust-General Power of Appointment................................................II-269
J.
Married Trust-QTIP .........................................................................................II-299
K.
Amendment to Joint Trust ...............................................................................II-328
L.
No Contest Clause............................................................................................II-331
M.
Durable POA ....................................................................................................II-341
O.
Durable HCPOA ..............................................................................................II-352
P.
Deed of Gift .....................................................................................................II-363
Q.
Funding the RLT ..............................................................................................II-367
R.
Thank you Letter-Trust ....................................................................................II-388
S.
CYA Letter-Married ........................................................................................II-390
T.
Advanced Estate Plan Techniques ...................................................................II-393
U.
Leo 1515 Disclosure ........................................................................................II-410
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ESTATE PLANNING BOOT CAMP
I.

THE PROCESS STEP-BY-STEP
A.
Initial telephone call with prospective client(s)
1.
The typical estate planning engagement begins with a telephone call from a prospective
client. If that person makes an appointment a letter is mailed or emailed (warn the client
that emailing to an office email address may invalidate attorney/client confidentiality)
within 24 hours confirming the fee arrangement, appointment date and appointment time.
The letter encloses forms for the client to fill out and bring to the appointment. If
planning will be done for a husband and wife, life partners or a parent and child, the letter
will contain the conflict and confidentiality disclosures required by the Virginia ethical
rules.
2.
NOTE: If the client seems truly interested in doing planning, but “doesn’t have time
right now” or “wants to wait until after” (the holidays, April 15, the summer, the winter, a
vacation trip, a child’s wedding, the Olympics, whatever) HAVE THEM MAKE AN
APPOINTMENT FOR A MONTH, TWO MONTHS, THREE MONTHS AWAY.
Explain that if they do want to get this done, they have to make a date – now.
3.
There are 3 forms for you to complete before your first appointment.
a.
The first is a questionnaire asking for names, addresses, telephone numbers,
birthdates, and social security numbers of family members. We will be
preparing formal legal documents for you so we need complete and formal
names. “William L. Babcock, Jr.” rather than “Bill Babcock.” If you own
assets using variations of your name or a former name let us know. We will
want your documents to clearly identify your checkered past so that as much
confusion as possible is avoided over whether or not an asset is owned by you
and controlled by your documents.
b.
Financial information is gathered on a form which groups assets both by
categories and by ownership (individual or joint). We ask that you round the
values to the nearest $1,000.
c.
One set of crucial decisions for you to make, with our guidance, is who should
serve as your fiduciaries – those who will protect you and your assets and make
medical decisions for you if you are incapacitated, and who will assure that your
assets pass to the appropriate persons at your death. If persons other than your
spouse and children (whose information we will have on the questionnaire)
might be appointed, we have a form on which you should list the names,
addresses and telephone numbers of the persons you think appropriate to:
manage your finances if you become incapacitated, make medical decisions for
you if you are unable to do so, and serve as your executor, trustee (if applicable)
and guardian for minor children (if applicable).
4.
Number, nature and timing of conferences, drafting, final document preparation and
signing.
a.
The initial estate planning conference is usually scheduled within a week of the
telephone call.
b.
The first appointment usually takes about 1 hour, but ranges from 3/4 of an hour
to 2 hours depending on how well prepared you are and how complicated your
situation is.
c.
At the conclusion of your first appointment we will schedule your next
appointment and commit to a date when drafts of your documents will be
emailed or mailed to you. Drafts normally are sent to clients within 7 days.
d.
If the documents are complicated the next appointment is to review the
documents with you. If the documents are less complicated the appointment is
for the signing.

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e.
5.

6.

Most clients are able to complete their estate planning within 30 days of the first
contact with us.
Documents typically prepared
a.
Each estate plan includes a Will, financial power of attorney and medical
directive. If circumstances warrant it the plan will also include a revocable
Trust. Usually our draft versions of your Will and revocable Trust contain
endnotes describing in brief terms the purpose or effect of each article in the
formal document.
b.
Excel is used to help us design your documents and to help us explain the
documents to you. The Excel worksheets list your assets, provide a diagram
showing how your assets will pass at the time of your death and calculate the
estimated costs of administering your estate, the federal estate taxes and the
estimated net amounts passing to each beneficiary.
c.
At the time you sign your documents we give you the originals, a set of copies,
and a memorandum describing how you can make gifts of tangible property at
your death without the formalities and costs of a formal amendment to your
Will. If your plan includes a revocable Trust you will be given a memorandum
explaining how to transfer your assets into the Trust.
d.
You are also given an instruction letter explaining where you should keep the
original documents and the copies, how to complete your life insurance and
retirement account beneficiary designations, how often to review your planning
and other information that may be helpful to you.
e.
Approximately 30 days after the documents are signed we send a letter to you
enclosing a copy of the instruction letter with a reminder that there were certain
steps that you needed to take to complete the estate planning process.
Fees
a.
Factors Influencing the Fees Charged to Clients
i.
After the first conference with you time is needed to think about how
best to design your documents. This may involve discussions with
other lawyers in the firm or outside the firm, researching Virginia law
or researching tax law.
ii.
Our basic documents are continually modified to keep up with changes
in the law and incorporate new ideas. They are the starting point.
Time is needed to adapt our standard form language to cover your
particular situation. Even in the simplest case we will have at least 3
conferences with you in person or by telephone, and it takes several
hours to get from our basic documents to the printing of draft
documents adapted to your situation and suitable for review by you.
iii.
Time (often considerable time) is needed to prepare an Excel
illustration of the plan. We find this step is very helpful for us because
it tests whether our initial ideas will produce the results desired. It is
equally helpful for clients because they can see on one sheet of paper
the amounts that we estimate would be received by each of their
intended beneficiaries under the current assumptions.
iv.
Time is needed to review the plan and the wording in the documents
with you.
v.
If you would like to provide distribution plans for multiple
contingencies, you have a difficult family situation, you have an
unusual asset, you own a closely held business, there are a large
number of beneficiaries you wish to provide for, your thinking changes
as the process proceeds or you ask for multiple drafts of your
documents, we will be spending more hours than usual in carrying out

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B.

C.

your wishes and we ask not to be bound to a fee quote that did not take
those factors into account.
b.
No retainer or deposit is required. The bill is presented at the time the
documents are signed. At that point we have completed your work and
delivered your documents to you, and we would appreciate payment at that time.
If you need to pay the fee in installments we can accommodate your request.
We do not accept credit cards.
c.
In the first telephone conversation we disclose the usual flat fees we charge for
the types of documents listed below. The fees assume both that your plan will
fit one of these formats that we regularly use and that we will be able to
complete the work with the usual amount of time spent in meetings with you, in
tailoring the documents to meet your specific instructions, in preparing final
documents and in supervising the document signing. The base documents are as
follows:
i.
Wills that make outright gifts to beneficiaries.
ii.
Wills that contain a trust protecting the beneficiaries from “creditors
and predators.”
iii.
Wills for wealthy individuals with trusts for estate tax planning. The
same form is the base for Wills for those with second marriages and
blended families.
iv.
Pour-over Wills and revocable Trusts without estate tax planning.
v.
Pour-over Wills and revocable Trusts with estate tax planning.
Engagement letter
1.
Confirm date and time of appointment.
2.
Enclose form to gather family information.
3.
Enclose form to gather asset & ownership information.
4.
Enclose form to gather names & addresses of possible fiduciaries.
5.
Confirm potential fees discussed in the initial phone call.
6.
Include ethical discussion if two clients are to be represented.
First appointment
1.
Review family information
2.
Review asset information
3.
Listen
4.
Explain concepts and options
a.
Trusts to protect beneficiaries
b.
Will vs. Revocable Trust
c.
Estate tax planning
5.
Obtain tentative decisions from the client(s)
6.
Confirm your deadline for production of drafts
7.
Schedule the next client appointment
8.
Common client wishes to re-shape:
a.
Gifts of specific assets. Occasionally a client will want Sally to receive 123
Main Street (where the client presently lives, worth $240,000), Sam to receive
123 Oak Street (presently worth $250,000) and Gillian to receive 123 Walnut
Street (presently worth $260,000). The logic is that all the properties are about
equal in value, so that will work perfectly. Any other assets will be divided
equally. Problems: client goes into a nursing home and Main Street is sold to
pay the entrance fee; a mortgage is put on one of the properties to finance the
entrance fee; the properties become too hard to manage, so one or both rental

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properties are sold; the properties appreciate (depreciate) at different rates; the
client sells one or more of the properties and buys replacement properties of
equal value and doesn’t put the new property addresses in the Will; the client
sells two properties and buys one larger replacement property; etc., etc., etc.
This plan is EXTREMELY unsafe. Do not agree to prepare such a Will.
The simple solution is division of the entire estate into 3 equal shares, one each
for Sally, Sam and Gillian. Sally gets the first choice of Main Street, Sam the
first choice of Oak Street and Gillian the first choice of Walnut Street.
Here is the language:
CHILD will have the right to receive ______________, Alexandria,
Virginia and ______________, Alexandria, Virginia (the “Properties”)
as a part of CHILD’S Trust. If the net value of the Properties exceeds
the total value of the distribution due to CHILD’S Trust, CHILD will
pay the Trust an amount equal to the difference between the value of
CHILD’S Trust and the net value of the Properties. Valuation of the
Properties for these purposes shall be by a qualified appraiser chosen
by the Trustee and the net value will be determined by subtracting the
amount of any mortgages outstanding at my/Grantor’s date of death
from the value determined by the appraiser. If another beneficiary
disputes the appraised value he or she may obtain a second appraisal at
his or her cost and the net value will be the average of the two
appraisals less the mortgages, unless otherwise agreed by the
beneficiaries. If CHILD takes the Properties any mortgage payments
made by the Trustee after the date of my/Grantor’s death shall be
reimbursed to the Trust by the beneficiary.
b.

c.

d.

e.

Gifts of large amounts of cash relative to estate size. Client has an estate of
$1,000,000 and wishes to have a Will that makes a cash gift of $500,000 to
charity, a cash gift of $300,000 to a niece and have the balance go to siblings.
What happens if the estate shrinks by 42%? Siblings take the hit – OK if that is
what the client wants. Better to have all percentage gifts. Percentage gifts can
be combined with a dollar amount minimum or maximum to protect or limit the
size of gifts. Example: 50% to my spouse, but not less than $400,000. Balance
50% to Child A and 50% to Child B.
Estate plan dependent on beneficiary designations Client has an estate of
$1,000,000 comprised of house worth $500,000, $100,000 CD payable to son,
$100,000 CD payable to daughter, 4 $50,000 CDs payable to grandchildren and
a $100,000 checking account joint with daughter so she can sign checks. What
happens when the client doesn’t renew one of the CDS? When the client
mistakenly renews the TOD designation for grandchild 1 to grandchild 2?
When son and daughter have a falling out after parent’s death? The plan is
unsafe because it does not automatically adjust to these changing circumstances.
Early termination of trusts for children. Client wants a trust for child until he
reaches age 18, or 21. Explain the high school/college graduation scene.
Receive a diploma. Receive a check ($100,000/$200,000/$500,000/$1,000,000)
on the way to the Prom (after stopping at the Corvette/Lexus/Jaguar/Jeep
dealership and the travel agent to book the trip to Paris and Bangkok). Explain
the best case/worse case outcomes. Worst case if child gets the inheritance later
than the age at which the child could have prudently managed the funds – child
is annoyed at deceased parents. Worst case if child gets the inheritance too soon
– it doesn’t last until the end of the month. Ask what the client would have done
with that much cash at age 18 or 21.
Termination of trusts for children with assets greater than $500,000. Protection
from “creditors and predators,” including IRS seeking estate tax.

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f.

D.

E.

F.
II.

Preparation of a “temporary” Will, to be put in final form very shortly thereafter.
The “permanent” will never gets done. Do it promptly and properly the first
time.
Second planning appointment (only for complicated plans)
1.
Review and explain the easy documents – POA and AMD
2.
Perhaps have them signed
3.
Explain the worksheets illustrating the plan
4.
Page through the Will (or pour over Will & revocable Trust)
5.
Gauge client understanding & tailor discussion to points of importance
6.
Ask if there are any questions remaining that you have not addressed
7.
Schedule the signing appointment
Final (signing) appointment
1.
Client proofs (compares) finals to drafts
2.
Supervise basic document signing (will, trust, poa, amd)
3.
Supervise signing of beneficiary designations for retirement accounts
4.
Describe the how the client should process the designations
5.
Point out the wording in the instruction letter detailing the designation process
6.
Point out the wording in the instruction letter to be used by the client for the new life
insurance beneficiary designations
7.
Supervise the signing of deeds if needed for real estate transfers
8.
Be sure the clients understand they are responsible for making asset transfers and
beneficiary designations
9.
Use the worksheets as a guide for the client
10.
List and detail any steps to be taken by you in the instruction letter
11.
Obtain client consent in the instruction letter for disclosure of documents and information
to fiduciaries and beneficiaries if client cannot be found
12.
Confirm in the instruction letter that all original documents have been returned to the
client
13.
Obtain client consent in the instruction letter for destruction of the file after a suitable
period in the discretion of the firm
14.
Present the bill or tell the clients it will be mailed promptly
15.
Re-confirm that fees will be hourly from this point
Close the File
1.
Calendar follow up letter for 30 days

DOCUMENTS
A.
First appointment letter
B.
Estate Planning Questionnaire
C.
Single client asset form
D.
Single client asset form Trust
E.
Married persons asset form
F.
Married persons asset form Trust
G.
Partnered client asset form
H.
Partnered client asset form Trust
I.
Fiduciaries information
J.
Durable Financial Power of Attorney
K.
Advance Medical Directive

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L.
M.
N.
O.
P.
Q.
R.
S.
T.
U.
V.
W.
X.
Y.
Z.
AA.
BB.
CC.
DD.

Health Care Power of Attorney
Will for married client – outright gifts
Will for married client –outright to spouse, trusts for children
Will for married client – trusts for spouse and children
Pour over Will for married client
Revocable Trust – outright gifts
Revocable Trust for married client (marital trust created)
Revocable Trust for married client (family & marital trusts created)
Letter forwarding draft documents
Estate Planning Worksheets
Trusts for Descendants Operating Manual
Letter enclosing signed documents
Tangibles Memo - single
Tangibles Memo - married
Beneficiary designation for retirement account
Trust Memo
Trust Certification
Deed to Trustee
30 day reminder letter

2013-1 Estate Planning Bootcamp Babcock - The Process Step-by-Step
3/9/13 wlb

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LAW OFFICE OF

WILLIAM L. BABCOCK, JR. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
William L. Babcock, Jr.

tel. 703-518-8400
fax 703-518-8401

wlb@willtrustestate.com

Kiersten L. Jensen
klj@willtrustestate.com

James A. Gillis
jag@willtrustestate.com

January 1, 2013
VIA EMAIL ONLY (Clients@yahoo.com)
John J. Smith
Mary M. Jones
123 Main Street
Alexandria, VA 22314
Re: Estate Planning
Dear John and Mary:
The purpose of this letter is to confirm our appointment to discuss estate planning
scheduled for Wednesday, January 9, 2013 at 10:00 a.m., and forward you some
preliminary materials. Enclosed are:
1. A financial information form to fill out and bring with you.
2. An Estate Planning Questionnaire to fill out and bring with you.
3. A Potential Fiduciaries list to fill out and bring with you.
4. A law firm résumé.
As discussed by telephone with Mary, we charge a base fee of $__________ for a
comprehensive set of estate planning documents. Included are Wills containing a trust
protecting beneficiaries, Financial Powers of Attorney and Advance Medical Directives,
as well as the technical language needed for life insurance and retirement account
beneficiary designations.
Providing the same substantive plan using pour-over Wills and living trusts at a
cost of $___________ would give you better disability planning and avoid probate. That
would mean your Executor would not have to file an Inventory of your assets and their
values at the Courthouse when the Estate is opened, nor would the names of your
beneficiaries and the amount each inherited be made public when the Estate is closed.
Avoiding probate would also avoid a modest amount of probate tax and associated fees.
The foregoing fees assume that your situation is straightforward and fits within the
typical pattern. It also assumes 2 conferences and the preparation of one set of draft and
one set of final documents. Additional conference or drafting time is billed at $____ per
hour, which might be necessary due to one or more of the following: your family

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John J. Smith
Mary M. Jones
January 1, 2013
Page 2
situation; unusual assets; special gifts; planning for lifetime gifts as advancements; our
time preparing life insurance or retirement account beneficiary designations; an unusually
large number or variety of beneficiaries or assets; review and coordination of the estate
planning documents with the requirements of a property settlement or premarital
agreement; etc.
If you would like to provide distribution plans for multiple contingencies, you
have a difficult family situation, you have an unusual asset, you own a closely held
business, there are a large number of beneficiaries you wish to provide for, your thinking
changes as the process proceeds or you need multiple drafts of your documents, we will
be spending more hours than usual in carrying out your wishes and we ask not to be
bound to a fee estimate that did not take those factors into account.
Sometimes estate planning calls for re-titling real estate and if that is the case a
new deed is required. We can prepare and record a Virginia deed at a cost of $____.
Deeds for property outside of Virginia must be prepared by an attorney or title company
in the state in which the property is located. We charge hourly to guide the preparation
and filing of those deeds.
For couples with second marriages who want to assure an inheritance is received
by their children from a prior marriage, or clients who have potentially taxable estates,
we can prepare more sophisticated Wills. The fee is then $_____. Using pour-over Wills
and living trusts for such tax planning costs $_____.
There are some technical but nonetheless important ethical issues that are
presented in the estate planning process when one attorney represents two individuals.
Couples frequently have conflicting interests and objectives regarding their estate
planning, such as different views on how property should pass after the death of one or
both of them, or different choices for executor or trustee. In some cases we may
recommend for estate tax or estate planning reasons that assets be transferred from one
person to another, and those transfers can affect the division of property in the event of
separation and can also convert separate property into marital property. These are just a
few examples -- each situation is unique.
If you had separate lawyers, each of you would receive independent and
confidential advice. That is not the case with only one lawyer. We cannot be an
advocate for either of you and must remain in the middle. If one of you gives us
information outside the presence of the other it will be disclosed to the other person.
Keeping such a secret would be a violation of our attorney-client relationship with the
uninformed person, which obligates us to disclose all relevant information to a client. If
you ask that information not be disclosed to the other party this firm will have to
withdraw as counsel and send a letter to both of you announcing that withdrawal. The

2013-2 First appointment letter.docx

I-8

John J. Smith
Mary M. Jones
January 1, 2013
Page 3
reason for the withdrawal would not be stated in the letter or otherwise disclosed, but the
uninformed person would know that something was amiss.
The firm is permitted to represent both of you, and to assist in the development of
a coordinated plan that serves your interests. This does not mean that each of the estate
planning documents you sign must agree in all details with that of your partner. It does
mean that each of you will be fully aware of the details of the other's estate plan.
Joint representation is a sensitive issue, and I would appreciate your reviewing and
signing the statement that follows and bringing this letter with you to the first meeting. If
you decide to obtain separate counsel, the firm would be happy to represent one of you.
If you use a work email address to send or receive correspondence from us, you
may be risking your right to keep those communications confidential under the attorneyclient privilege.
I look forward to meeting you on the 9th. Please contact me if you have any
questions concerning this letter.
Very truly yours,
William L. Babcock, Jr.
We have read the foregoing letter. We realize that there may be areas where our
interests and objectives differ and that there may be areas of potential or actual conflict of
interest between us in connection with our estate planning and related matters. We
understand that either of us may retain separate, independent counsel in connection with
these matters at any time.
Each of us requests that William L. Babcock, Jr. PC represent both of us jointly in
connection with our estate planning and related matters. We understand that if one of us
gives any employee of the firm information and asks that it not be disclosed to the other
party that William L. Babcock, Jr. PC will have to withdraw as counsel and send a letter
to both of you announcing that withdrawal.
____________________
Date

______________________________________
JOHN J. SMITH

____________________
Date

______________________________________
MARY M. JONES

2013-2 First appointment letter.docx

I-9

WILLIAM L. BABCOCK, JR. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
703-518-8400
703-518-8401 (fax)
wlb@willtrustestate.com
www.willtrustestate.com

Estate Planning Questionnaire

Please attempt to complete this form and bring the requested documents
to your first appointment. Do not be concerned if you are unable to
complete the questions or locate the documents before that meeting.

I-10

DOCUMENTS
Please bring the following documents with you to the initial conference:
1. Existing wills, trusts, powers of attorney, living wills, health care powers of attorney and
medical directives.
2. Retirement plan and group life insurance documents.
3. Trusts of which you or a family member are a grantor, trustee or beneficiary.
4. Gift tax returns.
5. Financial statements for businesses, farms, partnerships, etc.
6. Partnership agreements and buy-sell agreements.
7. Pre-nuptial and post-nuptial agreements.
8. Separation and/or property settlement agreements and divorce decrees.
9. Life insurance policies.
10. Designation of beneficiary forms for your life insurance policies, IRAs, and retirement plans.

I-11

FAMILY INFORMATION
1.

2.

3.
4.

5.

CLIENT 1:
Full Name: _________________________________ Nickname: ________________
Social security number _____ - ____ - ______
Date of birth _________________
Total no. of marriages (counting the current marriage) ______ / Date of marriage: _____
United States citizen? Yes _____ No _____
CLIENT 2:
Full Name: _________________________________ Nickname: ________________
Social security number ______ - ____ - ______
Date of birth ________________
Total no. of marriages (counting the current marriage) ______ / Date of marriage: _____
United States citizen? Yes _____ No _____
Home Address:_______________________________ (County or City of ____________)
City: ____________________________ State: ______________ Zip: _____________
Phone Numbers:
Fax ______-______-________
Home
______-________-___________
Client 1 work
______-________-___________
Fax ______-______-________
______-________-___________
Fax ______-______-________
Client 2 work
Client 1 cell
______-________-___________
Client 2 cell _______________
Email address(es): _______________________________________________________
Information regarding CHILDREN (adult, minor, adopted):
Name and Address

6.

Date: _____________

Telephone Number(s)
Email Address(es)

Birthdate

Marital
Status

Client 1 occupation:_______________________ Annual Earnings: $_______________
Employer:______________________________________________________________
Address:_______________________________________________________________
City: ______________________________ State: ______________ Zip: _________

I-12

No. of
Children

7.

8.
9.
10.
11.

12.

13.

Client 2 occupation_______________________ Annual Earnings: $_______________
Employer:______________________________________________________________
Address:_______________________________________________________________
City: ______________________________ State: ______________ Zip: _________
Do you have a child/beneficiary with special needs? Yes _____ No _____
Do you expect to receive a gift or inheritance of $500,000 or more?
Yes _____ No _____
Are you the beneficiary of any trusts? Yes _____ No _____
If yes, please furnish trust documents and a list of assets in each trust.
Have you ever made taxable gifts in a single year (currently $13,000 per person; previously
Yes _____ No ____
$12,0000, $11,000, $10,000, etc.)?
If yes, please furnish the gift tax returns filed in connection with such gifts.
Are there any continuing financial responsibilities as a result of a prior marriage?
Yes _____ No _____
If yes, please furnish the property settlement or separation agreement.
Have you lived in one of the following states during your current marriage?
Yes _____ No _____
Arizona ___ California ___ Colorado ___ Idaho ____ Louisiana ____ Nevada ___;
New Mexico ___ Texas ___ Washington ___ Wisconsin ___

14.

Do you own any Subchapter S stock?

Yes _____

No _____

15.

Are we authorized to send copies of your documents to your:
Financial planner Yes _____
Accountant/CPA Yes ____ No _____
Name & Address
Name & Address

No _____

INFORMATION ABOUT FIDUCIARIES
After your death, your executor will be responsible for probating your Will, collecting the assets
of your estate, carrying out the directions contained in your Will, filing income tax returns for you and
your estate, filing estate tax returns for your estate, and accounting (to the penny) to the Court for all of
the assets passing through the executor's hands.
Your trustee will be responsible for investing the assets of the trust, distributing the income and
principal of the trust to the beneficiaries during the term of the trust, filing income tax returns for the
trust, accounting to the beneficiaries each year, and distributing all of the trust assets when it terminates.
The guardian of a minor (under age 18) child becomes the substitute parent of the child, and
normally the child will live with the guardian. The guardian does not have control over the assets given
to the child, unless you have not created a trust in your Will. If there is no trust, the guardian will have
control over those assets, but only until the child reaches age 18.
Your agent named in a durable financial power of attorney has the power, immediately upon
your signing the document, to conduct your financial affairs on your behalf.
Your agent for health care decisions has the power, beginning at the time you are unable to make
health care decisions yourself, to make health care decisions for you.

I-13

SELECTION OF FIDUCIARIES
Do not be concerned if you do not know who to choose (or how to choose). We will discuss the
requirements for each position at our first conference. After the first conference you should check with
the individuals you wish to name to be sure they are willing to serve.
A fiduciary should be a responsible person who will act promptly. A fiduciary need not have special
expertise, and in fact should not be a person who thinks he or she can handle the administration without
outside help.
In the administration of an estate there are almost always opportunities to save time or trouble or tax
dollars, and there are almost always corresponding opportunities to cause really unfortunate and
avoidable consequences. There can be opportunities to save thousands (and sometimes tens or hundreds
of thousands) of tax dollars. Be sure the fiduciary you choose will not miss those opportunities in an
attempt to save on professional fees. The way to assure that your planning is executed for the best
advantage of your beneficiaries is for the fiduciary to seek early advice from experienced personnel
specializing in estate administration.
Generally married clients will name each other as executor, financial agent and medical agent during
lifetime, and as trustee of any trusts created for the surviving spouse. Consider what is appropriate in
your case. You should also name a backup financial agent, medical agent, executor and trustee. Clients
with children under age 18 should name a guardian and a backup.
16.

Consider who you would like to serve as EXECUTOR, TRUSTEE, GUARDIAN OF MINOR,
FINANCIAL AGENT and MEDICAL AGENT. Consider who you would like to serve as back
up to each.
We will need the FULL NAME, ADDRESS AND TELEPHONE NUMBER of each person
selected. Please write them out in advance if you know who they are, even if you don't know in
what capacity they will be named.

17.

BENEFICIARIES AND GIFTS
Do you want to leave any items of property (such as jewelry, cars, books, art, heirlooms, etc.) to
specific persons?

18.

Do you want to leave any cash gifts to individuals?

19.

Do you want to leave any property or cash to charity?

20.

Should your beneficiaries receive their inheritance outright or in trust? If in trust, at what age
should the trust end?

21.

Instructions regarding the disposition of your remains or the services to be conducted should be
contained in a personal letter kept at home with your copy of the Will. YOU ARE
ENCOURAGED TO WRITE A LETTER EXPRESSING YOUR THOUGHTS AND
FEELINGS ABOUT FAMILY OR OTHER MATTERS OF IMPORTANCE TO YOU. WE
WOULD LIKE TO REVIEW THAT LETTER TO BE SURE IT DOES NOT CONFLICT
WITH ANY PORTIONS OF YOUR LEGAL DOCUMENTS.
2013-3 Estate Planning Questionnaire.doc

I-14

ASSETS, LIABILITIES AND INCOME
Name:

ASSET

Value owned in your
name alone

Residence
Value:
Mortgage:
Net:
Other real estate
Value:
Mortgage:
Net:
Retirement assets:
401K
IRA
Other
Beneficiary:
Annuities
Beneficiary:
Stocks/Bonds/Mutual Funds
Checking/Savings/MM/CDs
Life Ins death benefit
Beneficiary:
Automobile(s)
Furniture, jewelry, etc.
Business interests
Other
Totals
LIABILITIES
Credit cards
Other
Totals
NET VALUE
INCOME
Salary
Pension
Social Security
Investment income
Other
Totals

2013-4

Value owned jointly with
survivorship

Value owned jointly
without survivorship
(tenants in common)

0

0

0

0
0

0
0

0
0

0

0

0

Single client asset form.xlsx

3/28/2013

I-15

ASSETS, LIABILITIES AND INCOME
Name:

ASSET
Residence
Value:
Mortgage:
Net:
Other real estate
Value:
Mortgage:
Net:
Retirement assets:
401K
IRA
Other
Beneficiary:
Annuities
Beneficiary:
Stocks/Bonds/Mutual Funds
Checking/Savings/MM/CDs
Life Ins death benefit
Beneficiary:
Automobile(s)
Furniture, jewelry, etc.
Business interests
Other
Totals
LIABILITIES
Credit cards
Other
Totals
NET VALUE
INCOME
Salary
Pension
Social Security
Investment income
Other
Totals

Value owned in your
name alone

Value in Trust

Value owned jointly
without survivorship
(tenants in common)

Value owned jointly
with survivorship

0

0

0

0
0

0
0

0
0

0

0

0

2013-5 Single client asset form Trust.xlsx

3/28/2013

I-16

ASSETS, LIABILITIES AND INCOME
Names:
ASSET
Residence
Value:
Mortgage:
Net:
Other real estate
Value:
Mortgage:
Net:
Retirement assets (H):
401K
IRA
Other
Beneficiary:
Retirement assets (W):
401K
IRA
Other
Beneficiary:
Annuities
Insured/Owner:
Beneficiary:
Stocks/Bonds/Mutual Funds
Checking/Savings/MM/CDs
Life Ins death benefit (H)
Beneficiary:
Life Ins death benefit (W)
Beneficiary:
Automobile(s)
Furniture, jewelry, etc.
Business interests
Other
Totals
LIABILITIES
Credit cards
Other
Totals
NET VALUE
INCOME
Salary
Pension
Social Security
Investment income
Other
Totals

2013-6 Married persons asset form.xlsx

Value of assets in
Husband's name

Value of assets in joint
names or payable to
Spouse on death

Value of assets in
Wife's name

0

0

0

0
0

0
0

0
0

0

0

0

I-17

3/28/2013

ASSETS, LIABILITIES AND INCOME
Names:

ASSET

Value of assets in
Husband's name

Residence
Value:
Mortgage:
Net:
Other real estate
Value:
Mortgage:
Net:
Retirement assets (H):
401K
IRA
Other
Beneficiary:
Retirement assets (W):
401K
IRA
Other
Beneficiary:
Annuities
Insured/Owner:
Beneficiary:
Stocks/Bonds/Mutual Funds
Checking/Savings/MM/CDs
Life Ins death benefit (H)
Beneficiary:
Life Ins death benefit (W)
Beneficiary:
Automobile(s)
Furniture, jewelry, etc.
Business interests
Other
Totals
LIABILITIES
Credit cards
Other
Totals
NET VALUE
INCOME
Salary
Pension
Social Security
Investment income
Other
Totals

Value in H's Trust

Value of assets in
Wife's name

Value in W's Trust

Value of assets in joint
names or payable to
Spouse on death

0

0

0

0
0

0
0

0
0

0

0

0

2013-7 Married persons asset form Trust.xlsx

3/28/2013

I-18

ASSETS, LIABILITIES AND INCOME
Names:

ASSET

Value in Partner 1's
Name Alone

Residence
Value:
Mortgage:
Net:
Other real estate
Value:
Mortgage:
Net:
Retirement assets (Partner 1):
401K
IRA
Other
Beneficiary:
Retirement assets (Partner 2):
401K
IRA
Other
Beneficiary:
Annuities
Insrd/Owner:
Beneficiary:
Stocks/Bonds/Mutual Funds
Checking/Savings/MM/CDs
Life Ins death benefit (Partner 1)
Beneficiary:
Life Ins death benefit (Partner 2)
Beneficiary:
Automobile(s)
Furniture, jewelry, etc.
Business interests
Other
Totals
LIABILITIES
Credit cards
Other
Totals
NET VALUE
INCOME
Salary
Pension
Social Security
Investment income
Other
Totals

2013-8 Partnered client asset form.xlsx

I-19

Value owned Jointly
with Survivorship or
Payable to Partner or
other person on Death

Value in Partner 2's
Name Alone

0

0

0

0
0

0
0

0
0

0

0

0

3/28/2013

ASSETS, LIABILITIES AND INCOME
Names:

ASSET

Value in
Partner 1's
Name Alone

Residence
Value:
Mortgage:
Net:
Other real estate
Value:
Mortgage:
Net:
Retirement assets (Partner 1):
401K
IRA
Other
Beneficiary:
Retirement assets (Partner 2):
401K
IRA
Other
Beneficiary:
Annuities
Insrd/Owner:
Beneficiary:
Stocks/Bonds/Mutual Funds
Checking/Savings/MM/CDs
Life Ins death benefit (Partner 1)
Beneficiary:
Life Ins death benefit (Partner 2)
Beneficiary:
Automobile(s)
Furniture, jewelry, etc.
Business interests
Other
Totals
LIABILITIES
Credit cards
Other
Totals
NET VALUE
INCOME
Salary
Pension
Social Security
Investment income
Other
Totals

2013-9 Partnered client asset form Trust.xlsx

Value in Partner Value in Partner Value in Partner
1's Trust
2's Name Alone
2's Trust

Value owned Jointly
with Survivorship or
Payable to Partner or
other person on Death

0

0

0

0
0

0
0

0
0

0

0

0

I-20

3/28/2013

POTENTIAL FIDUCIARIES
(NO NEED TO LIST YOUR CHILDREN)
Please list the PERSON(S) and BACKUP PERSON(S) who should handle the
following in the event of your disability or death:
Finances
Medical decisions
Raising your children, if any

Name: ___________________________________________
RELATIONSHIP TO YOU: __________________________
Address: ___________________________________________
Please use FULL NAMES
___________________________________________
(middle initial OR middle name)
Tel.:
Email:
Name: ___________________________________________
Include “Jr.” “III” etc.
RELATIONSHIP TO YOU: __________________________
Address: ___________________________________________
No nicknames please.
___________________________________________
Tel.:
Email:
Name: ___________________________________________
You do NOT need to identify
who will handle each task or who RELATIONSHIP TO YOU: __________________________
is the primary person and who is Address: ___________________________________________
___________________________________________
the secondary person.
Tel.:
Email:
Name: ___________________________________________
We will discuss those decisions
RELATIONSHIP TO YOU: __________________________
when you are here.
Address: ___________________________________________
Tel.:
Email:
Name: ___________________________________________
RELATIONSHIP TO YOU: __________________________
Address: ___________________________________________
Tel.:
Email:
Name: ___________________________________________
RELATIONSHIP TO YOU: __________________________
Address: ___________________________________________
Tel.:
Email:
2013-10 Fiduciaries information.doc

I-21

JOHN J. SMITH
DURABLE FINANCIAL POWER OF ATTORNEY
I appoint my spouse, MARY M. JONES, to be my Attorney-in-Fact (referred to as
my “Agent”).
Upon her resignation, incapacity or death, I appoint JOHN RELIABLE to serve as
my Agent.
Upon the resignation, incapacity or death of my Agent, I appoint
_________________ BANK to serve as my Agent. The primary task of the Bank will be
to transfer any assets in my name to my revocable trust, so that they can be managed as
trust assets. The Bank will have the power to appoint an individual to serve with the
Bank as my Attorney-in-Fact to exercise any of the powers enumerated below that it is
not willing or able to exercise. The appointment must be made in a notarized writing and
must specify the powers granted to the individual. The Bank will also have the power to
revoke the appointment, for any reason or no reason.
If I have not designated a person or entity to serve as successor Agent upon the
resignation, incapacity or death of the Agent then serving, or that person is unable or
unwilling to serve, my Agent then serving will have the power to name a replacement or
successor Agent or Agents. The designation must be made in a notarized writing.
This power of attorney is effective upon signing.
My Agent shall have full power to handle and manage my affairs, which power shall
be exercised for my exclusive benefit. The powers granted include, without limitation, the
power to:
General Powers: Perform all acts related to my property and affairs as I could if
acting personally, both now and in the future.
Agents: Grant authority to one or more agents to carry out the decisions or actions
required by my Agent, and to revoke the authority of such agents; to appoint an ancillary
Agent for me in any jurisdiction or country, and grant to the ancillary Agent such of the
powers granted herein to my Agent as my Agent may specifically delegate in writing,
with such restrictions or limitations thereon as my Agent may deem appropriate, and to
revoke such appointment; and to appoint an additional person or persons to serve jointly
or severally with my Agent, and to revoke such appointment.
Annuities: Purchase and/or contribute to annuities for my benefit; give permitted
directions regarding investments under such annuities; make application for benefits; and
exercise the rights and elections I possess with respect to such annuities, except
beneficiary designations.
Beneficiary Designations: My Agent is not authorized to change a beneficiary
designation made by me, including a POD (pay on death) or TOD (transfer on death)
arrangement, on any asset of mine.
Borrowing: Borrow such sums upon such terms and for such purposes as my
Agent deems appropriate, with or without security; and for such purposes sign, seal,
_______
initials
Prepared by: William L. Babcock, Jr. PC
526 King Street, Suite 518, Alexandria, Virginia 22314, 703-518-8400, wlb@willtrustestate.com

I-22

acknowledge and deliver notes, bonds, mortgages, deeds of trust, financing statements,
assignments and other such documents as my Agent deems appropriate.
Business: Continue any business, incorporated or unincorporated, in which I may
have an interest, or liquidate the same, including without limiting the generality of the
foregoing the power to (a) invest additional sums in such business even to the extent that
my estate is invested largely or entirely in such business, (b) act as or select other persons
to act as directors, officers or employees, for compensation determined without regard to
my Agent being a fiduciary hereunder, and (c) do all other things related to the business
deemed appropriate by my Agent.
Cash Accounts: Sign checks and drafts for the withdrawal of funds on deposit to
my credit, including joint accounts, whether custodial, agency, brokerage, checking,
special, savings or other type of account at any bank, savings association, credit union or
other depository; endorse checks, drafts and other negotiable paper payable to me;
deposit the same to the credit of any such account; open a new account; waive or require
demand, protest and notice of protest; and receive statements of account and canceled
checks.
Compensation: Determine and receive reimbursement for expenses incurred and
reasonable compensation for services rendered.
Compliance by Third Parties: Initiate litigation to require third parties to
recognize the validity of this power of attorney, and to seek equitable relief and damages,
including punitive damages, for injury to me or my estate because of any nonrecognition.
Credit Cards: Cancel or continue my credit cards, debit cards, charge accounts
and memberships in clubs and other personal credit arrangements, whether individual or
joint.
Domicile: Change my domicile and/or place of residence, for any reason, at any
time and from time to time, to any other jurisdiction in Virginia or to any other state or
country.
Disclaimers: Disclaim, in whole or in part, any bequest, legacy, devise, gift,
interest in any trust, interest in any other property, or power.
Electronic Account Access:
Obtain access to and use my online user
identifications, passwords and personal identification numbers ("PIN") to access my
accounts and perform transactions on my behalf. This includes the authority to make and
cancel electronic payments and to register and cancel electronic delivery of information
related to my accounts.
Federal Benefits: Exercise the rights I have, except the right to change beneficiary
designations, under any benefit programs administered by the federal government or any
of its subordinate agencies, including without limitation the Federal Thrift Savings Plan
(TSP), the Civil Service Retirement System (CSRS), the Federal Employee Retirement
System (FERS), the Federal Employees Group Life Insurance (FEGLI) program, the

________
initials
2

I-23

Federal Employee Health Benefits (FEHB) Program, the Social Security Administration,
Medicare and medical benefits provided by the military.
Gifts: Make gifts to my relatives by blood, marriage or adoption, or to charities,
which shall be considered acts for my exclusive benefit, in accordance with the following
instructions:
1.
If my spouse is not serving as my Agent, my Agent may
make gifts to my spouse in any amount.
2.
My Agent may consent to gifts made by my spouse as being
made one-half by me for gift tax purposes, even though such action subjects my
estate to additional liabilities.
3.
Gifts to my Agent in any one calendar year may not exceed
the greater of the gift tax annual exclusion amount for that year or the amount that
would be appropriate for my Agent’s health, education, maintenance and support.
4.
Gifts to charity may be made only in amounts which are
consistent with my personal history of making such gifts.
5.
Gifts of tuition and medical costs (paid directly to the
providers, not to the donee) may be made for medical and education expenses of
the donee.
6.
Other gifts may be made in amounts deemed appropriate by
my Agent, but unless approved by Court order, may not exceed for any donee in
any year the gift tax annual exclusion, or twice that amount if my spouse consents.
7.
My Agent may remove principal from a revocable trust
created by me for the purpose of making such gifts.
8.
My Agent may require that gifts be treated as advancements,
which may be done by stating in writing that they are advancements.
OR
Gifts: My Agent is not authorized to make gifts on my behalf.
Health Care Expenses: Pay my medical and other health care expenses.
Hiring: Hire, remove and replace accountants, agents, appraisers, attorneys,
brokers, consultants, custodians, investment advisors, investment counsel, investment
managers, real estate brokers, tax specialists, workmen, domestic help and others; pay
reasonable fees, salaries, wages or other remuneration to such persons.
Life Insurance: Purchase, maintain, surrender, collect, cancel, sell and assign life
insurance policies and annuities of any kind on my life or the life of anyone in whom I
have an insurable interest and to exercise all other options, rights, benefits and privileges
available to me, except the right to make beneficiary designations and the right to
exercise any power over life insurance owned by me insuring my Agent, the existence or
exercise of which would cause part of my property to be included in the gross estate of
my Agent for federal estate tax purposes.
Other Insurance: Purchase, maintain, surrender, collect or cancel my automobile,
home, liability, casualty, hospital, medical, Medicare supplement, Veterans, custodial
________
initials
3

I-24

care, long term care and disability insurance; pay premiums, select options, increase
coverage, pursue claims and adjust losses, as to both private and public plans, policies
and benefits, including but not limited to Medicare, Medicaid, SSI, Worker’s
Compensation and Veterans insurance and other benefits; and elect continuation or
COBRA coverage under any health benefits plan.
Investments: Buy, sell, receive information, vote and exercise all other rights with
respect to all types of partnerships, limited liability companies and other investment
entities.
Litigation: Commence and carry on actions, suits and other proceedings on my
behalf; interplead, intervene, join in and defend actions, suits and other proceedings
brought against me or my property or in which I have an interest; demand, sue for,
compromise, settle and collect damages for breach of contract, personal injury and all
other types of claims in law and equity; make, execute and deliver pleadings, discovery
documents, receipts, releases, settlement agreements and all other documents necessary
for the foregoing.
Mail: Redirect my mail, from time to time.
Memberships: Cancel, modify or continue my membership in clubs and other
organizations, pay dues and assessments, cancel, continue or transfer the right to season
ticket sales and purchases.
Personal Property: Buy, sell, encumber, transfer, deliver, store and insure tangible
personal property, including without limitation household and office goods, furniture and
furnishings, jewelry, books, automobiles, boats, art, clothing and personal effects; and
sign, seal, acknowledge and deliver bills of sale, leases, assignments, agreements,
financing statements, receipts and other instruments related to the same. MY AGENT IS
DIRECTED TO REVIEW MY WILL AND ATTEMPT TO DETERMINE IF I
HAVE SIGNED A TANGIBLE PROPERTY GIFT MEMO, TO CONFIRM THAT
A SALE WILL NOT INVALIDATE A GIFT IN ONE OF THOSE DOCUMENTS.
Pets: I authorize my Agent to pay the expenses associated with the feeding, care
(including veterinary costs), grooming and shelter of my pets. My Agent is further
authorized and directed to reimburse another person who has paid for such expenses.
Powers of Appointment: Exercise in whole or in part, release or let lapse any
power of appointment, whether limited or general.
REAL PROPERTY: BUY, SELL, LEASE, MORTGAGE, SUBDIVIDE,
DEVELOP, REPAIR, IMPROVE, TRANSFER AND CONVEY REAL ESTATE
FOR SUCH SUM OR SUMS OF MONEY OR OTHER CONSIDERATION AS MY
AGENT SHALL DEEM MOST FOR MY ADVANTAGE AND PROFIT; SIGN,
SEAL, ACKNOWLEDGE AND DELIVER ALL NECESSARY DEEDS, LEASES,
ASSIGNMENTS, EASEMENTS, AGREEMENTS, MORTGAGES, NOTES,
SETTLEMENT
STATEMENTS,
RELEASES
AND
OTHER
SUCH
INSTRUMENTS AND DOCUMENTS, WITH ALL NECESSARY OR

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CONVENIENT COVENANTS, WARRANTIES AND ASSURANCES, AS ARE
DEEMED APPROPRIATE BY MY AGENT.
Retirement Plans: Create and/or contribute to retirement, pension, profit sharing,
defined benefit and other such plans for my benefit; give permitted directions regarding
investments under such plans; exercise stock options; make application for benefits;
enforce, receive or roll over benefits; and exercise all other rights and elections I possess
with respect to such plans, except the right to change beneficiaries, including without
limitation, Keogh, 401(k), IRA, Roth IRA, SEP-IRA, TSP, CSRS, FERS and other plans
governed by ERISA, except that my Agent may only waive spousal rights I may have in
a retirement plan of my spouse if my Agent does not benefit, directly or indirectly, from
such waiver.
Revocable Trust: Transfer property of mine to the trustee of a revocable trust
created by me and of which I am a beneficiary, whether such trust is created before or
after the signing of this Durable Financial Power of Attorney; and the receipt of the
property by the trustee shall relieve my Agent from all further liability and accountability
for such property. My Agent shall have no power to amend or revoke a revocable trust
created by me, or any power over the assets of a revocable trust created by me, except to
the extent expressly granted by the trust or authorized by the GIFTS or the SUPPORT
AND MAINTENANCE paragraph or the SUPPORT AND MAINTENANCE OF
OTHERS paragraph of this document.
Reward Programs: Redeem for cash or other compensation, or transfer to a family
member, and otherwise deal with any benefits that may have accrued to me as a result of
travel, credit card use, etc.
Safe Deposit Box: Have access to safe deposit boxes held in my name alone or
jointly with another, and to remove my Will, other testamentary instruments, securities,
documents and other property.
Securities: Buy and sell stock, bonds, Treasury securities, debentures, notes,
mutual funds and all other negotiable and non-negotiable instruments of whatever kind;
vote stock in person or by proxy; exercise stock options; participate in voting trusts and
other transactions involving the common interests of security holders; and exercise all
other rights of ownership.
Support and Maintenance: Pay my bills, debts and other obligations and pay my
health, support and maintenance expenses.
Support and Maintenance of Others: Support any person I am supporting, in the
same standard of living I am providing (adjusted by circumstances and inflation, if
necessary), and others to whom I owe an obligation of support, in each case to the extent
deemed appropriate by my Agent. My Agent may obtain funds for such payments from a
revocable trust created by me.
Taxes: Represent me and hire counsel and/or accountants to represent me before
any office of the Internal Revenue Service, and of the Virginia Department of Taxation,
and any other country, state, county, city or other taxing authority, in connection with any
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tax matter (including specifically any individual income tax or gift tax matter for the
years 2000 through 2050); receive and/or inspect confidential information, notices and
other written communications addressed or related to me; perform any and all acts that I
can perform with respect to said tax matters; prepare, sign and file tax returns (including
specifically U.S. Forms 1040 and 709, Virginia Form 760 and all other forms that may be
filed in connection with any of them), estimates, waivers, consents, protests, receipts,
refund claims, requests for rulings, agreements and petitions; receive and negotiate
checks in payment of any tax refund; execute Form 2848 (Power of Attorney and
Declaration of Representative) and Form 8821 (Tax Information Authorization).
The following provisions apply to the administration of my affairs:
Accounting: My Agent shall account in writing to me for action taken on my
behalf, and shall account to a court-appointed guardian if one is appointed for me, as
required by law. If I am incapacitated, no guardian has been appointed for me and my
spouse is not acting as my Agent, my Agent shall account to my children at least once
every six (6) months by giving them a listing of my assets under the control of my Agent
and their present values, and a statement of the receipts and disbursements made by the
Agent during the preceding six (6) months.
Agent as Court-Appointed Fiduciary: My Agent shall be eligible to serve in all
other fiduciary capacities for me or my benefit, including but not limited to service as
Trustee, Guardian, Conservator, Committee, Executor and Administrator.
Consultation with Lawyers, Accountants and Financial Advisors: My Agent is
permitted to consult with my lawyers, accountants and financial advisors, to review any
documents of mine in their possession, to discuss with them my estate plan, financial plan
and tax situation and to discuss with them the ramifications of taking or not taking action
on my behalf. A professional consulted by my Agent under this paragraph shall not be
liable to me, my estate, heirs, successors or assigns for any breach of ethical duty or
obligation as a result of that person’s disclosure to my Agent of information concerning
my affairs or disclosure to my Agent of the advice given to me.
Disposition of Property: No person relying or acting upon this Durable Financial
Power of Attorney shall be required to see to the application or disposition of property
paid or delivered to my Agent.
Durable Power: Neither this Durable Financial Power of Attorney nor the
authority granted by it will terminate on my disability, incompetence or incapacity.
Duty to Act: My Agent shall have no duty to act on my behalf, but may act or
refrain from acting as my Agent deems appropriate in my Agent’s sole discretion. My
Agent shall have no responsibility to make my property productive of income, to increase
the value of my estate or to diversify my investments.
Fiduciary Duty: My Agent is my fiduciary and as such owes me a duty of loyalty
and good faith in all dealings undertaken by my Agent on my behalf.
Health Care Expenses: My Agent is directed to pay my health care expenses
authorized by the Agent named in my Advance Medical Directive. If there is a difference
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of opinion between my medical agent and my financial agent, my financial agent is
directed to pay all such expenses approved by my medical agent.
Incapacity of Agent: In the absence of actual knowledge to the contrary, a person
presented with this power of attorney may rely on a written statement by one acting joint
Agent that the other is incapacitated, and on a written statement by a successor Agent that
the acting Agent is incapacitated. If the successor Agent was not named in this document
but appointed by an acting Agent, the successor Agent must produce written evidence of
appointment.
Investment: My Agent is not required to sell any assets of mine or invest any cash
of mine, but if my Agent chooses to sell or invest my Agent will be subject to the
provisions of the Prudent Investor Rule paragraph below.
Liability of Agent: My Agent shall not be liable to me, my estate, my heirs,
successors or assigns for refraining from acting on my behalf. With respect to actions
other than investment decisions to buy or sell, my Agent shall likewise not be liable for
acting on my behalf, except for gross negligence or willful misconduct. My Agent’s
liability for investment decisions to buy or sell shall be controlled by the provisions of the
Prudent Investor Rule paragraph below.
Prudent Investor Rule: My Agent shall not be subject to the prudent investor rule,
but may buy, sell and hold any assets my Agent deems appropriate, without a
requirement to hold productive assets or to diversify investments.
Revocation of this Document: Any person relying or acting upon this Durable
Financial Power of Attorney shall be fully protected in presuming that it has not been
revoked, unless such person has actual notice of revocation. Any person may rely on a
written statement by my Agent that a copy of this Durable Financial Power of Attorney is
a true copy of the original and that the original has not been revoked.
Revocation of Prior Financial Powers: The execution of this document revokes all
powers of attorney related to financial matters previously executed by me.
Self-Dealing: It shall not be a breach of fiduciary duty for my Agent to transact
business with my estate during my lifetime, nor shall such activity or the gifting of my
property to my Agent be prohibited by any rules regarding self-dealing. It shall not be a
breach of fiduciary duty for my Agent to transact business with my estate during my
lifetime, nor shall such activity be prohibited by any rules regarding self-dealing. No
Agent will be liable for entering into transactions on my behalf with himself or herself, or
for gifting to himself or herself, so long as the transaction is authorized by this Power of
Attorney and my Agent believes in good faith that such transaction is in my best interest.
Virginia Law: This document shall be governed by the laws of Virginia.
Signed on March _____, 2013.
____________________________
Witness

________________________________(SEAL)
JOHN J. SMITH
*Social Security #_________________________
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___________________________
Witness
*

(see note below)

If this document is to be recorded I direct that my
social security number be redacted before recording.

COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
I, the undersigned Notary Public in and for the aforesaid jurisdiction, do hereby
certify that this day personally appeared before me JOHN J. SMITH, whose name is
signed to the foregoing Durable Financial Power of Attorney, and acknowledged the
same before me in the aforesaid jurisdiction.
Given under my hand on March _____, 2013.
______________________________________
Notary Public
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JOHN J. SMITH
ADVANCE MEDICAL DIRECTIVE
(VA. CODE §54.1-2981)
If I am incapable of making an informed decision and my attending physician
determines that I have a terminal condition where the application of life-prolonging
procedures would serve only to prolong artificially the dying process, I direct that such
procedures be withheld or withdrawn, and that I be permitted to die naturally with only
the administration of medication and the performance of medical procedures deemed
necessary to alleviate pain or provide me with comfort care.
In the above circumstances I direct that neither artificially administered hydration
nor nutrition be used to prolong my life, but one or both may be provided to me if doing
so would alleviate pain or provide comfort care.
FEMALE DECLARANT
Notwithstanding the foregoing, if I am pregnant at the time my attending
physician makes the above determination, and that physician and my obstetriciangynecologist agree that the embryo/fetus will be able to survive and be a healthy baby, I
direct my physician to maintain my life support until the baby is born.
I intend that this declaration shall be honored by my family and physician as the
final expression of my legal right to refuse medical or surgical treatment and accept the
consequences of such refusal.
FOR THE PURPOSES OF THIS DOCUMENT, THE FOLLOWING DEFINITIONS
WILL APPLY:
A “terminal condition” is one from which to a reasonable degree of medical
probability a patient cannot recover and either the patient’s death is imminent (likely to
occur within 6 months) or the patient is in a persistent vegetative state.
A “persistent vegetative state” is one in which the patient has suffered a loss of
consciousness with no behavioral evidence of self-awareness or awareness of
surroundings in a learned manner other than a reflex activity of nerves and muscles for
low-level conditioned response.
A “life-prolonging procedure” is a medical procedure, treatment or intervention
which utilizes mechanical or other artificial means to sustain, restore or supplant a
spontaneous vital function, or is of such a nature as to afford the patient no reasonable
expectation of recovery from a terminal condition and when applied to a patient in a
terminal condition would serve only to prolong the dying process. Artificially
administered hydration and nutrition are considered life-prolonging procedures and will
be withheld except as specified in the second paragraph above.
“Incapable of making an informed decision” means unable to understand the
nature, extent and probable consequences of a proposed medical decision or unable to
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compared with the risks and benefits of alternatives, or unable to communicate such
understanding.
1.
I appoint my spouse, MARY M. JONES, of _____________________,
telephone number _______________________, as my Agent, to make health care
decisions on my behalf as authorized in this document.
2.
If my Agent is not reasonably available or is unable or unwilling to act
(except for substantive reasons), I appoint JOHN RELIABLE, of
_____________________, telephone number _______________________ as my Agent.
3.
I give my Agent authority to make health care decisions on my behalf as
described below whenever I have been determined to be incapable of making an
informed decision about providing, withholding or withdrawing medical treatment,
regardless of whether I am in Virginia at the time my Agent acts. My Agent’s authority
is effective as long as I am incapable of making an informed decision.
NOTWITHSTANDING THE FOREGOING, MY AGENT IS NOT AUTHORIZED TO
MAKE DECISIONS WHICH ARE INCONSISTENT WITH MY DECLARATION AT
THE BEGINNING OF THIS DOCUMENT.
4.
The determination that I am incapable of making an informed decision shall
be made by my attending physician and a second physician or licensed clinical
psychologist after a personal examination of me and shall be certified in writing. Such
certification shall be required before treatment is withheld or withdrawn and before, or as
soon as reasonably practicable after, treatment is provided and every 180 days thereafter
while the treatment continues. If after a subsequent personal examination of me a
physician affirms in writing that I have regained capacity to make an informed decision,
any further decisions regarding my health care will require my informed consent.
5.
In exercising the power to make health care decisions on my behalf my
Agent shall be guided by my medical diagnosis, prognosis and the information provided
by my physicians as to the intrusiveness, pain, risks and side effects associated with
treatment or non-treatment, and shall make a choice for me based upon what my Agent
believes to be in my best interest.
STATUTORY SUGGESTED LANGUAGE:
My agent shall not make any decision regarding my health care which he knows,
or upon reasonable inquiry ought to know, is contrary to my religious beliefs
or my basic values, whether expressed orally or in writing.
BOUND BY ORAL STATEMENTS,
ELSE!!!!!!!!!!!!!!!

NOT

EVEN

MADE

TO

THE

AGENT,

BUT

TO

SOMEONE

6.
I release my Agent from the obligation to base decisions made for me on
my religious beliefs, basic values or treatment preferences, except to the extent they have
been made in writing and delivered to my Agent. Decisions authorized by this document
shall be made in the sole and absolute discretion of my Agent. I release my Agent from
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all liability for the consequences of decisions made by my Agent in good faith and
authorized by this document. My estate shall hold harmless and indemnify my Agent
from such liability, including attorney’s fees and costs to defend claims.
7.
I appoint my Agent as my personal representative for purposes of the
Health Insurance Portability and Accountability Act of 1996 and its regulations
("HIPAA").
8.
My Agent shall have full power and authority, under the circumstances and
subject to the conditions recited in this document, to take all actions and make all
decisions on my behalf regarding my physical and mental health, including but not being
limited to the following:
a. To consent, refuse or withdraw consent to medical care, treatment,
surgical procedures, diagnostic procedures, medication and the use of mechanical or
other procedures that affect bodily function, including but not limited to artificial
respiration, artificially administered nutrition and hydration, and cardiopulmonary
resuscitation. This authorization also specifically includes the power to direct and
consent to the writing of a “No Code” or “Do Not Resuscitate Order” or an “Emergency
Medical Services Do Not Resuscitate Order” by any health care provider.
b. To admit or discharge me from the care and custody of physicians,
hospitals, nursing homes, convalescent centers, homes for adults, hospice and other
facilities.
c. To request, receive and review information, oral or written, regarding
my physical or mental health, including medical and hospital records, including
information that would otherwise be private and protected by HIPAA, and to execute
releases and other documents that may be required in order to obtain such information,
and to disclose such information to such persons or entities as my Agent shall deem
appropriate. I authorize and direct doctors, hospitals and other health care providers to
release such records to my Agent.
d. To employ and discharge health care providers, companions, geriatric
care managers, hospice personnel and other persons, including any member of my
extended family, to provide health or companionship services that may be helpful in
assisting me in the enjoyment of life, regardless of whether I remain in a private home or
am admitted to a group care facility.
e. To exercise my right of privacy and my right to be left alone as they
relate to my medical treatment, even though the exercise of such rights might hasten my
death or be against conventional medical advice.
f. To consent, refuse or withdraw consent to pain relief therapies,
including unconventional pain relief therapies, even if their use may lead to permanent
physical damage, addiction or even hasten the moment of, but not intentionally cause, my
death.
g. To take any lawful actions that may be necessary to carry out these
decisions, including the granting of releases of liability to medical providers.
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h. To represent me in connection with medical services reimbursed or
provided by, or not reimbursed or provided by, any health insurer, health care provider,
or health maintenance organization. My Agent shall have access to all my medical
records, including specifically those that would otherwise be private and protected by
HIPAA, and full authority to act as my advocate in administrative, court or other
proceedings on my behalf, and may consent on my behalf to arbitration, mediation or
other alternative dispute resolution processes concerning my health care.
i. To authorize my participation in any health care study that offers the
prospect of direct therapeutic benefit to me and is approved by an institutional review
board or research review committee in accordance with applicable federal or state law.
j. To restrict or permit visitation by any person at any time.
9.
My Agent shall not be liable for any costs of my medical care. My Agent’s
signature on consent or admission papers shall not make my Agent liable for such costs.
10.
The execution of this document revokes all medical directives previously
executed by me. This Advance Medical Directive shall not terminate upon my disability.
11.
A person, firm or corporation relying upon this Advance Medical Directive
shall be fully protected unless and until actual notice of its revocation is received.
I am emotionally and mentally competent to make this Advance Medical Directive
and understand its purpose and effect.
Signed on March _____, 2013
____________________________________
JOHN J. SMITH
DECLARANT
The Declarant signed the foregoing Advance Medical Directive in my presence.
________________________________________
Witness
________________________________________
Witness

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COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
I, the undersigned Notary Public in and for the aforesaid jurisdiction, do hereby
certify that this day personally appeared before me JOHN J. SMITH, whose name is
signed to the foregoing Advance Medical Directive, and acknowledged the same before
me in the aforesaid jurisdiction.
Given under my hand on March _____, 2013
_______________________________________
Notary Public

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JOHN J. SMITH
HEALTH CARE POWER OF ATTORNEY
1.
I appoint my spouse, MARY M. JONES, of _____________________,
telephone number _______________________, as my Agent, to make health care
decisions on my behalf as authorized in this document.
2.
If my Agent is not reasonably available or is unable or unwilling to act
(except for substantive reasons), I appoint JOHN RELIABLE, of
_____________________, telephone number _______________________ as my Agent.
3.
I give my Agent authority to make health care decisions on my behalf as
described below whenever I have been determined to be incapable of making an
informed decision about providing, withholding or withdrawing medical treatment,
regardless of whether I am in Virginia at the time my Agent acts. My Agent’s authority
is effective as long as I am incapable of making an informed decision.
4.
“Incapable of making an informed decision” means unable to understand
the nature, extent and probable consequences of a proposed medical decision or unable to
make a rational evaluation of the risks and benefits of a proposed medical decision as
compared with the risks and benefits of alternatives, or unable to communicate such
understanding.
5.
The determination that I am incapable of making an informed decision shall
be made by my attending physician and a second physician or licensed clinical
psychologist after a personal examination of me and shall be certified in writing. Such
certification shall be required before treatment is withheld or withdrawn and before, or as
soon as reasonably practicable after, treatment is provided and every 180 days thereafter
while the treatment continues. If after a subsequent personal examination of me a
physician affirms in writing that I have regained capacity to make an informed decision,
any further decisions regarding my health care will require my informed consent.
6.
In exercising the power to make health care decisions on my behalf my
Agent shall be guided by my medical diagnosis, prognosis and the information provided
by my physicians as to the intrusiveness, pain, risks and side effects associated with
treatment or non-treatment, and shall make a choice for me based upon what my Agent
believes to be in my best interest.
7.
I release my Agent from the obligation to base decisions made for me on
my religious beliefs, basic values or treatment preferences, except to the extent they have
been made in writing and delivered to my Agent. Decisions authorized by this document
shall be made in the sole and absolute discretion of my Agent. I release my Agent from
all liability for the consequences of decisions made by my Agent in good faith and
authorized by this document. My estate shall hold harmless and indemnify my Agent
from such liability, including attorney’s fees and costs to defend claims.

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8.
I appoint my Agent as my personal representative for purposes of the
Health Insurance Portability and Accountability Act of 1996 and its regulations
("HIPAA").
9.
My Agent shall have full power and authority, under the circumstances and
subject to the conditions recited in this document, to take all actions and make all
decisions on my behalf regarding my physical and mental health, including but not being
limited to the following:
a. To consent, refuse or withdraw consent to medical care, treatment,
surgical procedures, diagnostic procedures, medication and the use of mechanical or
other procedures that affect bodily function, including but not limited to artificial
respiration, artificially administered nutrition and hydration, and cardiopulmonary
resuscitation. This authorization also specifically includes the power to direct and
consent to the writing of a “No Code” or “Do Not Resuscitate Order” or an “Emergency
Medical Services Do Not Resuscitate Order” by any health care provider.
b. To admit or discharge me from the care and custody of physicians,
hospitals, nursing homes, convalescent centers, homes for adults, hospice and other
facilities.
c. To request, receive and review information, oral or written, regarding
my physical or mental health, including medical and hospital records, including
information that would otherwise be private and protected by HIPAA, and to execute
releases and other documents that may be required in order to obtain such information,
and to disclose such information to such persons or entities as my Agent shall deem
appropriate. I authorize and direct doctors, hospitals and other health care providers to
release such records to my Agent.
d. To employ and discharge health care providers, companions, geriatric
care managers, hospice personnel and other persons, including any member of my
extended family, to provide health or companionship services that may be helpful in
assisting me in the enjoyment of life, regardless of whether I remain in a private home or
am admitted to a group care facility.
e. To exercise my right of privacy and my right to be left alone as they
relate to my medical treatment, even though the exercise of such rights might hasten my
death or be against conventional medical advice.
f. To consent, refuse or withdraw consent to pain relief therapies,
including unconventional pain relief therapies, even if their use may lead to permanent
physical damage, addiction or even hasten the moment of, but not intentionally cause, my
death.
g. To take any lawful actions that may be necessary to carry out these
decisions, including the granting of releases of liability to medical providers.
h. To represent me in connection with medical services reimbursed or
provided by, or not reimbursed or provided by, any health insurer, health care provider,
or health maintenance organization. My Agent shall have access to all my medical
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records, including specifically those that would otherwise be private and protected by
HIPAA, and full authority to act as my advocate in administrative, court or other
proceedings on my behalf, and may consent on my behalf to arbitration, mediation or
other alternative dispute resolution processes concerning my health care.
i. To authorize my participation in any health care study that offers the
prospect of direct therapeutic benefit to me and is approved by an institutional review
board or research review committee in accordance with applicable federal or state law.
j. To restrict or permit visitation by any person at any time.
10.
My Agent shall not be liable for any costs of my medical care. My Agent’s
signature on consent or admission papers shall not make my Agent liable for such costs.
11.
The execution of this document revokes all medical directives previously
executed by me. This Advance Medical Directive shall not terminate upon my disability.
12.
A person, firm or corporation relying upon this Advance Medical Directive
shall be fully protected unless and until actual notice of its revocation is received.
I am emotionally and mentally competent to make this Advance Medical Directive
and understand its purpose and effect.
Signed on March _____, 2013
____________________________________
JOHN J. SMITH
DECLARANT
The Declarant signed the foregoing Advance Medical Directive in my presence.
________________________________________
Witness
________________________________________
Witness
COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
I, the undersigned Notary Public in and for the aforesaid jurisdiction, do hereby
certify that this day personally appeared before me JOHN J. SMITH, whose name is
signed to the foregoing Advance Medical Directive, and acknowledged the same before
me in the aforesaid jurisdiction.
Given under my hand on March _____, 2013
_______________________________________
Notary Public
2013-13 Health Care Power of Attorney.docx
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WILL
OF
JOHN J. SMITH

March 15, 2013

William L. Babcock, Jr. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
703-518-8400 wlb@willtrustestate.com

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________________________________________________________________________
TABLE OF CONTENTS
________________________________________________________________________
I.
FAMILY MEMBERS .................................................................................................. 1
II.
PETS .............................................................................................................................. 1
III.
GIFTS OF CASH AND TANGIBLE PROPERTY.................................................... 1
IV.
SPECIFIC DOLLAR AMOUNT GIFT TO CHARITY ............................................ 2
V.
RESIDUARY GIFT ...................................................................................................... 2
VI.
EXECUTOR.................................................................................................................. 2
VII.
GUARDIAN.................................................................................................................. 3
VIII. ADDITIONAL FIDUCIARIES ................................................................................... 3
IX.
WAIVER OF BOND .................................................................................................... 3
X.
FIDUCIARY POWERS ............................................................................................... 3
XI.
MISCELLANEOUS ..................................................................................................... 3
XII.
IN TERROREM ............................................................................................................ 5

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WILL OF
JOHN J. SMITH
I, JOHN J. SMITH, of the City of Alexandria, Virginia, declare this to be my Will,
and revoke all prior Wills and Codicils made by me.
I.
FAMILY MEMBERS1
MARY M. JONES is my spouse. I have two children, JOHN J. SMITH, JR. and
MEREDITH L. SMITH. References to my children in this document are to them and no
others. References to my descendants are to my children and their descendants. My
spouse has two children from a prior marriage, BRADFORD JONES and ELIZABETH
JONES.
II.
PETS2
A.
If my spouse does not survive me, I direct my Executor to place any pet I
own at the time of my death with IRVING COLLIER. If IRVING COLLIER fails to
survive me, or is unable or unwilling to accept a pet I own, I direct my Executor to place
that pet with the first of the following individuals who is available and willing to accept
that pet: THOMAS RUTHERFORD. If none of the individuals I have listed in this
Paragraph A are able or willing to accept that pet, I direct my Executor to place that pet
with a responsible individual or family (that is, in a private, non-institutionalized setting)
where the pet will be cared for in a reasonable and loving manner.
B.
Prior to initiating such efforts to place my pet, I direct my Executor to
consult a veterinarian to ensure that the pet is or can be brought into generally good
health. A pet that cannot be restored to generally good health or whose suffering cannot
be alleviated shall be euthanized and the remains shall be disposed of in the discretion of
my Executor.
C.
The individual or family who receives my pet will also receive a cash gift
of FIVE THOUSAND DOLLARS (5,000) per pet. I request but do not require that the
money be used for the care and maintenance of my pet. A written receipt given by the
individual who accepts my pet and the cash gift shall be a full discharge of my Executor.
D.
The cost of veterinary services, temporary boarding, placement,
transportation and other expenses of caring for a pet during the administration of my
estate, or to otherwise carry out the purposes of this Article, shall be paid as a cost of
administration of my estate.
III.
GIFTS OF CASH AND TANGIBLE PROPERTY3
A.
I give EIGHT THOUSAND DOLLARS ($8,000) to JAMES
CARTWRIGHT, per stirpes.
B.
If I have left a written list of tangible personal property to be distributed at
my death, and that property is not otherwise specifically bequeathed in this Will, a
subsequent Will or a codicil, that written list shall be given effect to the extent it

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describes tangible personal property and intended recipients with reasonable certainty and
is signed by me, even though it does not satisfy the requirements for a Will or codicil.
C.
I give the rest of my furniture, furnishings, personal effects, automobiles
and other tangible personal property to my spouse.
D.
If my spouse does not survive me, I give said property (in kind, or if my
Executor determines that in kind distribution is not appropriate for some portion of said
property, then after sale), in as nearly equal portions as may be deemed practicable by my
Executor, to those of my children who survive me.
E.
My Executor shall have discretion to deliver to a relative, friend or guardian
of a minor child some portion or all of said property left to that child, to be held for the
use and benefit of the child and later distribution. A written receipt given by such
relative, friend or guardian shall be a full discharge of my Executor.
F.
Divisions in kind and valuations for that purpose shall be in the discretion
of my Executor, whose decisions shall be final. Expenses of distribution (including
storing, handling, packing, insuring and shipping) shall be paid as a cost of
administration.
IV.
SPECIFIC DOLLAR AMOUNT GIFT TO CHARITY4
If as a result of my death CHARITY does not receive TEN THOUSAND
DOLLARS ($10,000) from my IRA, I give the CHARITY as much as is needed from my
estate to make the total received by the CHARITY equal TEN THOUSAND DOLLARS
($10,000).
THIS LANGUAGE WILL RESULT IN LESS INCOME TAX LIABILITY ON THE
INDIVIDUAL BENEFICIARIES AND THEREFORE A GREATER BENEFIT TO THE
INDIVIDUAL BENEFICIARIES, WITH NO DETRIMENT TO THE CHARITIES.
V.
RESIDUARY GIFT5
I give the residue of my estate, including property over which I have a general
power of appointment, as follows:
A.
To my spouse.
B.
If my spouse does not survive me, per stirpes, to my descendants who
survive me.
C.
If my spouse does not survive me and I have no descendants who survive
me, one-half (1/2), per stirpes, to my siblings who survive me, and one-half (1/2), per
stirpes, to the siblings of my spouse who survive me.
VI.
EXECUTOR6
I nominate my spouse as Executor. If she fails to qualify or complete the
administration of my estate, I nominate JOHN RELIABLE as Executor.

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VII.
GUARDIAN7
If my spouse does not survive me, I nominate GEORGE JOHNSON as Guardian
of the person of any child of mine who is a minor at the time of my death. If that person
fails to qualify or complete the guardianship, I nominate SARAH MOORE as Guardian.
VIII.
ADDITIONAL FIDUCIARIES8
If the appointment of an additional fiduciary is necessary or desirable in any
jurisdiction, I appoint as my fiduciary (or co-fiduciary) in that jurisdiction such person or
entity as may be designated by my Executor, to have all the power and discretion in that
jurisdiction as my fiduciaries are given generally by this Will. I authorize my Executor to
waive bond and/or other security for such fiduciary and to remove and replace such
fiduciary, if deemed appropriate in the discretion of the Executor.
IX.
WAIVER OF BOND9
Fiduciaries will not be required to give bond or other security.
X.
FIDUCIARY POWERS10
Fiduciaries (except as otherwise expressly stated in this document) have the
powers and discretion granted by this document, by law, and by Va. Code §§64.2-105
and 64.2-777 as in force at the time the action is taken, exercisable in a fiduciary
capacity, including the following:
A.
To buy and sell real estate and all other types of property.
B.
To borrow money and encumber assets to secure such borrowing.
C.
To pay part or all joint income taxes due on returns filed with my spouse.
D.
To make distributions in cash or in kind or partly in each, make
distributions of undivided interests in assets and make non pro rata distributions of assets.
E.
To allocate assets with different characters and/or different income tax
bases to different beneficiaries, and to make tax elections without regard to the relative
interests of beneficiaries even if the result may be an advantage or disadvantage to one or
more beneficiaries; provided however, this authority may not be used to enlarge or shift
any beneficial interest except as an incidental consequence of the discharge of fiduciary
duties. Allocations and elections made in good faith shall not require equitable
adjustments.
F.
To purchase and/or retain assets without regard to the “prudent investor”
rule, or to a requirement to hold productive assets or to diversify investments.
XI.
MISCELLANEOUS11
A.
I direct my Executor to pay my legally enforceable debts, written charitable
pledges and the expenses of a funeral and/or memorial service, and the disposition of my
remains. Notwithstanding the foregoing, my Executor is not required to pay off secured
debts. The recipient of property will take the property subject to the secured debt, with

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no right to require my estate or another beneficiary to discharge the debt. My Executor
shall not seek contribution from my spouse for the payment of a joint debt.
B.
Transfer, estate, inheritance, succession and other death taxes payable by
reason of my death (not including generation-skipping transfer tax on a direct skip, which
will be charged against the distribution to the beneficiary or trust that causes that tax to be
payable) shall be charged against the general assets of my estate.
OR
C.
Transfer, estate, inheritance, succession and other death taxes payable by
reason of my death (not including generation-skipping transfer tax on a direct skip, which
will be charged against the distribution to the beneficiary or trust that causes that tax to be
payable) which are not directed to be paid from my estate by this Will or by another
document signed by me, shall be apportioned against and paid by the persons in
possession of that property or benefited thereby, in the manner provided by the Virginia
apportionment laws.
D.
“Descendants” means children, grandchildren, great-grandchildren, etc.,
and includes persons adopted prior to reaching age twenty-one (21) if they were born in a
year after the birth of my oldest descendant living at my death. “Descendants” does not
include children born out of wedlock unless the parent voluntarily provides parental care
and/or support for the child or recognizes the child for inheritance purposes in writing.
NOTES:
There are two issues here. First, a child who is legally adopted in a Court
proceeding (as opposed to a stepchild, who has no legal status for inheritance
purposes) is treated for inheritance purposes the same as a natural child. The
foregoing language simply prohibits someone from adopting an adult.
Second, under current Virginia law a person born out of wedlock will inherit
by, through or from the mother if the mother has no Will. Such a child will also
inherit by, through or from the father if the father has no Will and the parents
participated in a marriage ceremony (valid or invalid) before or after the birth, or
paternity is established by clear and convincing evidence as set forth in the Virginia
statutes.
You may include or exclude stepchildren, adopted children and/or children
born out of wedlock.
E.
A gift to descendants “per stirpes” means the gift is divided equally among
the members of the first generation of descendants in which at least one descendant is
living at the specified time, with each living member taking one share and any deceased
member’s child (or children in equal shares) taking the share to which the deceased
member would have been entitled, and likewise down the generations. No share shall be
allocated for a deceased child leaving no descendant surviving at the specified time.
NOTE:
If no children are surviving the assets are divided equally among the grandchildren.

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F.
Unless waived, an individual serving as my Executor shall be entitled to
reasonable compensation, based on the duties and responsibilities assumed and the time
and effort expended. A fee that does not exceed the published fee schedule of a bank or
trust institution licensed to do business in Virginia shall be conclusively deemed
reasonable. An individual may be paid fees that exceed such published fees if he or she
demonstrates to the Commissioner of Accounts that the fee sought is reasonable. An
individual shall also be entitled to reimbursement for accounting, tax preparation, legal
and investment management fees as expenses, which shall not be considered a part of the
fees paid to the fiduciary.
G.
A corporate Executor shall receive compensation in accordance with its
published fee schedule in effect when the services are rendered. If both an individual and
a corporate fiduciary serve, the corporate fiduciary will be entitled to receive
compensation in accordance with its published fee schedule in effect when the services
are rendered and the individual will be entitled to ONE HALF (1/2) of the fee for an
individual set forth in this Article.
H.
In the event that my spouse and I die under circumstances where there is no
sufficient evidence that we have died otherwise than simultaneously, it shall be
conclusively presumed in determining the distribution of property, and whether or not
distribution is controlled by the terms of this document, that my spouse survived me.
Except for my spouse, a person who is not established by clear and convincing evidence
to have survived an event by 120 hours shall be deemed to have predeceased the event.
I.
If a charity designated as a beneficiary has been misnamed, my Executor
shall have authority to determine the intended charity. If a condition of a gift cannot be
carried out by the charity, my Executor may modify or remove the condition in order to
permit the gift to be made. If a named charity is no longer in existence at my death, my
Executor is directed to select an alternate charitable beneficiary with a similar mission to
receive the gift. My Executor has absolute discretion to make these decisions.
XII.
IN TERROREM
If a person who would receive a benefit as a result of my death (outright or as the
beneficiary of a trust) directly or indirectly contests the validity of any provision of this
Will, that person and all of that person’s descendants will be treated as having
predeceased me and will forfeit all benefits that otherwise would have passed to that
person as a result of my death, whether by reason of this Will, that Trust, a beneficiary
designation or otherwise. This provision will not apply to a suit for construction or for
aid and direction.
Signed on March _____, 2013.
________________________________ (SEAL)
JOHN J. SMITH

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We certify that JOHN J. SMITH signed, sealed, acknowledged and declared the
foregoing instrument, each page of which is identified by his signature, as and for his Will,
in the presence of us, who, in his presence and at his request, and in the presence of each
other, all present together at the same time, have subscribed our names as witnesses.
According to our best knowledge and belief JOHN J. SMITH was over the age of eighteen
(18) years, of sound mind and memory, and under no constraint at the time of the execution
and acknowledgment of this instrument.
Signed on March_____, 2013.
_______________________________________
Address: _______________________________
_______________________________________
Address: _______________________________

Signed on March _____, 2013.

______________________________________
WILLIAM L. BABCOCK, JR.
Authorized Person

[FOR AN INTERNATIONAL WILL, THE TESTATOR MUST SIGN EACH
PAGE][VIRGINIA CODE 64.2-436(C): The authorized person shall ask the testator
whether he wishes to make a declaration concerning the safekeeping of his will. If so and
at the express request of the testator the place where he intends to have his will kept shall
be mentioned in the certificate provided for in § 64.2-437. ]
2013-14 Will for married client - outright gifts.docx
3/9/13 wlb

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COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
Before me, the undersigned authority, on this day personally appeared JOHN J.
SMITH, WILLIAM L. BABCOCK, JR. and KIERSTEN L. JENSEN, known to me to be
the person who signed the foregoing Will and the witnesses whose names are signed to the
Will, and all of these persons being by me first duly sworn, JOHN J. SMITH declared to me
and to the witnesses in my presence that the document is his Will and that he willingly
signed or directed another to sign it for him, and executed it in the presence of the witnesses
as his free and voluntary act for the purposes therein expressed; that the witnesses stated
before me that the Will was executed and acknowledged by JOHN J. SMITH as his Will in
the presence of the witnesses, who, in his presence and at his request, and in the presence of
each other, signed their names as witnesses on the day of the date of the Will, and that he, at
the time of the execution of the Will, was over the age of eighteen (18) years and of sound
and disposing mind and memory.
Sworn and acknowledged before me by JOHN J. SMITH, WILLIAM L.
BABCOCK, JR. and KIERSTEN L. JENSEN on March _____, 2013.
______________________________________
Notary Public

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WILL OF
JOHN J. SMITH
ENDNOTES
1

FAMILY MEMBERS. Reciting the names of family members and defining their
relationships is important to avoid ambiguity in the later sections of the Will.
2
PETS. Your Executor will be charged with the duty of placing your pets with a family
if the pets are in good health or can be restored to good health. If the pets cannot be
restored to good health and euthanasia is the humane alternative, the pets will be
euthanized.
3
GIFTS OF CASH AND TANGIBLE PROPERTY.
In law, property is divided into two categories, real property and personal property.
Real property includes land and buildings, and everything else is personal property.
Personal property is again divided into two categories, tangible and intangible.
Tangible property includes things with physical existence, such as furniture,
clothing, jewelry, automobiles, etc.
Intangible property includes things without physical existence, such as bank
accounts, life insurance, stock, contractual rights, etc. In most of these cases, a piece of
tangible personal property (paper) represents the underlying intangible personal property.
For instance, a stock certificate evidences ownership of shares in a corporation.
The technical details of the tangibles memo authorized by the Will are: (1) the list
may be prepared before or after the signing of the Will; (2) you may change it from time to
time; (3) your Executor will not be liable for distributing tangible personal property to the
apparent beneficiary under the Will without actual knowledge of the existence of the list;
(4) your Executor will not have any duty to recover property so distributed; (5) a person
named to receive tangible personal property in a list which is effective may recover that
property, or its value if the property cannot be recovered, from an apparent beneficiary to
whom it was distributed, in an action brought within one year after the probate of the Will.
4.
SPECIFIC DOLLAR AMOUNT GIFT TO CHARITY.
5.
RESIDUARY GIFT. The Residuary Gift is comprised of all cash, financial assets, real
estate and other intangible property not specifically bequeathed earlier in the Will. Joint
property, life insurance, pension proceeds, IRA funds and other pay-on-death assets are
not controlled by the Will, and instead pass outside the Will as you have designated for
each such asset.
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6.

EXECUTOR. The Executor will administer your assets for a limited time period,
generally for a year or two, while tax clearances are obtained and tangible property
distributed. Then the estate is closed and the other probate assets pass to your
beneficiaries.
7
GUARDIAN. The surviving parent is the natural guardian of minor children, so there is
no need to appoint a guardian unless you are the surviving parent. The appointment made
in the Will is not binding on the Court, but it is given considerable weight.
8.

ADDITIONAL FIDUCIARIES. Additional executors or trustees are sometimes
required to serve in Virginia if the person you appointed does not live in Virginia at the
time of your death. They are also sometimes needed to serve in states outside of Virginia
if you own property (particularly real estate) in other states.
9.
WAIVER OF BOND. Without this waiver, a fiduciary must each year pay (from
estate or trust funds) an insurance company to issue a fiduciary bond insuring that if the
fiduciary is negligent or runs off with assets the company will replace the loss. Virginia
banks with trust authority are exempt from this requirement.
10.
FIDUCIARY POWERS. These Code sections contain pages and pages of powers
which may be exercised by fiduciaries (executors and trustees are fiduciaries). The
additional powers give even more flexibility to the fiduciaries and are intended to save
time and money.
11.
MISCELLANEOUS. These definitions help assure that there is no confusion or
ambiguity about who you intend to be your beneficiaries and how and under what
circumstances they are to receive property.

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WILL
OF
JOHN J. SMITH
March 15, 2013

William L. Babcock, Jr. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
703-518-8400 wlb@willtrustestate.com

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________________________________________________________________________
TABLE OF CONTENTS
________________________________________________________________________
I.
FAMILY MEMBERS .................................................................................................. 1
II.
PETS .............................................................................................................................. 1
III.
GIFTS OF CASH AND TANGIBLE PROPERTY.................................................... 1
IV.
SPECIFIC DOLLAR AMOUNT GIFT TO CHARITY ............................................ 2
V.
RESIDUARY GIFT ...................................................................................................... 2
VI.
TRUSTS FOR DESCENDANTS ................................................................................ 2
VII.
EXECUTOR.................................................................................................................. 6
VIII. GUARDIAN.................................................................................................................. 6
IX.
TRUSTEE ADMINISTRATIVE PROVISIONS ....................................................... 6
X.
ADDITIONAL FIDUCIARIES ................................................................................... 8
XI.
WAIVER OF BOND .................................................................................................... 8
XII.
FIDUCIARY POWERS ............................................................................................... 8
XIII. GENERATION-SKIPPING TRANSFER TAX ......................................................... 9
XIV. LIMITATION OF POWERS ..................................................................................... 10
XV.
MISCELLANEOUS ................................................................................................... 10
XVI. WAIVER OF THE RULE AGAINST PERPETUITIES ......................................... 13
XVII. IN TERROREM .......................................................................................................... 14

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WILL OF
JOHN J. SMITH
I, JOHN J. SMITH, of the City of Alexandria, Virginia, declare this to be my Will,
and revoke all prior Wills and Codicils made by me.
I.
FAMILY MEMBERS1
MARY M. JONES is my spouse. I have two children, JOHN J. SMITH, JR. and
MEREDITH L. SMITH. References to my children in this document are to them and no
others. References to my descendants are to my children and their descendants. My spouse
has two children from a prior marriage, BRADFORD JONES and ELIZABETH JONES.
II.
PETS2
A.
If my spouse does not survive me, I direct my Executor to place any pet I
own at the time of my death with IRVING COLLIER. If IRVING COLLIER fails to
survive me, or is unable or unwilling to accept a pet I own, I direct my Executor to place
that pet with the first of the following individuals who is available and willing to accept
that pet: THOMAS RUTHERFORD, MARY POPPINS, ATTILA THE HUN. If none
of the individuals I have listed in this Paragraph A are able or willing to accept that pet, I
direct my Executor to place that pet with a responsible individual or family (that is, in a
private, non-institutionalized setting) where the pet will be cared for in a reasonable and
loving manner.
B.
Prior to initiating efforts to place my pet, I direct my Executor to consult a
veterinarian to ensure that the pet is or can be brought into generally good health. A pet
that cannot be restored to generally good health or whose suffering cannot be alleviated
shall be euthanized and the remains shall be disposed of in the discretion of my Executor.
C.
The individual or family who receives my pet will also receive a cash gift
of FIVE THOUSAND DOLLARS (5,000) per pet. I request but do not require that the
money be used for the care and maintenance of my pet. A written receipt given by the
individual who accepts my pet and the cash gift shall be a full discharge of my Executor.
D.
The cost of veterinary services, temporary boarding, placement,
transportation and other expenses of caring for a pet during the administration of my
estate, or to otherwise carry out the purposes of this Article, shall be paid as a cost of
administration of my estate.
III.
GIFTS OF CASH AND TANGIBLE PROPERTY3
A.
I give TEN THOUSAND DOLLARS ($10,000) to GREGORY CARLYLE.
If he does not survive me this gift will go to ________________. If neither of them survive
me this gift will lapse.
B.
If I have left a written list of tangible personal property to be distributed at
my death, and that property is not otherwise specifically bequeathed in this Will, a
subsequent Will or a codicil, that written list shall be given effect to the extent it

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describes tangible personal property and intended recipients with reasonable certainty and
is signed by me, even though it does not satisfy the requirements for a Will or codicil.
C.
I give the rest of my furniture, furnishings, personal effects, automobiles
and other tangible personal property to my spouse.
D.
If my spouse does not survive me, I give said property (in kind, or if my
Executor determines that in kind distribution is not appropriate for some portion of said
property, then after sale), in as nearly equal portions as may be deemed practicable by my
Executor, to those of my children who survive me.
E.
My Executor shall have discretion to deliver to a relative, friend or guardian
of a minor child some portion or all of said property left to that child, to be held for the
use and benefit of the child and later distribution. A written receipt given by such
relative, friend or guardian shall be a full discharge of my Executor.
Divisions in kind and valuations for that purpose shall be in the discretion of my
Executor, whose decisions shall be final. Expenses of distribution (including storing,
handling, packing, insuring and shipping) shall be paid as a cost of administration.
IV.
SPECIFIC DOLLAR AMOUNT GIFT TO CHARITY4
If as a result of my death CHARITY does not receive TEN THOUSAND
DOLLARS ($10,000) from my IRA, I give the CHARITY as much as is needed from my
estate to make the total received by the CHARITY equal TEN THOUSAND DOLLARS
($10,000).
THIS LANGUAGE WILL RESULT IN LESS INCOME TAX LIABILITY ON THE
INDIVIDUAL BENEFICIARIES AND THEREFORE A GREATER BENEFIT TO THE
INDIVIDUAL BENEFICIARIES, WITH NO DETRIMENT TO THE CHARITIES.
V.
RESIDUARY GIFT5
I give the residue of my estate, including property over which I have a general power
of appointment, as follows:
A.
To my spouse.
B.
If my spouse does not survive me, I direct my Executor to distribute the
residue, per stirpes, to Trusts for my descendants who survive me. The Trusts shall be
administered in accordance with the TRUSTS FOR DESCENDANTS Article of this
document.
C.
If neither my spouse nor any descendants of mine survive me, I direct my
Executor to distribute the residue one-half (1/2), per stirpes, to my siblings who survive
me, and one-half (1/2), per stirpes, to the siblings of my spouse who survive me.
OR
D.
_________ PERCENT (____%) to ______________, per stirpes.
E.
_________ PERCENT (____%) to ______________, per stirpes.
A.

VI.
TRUSTS FOR DESCENDANTS6
Trustees and Trust Advisors.
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1.
JOHN RELIABLE will be the Trustee. Upon the resignation,
incapacity or death of the Trustee, MARY DEPENDABLE will become the Trustee.
OR
2.
BANK & TRUST COMPANY will be the Trustee of a Trust created
for __________________, and notwithstanding any other provision of this document, he
may not serve as a Trustee, appoint a Trustee or remove a Trustee of a Trust created for
him.
3.
Notwithstanding the foregoing appointment of Trustees for the
Trusts for Descendants, upon the funding of the Trust, or upon reaching age THIRTY
(30), whichever is later, the primary beneficiary of the Trust: will become the Trustee of
that Trust; may appoint a Trustee to serve upon his or her resignation, incapacity, or
death, or to serve initially if the primary beneficiary declines to serve; and may remove
Trustees and appoint one or more successor Trustees, including himself or herself.
4.
If the primary beneficiary of the Trust is under age THIRTY (30)
and no Trustee has been appointed for that Trust, the primary beneficiary’s parent may
appoint the Trustee, who may be the parent, and may remove Trustees and appoint
successor Trustees to fill vacancies or to take office upon the resignation, incapacity or
death of a Trustee.
5.
If the Trustee of a Trust for a Descendant is not the primary
beneficiary of the Trust, the Trustee shall have discretion to appoint the primary
beneficiary as a Co-Trustee or the sole Trustee of the Trust. The Trustee shall also have
discretion, on one or on multiple occasions, to divide the Trust into separate trusts, in
amounts or proportions the Trustee deems appropriate, and appoint the primary
beneficiary as the Co-Trustee or sole Trustee of one or more of those separate trusts.
6.
The Trustee may appoint a Trust Advisor to make those decisions
reserved to a Trust Advisor. The Trustee must appoint a Trust Advisor if the Trust or a
portion of the Trust may be subject to generation-skipping transfer tax.
7.
A Trust Advisor must be independent, as defined in §674(c), from
the beneficiaries of the Trust, and not be related or subordinate, as defined in §672(c), to
the beneficiaries of the Trust. In addition, if the Trust Advisor is an individual, that
individual must be at least THIRTY (30) years old and one of the following: experienced
in business, finance or investments; a CFP; a CPA; or an attorney.
8.
Decisions of the Trust Advisor shall be within the absolute
discretion of the Trust Advisor. A Trust Advisor will be entitled to reimbursement for
expenses and reasonable compensation.
9.
If a person or entity serving as Trustee meets the requirements of a
Trust Advisor in this document, that person or entity will have the powers and discretion
granted by this document to Trustees and to Trust Advisors.
B.
The beneficiaries of a Trust for Descendants shall be the person for whom
the Trust was created (the “primary beneficiary”) and the descendants of that person.

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C.
The Trustee shall distribute so much of the net income and principal of the
Trust to or for their benefit each year as is appropriate for health, education, maintenance
and support.
D.
When making decisions regarding the distributions in accordance with the
above standards, the Trustee:
1.
Is directed not to make distributions to the descendants of the
primary beneficiary until the health, education, maintenance and support of the primary
beneficiary are provided for first.
2.
After the primary beneficiary, is directed to give priority to the
children of the primary beneficiary and then to subsequent generations in sequence.
3.
Is directed generally to treat the members of each generation equally,
but may favor one beneficiary over others in the same generation or in different
generations if such action is deemed appropriate by the Trustee because of the health,
support or educational needs of that beneficiary.
4.
Shall take into consideration the manner of living to which the
beneficiary has been accustomed.
5.
May take into consideration or may disregard the income and
principal that may be available to or for the beneficiary from other sources.
6.
Is not required to preserve principal for the descendants of the
primary beneficiary.
E.
Shall have discretion to treat principal distributions as advancements, by
stating in writing that they are advancements. May not make any distribution that would
discharge a legal obligation of the Trustee, including, but not limited to, any obligation to
support and/or educate a beneficiary.1
F.
If the Trust has a Trust Advisor, the Trustee may request a decision from
the Trust Advisor as to whether it is appropriate for:
1.
The Trustee to make a distribution of income and/or principal to or
for the benefit of one or more beneficiaries for a purpose other than health, education,
maintenance or support, and for such distribution to be treated as an advancement. If
after reviewing the circumstances the Trust Advisor determines that a proposed
distribution is appropriate, the Trustee is directed to make that distribution.
2.
The Trustee to make a distribution of income and/or principal to or
for the benefit of the parent, legal guardian or other person raising a beneficiary to
1

Virginia law imposes an obligation on a parent to support his or her children under the age of 18. Va. Code §2061. Discharge of a legal obligation of support is considered a payment to creditors and would therefore be the
exercise of a general power of appointment under IRC §2041(b)(1). If a Trustee has a general power of appointment
over the Trust assets the Trust assets would be included in the Trustee’s estate at death. Not good. This provision
avoids that problem by prohibiting a Trustee from discharging his or her legal obligation of support (clothing,
shelter and food), but leaving open the ability to pay for anything above and beyond legal support – such as private
school, music lessons, soccer clinics, cell phones, toys, etc., etc. Treas. Reg. §20.2041-1(c)(1)(b) states that “a
power of appointment is not a general power if by its terms it is” . . . “expressly not exercisable in favor of the
decedent or his creditors.”

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reimburse that person for lost income and for additional travel, household or other
expenses incurred as a result of raising and caring for the beneficiary. It is intended,
without limiting the generality of the foregoing, to permit the Trust Advisor to direct the
Trustee to pay some portion or all of the cost of such things as a larger automobile or
additional automobile, a larger or more suitable dwelling, the remodeling or renovation of
an existing dwelling and the construction of an addition to an existing dwelling. If after
reviewing the circumstances the Trust Advisor determines that a proposed distribution is
appropriate, the Trustee is directed to make that distribution.
3.
The Trust to be terminated. If after reviewing the circumstances the
Trust Advisor determines that the size of the Trust does not warrant the cost of
continuing, or its administration would be otherwise impractical or inappropriate, the
Trust Advisor shall approve the proposed termination of the Trust and determine if its
assets should be distributed to one or more of: the primary beneficiary, the descendants
of the primary beneficiary, trusts for one or more of them, and in what proportions. The
interests of remainder beneficiaries are to be disregarded when making these
determinations. Upon receiving approval for termination of the Trust and instructions as
to its distribution among the beneficiaries, the Trustee shall terminate the Trust and
distribute its assets in accordance with those instructions. Upon such distribution the
interests of all succeeding beneficiaries, whether vested or contingent, shall be
terminated.
G.
After reaching age EIGHTEEN (18) the primary beneficiary may by Will
or revocable trust direct how the assets of the Trust will pass at the death of the primary
beneficiary, and after reaching age THIRTY (30) the primary beneficiary may gift Trust
assets during the primary beneficiary’s lifetime by delivering to the Trustee a document
signed by the primary beneficiary, with the signature notarized, directing what assets are
to be gifted and to whom. In order to be effective the documents exercising these rights
must make specific reference to this limited power of appointment, as the power
contained in the Will of JOHN J. SMITH dated March 15, 2013, and comply with the
following restrictions:
1.
The primary beneficiary may not direct that the assets pass, directly
or indirectly, to the primary beneficiary making the appointment, his or her estate, the
creditors of either, a charity or any other non-individual. The primary beneficiary may
not direct how a life insurance policy owned by the Trust will pass or name the
beneficiary of a life insurance policy owned by the Trust.
2.
The assets may be given to any other individuals, in any proportions,
and may be in further trust or outright, provided that a Deferrable Retirement Benefit
may only be appointed to an individual who is younger than the primary beneficiary of
the trust created upon my death and/or a trust for his or her benefit which qualifies as a
“see-through trust” in accordance with IRS Code and Regs. §1.401(a)(9)-4, A-5(b), so
that the trust beneficiary will qualify as the Designated Beneficiary in accordance with
Regs. §1.401(a)(9)-4, A-5(a).
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3.
It is recommended that the primary beneficiary not exercise this
limited power of appointment to create a further power of appointment without first
receiving expert advice, so that the assets are not includible in the primary beneficiary’s
estate unless that is the intended result.
4.
Unless within NINETY (90) days after the death of the primary
beneficiary the Trustee has actual notice of the existence of a Will or revocable trust
exercising this limited power of appointment, the Trustee may, without incurring liability
to an appointee, proceed as if such power had not been exercised; provided however, this
sentence shall not bar the right which an appointee may have to enforce the appointment
against the persons who receive the property.
H.
If the primary beneficiary has not directed by Will or revocable trust how
the assets of his or her Trust will pass at death, those assets will be distributed, per
stirpes, to Trusts for the primary beneficiary’s descendants living at the death of the
primary beneficiary. If there are none, the assets will be distributed, per stirpes, to Trusts
for my descendants living at the death of the primary beneficiary. The Trusts shall be
administered in accordance with this Article; provided that a distribution payable to a
Trust for a person for whom a Trust created under this Article is already in existence shall
be added to that Trust. If in accordance with the foregoing distribution provisions a
Deferrable Retirement Benefit would be distributable to a Trust for a beneficiary who is
older than the primary beneficiary of the Trust created upon my death, those benefits
shall instead be distributed directly to the beneficiary free of trust.
I.
It is intended that Trusts for Descendants not be includible in the estate of
the primary beneficiary for federal estate tax purposes and the provisions of this
document shall be construed to carry out this intent. Notwithstanding the foregoing,
assets subject to the generation-skipping transfer tax will be included as provided in the
GENERATION-SKIPPING TRANSFER TAX Article of this document.
J.
No Trust shall be liable for the debts of a beneficiary, to transfer,
assignment or encumbrance by a beneficiary, or to the control of a beneficiary’s spouse.
VII.
EXECUTOR7
I nominate my spouse as Executor. If she fails to qualify or complete the
administration of my estate, I nominate JOHN RELIABLE as Executor.
VIII. GUARDIAN8
If my spouse does not survive me, I nominate GEORGE JOHNSON as Guardian of
the person of any child of mine who is a minor at the time of my death. If that person fails
to qualify or complete the guardianship, I nominate SARAH MOORE as Guardian.
IX.
TRUSTEE ADMINISTRATIVE PROVISIONS9
A.
If there is no other applicable provision in this document for the
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a Co-Trustee and may appoint a successor Trustee to take office upon the death,
resignation or incapacity of the Trustee then serving.
B.
If there is no other applicable provision in this document for the
appointment of a successor Trustee and the Trustee then serving has failed, refused or is
unable to appoint a successor Trustee, my then living children who are over the age of
TWENTY-FIVE (25), acting by majority/unanimously, will have the right to appoint a
successor Trustee, and may name themselves.
C.
A Trustee may resign by giving thirty (30) days written notice.
D.
An individual serving as a Trustee will cease to serve as Trustee upon the
issuance of a certification by a physician that the individual is incapable of managing the
trust. Each individual Trustee, by either formally accepting the appointment or by
serving as Trustee, authorizes and directs his or her health care providers to release to any
other Trustee and to any income beneficiary of the trust for which the person is serving as
Trustee (“Information Recipients”) all of the Trustee’s medical information relevant to a
determination whether the individual is capable of managing the Trust, and if requested
will sign releases to that effect. A Trustee who: 1) fails within thirty (30) days of a
written request to undergo an examination to determine whether the individual is capable
of managing the Trust; 2) fails within ten (10) days of such exam to release the results; or
3) fails within ten (10) days of a written request to disclose existing medical information,
shall be deemed to have resigned, provided that there is a reasonable basis to make the
request and that only one such request may be made every eighteen (18) months. A
Trustee who prohibits the release of such information shall be deemed to have resigned if
the information is not supplied to or a release is not signed and delivered to the
Information Recipient within ten (10) days after a request by the Information Recipient.
The cost of the examination shall be borne by the Trust for which the individual is acting
as Trustee.
E.
No bond or security will be required of any Trustee.
F.
Trustees of Trusts for Descendants will furnish the primary beneficiary
with a copy of this document and annual reports. Annual reports will include a list of
assets and liabilities at then-current market value and all receipts and disbursements for
the year, including trustee compensation. Trustees will not be obligated to provide copies
of this document or annual reports or any other information to any other persons or
entities, but may do so in the discretion of the Trustees.
G.
Trustees will not be required to file an inventory or accounts with the
Commissioner of Accounts or any other public official or court.
H.
Individual Trustees will be entitled to reasonable compensation, based on
the duties and responsibilities assumed and the time and effort expended. An individual
Trustee’s fee that does not exceed the published fee schedule of a bank or trust institution
licensed to do business in Virginia shall be conclusively deemed reasonable. Individual
Trustees may be paid fees that exceed such published fees if they demonstrate that the fee
sought is reasonable. Individual Trustees will also be entitled to reimbursement for
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accounting, tax preparation, legal and investment management fees as expenses, which
shall not be considered a part of the fees paid to the Trustee.
I.
A corporate Trustee shall receive compensation in accordance with its
published fee schedule in effect when the services are rendered. If both an individual and
a corporate fiduciary serve as Trustees, the corporate fiduciary will be entitled to receive
compensation in accordance with its published fee schedule in effect when the services
are rendered and the individual will be entitled to ONE HALF (1/2) of the corporate base
fee (the corporate fee without including extra charges for tax preparation, etc.).
J.
A Trustee may require as a condition precedent to the payment of a
discretionary distribution that a beneficiary furnish his or her own certification or other
evidence of health, income, assets and need for such distribution, in form and content
satisfactory to the Trustee. The Trustee shall be entitled to rely upon the certification of
the beneficiary and shall not be required to make inquiry as to the accuracy of the facts
certified. The Trustee will not be prohibited from making such inquiry or from relying
on other sources of information.
X.
ADDITIONAL FIDUCIARIES10
If the appointment of an additional fiduciary is necessary or desirable in any
jurisdiction, I appoint as my fiduciary (or co-fiduciary) in that jurisdiction such person or
entity as may be designated by my Executor, to have all the power and discretion in that
jurisdiction as my fiduciaries are given generally by this Will. I authorize my Executor to
waive bond and/or other security for such fiduciary and to remove and replace such
fiduciary, if deemed appropriate in the discretion of the Executor.
XI.
WAIVER OF BOND11
Fiduciaries will not be required to give bond or other security.
XII.
FIDUCIARY POWERS12
Fiduciaries (except as otherwise expressly stated in this document) have the powers
and discretion granted by this document, by law, and by Va. Code §§64.2-105 and 64.2-777
as in force at the time the action is taken, exercisable in a fiduciary capacity, including the
following:
A.
To buy and sell real estate and all other types of property.
B.
To borrow money and encumber assets to secure such borrowing.
C.
To pay part or all joint income taxes due on returns filed with my spouse.
D.
To make distributions in cash or in kind or partly in each, make
distributions of undivided interests in assets and make non pro rata distributions of assets.
E.
To commingle and make investments in common for trusts, and to merge or
consolidate a trust with one having substantially the same provisions.
F.
To divide a trust into two or more separate trusts.
G.
To allocate assets with different characters and/or different income tax
bases to different beneficiaries, and to make tax elections without regard to the relative
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interests of beneficiaries even if the result may be an advantage or disadvantage to one or
more beneficiaries; provided however, this authority may not be used to enlarge or shift
any beneficial interest except as an incidental consequence of the discharge of fiduciary
duties. Allocations and elections made in good faith shall not require equitable
adjustments.
H.
To purchase and/or retain assets without regard to the “prudent investor”
rule, or to a requirement to hold productive assets or to diversify investments.
I.
To change the situs of a trust created by this document to a different state or
country if the Trustee believes it to be in the best interests of the trust and the
beneficiaries. The Trustee may elect that the law of the new jurisdiction will govern the
trust to the extent necessary or appropriate. No such change in situs or governing law
may be made if it would increase the class of beneficiaries or give a beneficial interest or
economic benefit to a person not already a beneficiary.
J.
To allocate, in whole or in part, my generation-skipping transfer tax
(GSTT) exemption to property as to which I am the transferor, without obligation to
make the allocation equally or pro rata. A good faith allocation shall not be subject to
challenge.
K.
A Trust Advisor may authorize the Trustee to amend a trust created by this
document, but only if the amendment is required to insure that the trust qualifies as a
“see-through trust” in accordance with IRS Code and Regs. §1.401(a)(9)-4, A-5(b), so
that the trust beneficiary will qualify as my Designated Beneficiary in accordance with
Regs. §1.401(a)(9)-4, A-5(a) or to meet other tax planning objectives. No amendment
may be made that would increase the class of beneficiaries or give a beneficial interest or
economic benefit to a person not already a beneficiary.
XIII. GENERATION-SKIPPING TRANSFER TAX13
The following powers are granted to the Trust Advisor, in addition to those granted
in other portions of this document:
A.
The Trust Advisor may divide any trust into two separate trusts, one
exempt from generation-skipping transfer tax and the other subject to generation-skipping
transfer tax.
B.
The primary beneficiary of a trust that is subject, in whole or in part, to
generation-skipping transfer tax will have the power, with the consent of the Trust
Advisor, to withdraw, during the beneficiary’s lifetime, any part or all of the assets in
such trust that would otherwise be subject to the generation-skipping transfer tax.
C.
The Trust Advisor need not consider the advisability of consenting to such
a withdrawal until the primary beneficiary requests the consent in writing. The Trust
Advisor may but need not give consent until the primary beneficiary delivers a draft of
the proposed consent to the Trust Advisor along with an analysis of the pros and cons of
consenting and calculations of the tax and substantive effects of the proposed consent.
Good faith determinations of the Trust Advisor whether or not to consent to a withdrawal
shall bind all persons interested in the trust.
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XIV. LIMITATION OF POWERS14
A.
Notwithstanding anything in this document to the contrary, any provision
of this document and any power or discretion granted to a fiduciary by this document or
now or hereafter conferred upon a fiduciary generally, shall be void to the extent that it
may be construed or administered so as to:
1.
Cause assets of a Trust to be included in the estate of a descendant of
mine; provided however, it is accepted and understood that assets subject to the
generation-skipping transfer tax will be included as provided in the GENERATIONSKIPPING TRANSFER TAX Article of this document.
2.
Cause a trust holding a Deferrable Retirement Benefit to fail to
qualify as a “see-through trust” in accordance with the Internal Revenue Code and
Treasury Regulations, including Treas. Reg. §1.401(a)(9)-4.
3.
Permit a Trustee to make a discretionary distribution that is not
limited by an ascertainable standard related to health, education, maintenance or support,
unless approved by a Trust Advisor.
4.
Permit a Trustee to make a discretionary distribution that discharges
a legal obligation of the Trustee or any other person, including, but not limited to, an
obligation to support and/or educate a beneficiary.
5.
Permit a payment to or for the benefit of any person if such payment
will both discharge the legal obligation of another person and, on account of such
discharge, cause there to be imposed a federal tax on generation-skipping transfers.
B.
If a limitation contained in this document would prevent the exercise of a
power or discretion by a Trustee, but it could be exercised without violating the
restrictions contained in this Article by that Trustee acting jointly with an independent
Trustee or with an adverse Trustee, or by an independent Trust Advisor acting alone or an
adverse Trustee acting alone, then the Trustee may appoint such a Trustee or Trust
Advisor to exercise that power or discretion.
XV.
MISCELLANEOUS15
A.
I direct my Executor to pay my legally enforceable debts, written charitable
pledges and the expenses of a funeral and/or memorial service, and the disposition of my
remains. Notwithstanding the foregoing, my Executor is not required to pay off secured
debts. The recipient of property will take the property subject to the secured debt, with
no right to require my estate or another beneficiary to discharge the debt. My Executor
shall not seek contribution from my spouse for the payment of a joint debt.
B.
Transfer, estate, inheritance, succession and other death taxes payable by
reason of my death (not including generation-skipping transfer tax on a direct skip, which
will be charged against the distribution to the beneficiary or trust that causes that tax to be
payable) shall be charged against the general assets of my estate.
OR

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C.
Transfer, estate, inheritance, succession and other death taxes payable by
reason of my death (not including generation-skipping transfer tax on a direct skip, which
will be charged against the distribution to the beneficiary or trust that causes that tax to be
payable) which are not directed to be paid from my estate by this Will or by another
document signed by me, shall be apportioned against and paid by the persons in
possession of that property or benefited thereby, in the manner provided by the Virginia
apportionment laws.
D.
Unless waived, an individual serving as my Executor shall be entitled to
reasonable compensation, based on the duties and responsibilities assumed and the time
and effort expended. A fee that does not exceed the published fee schedule of a bank or
trust institution licensed to do business in Virginia shall be conclusively deemed
reasonable. An individual may be paid fees that exceed such published fees if he or she
demonstrates to the Commissioner of Accounts that the fee sought is reasonable. An
individual shall also be entitled to reimbursement for accounting, tax preparation, legal
and investment management fees as expenses, which shall not be considered a part of the
fees paid to the fiduciary.
E.
A corporate Executor shall receive compensation in accordance with its
published fee schedule in effect when the services are rendered. If both an individual and
a corporate fiduciary serve as Executors, the corporate fiduciary will be entitled to
receive compensation in accordance with its published fee schedule in effect when the
services are rendered and the individual will be entitled to ONE HALF (1/2) of the
corporate base fee (the corporate fee without including extra charges for tax preparation,
etc.).
F.
In the event that my spouse and I die under circumstances where there is no
sufficient evidence that we have died otherwise than simultaneously, it shall be
conclusively presumed in determining the distribution of property, and whether or not
distribution is controlled by the terms of this document, that my spouse survived me.
Except for my spouse, a person who is not established by clear and convincing evidence
to have survived an event by 120 hours shall be deemed to have predeceased the event.
G.
“Descendants” means children, grandchildren, great-grandchildren, etc.,
and includes persons adopted prior to reaching age twenty-one (21) if they were born in a
year after the birth of my oldest descendant living at my death. “Descendants” does not
include children born out of wedlock unless the parent voluntarily provides parental care
and/or support for the child or recognizes the child for inheritance purposes in writing.
NOTES:
There are two issues here. First, a child who is legally adopted in a Court
proceeding (as opposed to a stepchild, who has no legal status for inheritance
purposes) is treated for inheritance purposes the same as a natural child. The
foregoing language simply prohibits someone from adopting an adult.
Second, under current Virginia law a person born out of wedlock will inherit
by, through or from the mother if the mother has no Will. Such a child will also
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inherit by, through or from the father if the father has no Will and the parents
participated in a marriage ceremony (valid or invalid) before or after the birth, or
paternity is established by clear and convincing evidence as set forth in the Virginia
statutes.
You may include or exclude stepchildren, adopted children and/or children
born out of wedlock.
H.
A gift to descendants “per stirpes” means the gift is divided equally among
the members of the first generation of descendants in which at least one descendant is
living at the specified time, with each living member taking one share and any deceased
member’s child (or children in equal shares) taking the share to which the deceased
member would have been entitled, and likewise down the generations. No share shall be
allocated for a deceased child leaving no descendant surviving at the specified time.
NOTE:
If no children are surviving the assets are divided equally among the grandchildren.
I.
Unless the context otherwise requires, income beneficiaries include
discretionary income beneficiaries.
J.
When discretion is granted, that discretion does not authorize action beyond
the bounds of a reasonable judgment. When “absolute” discretion is granted, action
beyond the bounds of a reasonable judgment may be taken, as long as the action is not
dishonest, motivated other than by the accomplishment of the purposes of this document,
or arbitrary without an exercise of judgment.
K.
Health, education, maintenance and support shall be construed to be
ascertainable standards for federal estate and gift tax purposes such that the exercise,
release or lapse of a power limited by such standard will not be taxable for federal estate
or gift tax purposes.
L.
“Retirement Benefit” means a trust’s interest in one of the following types
of assets if payable to the trust as beneficiary or owned by the trust: a qualified or
nonqualified annuity; a benefit under a qualified or nonqualified plan of deferred
compensation; an account in or benefit payable under a pension, profit-sharing, stock
bonus, or other qualified retirement plan; an individual retirement account or trust; and
benefits under a plan that is established under IRC §408, §408A, §457, §403, §401, or
similar provisions of the Internal Revenue Code.
M.
“Deferrable Retirement Benefit” means a Retirement Benefit that is subject
to the Minimum Distribution Rules and as to which a designated beneficiary of the
Retirement Benefit has the option (under the terms of the plan or by transferring the
Retirement Benefit to an inherited IRA) to take distributions in annual installments over
the life expectancy of the oldest trust beneficiary. Benefits payable under a plan that is
not subject to the Minimum Distribution Rules (such as, under current law, a
“nonqualified deferred compensation plan”) are not Deferrable Retirement Benefits.
N.
Deferrable Retirement Benefits shall not be used to pay my debts, taxes,
administration expenses or other claims against my estate; nor for estate, inheritance or
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other transfer taxes due on account of my death, unless there are no other assets with
which to pay such obligations.
O.
After September 30 of the calendar year following the calendar year of my
death, Deferrable Retirement Benefits may not be distributed to my estate, a charity or
any other non-individual beneficiary, but only to an individual or to a trust which
qualifies as a “see-through trust” in accordance with the IRS Code and Regs. so that a
trust beneficiary will qualify as the Designated Beneficiary, unless under the distribution
plan in this document there are no individuals or “see-through trusts” eligible to receive
such benefits. This prohibition shall not apply to a gift or expense which is expressly
directed to be funded with Deferrable Retirement Benefits by this document.
P.
If my spouse survives me, and my estate is the beneficiary of Deferrable
Retirement Benefits, those benefits, other than Roth IRAs, shall be allocated or
distributed first to the portion of the Marital Trust elected as QTIP, then to the portion of
the Marital Trust not elected as QTIP. If my estate is the beneficiary of a Roth IRA, it
shall be allocated or distributed first to the portion of the Marital Trust not elected as
QTIP, then to the portion of the Marital Trust elected as QTIP.
Q.
If my spouse predeceases me and a trust created by this document is subject
to generation-skipping transfer tax, that trust shall be funded to the maximum extent
possible with Deferrable Retirement Benefits, other than Roth IRAs, which shall be
allocated or distributed to individual beneficiaries or trusts which: 1) are not subject to
generation-skipping transfer tax; and 2) are “see-through trusts” in accordance with the
IRS Code and Regs., so that each trust beneficiary qualifies as the Designated
Beneficiary.
R.
Charitable gifts shall be funded not later than September 30 of the year
following my death to the maximum extent possible with Deferrable Retirement
Benefits.2
S.
If a charity designated as a beneficiary has been misnamed, my Executor
shall have authority to determine the intended charity. If a condition of a gift cannot be
carried out by the charity, my Executor may modify or remove the condition in order to
permit the gift to be made. If a named charity is no longer in existence at my death, my
Executor is directed to select an alternate charitable beneficiary with a similar mission to
receive the gift. My Executor has absolute discretion to make these decisions.
XVI. WAIVER OF THE RULE AGAINST PERPETUITIES16
The rule against perpetuities shall not apply to this Will or to any of the following
created by this document: any trust, interest created in property held in trust, power of
appointment over property held in a trust created by this document or power of appointment
over property granted in this document.
2

The Trustee should satisfy such charitable bequests to comply with Treasury Regulation §1.401(a)(9)-4, A-3 and
A-4 in order to preserve the Trust as a “see-through trust.” Adapted from Natalie Choate, Form 4.2, Appendix B,
Life and Death Planning for Retirement Benefits, 7th Edition, 2011.

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XVII. IN TERROREM
If a person who would receive a benefit as a result of my death (outright or as the
beneficiary of a trust) directly or indirectly contests the validity of any provision of this
Will, that person and all of that person’s descendants will be treated as having predeceased
me and will forfeit all benefits that otherwise would have passed to that person as a result of
my death, whether by reason of this Will, that Trust, a beneficiary designation or otherwise.
This provision will not apply to a suit for construction or for aid and direction.
Signed on March _____, 2013.
________________________________ (SEAL)
JOHN J. SMITH
We certify that JOHN J. SMITH signed, sealed, acknowledged and declared the
foregoing instrument, each page of which is identified by his signature, as and for his Will,
in the presence of us, who, in his presence and at his request, and in the presence of each
other, all present together at the same time, have subscribed our names as witnesses.
According to our best knowledge and belief JOHN J. SMITH was over the age of eighteen
(18) years, of sound mind and memory, and under no constraint at the time of the execution
and acknowledgment of this instrument.
Signed on March _____, 2013.
_______________________________________
Address: _______________________________
_______________________________________
Address: _______________________________

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COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
Before me, the undersigned authority, on this day personally appeared JOHN J.
SMITH, WILLIAM L. BABCOCK, JR. and KIERSTEN L. JENSEN, known to me to be
the person who signed the foregoing Will and the witnesses whose names are signed to the
Will, and all of these persons being by me first duly sworn, JOHN J. SMITH declared to me
and to the witnesses in my presence that the document is his Will and that he willingly
signed or directed another to sign it for him, and executed it in the presence of the witnesses
as his free and voluntary act for the purposes therein expressed; that the witnesses stated
before me that the Will was executed and acknowledged by JOHN J. SMITH as his Will in
the presence of the witnesses, who, in his presence and at his request, and in the presence of
each other, signed their names as witnesses on the day of the date of the Will, and that he, at
the time of the execution of the Will, was over the age of eighteen (18) years and of sound
and disposing mind and memory.
Sworn and acknowledged before me by JOHN J. SMITH, WILLIAM L.
BABCOCK, JR. and KIERSTEN L. JENSEN on March _____, 2013.
______________________________________
Notary Public

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ADDITIONAL REQUIREMENTS FOR AN INTERNATIONAL WILL DISPOSING
OF PROPERTY LOCATED OUTSIDE OF THE U.S.
Signed on [month] _____, 20__.

______________________________________
WILLIAM L. BABCOCK, JR.
Authorized Person

[THE TESTATOR MUST SIGN EACH PAGE TO QUALIFY AS AN
INTERNATIONAL WILL]
[VIRGINIA CODE 64.2-436(C): The authorized person shall ask the testator whether he wishes
to make a declaration concerning the safekeeping of his will. If so and at the express request of
the testator the place where he intends to have his will kept shall be mentioned in the certificate
provided for in § 64.2-437. ]

2013-15 WILL for married client - outright to spouse, trusts for children.docx
3/9/13 wlb

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WILL OF
JOHN J. SMITH
ENDNOTES

1

FAMILY MEMBERS. Reciting the names of family members and defining their
relationships is important to avoid ambiguity in the later sections of the Will.
2
PETS. Your Executor will be charged with the duty of placing your pets with a family
if the pets are in good health or can be restored to good health. If the pets cannot be
restored to good health and euthanasia is the humane alternative, the pets will be
euthanized.
3
GIFTS OF CASH AND TANGIBLE PROPERTY.
In law, property is divided into two categories, real property and personal property.
Real property includes land and buildings, and everything else is personal property.
Personal property is again divided into two categories, tangible and intangible.
Tangible property includes things with physical existence, such as furniture,
clothing, jewelry, automobiles, etc.
Intangible property includes things without physical existence, such as bank
accounts, life insurance, stock, contractual rights, etc. In most of these cases, a piece of
tangible personal property (paper) represents the underlying intangible personal property.
For instance, a stock certificate evidences ownership of shares in a corporation.
The technical details of the tangibles memo authorized by the Will are: (1) the list
may be prepared before or after the signing of the Will; (2) you may change it from time to
time; (3) your Executor will not be liable for distributing tangible personal property to the
apparent beneficiary under the Will without actual knowledge of the existence of the list;
(4) your Executor will not have any duty to recover property so distributed; (5) a person
named to receive tangible personal property in a list which is effective may recover that
property, or its value if the property cannot be recovered, from an apparent beneficiary to
whom it was distributed, in an action brought within one year after the probate of the Will.
4.
SPECIFIC DOLLAR AMOUNT GIFT TO CHARITY.
5.
RESIDUARY GIFT. The Residuary Gift is comprised of all cash, financial assets, real
estate and other intangible property not specifically bequeathed earlier in the Will. Joint
property, life insurance, pension proceeds, IRA funds and other pay-on-death assets are
not controlled by the Will, and instead pass outside the Will as you have designated for
each such asset.
6.
TRUSTS FOR DESCENDANTS. The children do not inherit outright, but in trust.
Each child has a separate Trust, controls the management and investment of the assets in
the Trust, and as Trustee is authorized to make income and principal distributions to pay

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for his or her health, support and educational expenses and those of his or her
descendants.
Keeping the property in trust helps to preserve it from creditors and disaffected
spouses. It also keeps the trust assets (subject to certain limits) out of the beneficiary’s
estate, which could result in an enormous tax saving to grandchildren.
7.
EXECUTOR. The Executor will administer your assets for a limited time period,
generally for a year or two, while tax clearances are obtained and tangible property
distributed. Then the estate is closed and the other probate assets pass to your
beneficiaries.
8
GUARDIAN. The surviving parent is the natural guardian of minor children, so there is
no need to appoint a guardian unless you are the surviving parent. The appointment made
in the Will is not binding on the Court, but it is given considerable weight.
9.

TRUSTEES. These provisions set out orderly procedures for the succession of
Trustees and deal with other issues related to management, Trustee fees, etc. The
Trustee’s duties include investment, tax return preparation, annual accounting to the
Court and decisions regarding distributions of income and principal to the beneficiaries.
The Trustee will carry out these duties during the entire duration of the Trust.
10.
ADDITIONAL FIDUCIARIES. Additional executors or trustees are sometimes
required to serve in Virginia if the person you appointed does not live in Virginia at the
time of your death. They are also sometimes needed to serve in states outside of Virginia
if you own property (particularly real estate) in other states.
11.
WAIVER OF BOND. Without this waiver, a fiduciary must each year pay (from
estate or trust funds) an insurance company to issue a fiduciary bond insuring that if the
fiduciary is negligent or runs off with assets the company will replace the loss. Virginia
banks with trust authority are exempt from this requirement.
12.
FIDUCIARY POWERS. These Code sections contain pages and pages of powers
which may be exercised by fiduciaries (executors and trustees are fiduciaries). The
additional powers give even more flexibility to the fiduciaries and are intended to save
time and money.
13.
GENERATION-SKIPPING TRANSFER TAX PROVISIONS. If a child dies after
creation of a trust but prior to receiving his or her full distribution from the trust, and that
distribution instead would pass to the deceased child’s children, the termination of the
child’s interest and the transfer of the distribution to the grandchildren could be taxable at
40% as a generation-skipping transfer. This provision attempts to avoid or minimize the
tax.
[If Trusts are for beneficiaries who are not Testator’s children]
If a beneficiary who is a generation younger than you dies after creation of a trust
but prior to receiving his or her full distribution from the trust, and that distribution
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instead would pass to the deceased beneficiary’s children, the termination of the
beneficiary’s interest and the transfer of the distribution to the next generation of
beneficiaries could be taxable at 35% as a generation-skipping transfer. This provision
attempts to avoid or minimize the tax.
14.
LIMITATION OF POWERS. It is intended that the property passing into the Trusts
for beneficiaries not be included in their estates and provide them some protection from
claims of creditors. This “savings clause” attempts to insure that no provisions of this
document inadvertently jeopardize that planning.
15.
MISCELLANEOUS. These definitions help assure that there is no confusion or
ambiguity about who you intend to be your beneficiaries and how and under what
circumstances they are to receive property.
16
RULE AGAINST PERPETUITIES. This rule prohibits any trust from lasting longer
than a “life or lives in being” at the time of your death, plus 21 years. Virginia now
permits the waiver of this rule, which is what this language does.

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WILL

OF

JOHN J. SMITH

March 15, 2013

William L. Babcock, Jr. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
703-518-8400
wlb@willtrustestate.com

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________________________________________________________________________
TABLE OF CONTENTS
________________________________________________________________________
I.
FAMILY MEMBERS .................................................................................................. 1
II.
PETS .............................................................................................................................. 1
III.
GIFTS OF CASH AND TANGIBLE PROPERTY.................................................... 1
IV.
DEBTS, TAXES AND OTHER CHARGES.............................................................. 2
V.
RESIDUARY GIFT ...................................................................................................... 3
VI.
MARITAL TRUST....................................................................................................... 3
VII.
TRUSTS FOR DESCENDANTS ................................................................................ 6
VIII. EXECUTOR................................................................................................................ 10
IX.
GUARDIAN................................................................................................................ 10
X.
TRUSTEE ADMINISTRATIVE PROVISIONS ..................................................... 10
XI.
ADDITIONAL FIDUCIARIES ................................................................................. 12
XII.
WAIVER OF BOND .................................................................................................. 12
XIII. FIDUCIARY POWERS ............................................................................................. 12
XIV. GENERATION-SKIPPING TRANSFER TAX ....................................................... 13
XV.
LIMITATION OF POWERS ..................................................................................... 13
XVI. MISCELLANEOUS ................................................................................................... 15
XVII. WAIVER OF THE RULE AGAINST PERPETUITIES ......................................... 17
XVIII. IN TERROREM .......................................................................................................... 18

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WILL OF
JOHN J. SMITH
I, JOHN J. SMITH, of the City of Alexandria, Virginia, declare this to be my Will,
and revoke all prior Wills and Codicils made by me.
I.
FAMILY MEMBERS1
MARY M. JONES is my spouse. I have two children, JOHN J. SMITH, JR. and
MEREDITH L. SMITH. References to my children in this document are to them and no
others. References to my descendants are to my children and their descendants. My
spouse has two children from a prior marriage, BRADFORD JONES and ELIZABETH
JONES.
II.
PETS2
A.
If my spouse does not survive me, I direct my Executor to place any pet I
own at the time of my death with IRVING COLLIER. If IRVING COLLIER fails to
survive me, or is unable or unwilling to accept a pet I own, I direct my Executor to place
that pet with the first of the following individuals who is available and willing to accept
that pet: THOMAS RUTHERFORD. If none of the individuals I have listed in this
Paragraph A are able or willing to accept that pet, I direct my Executor to place that pet
with a responsible individual or family (that is, in a private, non-institutionalized setting)
where the pet will be cared for in a reasonable and loving manner.
B.
Prior to initiating such efforts to place my pet, I direct my Executor to
consult a veterinarian to ensure that the pet is or can be brought into generally good
health. A pet that cannot be restored to generally good health or whose suffering cannot
be alleviated shall be euthanized and the remains shall be disposed of in the discretion of
my Executor.
C.
The individual or family who receives my pet will also receive a cash gift
of FIVE THOUSAND DOLLARS (5,000). I request but do not require that the money
be used for the care and maintenance of my pet. A written receipt given by the individual
who accepts my pet and the cash gift shall be a full discharge of my Executor.
D.
The cost of veterinary services, temporary boarding, placement,
transportation and other expenses of caring for a pet during the administration of my
estate, or to otherwise carry out the purposes of this Article, shall be paid as a cost of
administration of my estate.
III.
GIFTS OF CASH AND TANGIBLE PROPERTY3
A.
I make the following gifts of cash and waive the requirement that interest
be paid on the gifts if they are not paid within 12 months of my death. If the beneficiary
does not survive me that gift [CHOOSE ONE OF THE FOLLOWING
ALTERNATIVES] will go to the beneficiary’s children living on the date of my death
OR will lapse and pass as a part of my Residuary Gift.
1.
___ THOUSAND DOLLARS ($__,000) to __ of Alexandria,
Virginia.

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2.

___ THOUSAND DOLLARS ($__,000) to __ of Alexandria,

Virginia.
3.
If as a result of my death CHARITY does not receive TEN
THOUSAND DOLLARS ($10,000) from my IRA, I give the CHARITY as much as is
needed from my estate to make the total received by the CHARITY equal TEN
THOUSAND DOLLARS ($10,000). THIS LANGUAGE WILL RESULT IN LESS
INCOME TAX LIABILITY ON THE INDIVIDUAL BENEFICIARIES AND
THEREFORE A GREATER BENEFIT TO THE INDIVIDUAL BENEFICIARIES,
WITH NO DETRIMENT TO THE CHARITIES.
B.
If I have left a written list of tangible personal property to be distributed at
my death, and that property is not otherwise specifically bequeathed in this Will, a
subsequent Will or a codicil, that written list shall be given effect to the extent it
describes tangible personal property and intended recipients with reasonable certainty and
is signed by me, even though it does not satisfy the requirements for a Will or codicil.
C.
I give the rest of my furniture, furnishings, personal effects, automobiles
and other tangible personal property to my spouse.
D.
If my spouse does not survive me, I give said property (in kind, or if my
Executor determines that in kind distribution is not appropriate for some portion of said
property, then after sale), in as nearly equal portions as may be deemed practicable by my
Executor, to those of my children who survive me.
E.
My Executor shall have discretion to deliver to a relative, friend or guardian
of a minor child some portion or all of said property left to that child, to be held for the
use and benefit of the child and later distribution. A written receipt given by such
relative, friend or guardian shall be a full discharge of my Executor.
F.
Divisions in kind and valuations for that purpose shall be in the discretion
of my Executor, whose decisions shall be final. Expenses of distribution (including
storing, handling, packing, insuring and shipping) shall be paid as a cost of
administration.
IV.
DEBTS, TAXES AND OTHER CHARGES4
A.
If my spouse survives me and the Marital Trust is divided into QTIP and
non-QTIP shares, DEBTS, TAXES AND OTHER CHARGES shall be allocated between
those shares after division.
B.
If my spouse survives me, funeral expenses, debts and expenses of
administration that are allowed as estate tax deductions will be charged first against the
portion of the Marital Trust that is elected to qualify for the marital deduction, and if
insufficient then against the portion of the Marital Trust that is not elected to qualify for
the marital deduction. Such obligations that are not allowed as estate tax deductions will
be charged first against the portion of the Marital Trust not elected to qualify for the
marital deduction, and if insufficient then against the portion of the Marital Trust elected
to qualify for the marital deduction. If my spouse does not survive me, such obligations
will be paid from the general assets of my estate.
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C.
If my spouse survives me, transfer, estate, inheritance, succession and other
death taxes payable by reason of my death in respect of property passing under this Will
(not including generation-skipping transfer tax on a direct skip, which will be charged
against the distribution to the beneficiary or trust that causes that tax to be payable) shall
be charged against the portion of the Marital Trust not elected to qualify for the marital
deduction, and if insufficient then against the portion of the Marital Trust elected to
qualify for the marital deduction. If my spouse does not survive me, such taxes in respect
of property passing under this Will shall be charged against the general assets of my
estate.
1.
Such taxes in respect of property not passing under this Will, which
are not directed to be paid from my estate by this Will or by another document signed by
me, shall be apportioned against and paid by the persons in possession of that property or
benefited thereby, in the manner provided by the Virginia apportionment laws.
2.
Unless there are no other funds available, such taxes will not be
charged against a gift which qualifies for the estate tax charitable deduction.
3.
Property payable by beneficiary designation to my estate or to a trust
created by this Will shall be considered passing under this Will.
4.
Income taxes imposed upon or chargeable to the income of my estate
shall be apportioned to and deducted from the shares of all beneficiaries having an
interest in income, except charitable beneficiaries, in such equitable manner as my
Executor determines. The determination shall be conclusive as to all persons interested
in my estate.
IF THERE IS A LARGE RETIREMENT ACCOUNT PASSING DIRECTLY TO
BENEFICIARIES, WOULD ITS PROPORTIONATE SHARE OF THE ESTATE TAX
HAVE TO COME FROM THAT ACCOUNT? IF SO IT WOULD TRIGGER INCOME
TAX.
V.
RESIDUARY GIFT5
I give the residue of my estate, including all property over which I have a general
power of appointment, as follows:
A.
To the Trustee of the Marital Trust, to be administered in accordance with
the terms of the MARITAL TRUST Article of this document.
B.
If my spouse predeceases me, per stirpes, to Trusts for my descendants
living on the date of my death. The Trusts shall be administered in accordance with the
TRUSTS FOR DESCENDANTS Article of this document.
C.
If my spouse predeceases me and I have no descendants who survive me,
one-half (1/2), per stirpes, to my siblings who survive me, and one-half (1/2), per stirpes,
to the siblings of my spouse who survive me.
A.

VI.
MARITAL TRUST6
Trustees and Trust Advisors.
1.
My spouse will be the Trustee.
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2.
At any time after my death my spouse may appoint a Trustee to
serve upon the resignation, incapacity or death of my spouse, or to serve initially if my
spouse declines to serve.
3.
If my spouse does not appoint a successor Trustee, then upon the
declination of my spouse to serve as Trustee, or upon the resignation, incapacity or death
of my spouse while serving as Trustee, MARY DEPENDABLE will become the Trustee.
4.
My spouse may remove Trustees and appoint one or more successor
Trustees, including herself, making such an appointment effective at any time, including
upon the resignation, incapacity or death of any Trustee.
5.
If there are no other applicable provisions in this Article for the
appointment of a successor Trustee, and my spouse fails, refuses or is unable to appoint a
successor Trustee, my then living children who are over the age of THIRTY (30), acting
by majority/unanimously, will have the right to appoint one or more successor Trustees,
including one or more of themselves.
6.
The Trustee may appoint a Trust Advisor to make those decisions
regarding distributions that are reserved to the Trust Advisor by this Article. The Trustee
must appoint a Trust Advisor if the Trust or a portion of the Trust may be subject to
generation-skipping transfer tax.
7.
A Trust Advisor must be independent, as defined in §674(c), from
the beneficiaries of the Trust, and not be related or subordinate, as defined in §672(c), to
the beneficiaries of the Trust. In addition, if the Trust Advisor is an individual, that
individual must be at least THIRTY (30) years old and one of the following: experienced
in business, finance or investments; a CFP; a CPA; or an attorney.
8.
Decisions of the Trust Advisor shall be within the absolute
discretion of the Trust Advisor. A Trust Advisor will be entitled to reimbursement for
expenses and reasonable compensation.
B.
Commencing with the date of my death, the Trustee is directed to pay to
my spouse the net income of the Marital Trust, in quarterly or other convenient
installments (but at least annually), for and during the life of my spouse.
C.
The Trustee is authorized to pay to my spouse so much of the principal of
the Marital Trust as is appropriate for health, education, maintenance and support, taking
into consideration the manner of living to which my spouse has been accustomed, the
income received from the Marital Trust and the income and principal that may be
available to or for my spouse from other sources. The Trustee is directed to disregard the
interests of the remainder beneficiaries in making such decisions.
D.
If there is a Trust Advisor for the Marital Trust, the Trustee may request a
decision from the Trust Advisor as to whether it is appropriate for:
1.
The Trustee to make a distribution of principal to my spouse for a
purpose other than health, education, maintenance or support. The Trust Advisor is
directed to disregard the interests of the remainder beneficiaries in making such

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decisions. If after reviewing the circumstances the Trust Advisor determines that a
proposed distribution is appropriate, the Trustee is directed to make that distribution.
2.
The Marital Trust to be terminated. If after reviewing the
circumstances the Trust Advisor determines that the size of the Marital Trust does not
warrant the cost of continuing, or its administration would be otherwise impractical or
inappropriate, the Trust Advisor shall approve the proposed termination. The Trust
Advisor is directed to disregard the interests of the remainder beneficiaries when making
this decision. Upon receiving approval for termination of the Trust its assets shall be
distributed to my spouse. Upon such distribution the interests of all succeeding
beneficiaries, whether vested or contingent, shall be terminated.
E.
Upon the death of my spouse:
1.
Except to the extent the Will of my spouse contains a different
direction for the payment of death taxes which specifically refers to this Marital Trust,
the Trustee shall make available to the personal representative of my spouse from the
principal of the Marital Trust, the amount the personal representative determines to be
equal to the excess of (a) the transfer, estate, inheritance, succession and other death taxes
(not including Chapter 13 tax on a direct skip) which become payable by reason of the
death of my spouse, over (b) those taxes which would become payable by reason of the
death of my spouse if no part of the property belonging to the Marital Trust had been
included in the tax computation. The Trustee shall pay this amount at such times as the
personal representative of my spouse may request in writing. The Trustee shall be fully
protected in relying upon the determination of the personal representative of my spouse
as to the amount payable.
2.
If only part of the Marital Trust is elected as qualified terminable
interest property, such payment shall be made from the part that is so elected. Any
amount paid under this Paragraph shall be in satisfaction of any recovery to which
Grantor’s spouse or the estate of my spouse shall be entitled under §2207A, as amended.
3.
The balance of the Marital Trust shall be distributed, per stirpes, to
trusts for the Grantor’s descendants living on the date of death of my spouse. The trusts
shall be administered in accordance with the TRUSTS FOR DESCENDANTS Article of
this document.
F.
Notwithstanding anything in this document to the contrary, a power granted
to the Trustee to retain or invest in unproductive property shall be limited by the right of
my spouse to require the Trustee to make property productive or to convert it to
productive property within a reasonable time. Unproductive property includes Deferrable
Retirement Benefits.
G.
In lieu of making property productive or converting unproductive property,
the Trustee may distribute quarterly to my spouse other assets from the Marital Trust, the
value of which is equal to the income that would have been produced during the quarter if
the property had been made productive or converted to income producing property.

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H.
The Trustee shall have the right at any time to withdraw part or all of the
assets in a Deferrable Retirement Benefit.
I.
The Trustee must each year withdraw from Deferrable Retirement Benefits
payable to the Marital Trust an amount which is equal to the greater of: (i) the net
income of those Deferrable Retirement Benefits; and (ii) the minimum required
distribution.
J.
The Trustee shall treat distributions from a Deferrable Retirement Benefit
as income of the Marital Trust to the extent that the distribution represents income
generated or deemed to be generated by such Deferrable Retirement Benefit,
notwithstanding the treatment of such portion of the distribution under any law
concerning the determination of income and principal for trust accounting purposes, and
the Trustee shall not charge to such income an expense properly chargeable to the nonincome portion of the distribution.
K.
Part or all of the Marital Trust may be elected as qualified terminable
interest property. The Trustee may not fund the portion of the Trust which is not elected
as qualified terminable interest property with Deferrable Retirement Benefits unless there
are no other assets that can be used to fund that portion of the Trust. The Trustee shall, to
the extent possible, make distributions of principal, if any, to my spouse and pay all death
taxes on both trusts payable by reason of the death of my spouse, from the trust as to
which the election has been made.
L.
The Marital Trust shall not be liable for the debts of a beneficiary, to
transfer, assignment or encumbrance by a beneficiary, or to the control of a beneficiary’s
spouse.
VII.
TRUSTS FOR DESCENDANTS7
A.
Trustees and Trust Advisors.
1.
JOHN RELIABLE will be the Trustee. Upon the resignation,
incapacity or death of the Trustee, MARY DEPENDABLE will become the Trustee.
2.
BANK & TRUST COMPANY will be the Trustee of a Trust created
for __________________, and notwithstanding any other provision of this document, she
may not serve as a Trustee, appoint a Trustee or remove a Trustee of a Trust created for
her.
3.
Notwithstanding the foregoing appointment of a Trustee/Trustees for
the Trusts for Descendants, upon the funding of the Trust, or upon reaching age THIRTY
(30), whichever is later, the primary beneficiary of the Trust: will become the Trustee of
that Trust; may appoint a Trustee to serve upon his or her resignation, incapacity, or
death, or to serve initially if the primary beneficiary declines to serve; and may remove
Trustees and appoint one or more successor Trustees, including himself or herself.
4.
If the primary beneficiary of the Trust is under age THIRTY (30)
and no Trustee has been appointed for that Trust, the primary beneficiary’s parent may
appoint the Trustee, who may be the parent, and may remove Trustees and appoint

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successor Trustees to fill vacancies or to take office upon the resignation, incapacity or
death of a Trustee.
5.
If the Trustee of a Trust for a Descendant is not the primary
beneficiary of the Trust, the Trustee shall have discretion to appoint the primary
beneficiary as a Co-Trustee or the sole Trustee of the Trust. The Trustee shall also have
discretion, on one or on multiple occasions, to divide the Trust into separate trusts, in
amounts or proportions the Trustee deems appropriate, and appoint the primary
beneficiary as the Co-Trustee or sole Trustee of one or more of those separate trusts.
6.
The Trustee may appoint a Trust Advisor to make those decisions
reserved to a Trust Advisor. The Trustee must appoint a Trust Advisor if the Trust or a
portion of the Trust may be subject to generation-skipping transfer tax.
7.
A Trust Advisor must be independent, as defined in §674(c), from
the beneficiaries of the Trust, and not be related or subordinate, as defined in §672(c), to
the beneficiaries of the Trust. In addition, if the Trust Advisor is an individual, that
individual must be at least THIRTY (30) years old and one of the following: experienced
in business, finance or investments; a CFP; a CPA; or an attorney.
8.
Decisions of the Trust Advisor shall be within the absolute
discretion of the Trust Advisor. A Trust Advisor will be entitled to reimbursement for
expenses and reasonable compensation.
9.
If a person or entity serving as Trustee meets the requirements of a
Trust Advisor in this document, that person or entity will have the powers and discretion
granted by this document to Trustees and to Trust Advisors.
B.
The beneficiaries of a Trust for Descendants shall be the person for whom
the Trust was created (the “primary beneficiary”) and the descendants of that person.
C.
The Trustee shall distribute so much of the net income and principal of the
Trust to or for their benefit each year as is appropriate for health, education, maintenance
and support.
D.
When making decisions regarding the distributions in accordance with the
above standards, the Trustee:
1.
Is directed not to make distributions to the descendants of the
primary beneficiary until the health, education, maintenance and support of the primary
beneficiary are provided for first.
2.
After the primary beneficiary, is directed to give priority to the
children of the primary beneficiary and then to subsequent generations in sequence.
3.
Is directed generally to treat the members of each generation equally,
but may favor one beneficiary over others in the same generation or in different
generations if such action is deemed appropriate by the Trustee because of the health,
support or educational needs of that beneficiary.
4.
Shall take into consideration the manner of living to which the
beneficiary has been accustomed.

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5.
May take into consideration or may disregard the income and
principal that may be available to or for the beneficiary from other sources.
6.
Is not required to preserve principal for the descendants of the
primary beneficiary.
E.
Shall have discretion to treat principal distributions as advancements, by
stating in writing that they are advancements. May not make any distribution that would
discharge a legal obligation of the Trustee, including, but not limited to, any obligation to
support and/or educate a beneficiary.1
F.
If the Trust has a Trust Advisor, the Trustee may request a decision from
the Trust Advisor as to whether it is appropriate for:
1.
The Trustee to make a distribution of income and/or principal to or
for the benefit of one or more beneficiaries for a purpose other than health, education,
maintenance or support, and for such distribution to be treated as an advancement. If
after reviewing the circumstances the Trust Advisor determines that a proposed
distribution is appropriate, the Trustee is directed to make that distribution.
2.
The Trustee to make a distribution of income and/or principal to or
for the benefit of the parent, legal guardian or other person raising a beneficiary to
reimburse that person for lost income and for additional travel, household or other
expenses incurred as a result of raising and caring for the beneficiary. It is intended,
without limiting the generality of the foregoing, to permit the Trust Advisor to direct the
Trustee to pay some portion or all of the cost of such things as a larger automobile or
additional automobile, a larger or more suitable dwelling, the remodeling or renovation of
an existing dwelling and the construction of an addition to an existing dwelling. If after
reviewing the circumstances the Trust Advisor determines that a proposed distribution is
appropriate, the Trustee is directed to make that distribution.
3.
The Trust to be terminated. If after reviewing the circumstances the
Trust Advisor determines that the size of the Trust does not warrant the cost of
continuing, or its administration would be otherwise impractical or inappropriate, the
Trust Advisor shall approve the proposed termination of the Trust and determine if its
assets should be distributed to one or more of: the primary beneficiary, the descendants
of the primary beneficiary, trusts for one or more of them, and in what proportions. The
interests of remainder beneficiaries are to be disregarded when making these
determinations. Upon receiving approval for termination of the Trust and instructions as
1

Virginia law imposes an obligation on a parent to support his or her children under the age of 18. Va. Code §2061. Discharge of a legal obligation of support is considered a payment to creditors and would therefore be the
exercise of a general power of appointment under IRC §2041(b)(1). If a Trustee has a general power of appointment
over the Trust assets the Trust assets would be included in the Trustee’s estate at death. Not good. This provision
avoids that problem by prohibiting a Trustee from discharging his or her legal obligation of support (clothing,
shelter and food), but leaving open the ability to pay for anything above and beyond legal support – such as private
school, music lessons, soccer clinics, cell phones, toys, etc., etc. Treas. Reg. §20.2041-1(c)(1)(b) states that “a
power of appointment is not a general power if by its terms it is” . . . “expressly not exercisable in favor of the
decedent or his creditors.”

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to its distribution among the beneficiaries, the Trustee shall terminate the Trust and
distribute its assets in accordance with those instructions. Upon such distribution the
interests of all succeeding beneficiaries, whether vested or contingent, shall be
terminated.
G.
After reaching age EIGHTEEN (18) the primary beneficiary may by Will
or revocable trust direct how the assets of the Trust will pass at the death of the primary
beneficiary, and after reaching age THIRTY (30) the primary beneficiary may gift Trust
assets during the primary beneficiary’s lifetime by delivering to the Trustee a document
signed by the primary beneficiary, with the signature notarized, directing what assets are
to be gifted and to whom. In order to be effective the documents exercising these rights
must make specific reference to this limited power of appointment, as the power
contained in the Will of JOHN J. SMITH dated March 15, 2013, and comply with the
following restrictions:
1.
The primary beneficiary may not direct that the assets pass, directly
or indirectly, to the primary beneficiary making the appointment, his or her estate, the
creditors of either, a charity or any other non-individual. The primary beneficiary may
not direct how a life insurance policy owned by the Trust will pass or name the
beneficiary of a life insurance policy owned by the Trust.
2.
The assets may be given to any other individuals, in any proportions,
and may be in further trust or outright, provided that a Deferrable Retirement Benefit
may only be appointed to an individual who is younger than the primary beneficiary of
the trust created upon Grantor’s death and/or a trust for his or her benefit which qualifies
as a “see-through trust” in accordance with IRS Code and Regs. §1.401(a)(9)-4, A-5(b),
so that the trust beneficiary will qualify as the Designated Beneficiary in accordance with
Regs. §1.401(a)(9)-4, A-5(a).
3.
It is recommended that the primary beneficiary not exercise this
limited power of appointment to create a further power of appointment without first
receiving expert advice, so that the assets are not includible in the primary beneficiary’s
estate unless that is the intended result.
4.
Unless within NINETY (90) days after the death of the primary
beneficiary the Trustee has actual notice of the existence of a Will or revocable trust
exercising this limited power of appointment, the Trustee may, without incurring liability
to an appointee, proceed as if such power had not been exercised; provided however, this
sentence shall not bar the right which an appointee may have to enforce the appointment
against the persons who receive the property.
H.
If the primary beneficiary has not directed by Will or revocable trust how
the assets of his or her Trust will pass at death, those assets will be distributed, per
stirpes, to Trusts for the primary beneficiary’s descendants living at the death of the
primary beneficiary. If there are none, the assets will be distributed, per stirpes, to Trusts
for Grantor’s my descendants living at the death of the primary beneficiary. The Trusts
shall be administered in accordance with this Article; provided that a distribution payable
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to a Trust for a person for whom a Trust created under this Article is already in existence
shall be added to that Trust. If in accordance with the foregoing distribution provisions a
Deferrable Retirement Benefit would be distributable to a Trust for a beneficiary who is
older than the primary beneficiary of the Trust created upon Grantor’s death, those
benefits shall instead be distributed directly to the beneficiary free of trust.
I.
It is intended that Trusts for Descendants not be includible in the estate of
the primary beneficiary for federal estate tax purposes and the provisions of this
document shall be construed to carry out this intent. Notwithstanding the foregoing,
assets subject to the generation-skipping transfer tax will be included as provided in the
GENERATION-SKIPPING TRANSFER TAX Article of this document.
J.
No Trust shall be liable for the debts of a beneficiary, to transfer,
assignment or encumbrance by a beneficiary, or to the control of a beneficiary’s spouse.
VIII.
EXECUTOR8
I nominate my spouse as Executor. If she fails to qualify or complete the
administration of my estate, I nominate JOHN RELIABLE as Executor.
IX.
GUARDIAN9
If my spouse does not survive me, I nominate GEORGE JOHNSON as Guardian
of the person of any child of mine who is a minor at the time of my death. If that person
fails to qualify or complete the guardianship, I nominate SARAH MOORE as Guardian.
X.
TRUSTEE ADMINISTRATIVE PROVISIONS10
A.
If there are no other applicable provisions in this document for the
appointment of a successor Trustee, the acting Trustee may designate a successor to take
office upon the death, resignation or incapacity of the acting Trustee.
B.
If there is no other applicable provision in this document for the
appointment of a successor Trustee and the acting Trustee has failed, refused or is unable
to appoint a successor Trustee, my then living children/siblings/[friends] who are over
the age of TWENTY-FIVE (25), acting by majority/unanimously, will have the right to
appoint a successor Trustee, and may name themselves.
C.
A Trustee may resign by giving thirty (30) days written notice.
D.
An individual serving as a Trustee will cease to serve as Trustee upon the
issuance of a certification by a physician that the individual is incapable of managing the
trust. Each individual Trustee, by either formally accepting the appointment or by
serving as Trustee, authorizes and directs his or her health care providers to release to any
other Trustee and to any income beneficiary of the trust for which the person is serving as
Trustee (“Information Recipients”) all of the Trustee’s medical information relevant to a
determination whether the individual is capable of managing the Trust, and if requested
will sign releases to that effect. A Trustee who: (1) fails within thirty (30) days of a
written request to undergo an examination to determine whether the individual is capable
of managing the Trust; (2) fails within ten (10) days of such exam to release the results;
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or (3) fails within ten (10) days of a written request to disclose existing medical
information, shall be deemed to have resigned, provided that there is a reasonable basis to
make the request and that only one such request may be made every eighteen (18)
months. A Trustee who prohibits the release of such information shall be deemed to have
resigned if the information is not supplied to or a release is not signed and delivered to
the Information Recipient within ten (10) days after a request by the Information
Recipient. The cost of the examination shall be borne by the Trust for which the
individual is acting as Trustee.
E.
No bond or security will be required of any Trustee.
F.
Trustees of the Marital Trust will furnish copies of this document to my
spouse and my children and will render annual reports to my spouse and my children.
Trustees of Trusts for Descendants will furnish the primary beneficiary with a copy of
this document and annual reports. Annual reports will include a list of assets and
liabilities at then-current market value and all receipts and disbursements for the year,
including trustee compensation. Trustees will not be obligated to provide copies of this
document or annual reports or any other information to any other persons or entities, but
may do so in the discretion of the Trustees.
G.
Trustees will not be required to file an inventory or accounts with the
Commissioner of Accounts or any other public official or court.
H.
Individual Trustees will be entitled to reasonable compensation, based on
the duties and responsibilities assumed and the time and effort expended. An individual
Trustee’s fee that does not exceed the published fee schedule of a bank or trust institution
licensed to do business in Virginia shall be conclusively deemed reasonable. Individual
Trustees may be paid fees that exceed such published fees if they demonstrate that the fee
sought is reasonable. Individual Trustees will also be entitled to reimbursement for
accounting, tax preparation, legal and investment management fees as expenses, which
shall not be considered a part of the fees paid to the Trustee.
I.
If two or more individuals serve as Trustees, each will be entitled to a pro
rata portion of the fee.
J.
A corporate Trustee shall receive compensation in accordance with its
published fee schedule in effect when the services are rendered. If both an individual and
a corporate fiduciary serve as Trustees, the corporate fiduciary will be entitled to receive
compensation in accordance with its published fee schedule in effect when the services
are rendered and the individual will be entitled to ONE HALF (1/2) of the corporate base
fee (the corporate fee without including extra charges for tax preparation, etc.).
K.
A Trustee may require as a condition precedent to the payment of a
discretionary distribution that a beneficiary furnish his or her own certification or other
evidence of health, income, assets and need for such distribution, in form and content
satisfactory to the Trustee. The Trustee shall be entitled to rely upon the certification of
the beneficiary and shall not be required to make inquiry as to the accuracy of the facts

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certified. The Trustee will not be prohibited from making such inquiry or from relying
on other sources of information.
L.
If a person or entity serving as Trustee meets the requirements of a Trust
Advisor in this document, that person or entity will have the powers and discretion
granted by this document to Trustees and to Trust Advisors.
XI.
ADDITIONAL FIDUCIARIES11
If the appointment of an additional fiduciary is necessary or desirable in any
jurisdiction, I appoint as my fiduciary (or co-fiduciary) in that jurisdiction such person or
entity as may be designated by my Executor, to have all the power and discretion in that
jurisdiction as my fiduciaries are given generally by this Will. I authorize my Executor to
waive bond and/or other security for such fiduciary and to remove and replace such
fiduciary, if deemed appropriate in the discretion of the Executor.
XII.
WAIVER OF BOND12
Fiduciaries will not be required to give bond or other security.
XIII.
FIDUCIARY POWERS13
Fiduciaries (except as otherwise expressly stated in this document) have the
powers and discretion granted by this document, by law, and by Va. Code §§64.2-105
and 64.2-777 as in force at the time the action is taken, exercisable in a fiduciary
capacity, including the following:
A.
To buy and sell real estate and all other types of property.
B.
To borrow money and encumber assets to secure such borrowing.
C.
To pay part or all joint income taxes due on returns filed with my spouse.
D.
To make distributions in cash or in kind or partly in each, make
distributions of undivided interests in assets and make non pro rata distributions of assets.
E.
To commingle and make investments in common for trusts, and to merge or
consolidate a trust with one having substantially the same provisions.
F.
To divide a trust into two or more separate trusts.
G.
To allocate assets with different characters and/or different income tax
bases to different beneficiaries, and to make tax elections without regard to the relative
interests of beneficiaries even if the result may be an advantage or disadvantage to one or
more beneficiaries; provided however, this authority may not be used to enlarge or shift
any beneficial interest except as an incidental consequence of the discharge of fiduciary
duties. Allocations and elections made in good faith shall not require equitable
adjustments.
H.
To purchase and/or retain assets without regard to the “prudent investor”
rule, or to a requirement to hold productive assets (except as to the Marital Trust) or to
diversify investments.
I.
To change the situs of a trust created by this document to a different state or
country if the Trustee believes it to be in the best interests of the trust and the
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beneficiaries. The Trustee may elect that the law of the new jurisdiction will govern the
trust to the extent necessary or appropriate. No such change in situs or governing law
may be made if it would increase the class of beneficiaries, cause an asset passing into
the Marital Trust and elected as QTIP to not qualify for the marital deduction or give a
beneficial interest or economic benefit to a person not already a beneficiary.
J.
To allocate, in whole or in part, my generation-skipping transfer tax
(GSTT) exemption to property as to which I am the transferor, without obligation to
make the allocation equally or pro rata. A good faith allocation shall not be subject to
challenge.
K.
To elect that all or a fractional share of a marital trust created by me be
treated as qualified terminable interest property (QTIP), and to elect for purposes of
generation-skipping transfer tax to treat the QTIP share as if the QTIP election had not
been made. A good faith election shall not be subject to challenge.
L.
A Trust Advisor may authorize the Trustee to amend a trust created by this
document, but only if the amendment is required to insure that the trust qualifies as a
“see-through trust” in accordance with IRS Code and Regs. §1.401(a)(9)-4, A-5(b), so
that the trust beneficiary will qualify as my Designated Beneficiary in accordance with
Regs. §1.401(a)(9)-4, A-5(a) or to meet other tax planning objectives. No amendment
may be made that would increase the class of beneficiaries or give a beneficial interest or
economic benefit to a person not already a beneficiary.
XIV.
GENERATION-SKIPPING TRANSFER TAX14
The following powers are granted to the Trust Advisor, in addition to those
granted in other portions of this document:
A.
The Trust Advisor may divide any trust into two separate trusts, one
exempt from generation-skipping transfer tax and the other subject to generation-skipping
transfer tax.
B.
The primary beneficiary of a trust that is subject, in whole or in part, to
generation-skipping transfer tax will have the power, with the consent of the Trust
Advisor, to withdraw, during the beneficiary’s lifetime, any part or all of the assets in
such trust that would otherwise be subject to the generation-skipping transfer tax.
C.
The Trust Advisor need not consider the advisability of consenting to such
a withdrawal until the primary beneficiary requests the consent in writing. The Trust
Advisor may but need not give consent until the primary beneficiary delivers a draft of
the proposed consent to the Trust Advisor along with an analysis of the pros and cons of
consenting and calculations of the tax and substantive effects of the proposed consent.
Good faith determinations of the Trust Advisor whether or not to consent to a withdrawal
shall bind all persons interested in the trust.
XV.
LIMITATION OF POWERS15
A.
Notwithstanding anything in this document to the contrary, any provision
of this document and any power or discretion granted to a fiduciary by this document or
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now or hereafter conferred upon a fiduciary generally, shall be void to the extent that it
may be construed or administered so as to:
1.
Cause my estate to lose the tax benefit afforded by the marital
deduction with respect to any outright gift to my spouse, or that portion of qualified
terminable interest property (QTIP), which is elected to qualify for the marital deduction.
2.
Cause that portion of the Marital Trust not elected to qualify for the
marital deduction to be included in my spouse’s estate for federal estate tax purposes.
3.
Cause assets of a Trust to be included in the estate of a descendant of
mine; provided however, it is accepted and understood that assets subject to the
generation-skipping transfer tax will be included as provided in the GENERATIONSKIPPING TRANSFER TAX Article of this document.
4.
Cause a trust holding a Deferrable Retirement Benefit to fail to
qualify as a “see-through trust” in accordance with the Internal Revenue Code and
Treasury Regulations, including Treas. Reg. §1.401(a)(9)-4.
5.
Permit a Trustee to make a discretionary distribution that is not
limited by an ascertainable standard related to health, education, maintenance or support,
unless approved by a Trust Advisor.
6.
Permit a Trustee to make a discretionary distribution that discharges
a legal obligation of the Trustee or any other person, including, but not limited to, an
obligation to support and/or educate a beneficiary.2
7.
Permit a payment to or for the benefit of any person if such payment
will both discharge the legal obligation of another person and, on account of such
discharge, cause there to be imposed a federal tax on generation-skipping transfers.
B.
If a limitation contained in this document would prevent the exercise of a
power or discretion by a Trustee, but it could be exercised without violating the
restrictions contained in this Article by that Trustee acting jointly with an independent
Trustee or with an adverse Trustee, or by an independent Trust Advisor acting alone or an
adverse Trustee acting alone, then the Trustee may appoint such a Trustee or Trust
Advisor to exercise that power or discretion.
2

Virginia law imposes an obligation on a parent to support his or her children under the age of
18. Va. Code §20-61. Discharge of a legal obligation of support is considered a payment to
creditors and would therefore be the exercise of a general power of appointment under IRC
§2041(b)(1). If a Trustee has a general power of appointment over the Trust assets the Trust
assets would be included in the Trustee’s estate at death. Not good. This provision avoids that
problem by prohibiting a Trustee from discharging his or her legal obligation of support
(clothing, shelter and food), but leaving open the ability to pay for anything above and beyond
legal support – such as private school, music lessons, soccer clinics, cell phones, toys, etc., etc.
Treas. Reg. §20.2041-1(c)(1)(b) states that “a power of appointment is not a general power if by
its terms it is . . . expressly not exercisable in favor of the decedent or his creditors” (and of
course the decedent’s estate and the creditors of the estate, which are irrelevant here because no
such distributions are authorized under the language of the Family Trust).

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XVI.
MISCELLANEOUS16
A.
I direct my Executor to pay my legally enforceable debts, written charitable
pledges and the expenses of a funeral and/or memorial service, and the disposition of my
remains. Notwithstanding the foregoing, my Executor is not required to pay off secured
debts. The recipient of property will take the property subject to the secured debt, with
no right to require my estate or another beneficiary to discharge the debt. My Executor
shall not seek contribution from my spouse for the payment of a joint debt.
B.
Unless waived, an individual serving as my Executor shall be entitled to
reasonable compensation, based on the duties and responsibilities assumed and the time
and effort expended. A fee that does not exceed the published fee schedule of a bank or
trust institution licensed to do business in Virginia shall be conclusively deemed
reasonable. An individual may be paid fees that exceed such published fees if he or she
demonstrates to the Commissioner of Accounts that the fee sought is reasonable. An
individual shall also be entitled to reimbursement for accounting, tax preparation, legal
and investment management fees as expenses, which shall not be considered a part of the
fees paid to the fiduciary.
C.
A corporate Executor shall receive compensation in accordance with its
published fee schedule in effect when the services are rendered. If both an individual and
a corporate fiduciary serve as Executors, the corporate fiduciary will be entitled to
receive compensation in accordance with its published fee schedule in effect when the
services are rendered and the individual will be entitled to ONE HALF (1/2) of the
corporate base fee (the corporate fee without including extra charges for tax preparation,
etc.).
D.
In the event that my spouse and I die under circumstances where there is no
sufficient evidence that we have died otherwise than simultaneously, it shall be
conclusively presumed in determining the distribution of property, and whether or not
distribution is controlled by the terms of this document, that my spouse survived me.
Except for my spouse, a person who is not established by clear and convincing evidence
to have survived an event by 120 hours shall be deemed to have predeceased the event.
E.
“Descendants” means children, grandchildren, great-grandchildren, etc.,
and includes persons adopted prior to reaching age twenty-one (21) if they were born in a
year after the birth of my oldest descendant living at my death. “Descendants” does not
include children born out of wedlock unless the parent voluntarily provides parental care
and/or support for the child or recognizes the child for inheritance purposes in writing.
NOTES:
There are two issues here. First, a child who is legally adopted in a Court
proceeding (as opposed to a stepchild, who has no legal status for inheritance purposes) is
treated for inheritance purposes the same as a natural child. The foregoing language
simply prohibits someone from adopting an adult.
Second, under current Virginia law a person born out of wedlock will inherit
by, through or from the mother if the mother has no Will. Such a child will also inherit
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by, through or from the father if the father has no Will and the parents participated in a
marriage ceremony (valid or invalid) before or after the birth, or paternity is established
by clear and convincing evidence as set forth in the Virginia statutes.
You may include or exclude stepchildren, adopted children and/or children
born out of wedlock.
F.
A gift to descendants “per stirpes” means the gift is divided equally among
the members of the first generation of descendants in which at least one descendant is
living at the specified time, with each living member taking one share and any deceased
member’s child (or children in equal shares) taking the share to which the deceased
member would have been entitled, and likewise down the generations. No share shall be
allocated for a deceased child leaving no descendant surviving at the specified time.
NOTE: If no children are surviving the assets are divided equally among the
grandchildren.
G.
Unless the context otherwise requires, income beneficiaries include
discretionary income beneficiaries.
H.
When discretion is granted, that discretion does not authorize action beyond
the bounds of a reasonable judgment. When “absolute” discretion is granted, action
beyond the bounds of a reasonable judgment may be taken as long as the action is not
dishonest, motivated other than by the accomplishment of the purposes of this document,
or arbitrary without an exercise of judgment.
I.
Health, education, maintenance and support shall be construed to be
ascertainable standards for federal estate and gift tax purposes such that the exercise,
release or lapse of a power limited by such standard will not be taxable for federal estate
or gift tax purposes.
J.
“Retirement Benefit” means a trust’s interest in one of the following types
of assets if payable to the trust as beneficiary or owned by the trust: a qualified or
nonqualified annuity; a benefit under a qualified or nonqualified plan of deferred
compensation; an account in or benefit payable under a pension, profit-sharing, stock
bonus, or other qualified retirement plan; an individual retirement account or trust; and
benefits under a plan that is established under IRC §408, §408A, §457, §403, §401, or
similar provisions of the Internal Revenue Code.
K.
“Deferrable Retirement Benefit” means a Retirement Benefit that is subject
to the Minimum Distribution Rules and as to which a designated beneficiary of the
Retirement Benefit has the option (under the terms of the plan or by transferring the
Retirement Benefit to an inherited IRA) to take distributions in annual installments over
the life expectancy of the oldest trust beneficiary. Benefits payable under a plan that is
not subject to the Minimum Distribution Rules (such as, under current law, a
“nonqualified deferred compensation plan”) are not Deferrable Retirement Benefits.
L.
Deferrable Retirement Benefits shall not be used to pay my debts, taxes,
administration expenses or other claims against my estate; nor for estate, inheritance or

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other transfer taxes due on account of my death, unless there are no other assets with
which to pay such obligations.
M.
After September 30 of the calendar year following the calendar year of my
death, Deferrable Retirement Benefits may not be distributed to my estate, a charity or
any other non-individual beneficiary, but only to an individual or to a trust which
qualifies as a “see-through trust” in accordance with the IRS Code and Regs. so that a
trust beneficiary will qualify as the Designated Beneficiary, unless under the distribution
plan in this document there are no individuals or “see-through trusts” eligible to receive
such benefits. This prohibition shall not apply to a gift or expense which is expressly
directed to be funded with Deferrable Retirement Benefits by this document.
N.
If my spouse survives me, and my estate is the beneficiary of Deferrable
Retirement Benefits, those benefits, other than Roth IRAs, shall be allocated or
distributed first to the portion of the Marital Trust elected as QTIP, then to the portion of
the Marital Trust not elected as QTIP. If my estate is the beneficiary of a Roth IRA, it
shall be allocated or distributed first to the portion of the Marital Trust not elected as
QTIP, then to the portion of the Marital Trust elected as QTIP.
O.
If my spouse predeceases me and a trust created by this document is subject
to generation-skipping transfer tax, that trust shall be funded to the maximum extent
possible with Deferrable Retirement Benefits, other than Roth IRAs, which shall be
allocated or distributed to individual beneficiaries or trusts which: 1) are not subject to
generation-skipping transfer tax; and 2) are “see-through trusts” in accordance with the
IRS Code and Regs., so that each trust beneficiary qualifies as the Designated
Beneficiary.
P.
Charitable gifts shall be funded not later than September 30 of the year
following my death to the maximum extent possible with Deferrable Retirement
Benefits.3
Q.
If a charity designated as a beneficiary has been misnamed, my Executor
shall have authority to determine the intended charity. If a condition of a gift cannot be
carried out by the charity, my Executor may modify or remove the condition in order to
permit the gift to be made. If a named charity is no longer in existence at my death, my
Executor is directed to select an alternate charitable beneficiary with a similar mission to
receive the gift. My Executor has absolute discretion to make these decisions.
XVII.
WAIVER OF THE RULE AGAINST PERPETUITIES17
The rule against perpetuities shall not apply to this Will or to any of the following
created by this document: any trust, interest created in property held in trust, power of

3

The Trustee should satisfy such charitable bequests to comply with Treasury Regulation
§1.401(a)(9)-4, A-3 and A-4 in order to preserve the Trust as a “see-through trust.” Adapted
from Natalie Choate, Form 4.2, Appendix B, Life and Death Planning for Retirement Benefits,
7th Edition, 2011.

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appointment over property held in a trust created by this document or power of
appointment over property granted in this document.
XVIII. IN TERROREM
If a person who would receive a benefit as a result of my death (outright or as the
beneficiary of a trust) directly or indirectly contests the validity of any provision of this
Will, that person and all of that person’s descendants will be treated as having
predeceased me and will forfeit all benefits that otherwise would have passed to that
person as a result of my death, whether by reason of this Will, that Trust, a beneficiary
designation or otherwise. This provision will not apply to a suit for construction or for
aid and direction.
Signed on March _____, 2013.
________________________________ (SEAL)
“FName:LIKE THIS» J. SMITH
We certify that JOHN J. SMITH signed, sealed, acknowledged and declared the
foregoing instrument, each page of which is identified by his/her signature, as and for
his/her Will, in the presence of us, who, in his/her presence and at his/her request, and in the
presence of each other, all present together at the same time, have subscribed our names as
witnesses. According to our best knowledge and belief JOHN J. SMITH was over the age
of eighteen (18) years, of sound mind and memory, and under no constraint at the time of
the execution and acknowledgment of this instrument.
Signed on [month] _____, 20__.
_______________________________________
Address: _______________________________
_______________________________________
Address: _______________________________

Signed on [month] _____, 20__.

______________________________________
WILLIAM L. BABCOCK, JR.
Authorized Person
[THE TESTATOR MUST SIGN EACH PAGE][VIRGINIA CODE 64.2-436(C): The
authorized person shall ask the testator whether he wishes to make a declaration
concerning the safekeeping of his will. If so and at the express request of the testator the
place where he intends to have his will kept shall be mentioned in the certificate provided
for in § 64.2-437.]
2013-16 WILL for married client - trusts for spouse and children.docx
3/9/13 wlb

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COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
Before me, the undersigned authority, on this day personally appeared JOHN J.
SMITH, WILLIAM L. BABCOCK, JR. and KIERSTEN L. JENSEN, known to me to be
the person who signed the foregoing Will and the witnesses whose names are signed to the
Will, and all of these persons being by me first duly sworn, JOHN J. SMITH declared to me
and to the witnesses in my presence that the document is his Will and that he willingly
signed or directed another to sign it for him, and executed it in the presence of the witnesses
as his free and voluntary act for the purposes therein expressed; that the witnesses stated
before me that the Will was executed and acknowledged by JOHN J. SMITH as his Will in
the presence of the witnesses, who, in his presence and at his request, and in the presence of
each other, signed their names as witnesses on the day of the date of the Will, and that he, at
the time of the execution of the Will, was over the age of eighteen (18) years and of sound
and disposing mind and memory.
Sworn and acknowledged before me by JOHN J. SMITH, WILLIAM L.
BABCOCK, JR. and KIERSTEN L. JENSEN on March _____, 2013.
______________________________________
Notary Public

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WILL OF JOHN J. SMITH
ENDNOTES
1.

FAMILY MEMBERS. Reciting the names of family members and defining their
relationships is important to avoid ambiguity in the later sections of the Will.
2
PETS. Your Executor will be charged with the duty of placing your pets with a family
if the pets are in good health or can be restored to good health. If the pets cannot be
restored to good health and euthanasia is the humane alternative, the pets will be
euthanized.
3.
GIFTS OF CASH AND TANGIBLE PROPERTY.
In law, property is divided into two categories, real property and personal
property. Real property includes land and buildings, and everything else is personal
property.
Personal property is again divided into two categories, tangible and intangible.
Tangible property includes things with physical existence, such as furniture,
clothing, jewelry, automobiles, etc.
Intangible property includes things without physical existence, such as bank
accounts, life insurance, stock, contractual rights, etc. In most of these cases, a piece of
tangible personal property (paper) represents the underlying intangible personal property.
For instance, a stock certificate evidences ownership of shares in a corporation.
The technical details of the tangibles memo authorized by the Will are: (1) the list
may be prepared before or after the signing of the Will; (2) you may change it from time to
time; (3) your Executor will not be liable for distributing tangible personal property to the
apparent beneficiary under the Will without actual knowledge of the existence of the list;
(4) your Executor will not have any duty to recover property so distributed; (5) a person
named to receive tangible personal property in a list which is effective may recover that
property, or its value if the property cannot be recovered, from an apparent beneficiary to
whom it was distributed, in an action brought within one year after the probate of the Will.
4.
TAXES. This provision directs how taxes will be paid and apportioned among
beneficiaries.
5.
RESIDUARY GIFT. The Residuary Gift is comprised of all cash, financial assets, real
estate and other intangible property not specifically bequeathed earlier in the Will. Joint
property, life insurance, pension proceeds, IRA funds and other pay-on-death assets are
not controlled by the Will, and instead pass outside the Will as you have designated for
each such asset.
6
MARITAL TRUST (QTIP Trust). Most of the Marital Trust provisions are required by
the tax law. All of the income must be paid to your spouse, but the Trustee’s authority to
distribute principal to your spouse is optional. The Marital Trust may be divided into two
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trusts for estate tax purposes. One would contain the amount exempt from estate tax at
your death, which would also be exempt from estate tax at your spouse’s subsequent
death. The other would contain the non-exempt amount which was elected to be
deducted on your estate tax return and included in your spouse’s estate upon your
spouse’s subsequent death.
7.
TRUSTS FOR DESCENDANTS. The children do not inherit outright, but in trust.
Each child has a separate Trust, controls the management and investment of the assets in
the Trust, and as Trustee is authorized to make income and principal distributions to pay
for his or her health, support and educational expenses and those of his or her
descendants.
Keeping the property in trust helps to preserve it from creditors and disaffected
spouses. It also keeps the trust assets (subject to certain limits) out of the beneficiary’s
estate, which could result in an enormous tax saving to grandchildren.
8.
EXECUTOR. The Executor will administer your assets for a limited time period,
generally for a year or two, while tax clearances are obtained and tangible property
distributed. Then the estate is closed and the other probate assets pass to your
beneficiaries.
9.
GUARDIAN. The surviving parent is the natural guardian of minor children, so there is
no need to appoint a guardian unless you are the surviving parent. The appointment made
in the Will is not binding on the Court, but it is given considerable weight.
10.

TRUSTEES. These provisions set out orderly procedures for the succession of
Trustees and deal with other issues related to management, Trustee fees, etc. The
Trustee’s duties include investment, tax return preparation, annual accounting to the
beneficiaries (but not the Court) and decisions regarding distributions of income and
principal to the beneficiaries. The Trustee will carry out these duties during the entire
duration of the Trust.
11.
ADDITIONAL FIDUCIARIES. Additional executors or trustees are sometimes
required to serve in Virginia if the person you appointed does not live in Virginia at the
time of your death. They are also sometimes needed to serve in states outside of Virginia
if you own property (particularly real estate) in other states.
12.
WAIVER OF BOND. Without this waiver, a fiduciary must each year pay (from
estate or trust funds) an insurance company to issue a fiduciary bond insuring that if the
fiduciary is negligent or runs off with assets the company will replace the loss. Virginia
banks with trust authority are exempt from this requirement.
13.
FIDUCIARY POWERS. These Code sections contain pages and pages of powers
which may be exercised by fiduciaries (executors and trustees are fiduciaries). The
additional powers give even more flexibility to the fiduciaries and are intended to save
time and money.
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14.

GENERATION-SKIPPING TRANSFER TAX PROVISIONS. If a child dies after
creation of a trust but prior to receiving his or her full distribution from the trust, and that
distribution instead would pass to the deceased child’s children, the termination of the
child’s interest and the transfer of the distribution to the grandchildren could be taxable at
40% as a generation-skipping transfer. This provision attempts to avoid or minimize the
tax.
[If Trusts are for beneficiaries who are not Testator’s children]
If a beneficiary who is a generation younger than you dies after creation of a trust but
prior to receiving his or her full distribution from the trust, and that distribution instead
would pass to the deceased beneficiary’s children, the termination of the beneficiary’s
interest and the transfer of the distribution to the next generation of beneficiaries could be
taxable at 46% as a generation-skipping transfer. This provision attempts to avoid or
minimize the tax.
15.
LIMITATION OF POWERS. The most important deduction available against estate
taxes is the marital deduction. This “savings clause” attempts to insure that no provisions
of this document inadvertently jeopardize that deduction.
16.

MISCELLANEOUS. These definitions help assure that there is no confusion or
ambiguity about who you intend to be your beneficiaries and how and under what
circumstances they are to receive property.
17.
RULE AGAINST PERPETUITIES. This rule prohibits any trust from lasting longer
than a “life or lives in being” at the time of your death, plus 21 years. Virginia now
permits the waiver of this rule, which is what this language does.

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WILL

OF

JOHN J. SMITH

March 15, 2013

William L. Babcock, Jr. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
703-518-8400
wlb@willtrustestate.com

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TABLE OF CONTENTS
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.

FAMILY MEMBERS ..................................................................................................... 1
GIFTS OF TANGIBLE PROPERTY ............................................................................ 1
RESIDUARY GIFT ........................................................................................................ 1
EXECUTOR .................................................................................................................... 2
GUARDIAN .................................................................................................................... 2
ADDITIONAL FIDUCIARIES ..................................................................................... 2
WAIVER OF BOND ...................................................................................................... 2
FIDUCIARY POWERS.................................................................................................. 2
TAXES ............................................................................................................................. 3
MISCELLANEOUS ....................................................................................................... 3
IN TERROREM .............................................................................................................. 3

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WILL OF
JOHN J. SMITH
I, JOHN J. SMITH, of the City of Alexandria, Virginia, declare this to be my Will,
and revoke all prior Wills and Codicils made by me.
I.
FAMILY MEMBERS1
MARY M. JONES is my spouse. I have two children, JOHN J. SMITH, JR. and
MEREDITH L. SMITH. References to my children in this document are to them and no
others. References to my descendants are to my children and their descendants. My spouse
has two children from a prior marriage, BRADFORD JONES and ELIZABETH JONES.
II.
GIFTS OF TANGIBLE PROPERTY2
A. If I have left a written list of tangible personal property to be distributed at my
death, and that property is not otherwise specifically bequeathed in this Will, a
subsequent Will or a codicil, that written list shall be given effect to the extent it
describes tangible personal property and intended recipients with reasonable certainty and
is signed by me, even though it does not satisfy the requirements for a Will or codicil.
B. I give the rest of my furniture, furnishings, personal effects, automobiles and
other tangible personal property, to the JOHN J. SMITH TRUST dated March 15, 2013,
as amended, to be administered in accordance with the terms of the Trust in effect at my
death.
OR
C. I give the rest of my furniture, furnishings, personal effects, automobiles and
other tangible personal property to my spouse.
D. If my spouse does not survive me, I give the rest of said property (in kind, or if
my Executor determines that in kind distribution is not appropriate for some portion of
said property, then after sale), in as nearly equal portions as may be deemed practicable
by my Executor, to those of my children who survive me.
E. My Executor shall have discretion to deliver to a relative, friend or guardian of
a minor child some portion or all of said property left to that child, to be held for the use
and benefit of the child and later distribution. A written receipt given by such relative,
friend or guardian shall be a full discharge of my Executor.
F. Divisions in kind and valuations shall be in the discretion of my Executor, after
consultation with the beneficiaries. Expenses of distribution (including storing, handling,
packing, insuring and shipping) shall be paid as a cost of administration.
III.
RESIDUARY GIFT3
A. I give the residue of my estate, including all property over which I have a
general power of appointment, to the JOHN J. SMITH TRUST dated March 15, 2013, as
amended, to be administered in accordance with the terms of the Trust in effect at my
death.
B. If for any reason (other than the revocation of that Trust by me) the gift to that
Trust cannot be carried out, I incorporate by reference all of the terms of that Trust into

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this Will and direct that my Residuary Gift be administered and distributed in accordance
with the terms of that Trust as last amended by me.
IV. EXECUTOR4
I nominate my spouse as Executor. If she fails to qualify or complete the
administration of my estate, I nominate JOHN RELIABLE, as Executor.
V.
GUARDIAN5
If my spouse does not survive me, I nominate GEORGE JOHNSON as Guardian of
the person of any child of mine who is a minor at the time of my death. If he fails to qualify
or complete the Guardianship, I nominate SARAH MOORE as Guardian.
VI. ADDITIONAL FIDUCIARIES6
If the appointment of an additional fiduciary is necessary in any jurisdiction, I
appoint as my fiduciary (or co-fiduciary) in that jurisdiction such person or entity as may be
designated by my Executor, to have all the powers and discretion in that jurisdiction as my
fiduciaries are given by this Will. I authorize my Executor to waive bond and/or other
security for such fiduciary. I further authorize my Executor to remove and replace any such
additional fiduciary, if deemed appropriate in the discretion of my Executor.
VII. WAIVER OF BOND7
Fiduciaries shall not be required to give bond or other security.
VIII. FIDUCIARY POWERS8
A. Fiduciaries (except as otherwise expressly stated in this document) shall have
the power and discretion granted by this document, by law, and by Va. Code §64.2-105,
as in force at the time the action is taken, including the following:
1.
To buy and sell real estate and all other types of property.
2.
To borrow money and to encumber assets to secure such borrowing.
3.
To pay part or all joint income taxes due on returns filed with my
spouse.
4.
To make distributions in cash or in kind or partly in each, make
distributions of undivided interests in assets and make non pro rata distributions of assets.
5.
To allocate assets with different characters and/or different income
tax bases to different beneficiaries, and to make tax elections without regard to the
relative interests of beneficiaries even if the result may be an advantage or disadvantage
to one or more beneficiaries; however, this authority may not be used to enlarge or shift
any beneficial interest except as an incidental consequence of the discharge of fiduciary
duties. Allocations and elections made in good faith will not require equitable
adjustments.
6.
To purchase and/or retain assets without regard to the “prudent
investor” rule, or to a requirement to hold productive assets or to diversify investments.

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IX. TAXES9
A. Transfer, estate, inheritance, succession and other death taxes (not including
generation-skipping transfer tax on a direct skip, which will be charged against the
distribution to the beneficiary or successor trust that causes that tax to be payable)
payable by reason of my death shall be paid out of my estate without apportionment to
the extent imposed in respect of property passing under this Will. If my estate is
insufficient to satisfy such taxes, I direct that they be paid, to the extent requested by my
Executor, from the JOHN J. SMITH TRUST dated March 15, 2013, as amended.
B. Such taxes in respect of property not passing under this Will, which are not
directed to be paid from my estate by this Will, by my revocable Trust or by another
document signed by me, shall be apportioned against and paid by the persons in
possession of that property or benefited thereby, in the manner provided by the Virginia
apportionment laws. Property distributed to my revocable Trust pursuant to the
Residuary Gift shall not be considered property passing under this Will.
X.
MISCELLANEOUS10
A. I direct my Executor to pay my legally enforceable debts, written charitable
pledges and the expenses of a funeral and/or memorial service, including a suitable
monument. Notwithstanding the foregoing, my Executor is not required to pay off
secured debts. The recipient of property will take the property subject to the secured
debt, with no right to require my estate or another beneficiary to discharge the debt.
B. My Executor shall not seek contribution from my spouse for the payment of a
joint debt.
C. Individual fiduciaries shall be entitled to reasonable compensation, based on
the duties and responsibilities assumed and the time and effort expended. An individual
fiduciary’s fee that does not exceed the published fee schedule of a bank or trust
institution licensed to do business in Virginia shall be conclusively deemed reasonable.
Individual fiduciaries may be paid fees that exceed such published fees if they
demonstrate to the Commissioner of Accounts that the fee sought is reasonable.
Individual fiduciaries shall also be entitled to reimbursement for accounting, tax
preparation, legal and investment management fees as expenses, which shall not be
considered a part of the fees paid to the fiduciary.
D. In the event that my spouse and I die under circumstances where there is no
sufficient evidence that we have died otherwise than simultaneously, it shall be
conclusively presumed in determining the distribution of property, and whether or not
distribution is controlled by the terms of this document, that my spouse survived me.
Except for my spouse, a person who is not established by clear and convincing evidence
to have survived an event by 120 hours shall be deemed to have predeceased the event.
XI.

IN TERROREM

If a person who would receive a benefit as a result of my death directly or indirectly
contests the validity of any provision of this Will or of the JOHN J. SMITH TRUST dated
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March 15, 2013, as amended, that person and all of that person’s descendants will be treated
as having predeceased me, and will forfeit all benefits that otherwise would have passed to
that person under this Will, under that Trust, and as a result of a beneficiary designation, or
otherwise. This provision will not apply to a suit for construction or for aid and direction if
the Will or Trust requires interpretation by a court.
Signed on March ___, 2013.
______________________________ (SEAL)
JOHN J. SMITH
We certify that JOHN J. SMITH signed, sealed, acknowledged and declared the
foregoing instrument, each page of which is identified by his initials, as and for his Will, in
the presence of us, who, in his presence and at his request, and in the presence of each other,
all present together at the same time, have subscribed our names as witnesses. According to
our best knowledge and belief JOHN J. SMITH was over the age of eighteen (18) years, of
sound mind and memory, and under no constraint at the time of the execution and
acknowledgment of this instrument.
Signed on March ___, 2013.
_____________________________________
Address: _____________________________
_____________________________________
Address: _____________________________

2013-17 pour over WILL for married client.docx
3/9/13 wlb

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COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
Before me, the undersigned authority, on this day personally appeared JOHN J.
SMITH, WILLIAM L. BABCOCK, JR. and KIERSTEN L. JENSEN, known to me to be
the person who signed the foregoing Will and the witnesses whose names are signed to the
Will, and all of these persons being by me first duly sworn, JOHN J. SMITH declared to me
and to the witnesses in my presence that the document is his Will and that he willingly
signed or directed another to sign it for him, and executed it in the presence of the witnesses
as his free and voluntary act for the purposes therein expressed; that the witnesses stated
before me that the Will was executed and acknowledged by JOHN J. SMITH as his Will in
the presence of the witnesses, who, in his presence and at his request, and in the presence of
each other, signed their names as witnesses on the day of the date of the Will, and that he, at
the time of the execution of the Will, was over the age of eighteen (18) years and of sound
and disposing mind and memory.
Sworn and acknowledged before me by JOHN J. SMITH, WILLIAM L.
BABCOCK, JR. and KIERSTEN L. JENSEN on March _____, 2013.
______________________________________
Notary Public

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WILL OF JOHN J. SMITH
ENDNOTES
1

FAMILY MEMBERS. Reciting the names of family members and defining their
relationships is important to avoid ambiguity in the later sections of the Will.
2
GIFTS OF TANGIBLE PROPERTY.
In law, property is divided into two categories, real property and personal property.
Real property includes land and buildings, and everything else is personal property.
Personal property is again divided into two categories, tangible and intangible.
Tangible property includes things with physical existence, such as furniture,
clothing, jewelry, automobiles, etc.
Intangible property includes things without physical existence, such as bank
accounts, life insurance, stock, contractual rights, etc. In most of these cases, there is a
piece of tangible personal property which represents the underlying intangible personal
property. For instance, a stock certificate is tangible personal property, but ownership in the
corporation is intangible personal property.
The technical details of the tangibles memo authorized by the Will are: (1) the list
may be prepared before or after the signing of the Will; (2) you may change it from time to
time; (3) your Executor will not be liable for distributing tangible personal property to the
apparent beneficiary under the Will without actual knowledge of the existence of the list;
(4) your Executor will not have any duty to recover property so distributed; (5) a person
named to receive tangible personal property in a list which is effective may recover that
property, or its value if the property cannot be recovered, from an apparent beneficiary to
whom it was distributed, in an action brought within one year after the probate of the Will.
3

RESIDUARY GIFT. The Residuary Gift is comprised of real estate, cash, financial
assets and other intangible property not specifically bequeathed earlier in the Will. Joint
property, life insurance, pension proceeds, IRA funds and other pay-on-death assets are
not controlled by the Will, and instead pass outside the Will as you have designated for
each such asset.
4
EXECUTOR. The Executor will administer your assets for a limited time period,
generally for a year or two, while tax clearances are obtained and tangible property
distributed. Then the estate is closed and the other probate assets pass to your
beneficiaries.
5
GUARDIAN. The surviving parent is the natural guardian of minor children, so there
is no need to appoint a guardian unless you are the surviving parent. The appointment
made in the Will is not binding on the Court, but it is given considerable weight.

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6

ADDITIONAL FIDUCIARIES. Additional executors or trustees are sometimes
required to serve in Virginia if the person you appointed does not live in Virginia at the
time of your death. They are also sometimes needed to serve in states outside of Virginia
if you own property (particularly real estate) in other states.
7
WAIVER OF BOND. Without this waiver, a fiduciary must each year pay (from estate
or trust funds) an insurance company to issue a fiduciary bond insuring that if the
fiduciary is negligent or runs off with assets the company will replace the loss. Virginia
banks with trust authority are exempt from this requirement.
8
FIDUCIARY POWERS. Va. Code Section 64.2-105 contains more than 4 pages of fine
print detailing very broad and flexible powers which may be exercised by fiduciaries
(executors and trustees are fiduciaries), which are incorporated into this document by
reference. The additional powers which are included are intended to save time and money
and give even more flexibility to the fiduciaries.
9
TAXES. This provision directs how taxes will be paid and apportioned among
beneficiaries.
10
MISCELLANEOUS. These clauses help assure that there is no confusion or
ambiguity regarding some of the duties of your Executor and the fees paid to that person.
Also, stating the order in which you died in the event of a simultaneous death may have
tax implications.

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I-102

AMENDMENT AND RESTATEMENT
OF THE
JOHN J. SMITH TRUST
Dated MARCH 15, 2013

Effective as of
March 15, 2013

William L. Babcock, Jr. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
703-518-8400
wlb@willtrustestate.com

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TABLE OF CONTENTS
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
XII.
XIII.
XIV.

FAMILY MEMBERS .................................................................................................. 1
RESERVED RIGHTS .................................................................................................. 1
TRUSTEES OF THE JOHN J. SMITH TRUST ........................................................ 1
DISTRIBUTION PROVISIONS DURING GRANTOR’S LIFETIME ................... 2
GIFTS DURING GRANTOR’S LIFETIME .............................................................. 2
DEBTS, TAXES AND OTHER CHARGES.............................................................. 2
PETS .............................................................................................................................. 3
GIFTS OF TANGIBLE PROPERTY AT GRANTOR’S DEATH ........................... 3
CASH GIFTS AT GRANTOR’S DEATH.................................................................. 4
DISPOSITION OF TRUST REMAINDER UPON GRANTOR’S
DEATH .......................................................................................................................... 5
TRUSTEE ADMINISTRATIVE PROVISIONS ....................................................... 5
TRUSTEE POWERS.................................................................................................... 6
MISCELLANEOUS ..................................................................................................... 7
GOVERNING LAW..................................................................................................... 8

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AMENDMENT AND RESTATEMENT OF THE
JOHN J. SMITH TRUST DATED MARCH 15, 2013
This Amendment and Restatement effective on March _____, 2013, by and
between JOHN J. SMITH, Grantor, and JOHN J. SMITH and MARY M. JONES, jointly
and severally, Trustees (sometimes referred to in the singular). Either Trustee may act
alone.
WHEREAS, the Trust was originally created on March 15, 2013; and
WHEREAS, the Grantor reserved the right to amend the Trust; and
WHEREAS, the Grantor is now amending and restating the Trust in full in this
document.
The Grantor amends the Trust by canceling the terms set forth in the original Trust
document dated March 15, 2013 and in any amendments and restatements made prior to
this date, and restating the terms of the Trust in full in this document.
The Grantor and the Trustees agree as follows:
I.
FAMILY MEMBERS1
MARY M. JONES is Grantor’s spouse. Grantor has two children, JOHN J.
SMITH, JR. and MEREDITH L. SMITH. References to Grantor’s children in this
document are to them and any children subsequently born to or adopted by Grantor
References to Grantor’s descendants are to Grantor’s children and their descendants.
Grantor’s spouse has two children from a previous marriage, BRADFORD JONES and
ELIZABETH JONES.
II.
RESERVED RIGHTS2
This Agreement and the Trust are revocable, and may be amended or revoked, in
whole or in part, by Grantor. To be effective an amendment or revocation must be made
in a writing signed by Grantor. No signature or consent need be obtained from the
Trustee, except that no amendment that changes the duties or compensation of the
Trustee shall bind the Trustee until accepted in writing by the Trustee.
III.
TRUSTEES OF THE JOHN J. SMITH TRUST3
A.
JOHN J. SMITH and MARY M. JONES are the Trustees. Their power and
discretion may be exercised and discharged by them acting jointly or by either of them
acting alone.
B.
Upon the resignation, incapacity or death of one of them, the other will
continue as sole Trustee with full authority.
C.
Upon the resignation, incapacity or death of both of them, JOHN
RELIABLE will become the Trustee.
D.
Upon the resignation, incapacity or death of both of them, Grantor’s
children will become the Trustees. Their power and discretion must be exercised and
discharged by them acting jointly, and all checks and other documents must be signed by
both of them. Upon the resignation, incapacity or death of one of them while serving as
Trustee, the other will continue as sole Trustee, with full authority.

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E.
Upon the incapacity or death of JOHN J. SMITH and MARY M. JONES,
___________________ will have the power to remove the Trustee and appoint a
successor Trustee, contingent upon his/her having obtained, prior to his removal of the
Trustee then serving, a written agreement to serve as successor Trustee by a bank or trust
company licensed to conduct trust business in Virginia.
IV.
DISTRIBUTION PROVISIONS DURING GRANTOR’S LIFETIME4
A.
The Trustee shall pay out or retain Trust income and principal as directed
by the Grantor.
B.
If the Grantor is declared incapable of managing the Trust the Trustee shall
pay so much of the Trust income and/or principal to or for the benefit of Grantor and
Grantor’s spouse and any dependents of the Grantor as is appropriate to provide for
health, education, maintenance and support, taking into account their accustomed manner
of living and the income and principal available to them from other sources.
V.
GIFTS DURING GRANTOR’S LIFETIME5
A.
The Trustee shall, at the oral or written direction of the Grantor, distribute
principal from the Trust to third parties as gifts.
B.
In addition, the Trustee shall, if Grantor’s Attorney-in-Fact (“Agent”) has
been granted gifting authority in the Durable Financial Power of Attorney appointing the
Agent and has requested a principal distribution for the purpose of making gifts in
accordance with that gifting authority:
1.
Distribute principal from the Trust to the Agent for that purpose, or
2.
Distribute principal directly to the donee as a gift.
C.
The Trustee may rely upon the representations of the Agent as to the gifting
authority of the Agent and need not monitor the disposition of a gift if it is distributed to
the Agent rather than to the donee.
VI.
DEBTS, TAXES AND OTHER CHARGES6
A.
Upon the death of the Grantor the Trust will become irrevocable.
B.
If Grantor’s probate estate (excluding income) is insufficient to pay written
charitable pledges, funeral expenses, claims against the estate, expenses of administering
the estate, death taxes chargeable to the estate and pre-residuary legacies and devises
given by Will, the Trustee will make available to Grantor’s Executor or pay directly such
sums as the Executor certifies are due and the Trustee determines are payable under the
terms of this document. The Trustee may rely on the determination of Grantor’s
Executor as to the amount and the party to be paid.
C.
Funeral expenses, debts and expenses of administration of Grantor’s estate
and of this Trust will be paid from the general assets of the Trust before distributions to
beneficiaries or successor trusts.
D.
Transfer, estate, inheritance, succession and other death taxes payable by
reason of Grantor’s death (not including generation-skipping transfer tax on a direct skip,
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which will be charged against the distribution to the beneficiary or successor trust that
causes that tax to be payable) will be charged against the general assets of the Trust
before distributions to beneficiaries or successor trusts.
OR
E.
Transfer, estate, inheritance, succession and other death taxes payable by
reason of Grantor’s death (not including generation-skipping transfer tax on a direct skip,
which will be charged against the distribution to the beneficiary or trust that causes that
tax to be payable) which are not directed to be paid from Grantor’s estate by Will or by
another document signed by Grantor, shall be apportioned against and paid by the
persons in possession of that property or benefited thereby, in the manner provided by the
Virginia apportionment laws.
VII.
PETS7
A.
If Grantor’s spouse does not survive Grantor, Grantor directs the Trustee
under this document to place any pet Grantor owns at the time of Grantor’s death with
IRVING COLLIER. If IRVING COLLIER fails to survive Grantor, or is unable or
unwilling to accept a pet Grantor owns, Grantor directs the Trustee to place that pet with
the first of the following individuals who is available and willing to accept that pet:
THOMAS RUTHERFORD. If none of the individuals Grantor has listed in this
Paragraph A are able or willing to accept that pet, Grantor directs the Trustee to place
that pet with a responsible individual or family (that is, in a private, non-institutionalized
setting) where the pet will be cared for in a reasonable and loving manner.
B.
Prior to initiating such efforts to place Grantor’s pet, Grantor directs the
Trustee to consult a veterinarian to ensure that the pet is or can be brought into generally
good health. A pet that cannot be restored to generally good health or whose suffering
cannot be alleviated shall be euthanized and the remains shall be disposed of in the
discretion of the Trustee.
C.
The individual or family who receives a pet under this Article will also
receive a cash gift of FIVE THOUSAND DOLLARS (5,000) per pet. Grantor requests
but does not require that the money be used for the care and maintenance of Grantor’s
pet. A written receipt given by the individual who accepts Grantor’s pet and the cash gift
shall be a full discharge of the Trustee.
D.
The cost of veterinary services, temporary boarding, placement,
transportation and other expenses of caring for a pet during the administration of
Grantor’s estate, or to otherwise carry out the purposes of this Article, shall be paid as a
cost of administration of Grantor’s estate.
VIII.
GIFTS OF TANGIBLE PROPERTY AT GRANTOR’S DEATH8
Upon Grantor’s death the Trustee is directed to distribute furniture, furnishings,
personal effects, automobiles and other tangible personal property as follows:
A.
If Grantor has left a written list of tangible personal property to be
distributed at Grantor’s death, and that property is not otherwise specifically bequeathed
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in a Will or codicil of Grantor, that list shall be given effect to the extent it describes
tangible personal property and intended recipients with reasonable certainty and is signed
by Grantor, even though it does not satisfy the requirements for a Will or codicil.
B.
The Trustee is directed to distribute the rest of Grantor’s furniture,
furnishings, personal effects, automobiles and other tangible personal property to
Grantor’s spouse.
C.
If Grantor’s spouse does not survive Grantor, the Trustee is directed to
distribute the rest of Grantor’s furniture, furnishings, personal effects, automobiles and
other tangible personal property (in kind, or if the Trustee determines that in kind
distribution is not appropriate for some or all of that property, then after sale), in as nearly
equal portions as deemed practicable by the Trustee, to those of Grantor’s children who
survive Grantor.
D.
The Trustee shall have discretion to deliver to a relative, friend or guardian
of a minor child some portion or all of said property left to that child, to be held for the
use and benefit of the child and later distribution. A written receipt given by such
relative, friend or guardian shall be a full discharge of the Trustee.
E.
Valuations and divisions in kind shall be in the discretion of the Trustee,
whose decisions shall be final. Expenses of distribution (including storing, handling,
packing, insuring and shipping) shall be paid as a cost of administration.
IX.
CASH GIFTS AT GRANTOR’S DEATH
Upon Grantor’s death, the Trustee shall make the following distributions of cash
cash and waive the requirement that interest be paid on the gifts if they are not paid
within 12 months of death:
A.
________ THOUSAND DOLLARS ($ ,000) to _____________, per
stirpes. If he/she predeceases the Grantor and is not survived by descendants, this gift
shall be distributed ___________.
B.
________ THOUSAND DOLLARS ($ ,000) to _____________. If he/she
predeceases the Grantor, this gift shall be distributed ____________.
C.
If as a result of Grantor’s death CHARITY does not receive TEN
THOUSAND DOLLARS ($10,000) (from any source, but specifically including an IRA
or qualified plan), the Trustee is directed to distribute to the CHARITY as much as is
needed to make the total received by the CHARITY equal TEN THOUSAND
DOLLARS ($10,000).
D.
If an amount less than what is specified above for a beneficiary passes to
that beneficiary outside of this Trust as a result of Grantor’s death (from any source, but
specifically including an IRA or qualified plan), the Trustee is directed to distribute the
amount of any deficiency to that beneficiary. [MAKE SURE THE CLIENT SIGNS A
RETIREMENT ACCOUNT BENEFICIARY DESIGNATION FORM GIVING THE
SAME CASH AMOUNT TO THE BENEFICIARY.]

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DISPOSITION OF TRUST REMAINDER UPON GRANTOR’S DEATH9
Upon Grantor’s death:
A.
Trust Assets are defined as the assets of the Trust at Grantor’s death, plus
other assets received by the Trustee as a result of Grantor’s death, less DEBTS, TAXES
AND OTHER CHARGES, less PETS, less GIFTS OF TANGIBLE PROPERTY AT
GRANTOR’S DEATH, less CASH GIFTS AT GRANTOR’S DEATH.
B.
If Grantor’s spouse survives the Grantor, the Trust Assets will be
distributed to the Grantor’s spouse.
C.
If Grantor’s spouse does not survive the Grantor, the Trustee will distribute
the Trust Assets, per stirpes, to the Grantor’s descendants living on the date of Grantor’s
death.
D.
If neither Grantor’s spouse nor any descendants of the Grantor survive the
Grantor, the Trust Assets will be distributed as follows:
1.
__________________________
2.
__________________________
X.

XI.
TRUSTEE ADMINISTRATIVE PROVISIONS10
A.
If there is no other applicable provision in this document for the
appointment of a Co-Trustee or a successor Trustee, the Trustee then serving may appoint
a Co-Trustee and may appoint a successor Trustee to take office upon the death,
resignation or incapacity of the Trustee then serving.
B.
If there is no other applicable provision in this document for the
appointment of a Co-Trustee or a successor Trustee and the Trustee then serving has
failed, refused or is unable to appoint a Co-Trustee or a successor Trustee, Grantor’s then
living children who are over the age of TWENTY-FIVE (25), acting by
majority/unanimously, will have the right to appoint a Co-Trustee and a successor
Trustee, and may name themselves.
C.
A Trustee may resign by giving thirty (30) days written notice.
D.
Acceptance of trusteeship by a Trustee not a party to this Agreement shall
be evidenced by an instrument in writing.
E.
An individual serving as a Trustee will cease to serve as Trustee upon the
issuance of a certification by a physician that the individual is incapable of managing the
trust. Each individual Trustee, either by formally accepting appointment or by serving as
Trustee, directs health care providers to release to any other Trustee and to any income
beneficiary of the trust for which the person is serving as Trustee (“Information
Recipients”) all of the Trustee’s medical information relevant to a determination whether
the individual is capable of managing the Trust, and if requested will sign releases to that
effect. A Trustee who: (1) fails within thirty (30) days of a written request to undergo an
examination to determine whether the individual is capable of managing the Trust; (2)
fails within ten (10) days of such exam to release the results; or (3) fails within ten (10)
days of a written request to disclose existing medical information, shall be deemed to
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have resigned, provided that there is a reasonable basis to make the request and that only
one such request may be made every eighteen (18) months. The cost of the examination
shall be borne by the Trust for which the individual is acting as Trustee.
F.
No bond or security will be required of any Trustee.
G.
While the Grantor is living the Trustee will make annual reports to the
Grantor. After Grantor’s death Trustees will furnish copies of this document to Grantor’s
spouse and Grantor’s children and will make annual reports to Grantor’s spouse and
Grantor’s children. Annual reports will include a list of assets and liabilities at thencurrent market value and all receipts and disbursements for the year, including trustee
compensation. Trustees will not be obligated to provide copies of this document or
annual reports or any other information to any other persons or entities, but may do so in
the absolute discretion of the Trustees.
H.
Trustees will not be required to file an inventory or accounts with the
Commissioner of Accounts or any other public official or court.
I.
Individual Trustees will be entitled to reasonable compensation, based on
the duties and responsibilities assumed and the time and effort expended. An individual
Trustee’s fee that does not exceed the published fee schedule of a bank or trust institution
licensed to do business in Virginia shall be conclusively deemed reasonable. Individual
Trustees may be paid fees that exceed such published fees if they demonstrate that the fee
sought is reasonable. Individual Trustees will also be entitled to reimbursement for
accounting, tax preparation, legal and investment management fees as expenses, which
shall not be considered a part of the fees paid to the Trustee. A corporate Trustee shall
receive compensation in accordance with its published fee schedule in effect when the
services are rendered. If both an individual and a corporate fiduciary serve as Trustees,
each will be entitled to a fee as set forth in this paragraph. If two individuals serve as
Trustees, each will be entitled to the fee (ONE-HALF (1/2) of the fee) set forth in this
paragraph.
XII.
TRUSTEE POWERS11
Trustees (except as otherwise expressly stated in this document) have all the powers
and discretion granted by this document, by law, and by Va. Code §§64.2-105 and 64.2777 as in force at the time the action is taken, exercisable in a fiduciary capacity,
including the following:
A.
To buy and sell real estate and all other types of property.
B.
To borrow money and encumber assets to secure such borrowing.
C.
To pay all or any part of joint taxes due on income tax returns filed with
Grantor’s spouse.
D.
To make distributions in cash or in kind or partly in each, make
distributions of undivided interests in assets and make non pro rata distributions of assets.
E.
To allocate assets with different characters and/or different income tax
bases to different beneficiaries, and to make tax elections without regard to the relative
interests of beneficiaries even if the result may be an advantage or disadvantage to one or
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more beneficiaries; provided however, this authority may not be used to enlarge or shift
any beneficial interest except as an incidental consequence of the discharge of fiduciary
duties. Allocations and elections made in good faith shall not require equitable
adjustments.
F.
To purchase and/or retain assets without regard to the “prudent investor”
rule, or to a requirement to hold productive assets or to diversify investments.
XIII.
MISCELLANEOUS12
A.
In the event that Grantor’s spouse and Grantor die under circumstances
where there is no sufficient evidence that they died otherwise than simultaneously, it shall
be conclusively presumed in determining the distribution of property, and whether or not
distribution is controlled by the terms of this document, that Grantor’s spouse survived
Grantor. Except for Grantor’s spouse, a person who is not established by clear and
convincing evidence to have survived an event by 120 hours shall be deemed to have
predeceased the event.
B.
“Descendants” means children, grandchildren, great-grandchildren, etc.,
and includes persons adopted prior to reaching age twenty-one (21) if they were born in a
year after the birth of Grantor’s oldest descendant living at Grantor’s death.
“Descendants” does not include children born out of wedlock unless the parent
voluntarily provides parental care and/or support for the child or recognizes the child for
inheritance purposes in writing.
[There are two issues here. First, a child who is legally adopted in a Court
proceeding (as opposed to a stepchild, who has no legal status for inheritance purposes) is
treated for inheritance purposes the same as a natural child. The foregoing language
simply prohibits someone from adopting an adult.
Second, under current Virginia law a person born out of wedlock will
inherit by, through or from the mother if the mother has no Will. Such a child will also
inherit by, through or from the father if the father has no Will and the parents participated
in a marriage ceremony (valid or invalid) before or after the birth, or paternity is
established by clear and convincing evidence as set forth in the Virginia statutes.
You may change the above results and make your own choice to include or
exclude stepchildren, adopted children and/or children born out of wedlock.]
C.
A gift to descendants “per stirpes” means the gift is divided equally among
the members of the first generation of descendants in which at least one descendant is
living at the specified time, with each living member taking one share and any deceased
member’s child (or children in equal shares) taking the share to which the deceased
member would have been entitled, and likewise down the generations. No share shall be
allocated for a deceased child leaving no descendant surviving at the specified time.
[If no children are surviving the assets are divided equally among the
grandchildren.]
D.
“Trustee” means “Trustees” if appropriate in the context of its usage.

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E.
When discretion is granted, that discretion does not authorize action beyond
the bounds of a reasonable judgment. When “absolute” discretion is granted, action
beyond the bounds of a reasonable judgment may be taken as long as the action is not
dishonest, motivated other than by the accomplishment of the purposes of this document,
or arbitrary without an exercise of judgment.
F.
Health, education, maintenance and support shall be construed to be
ascertainable standards for federal estate and gift tax purposes such that the exercise,
release or lapse of a power limited by such standard will not be taxable for federal estate
or gift tax purposes.
G.
If a charity designated as a beneficiary has been misnamed, the Trustee
shall have authority to determine the intended charity. If a condition of a gift cannot be
carried out by the charity, the Trustee may modify or remove the condition in order to
permit the gift to be made. If a named charity is no longer in existence at Grantor’s
death, the Trustee is directed to select an alternate charitable beneficiary with a similar
mission to receive the gift. The Trustee has absolute discretion to make these decisions.
H.
If this Agreement has been revoked, but at the Grantor’s death an insurance
policy or any other assets are payable to the Trustee or the Trust, such insurance proceeds
or other assets shall be paid to Grantor’s estate.
XIV.
GOVERNING LAW
This document shall be governed and construed according to the laws of Virginia.
WITNESSES:

GRANTOR:

____________________________

______________________________ (SEAL)
JOHN J. SMITH

____________________________
TRUSTEES:
______________________________ (SEAL)
JOHN J. SMITH
______________________________ (SEAL)
MARY M. JONES
COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
The foregoing document was acknowledged before me on March _____, 2013 by
JOHN J. SMITH as Grantor and Trustee.
_______________________________________
Notary Public

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COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
The foregoing document was acknowledged before me on March _____, 2013 by
MARY M. JONES as Trustee.
_______________________________________
Notary Public

2013-18 Revocable Trust for married client (outright gifts).docx
3/9/13 wlb

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TRUST OF JOHN J. SMITH
ENDNOTES

1

FAMILY MEMBERS. Reciting the names of family members and defining their
relationships is important to avoid ambiguity in the later sections of the Trust.
2
RESERVED RIGHTS. These rights assure that the Trust is revocable and subject to
your complete control during your lifetime, even if you appoint someone else as Trustee.
3
TRUSTEES. This mainly covers Trustees during your lifetime and at death, when the
Trustee will wind up this phase of the Trust and distribute its assets to the successor trust
or trusts.
4
DISTRIBUTION PROVISIONS DURING GRANTOR’S LIFETIME. You use the
income and principal titled in the name of the Trust just as you currently use income and
principal titled in your name. If you resign as Trustee in favor of the successor Trustee,
you have the power to direct the Trustee how income and principal are to be used. If you
become incompetent the successor Trustee will take over and make distributions during
your lifetime as provided in this Article.
5
GIFTS DURING GRANTOR’S LIFETIME. This provision permits the financial
Agent to use trust funds to make gifts when there are no assets outside of the Trust which
are appropriate to use for gifts.
6
DEBTS, TAXES AND OTHER CHARGES. These provisions allocate taxes and
expenses among the beneficiaries.
7
PETS. Your Executor will be charged with the duty of placing your pets with a family
if the pets are in good health or can be restored to good health. If the pets cannot be
restored to good health and euthanasia is the humane alternative, the pets will be
euthanized.
8
GIFTS OF TANGIBLE PROPERTY.
In law, all property is divided into two categories, real property and personal
property. Real property includes land and buildings, and everything else is personal
property.
Personal property is again divided into two categories, tangible and intangible.
Tangible property includes things with physical existence, such as furniture,
clothing, jewelry, automobiles, etc.
9.
DISPOSITION OF TRUST UPON GRANTOR’S DEATH. If your spouse is
surviving all the assets pass to your spouse/into the Marital Trust. If your spouse is not
surviving, all the assets pass into individual trusts for your children.
10
TRUSTEE ADMINISTRATIVE PROVISIONS. These provisions deal with issues
related to management, Trustee fees, etc.

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11

TRUSTEE POWERS. These Code sections contain pages and pages of detailing very
broad and flexible powers which may be exercised by Trustees, which are incorporated
into this document by reference. The additional powers which are included are intended
to save time and money and give even more flexibility to the fiduciaries.
12
MISCELLANEOUS. These definitions help assure that there is no confusion or
ambiguity about who you intend to be your beneficiaries and how and under what
circumstances they are to receive property.

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AMENDMENT AND RESTATEMENT
OF THE
JOHN J. SMITH TRUST
Dated MARCH 15, 2013

Effective as of
March 15, 2013

William L. Babcock, Jr. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
703-518-8400
wlb@willtrustestate.com

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TABLE OF CONTENTS
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.

FAMILY MEMBERS .................................................................................................. 1
RESERVED RIGHTS .................................................................................................. 1
TRUSTEES OF THE JOHN J. SMITH TRUST ........................................................ 1
DISTRIBUTION PROVISIONS DURING GRANTOR’S LIFETIME ................... 2
GIFTS DURING GRANTOR’S LIFETIME .............................................................. 2
DEBTS, TAXES AND OTHER CHARGES.............................................................. 2
PETS .............................................................................................................................. 3
GIFTS OF TANGIBLE PROPERTY AT GRANTOR’S DEATH ........................... 3
CASH GIFTS AT GRANTOR’S DEATH.................................................................. 4
DISPOSITION OF TRUST REMAINDER UPON GRANTOR’S
DEATH .......................................................................................................................... 4
XI.
MARITAL TRUST (QTIP TRUST) ........................................................................... 5
XII.
TRUSTS FOR DESCENDANTS ................................................................................ 8
XIII. TRUSTEE ADMINISTRATIVE PROVISIONS ..................................................... 12
XIV. TRUSTEE POWERS.................................................................................................. 13
XV.
GENERATION-SKIPPING TRANSFER TAX PROVISIONS ............................. 14
XVI. LIMITATION OF POWERS ..................................................................................... 15
XVII. MISCELLANEOUS ................................................................................................... 15
XVIII. WAIVER OF THE RULE AGAINST PERPETUITIES ......................................... 18
XIX. IN TERROREM .......................................................................................................... 18
XX.
GOVERNING LAW................................................................................................... 18

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AMENDMENT AND RESTATEMENT OF THE
JOHN J. SMITH TRUST DATED MARCH 15, 2013
This Amendment and Restatement effective on March _____, 2013, by and
between JOHN J. SMITH, Grantor, and JOHN J. SMITH and MARY M. JONES, jointly
and severally, Trustees (sometimes referred to in the singular). Either Trustee may act
alone.
WHEREAS, the Trust was originally created on February 25, 2010; and
WHEREAS, the Grantor reserved the right to amend the Trust; and
WHEREAS, the Grantor is now amending and restating the Trust in full in this
document.
The Grantor amends the Trust by canceling the terms set forth in the original Trust
document dated March 15, 2013 and in any amendments and restatements made prior to
this date, and restating the terms of the Trust in full in this document.
The Grantor and the Trustees agree as follows:
I.
FAMILY MEMBERS1
MARY M. JONES is Grantor’s spouse. Grantor has two children, JOHN J.
SMITH, JR. and MEREDITH L. SMITH. References to Grantor’s children in this
document are to them and no others. References to Grantor’s descendants are to
Grantor’s children and their descendants. Grantor’s spouse has two children from a
previous marriage, BRADFORD JONES and ELIZABETH JONES.
II.
RESERVED RIGHTS2
This Agreement and the Trust are revocable, and may be amended or revoked, in
whole or in part, by Grantor. To be effective an amendment or revocation must be made
in a writing signed by Grantor. No signature or consent need be obtained from the
Trustee, except that no amendment that changes the duties or compensation of the
Trustee shall bind the Trustee until accepted in writing by the Trustee.
III.
TRUSTEES OF THE JOHN J. SMITH TRUST3
A.
JOHN J. SMITH and MARY M. JONES are the Trustees. Their power and
discretion may be exercised and discharged by them acting jointly or by either of them
acting alone.
B.
Upon the resignation, incapacity or death of one of them, the other will
continue as sole Trustee with full authority.
C.
Upon the resignation, incapacity or death of both of them, JOHN
RELIABLE will become the Trustee.
OR
D.
Upon the resignation, incapacity or death of both of them, Grantor’s
children will become the Trustees. Their power and discretion must be exercised and
discharged by them acting jointly, and all checks and other documents must be signed by
both of them. Upon the resignation, incapacity or death of one of them while serving as
Trustee, the other will continue as sole Trustee, with full authority.

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IV.
DISTRIBUTION PROVISIONS DURING GRANTOR’S LIFETIME4
A.
The Trustee shall pay out or retain Trust income and principal as directed
by the Grantor.
B.
If the Grantor is declared incapable of managing the Trust the Trustee shall
pay so much of the Trust income and/or principal to or for the benefit of Grantor and
Grantor’s spouse and any dependents of the Grantor as is appropriate to provide for
health, education, maintenance and support, taking into account their accustomed manner
of living and the income and principal available to them from other sources.
V.
GIFTS DURING GRANTOR’S LIFETIME5
A.
The Trustee shall, at the oral or written direction of the Grantor, distribute
principal from the Trust to third parties as gifts.
B.
In addition, the Trustee shall, if Grantor’s Attorney-in-Fact (“Agent”) has
been granted gifting authority in the Durable Financial Power of Attorney appointing the
Agent and has requested a principal distribution for the purpose of making gifts in
accordance with that gifting authority:
1.
Distribute principal from the Trust to the Agent for that purpose, or
2.
Distribute principal directly to the donee as a gift.
C.
The Trustee may rely upon the representations of the Agent as to the gifting
authority of the Agent and need not monitor the disposition of a gift if it is distributed to
the Agent rather than to the donee.
VI.
DEBTS, TAXES AND OTHER CHARGES6
A.
Upon the death of the Grantor the Trust will become irrevocable.
B.
If Grantor’s probate estate (excluding income) is insufficient to pay written
charitable pledges, funeral expenses, claims against the estate, expenses of administering
the estate, death taxes chargeable to the estate and pre-residuary legacies and devises
given by Will, the Trustee will make available to Grantor’s Executor or pay directly such
sums as the Executor certifies are due and the Trustee determines are payable under the
terms of this document. The Trustee may rely on the determination of Grantor’s
Executor as to the amount and the party to be paid.
C.
Funeral expenses, debts and expenses of administration of Grantor’s estate
and of this Trust will be paid from the general assets of the Trust before distributions to
beneficiaries or successor trusts.
D.
Transfer, estate, inheritance, succession and other death taxes payable by
reason of Grantor’s death (not including generation-skipping transfer tax on a direct skip,
which will be charged against the distribution to the beneficiary or successor trust that
causes that tax to be payable) will be charged against the general assets of the Trust
before distributions to beneficiaries or successor trusts.
OR
E.
Transfer, estate, inheritance, succession and other death taxes payable by
reason of Grantor’s death (not including generation-skipping transfer tax on a direct skip,
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which will be charged against the distribution to the beneficiary or trust that causes that
tax to be payable) which are not directed to be paid from Grantor’s estate by Will or by
another document signed by Grantor, shall be apportioned against and paid by the
persons in possession of that property or benefited thereby, in the manner provided by the
Virginia apportionment laws.
VII.
PETS7
A.
If Grantor’s spouse does not survive Grantor, Grantor directs the Trustee
under this document to place any pet Grantor owns at the time of Grantor’s death with
IRVING COLLIER. If IRVING COLLIER fails to survive Grantor, or is unable or
unwilling to accept a pet Grantor owns, Grantor directs the Trustee to place that pet with
the first of the following individuals who is available and willing to accept that pet:
THOMAS RUTHERFORD. If none of the individuals Grantor has listed in this
Paragraph A are able or willing to accept that pet, Grantor directs the Trustee to place
that pet with a responsible individual or family (that is, in a private, non-institutionalized
setting) where the pet will be cared for in a reasonable and loving manner.
B.
Prior to initiating such efforts to place Grantor’s pet, Grantor directs the
Trustee to consult a veterinarian to ensure that the pet is or can be brought into generally
good health. A pet that cannot be restored to generally good health or whose suffering
cannot be alleviated shall be euthanized and the remains shall be disposed of in the
discretion of the Trustee.
C.
The individual or family who receives a pet under this Article will also
receive a cash gift of FIVE THOUSAND DOLLARS (5,000) per pet. Grantor requests
but does not require that the money be used for the care and maintenance of Grantor’s
pet. A written receipt given by the individual who accepts Grantor’s pet and the cash gift
shall be a full discharge of the Trustee.
D.
The cost of veterinary services, temporary boarding, placement,
transportation and other expenses of caring for a pet during the administration of
Grantor’s estate, or to otherwise carry out the purposes of this Article, shall be paid as a
cost of administration of Grantor’s estate.
VIII.
GIFTS OF TANGIBLE PROPERTY AT GRANTOR’S DEATH8
Upon Grantor’s death the Trustee is directed to distribute furniture, furnishings,
personal effects, automobiles and other tangible personal property as follows:
A.
If Grantor has left a written list of tangible personal property to be
distributed at Grantor’s death, and that property is not otherwise specifically bequeathed
in a Will or codicil of Grantor, that list shall be given effect to the extent it describes
tangible personal property and intended recipients with reasonable certainty and is signed
by Grantor, even though it does not satisfy the requirements for a Will or codicil.
B.
The Trustee is directed to distribute the rest of Grantor’s furniture,
furnishings, personal effects, automobiles and other tangible personal property to
Grantor’s spouse.
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C.
If Grantor’s spouse does not survive Grantor, the Trustee is directed to
distribute the rest of Grantor’s furniture, furnishings, personal effects, automobiles and
other tangible personal property (in kind, or if the Trustee determines that in kind
distribution is not appropriate for some or all of that property, then after sale), in as nearly
equal portions as deemed practicable by the Trustee, to those of Grantor’s children who
survive Grantor.
D.
The Trustee shall have discretion to deliver to a relative, friend or guardian
of a minor child some portion or all of said property left to that child, to be held for the
use and benefit of the child and later distribution. A written receipt given by such
relative, friend or guardian shall be a full discharge of the Trustee.
E.
Valuations and divisions in kind shall be in the discretion of the Trustee,
whose decisions shall be final. Expenses of distribution (including storing, handling,
packing, insuring and shipping) shall be paid as a cost of administration.
IX.
CASH GIFTS AT GRANTOR’S DEATH
Upon Grantor’s death, the Trustee shall make the following distributions of cash
cash. The requirement that interest be paid on the gifts if they are not paid within 12
months of death is waived.
A.
________ THOUSAND DOLLARS ($ ,000) to _____________, per
stirpes. If he/she predeceases the Grantor and is not survived by descendants, this gift
shall be distributed ___________.
B.
________ THOUSAND DOLLARS ($ ,000) to _____________. If he/she
predeceases the Grantor, this gift shall be distributed ____________.
C.
If as a result of Grantor’s death CHARITY does not receive TEN
THOUSAND DOLLARS ($10,000) (from any source, but specifically including an IRA
or qualified plan), the Trustee is directed to distribute to the CHARITY as much as is
needed to make the total received by the CHARITY equal TEN THOUSAND
DOLLARS ($10,000).
D.
If an amount less than what is specified above for a beneficiary passes to
that beneficiary outside of this Trust as a result of Grantor’s death (from any source, but
specifically including an IRA or qualified plan), the Trustee is directed to distribute the
amount of any deficiency to that beneficiary. [MAKE SURE THE CLIENT SIGNS A
RETIREMENT ACCOUNT BENEFICIARY DESIGNATION FORM GIVING THE
SAME CASH AMOUNT TO THE BENEFICIARY.]
DISPOSITION OF TRUST REMAINDER UPON GRANTOR’S DEATH9
Upon Grantor’s death:
A.
Trust Assets are defined as the assets of the Trust at Grantor’s death, plus
other assets received by the Trustee as a result of Grantor’s death, less DEBTS, TAXES
AND OTHER CHARGES, less PETS, less GIFTS OF TANGIBLE PROPERTY AT
GRANTOR’S DEATH, less CASH GIFTS AT GRANTOR’S DEATH.
X.

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B.
If Grantor’s spouse survives the Grantor, the Trust Assets will be
distributed to the Trustee of the MARITAL TRUST and administered in accordance with
the MARITAL TRUST Article of this document.
C.
If Grantor’s spouse does not survive the Grantor, the Trustee will distribute
the Trust Assets, per stirpes, to trusts for the Grantor’s descendants living on the date of
Grantor’s death. The Trusts will be administered in accordance with the TRUSTS FOR
DESCENDANTS Article of this document.
D.
If neither Grantor’s spouse nor any descendants of the Grantor survive the
Grantor, the Trust Assets will be distributed as follows:
1.
__________________________
2.
__________________________
XI.
MARITAL TRUST (QTIP TRUST)10
A.
Trustees and Trust Advisors.
1.
Grantor’s spouse will be the Trustee.
2.
At any time after Grantor’s death Grantor’s spouse may appoint a
Trustee to serve upon the resignation, incapacity or death of Grantor’s spouse, or to
serve initially if Grantor’s spouse declines to serve.
3.
If Grantor’s spouse does not appoint a successor Trustee, then upon
the declination of Grantor’s spouse to serve as Trustee, or upon the resignation,
incapacity or death of Grantor’s spouse while serving as Trustee, MARY
DEPENDABLE will become the Trustee.
4.
Grantor’s spouse may remove Trustees and appoint one or more
successor Trustees, including herself, making such an appointment effective at any time,
including upon the resignation, incapacity or death of any Trustee.
5.
Grantor’s spouse and JOHN RELIABLE, jointly, will be the
Trustees. Their power and discretion must be exercised and discharged by them acting
jointly, and all checks and other documents must be signed by both Trustees. Upon the
resignation, incapacity or death of one of them, Mary Dependable will serve in the place
of that person. OR Upon the resignation, incapacity or death of one of them, the other
will serve as sole Trustee with full authority.
6.
If there are no other applicable provisions in this Article for the
appointment of a successor Trustee, and Grantor’s spouse fails, refuses or is unable to
appoint a successor Trustee, Grantor’s then living children who are over the age of
THIRTY (30), acting by majority/unanimously, will have the right to appoint one or
more successor Trustees, including one or more of themselves.
7.
The Trustee may appoint a Trust Advisor to make those decisions
regarding distributions that are reserved to the Trust Advisor by this Article. The Trustee
must appoint a Trust Advisor if the Trust or a portion of the Trust may be subject to
generation-skipping transfer tax.
8.
A Trust Advisor must be independent, as defined in §674(c), from
the beneficiaries of the Trust, and not be related or subordinate, as defined in §672(c), to
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the beneficiaries of the Trust. In addition, if the Trust Advisor is an individual, that
individual must be at least THIRTY (30) years old and one of the following: experienced
in business, finance or investments; a CFP; a CPA; or an attorney.
9.
Decisions of the Trust Advisor shall be within the absolute
discretion of the Trust Advisor. A Trust Advisor will be entitled to reimbursement for
expenses and reasonable compensation.
B.
Commencing with the date of Grantor’s death, the Trustee is directed to
pay to Grantor’s spouse the net income of the Marital Trust, in quarterly or other
convenient installments (but at least annually), for and during the life of Grantor’s
spouse.
C.
The Trustee is authorized to pay to Grantor’s spouse so much of the
principal of the Marital Trust as is appropriate for health, education, maintenance and
support, taking into consideration the manner of living to which Grantor’s spouse has
been accustomed, the income received from the Marital Trust and the income and
principal that may be available to or for Grantor’s spouse from other sources. The
Trustee is directed to disregard the interests of the remainder beneficiaries in making
such decisions.
D.
If there is a Trust Advisor for the Marital Trust, the Trustee may request a
decision from the Trust Advisor as to whether it is appropriate for:
1.
The Trustee to make a distribution of principal to Grantor’s spouse
for a purpose other than health, education, maintenance or support. The Trust Advisor is
directed to disregard the interests of the remainder beneficiaries in making such
decisions. If after reviewing the circumstances the Trust Advisor determines that a
proposed distribution is appropriate, the Trustee is directed to make that distribution.
2.
The Marital Trust to be terminated. If after reviewing the
circumstances the Trust Advisor determines that the size of the Marital Trust does not
warrant the cost of continuing, or its administration would be otherwise impractical or
inappropriate, the Trust Advisor shall approve the proposed termination. The Trust
Advisor is directed to disregard the interests of the remainder beneficiaries when making
this decision. Upon receiving approval for termination of the Trust its assets shall be
distributed to Grantor’s spouse. Upon such distribution the interests of all succeeding
beneficiaries, whether vested or contingent, shall be terminated.
E.
Upon the death of Grantor’s spouse:
1.
Except to the extent the Will of Grantor’s spouse contains a different
direction for the payment of death taxes which specifically refers to this Marital Trust,
the Trustee shall make available to the personal representative of Grantor’s spouse from
the principal of the Marital Trust, the amount the personal representative determines to be
equal to the excess of (a) the transfer, estate, inheritance, succession and other death taxes
(not including Chapter 13 tax on a direct skip) which become payable by reason of the
death of Grantor’s spouse, over (b) those taxes which would become payable by reason
of the death of Grantor’s spouse if no part of the property belonging to the Marital Trust
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had been included in the tax computation. The Trustee shall pay this amount at such
times as the personal representative of Grantor’s spouse may request in writing. The
Trustee shall be fully protected in relying upon the determination of the personal
representative of Grantor’s spouse as to the amount payable.
2.
If only part of the Marital Trust is elected as qualified terminable
interest property, such payment shall be made from the part that is so elected. Any
amount paid under this Paragraph shall be in satisfaction of any recovery to which
Grantor’s spouse or the estate of Grantor’s spouse shall be entitled under §2207A, as
amended.
3.
The balance of the Marital Trust shall be distributed, per stirpes, to
the Grantor’s descendants living on the date of death of Grantor’s spouse.
OR
4.
The balance of the Marital Trust shall be distributed, per stirpes, to
trusts for the Grantor’s descendants living on the date of death of Grantor’s spouse. The
trusts shall be administered in accordance with the TRUSTS FOR DESCENDANTS
Article of this document.
F.
Notwithstanding anything in this document to the contrary, a power granted
to the Trustee to retain or invest in unproductive property shall be limited by the right of
Grantor’s spouse to require the Trustee to make property productive or to convert it to
productive property within a reasonable time. Unproductive property includes Deferrable
Retirement Benefits.
G.
In lieu of making property productive or converting unproductive property,
the Trustee may distribute quarterly to Grantor’s spouse other assets from the Marital
Trust, the value of which is equal to the income that would have been produced during
the quarter if the property had been made productive or converted to income producing
property.
H.
The Trustee shall have the right at any time to withdraw part or all of the
assets in a Deferrable Retirement Benefit.
I.
The Trustee must each year withdraw from Deferrable Retirement Benefits
payable to the Marital Trust an amount which is equal to the greater of: (i) the net
income of those Deferrable Retirement Benefits; and (ii) the minimum required
distribution.
J.
The Trustee shall treat distributions from a Deferrable Retirement Benefit
as income of the Marital Trust to the extent that the distribution represents income
generated or deemed to be generated by such Deferrable Retirement Benefit,
notwithstanding the treatment of such portion of the distribution under any law
concerning the determination of income and principal for trust accounting purposes, and
the Trustee shall not charge to such income an expense properly chargeable to the nonincome portion of the distribution.
K.
Part or all of the Marital Trust may be elected as qualified terminable
interest property. The Trustee may not fund the portion of the Trust which is not elected
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as qualified terminable interest property with Deferrable Retirement Benefits unless there
are no other assets that can be used to fund that portion of the Trust. The Trustee shall, to
the extent possible, make distributions of principal, if any, to Grantor’s spouse and pay
all death taxes on both trusts payable by reason of the death of Grantor’s spouse, from the
trust as to which the election has been made.
L.
The Marital Trust shall not be liable for the debts of a beneficiary, to
transfer, assignment or encumbrance by a beneficiary, or to the control of a beneficiary’s
spouse.
XII.
TRUSTS FOR DESCENDANTS11
A.
Trustees and Trust Advisors.
1.
JOHN RELIABLE will be the Trustee. Upon the resignation,
incapacity or death of the Trustee, MARY DEPENDABLE will become the Trustee.
2.
_____________________________, jointly, will be the Trustees.
Their power and discretion must be exercised and discharged by them acting jointly, and
all checks and other documents must be signed by both Trustees. Upon the resignation,
incapacity or death of one of them, MARY DEPENDABLE will serve in the place of that
person. OR Upon the resignation, incapacity or death of one of them, the other will
serve as sole Trustee with full authority.
3.
BANK & TRUST COMPANY will be the Trustee of a Trust created
for __________________, and notwithstanding any other provision of this document, she
may not serve as a Trustee, appoint a Trustee or remove a Trustee of a Trust created for
her.
4.
Notwithstanding the foregoing appointment of a Trustee/Trustees for
the Trusts for Descendants, upon the funding of the Trust, or upon reaching age THIRTY
(30), whichever is later, the primary beneficiary of the Trust: will become the Trustee of
that Trust; may appoint a Trustee to serve upon his or her resignation, incapacity, or
death, or to serve initially if the primary beneficiary declines to serve; and may remove
Trustees and appoint one or more successor Trustees, including himself or herself.
5.
If the primary beneficiary of the Trust is under age THIRTY (30)
and no Trustee has been appointed for that Trust, the primary beneficiary’s parent may
appoint the Trustee, who may be the parent, and may remove Trustees and appoint
successor Trustees to fill vacancies or to take office upon the resignation, incapacity or
death of a Trustee.
6.
If the Trustee of a Trust for a Descendant is not the primary
beneficiary of the Trust, the Trustee shall have discretion to appoint the primary
beneficiary as a Co-Trustee or the sole Trustee of the Trust. The Trustee shall also have
discretion, on one or on multiple occasions, to divide the Trust into separate trusts, in
amounts or proportions the Trustee deems appropriate, and appoint the primary
beneficiary as the Co-Trustee or sole Trustee of one or more of those separate trusts.

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7.
The Trustee may appoint a Trust Advisor to make those decisions
reserved to a Trust Advisor. The Trustee must appoint a Trust Advisor if the Trust or a
portion of the Trust may be subject to generation-skipping transfer tax.
8.
A Trust Advisor must be independent, as defined in §674(c), from
the beneficiaries of the Trust, and not be related or subordinate, as defined in §672(c), to
the beneficiaries of the Trust. In addition, if the Trust Advisor is an individual, that
individual must be at least THIRTY (30) years old and one of the following: experienced
in business, finance or investments; a CFP; a CPA; or an attorney.
9.
Decisions of the Trust Advisor shall be within the absolute
discretion of the Trust Advisor. A Trust Advisor will be entitled to reimbursement for
expenses and reasonable compensation.
10.
If a person or entity serving as Trustee meets the requirements of a
Trust Advisor in this document, that person or entity will have the powers and discretion
granted by this document to Trustees and to Trust Advisors.
B.
The beneficiaries of a Trust for Descendants shall be the person for whom
the Trust was created (the “primary beneficiary”) and the descendants of that person.
C.
The Trustee shall distribute so much of the net income and principal of the
Trust to or for their benefit each year as is appropriate for health, education, maintenance
and support.
D.
When making decisions regarding the distributions in accordance with the
above standards, the Trustee:
1.
Is directed not to make distributions to the descendants of the
primary beneficiary until the health, education, maintenance and support of the primary
beneficiary are provided for first.
2.
After the primary beneficiary, is directed to give priority to the
children of the primary beneficiary and then to subsequent generations in sequence.
3.
Is directed generally to treat the members of each generation equally,
but may favor one beneficiary over others in the same generation or in different
generations if such action is deemed appropriate by the Trustee because of the health,
support or educational needs of that beneficiary.
4.
Shall take into consideration the manner of living to which the
beneficiary has been accustomed.
5.
May take into consideration or may disregard the income and
principal that may be available to or for the beneficiary from other sources.
6.
Is not required to preserve principal for the descendants of the
primary beneficiary.
E.
Shall have discretion to treat principal distributions as advancements, by
stating in writing that they are advancements. May not make any distribution that would

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discharge a legal obligation of the Trustee, including, but not limited to, any obligation to
support and/or educate a beneficiary.1
F.
If the Trust has a Trust Advisor, the Trustee may request a decision from
the Trust Advisor as to whether it is appropriate for:
1.
The Trustee to make a distribution of income and/or principal to or
for the benefit of one or more beneficiaries for a purpose other than health, education,
maintenance or support, and for such distribution to be treated as an advancement. If
after reviewing the circumstances the Trust Advisor determines that a proposed
distribution is appropriate, the Trustee is directed to make that distribution.
2.
The Trustee to make a distribution of income and/or principal to or
for the benefit of the parent, legal guardian or other person raising a beneficiary to
reimburse that person for lost income and for additional travel, household or other
expenses incurred as a result of raising and caring for the beneficiary. It is intended,
without limiting the generality of the foregoing, to permit the Trust Advisor to direct the
Trustee to pay some portion or all of the cost of such things as a larger automobile or
additional automobile, a larger or more suitable dwelling, the remodeling or renovation of
an existing dwelling and the construction of an addition to an existing dwelling. If after
reviewing the circumstances the Trust Advisor determines that a proposed distribution is
appropriate, the Trustee is directed to make that distribution.
3.
The Trust to be terminated. If after reviewing the circumstances the
Trust Advisor determines that the size of the Trust does not warrant the cost of
continuing, or its administration would be otherwise impractical or inappropriate, the
Trust Advisor shall approve the proposed termination of the Trust and determine if its
assets should be distributed to one or more of: the primary beneficiary, the descendants
of the primary beneficiary, trusts for one or more of them, and in what proportions. The
interests of remainder beneficiaries are to be disregarded when making these
determinations. Upon receiving approval for termination of the Trust and instructions as
to its distribution among the beneficiaries, the Trustee shall terminate the Trust and
distribute its assets in accordance with those instructions. Upon such distribution the
interests of all succeeding beneficiaries, whether vested or contingent, shall be
terminated.
G.
After reaching age EIGHTEEN (18) the primary beneficiary may by Will
or revocable trust direct how the assets of the Trust will pass at the death of the primary
1

Virginia law imposes an obligation on a parent to support his or her children under the age of 18. Va. Code §2061. Discharge of a legal obligation of support is considered a payment to creditors and would therefore be the
exercise of a general power of appointment under IRC §2041(b)(1). If a Trustee has a general power of appointment
over the Trust assets the Trust assets would be included in the Trustee’s estate at death. Not good. This provision
avoids that problem by prohibiting a Trustee from discharging his or her legal obligation of support (clothing,
shelter and food), but leaving open the ability to pay for anything above and beyond legal support – such as private
school, music lessons, soccer clinics, cell phones, toys, etc., etc. Treas. Reg. §20.2041-1(c)(1)(b) states that “a
power of appointment is not a general power if by its terms it is” . . . “expressly not exercisable in favor of the
decedent or his creditors.”

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beneficiary, and after reaching age THIRTY (30) the primary beneficiary may gift Trust
assets during the primary beneficiary’s lifetime by delivering to the Trustee a document
signed by the primary beneficiary, with the signature notarized, directing what assets are
to be gifted and to whom. In order to be effective the documents exercising these rights
must make specific reference to this limited power of appointment, as the power
contained in the JOHN J. SMITH TRUST dated March 15, 2013, as amended, and
comply with the following restrictions:
1.
The primary beneficiary may not direct that the assets pass, directly
or indirectly, to the primary beneficiary making the appointment, his or her estate, the
creditors of either, a charity or any other non-individual. The primary beneficiary may
not direct how a life insurance policy owned by the Trust will pass or name the
beneficiary of a life insurance policy owned by the Trust.
2.
The assets may be given to any other individuals, in any proportions,
and may be in further trust or outright, provided that a Deferrable Retirement Benefit
may only be appointed to an individual who is younger than the primary beneficiary of
the trust created upon Grantor’s death and/or a trust for his or her benefit which qualifies
as a “see-through trust” in accordance with IRS Code and Regs. §1.401(a)(9)-4, A-5(b),
so that the trust beneficiary will qualify as the Designated Beneficiary in accordance with
Regs. §1.401(a)(9)-4, A-5(a).
3.
It is recommended that the primary beneficiary not exercise this
limited power of appointment to create a further power of appointment without first
receiving expert advice, so that the assets are not includible in the primary beneficiary’s
estate unless that is the intended result.
4.
Unless within NINETY (90) days after the death of the primary
beneficiary the Trustee has actual notice of the existence of a Will or revocable trust
exercising this limited power of appointment, the Trustee may, without incurring liability
to an appointee, proceed as if such power had not been exercised; provided however, this
sentence shall not bar the right which an appointee may have to enforce the appointment
against the persons who receive the property.
H.
If the primary beneficiary has not directed by Will or revocable trust how
the assets of his or her Trust will pass at death, those assets will be distributed, per
stirpes, to Trusts for the primary beneficiary’s descendants living at the death of the
primary beneficiary. If there are none, the assets will be distributed, per stirpes, to Trusts
for Grantor’s descendants living at the death of the primary beneficiary. The Trusts shall
be administered in accordance with this Article; provided that a distribution payable to a
Trust for a person for whom a Trust created under this Article is already in existence shall
be added to that Trust. If in accordance with the foregoing distribution provisions a
Deferrable Retirement Benefit would be distributable to a Trust for a beneficiary who is
older than the primary beneficiary of the Trust created upon Grantor’sdeath, those
benefits shall instead be distributed directly to the beneficiary free of trust.

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I.
It is intended that Trusts for Descendants not be includible in the estate of
the primary beneficiary for federal estate tax purposes and the provisions of this
document shall be construed to carry out this intent. Notwithstanding the foregoing,
assets subject to the generation-skipping transfer tax will be included as provided in the
GENERATION-SKIPPING TRANSFER TAX Article of this document.
J.
No Trust shall be liable for the debts of a beneficiary, to transfer,
assignment or encumbrance by a beneficiary, or to the control of a beneficiary’s spouse.
XIII.
TRUSTEE ADMINISTRATIVE PROVISIONS12
A.
If there is no other applicable provision in this document for the
appointment of a Co-Trustee or a successor Trustee, the Trustee then serving may appoint
a Co-Trustee and may appoint a successor Trustee to take office upon the death,
resignation or incapacity of the Trustee then serving.
B.
If there is no other applicable provision in this document for the
appointment of a Co-Trustee or a successor Trustee and the Trustee then serving has
failed, refused or is unable to appoint a Co-Trustee or a successor Trustee, Grantor’s then
living children who are over the age of TWENTY-FIVE (25), acting by
majority/unanimously, will have the right to appoint a Co-Trustee and a successor
Trustee, and may name themselves.
C.
A Trustee may resign by giving thirty (30) days written notice.
D.
Acceptance of trusteeship by a Trustee not a party to this Agreement shall
be evidenced by an instrument in writing.
E.
An individual serving as a Trustee will cease to serve as Trustee upon the
issuance of a certification by a physician that the individual is incapable of managing the
trust. Each individual Trustee, either by formally accepting appointment or by serving as
Trustee, directs health care providers to release to any other Trustee and to any income
beneficiary of the trust for which the person is serving as Trustee (“Information
Recipients”) all of the Trustee’s medical information relevant to a determination whether
the individual is capable of managing the Trust, and if requested will sign releases to that
effect. A Trustee who: (1) fails within thirty (30) days of a written request to undergo an
examination to determine whether the individual is capable of managing the Trust; (2)
fails within ten (10) days of such exam to release the results; or (3) fails within ten (10)
days of a written request to disclose existing medical information, shall be deemed to
have resigned, provided that there is a reasonable basis to make the request and that only
one such request may be made every eighteen (18) months. The cost of the examination
shall be borne by the Trust for which the individual is acting as Trustee.
F.
No bond or security will be required of any Trustee.
G.
While the Grantor is living the Trustee will make annual reports to the
Grantor. After Grantor’s death Trustees will furnish copies of this document to Grantor’s
spouse and Grantor’s children and will make annual reports to Grantor’s spouse and
Grantor’s children. Trustees of the Marital Trust will furnish copies of this document to
Grantor’s spouse and Grantor’s children and will make annual reports to Grantor’s
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spouse and Grantor’s children. Trustees of a Trust for Descendants will furnish the
primary beneficiary with a copy of this document and annual reports. Annual reports will
include a list of assets and liabilities at then-current market value and all receipts and
disbursements for the year, including trustee compensation. Trustees will not be
obligated to provide copies of this document or annual reports or any other information to
any other persons or entities, but may do so in the absolute discretion of the Trustees.
H.
Trustees will not be required to file an inventory or accounts with the
Commissioner of Accounts or any other public official or court.
I.
Individual Trustees will be entitled to reasonable compensation, based on
the duties and responsibilities assumed and the time and effort expended. An individual
Trustee’s fee that does not exceed the published fee schedule of a bank or trust institution
licensed to do business in Virginia shall be conclusively deemed reasonable. Individual
Trustees may be paid fees that exceed such published fees if they demonstrate that the fee
sought is reasonable. Individual Trustees will also be entitled to reimbursement for
accounting, tax preparation, legal and investment management fees as expenses, which
shall not be considered a part of the fees paid to the Trustee. A corporate Trustee shall
receive compensation in accordance with its published fee schedule in effect when the
services are rendered. If both an individual and a corporate fiduciary serve as Trustees,
each will be entitled to a fee as set forth in this paragraph. If two individuals serve as
Trustees, each will be entitled to the fee (ONE-HALF (1/2) of the fee) set forth in this
paragraph.
J.
A Trustee may require as a condition precedent to the payment of a
discretionary distribution that a beneficiary furnish his or her own certification or other
evidence of health, income, assets and need for such distribution, in form and content
satisfactory to the Trustee. The Trustee shall be entitled to rely upon the certification of
the beneficiary and shall not be required to make inquiry as to the accuracy of the facts
certified. The Trustee will not be prohibited from making such inquiry or from relying
on other sources of information.
K.
If a person or entity serving as Trustee meets the definition of a Trust
Advisor in this document, that person or entity will have the powers and discretion
granted by this document to Trustees and to Trust Advisors.
XIV.
TRUSTEE POWERS13
Trustees (except as otherwise expressly stated in this document) have all the powers
and discretion granted by this document, by law, and by Va. Code §§64.2-105 and 64.2777 as in force at the time the action is taken, exercisable in a fiduciary capacity,
including the following:
A.
To buy and sell real estate and all other types of property.
B.
To borrow money and encumber assets to secure such borrowing.
C.
To pay all or any part of joint taxes due on income tax returns filed with
Grantor’s spouse.

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D.
To make distributions in cash or in kind or partly in each, make
distributions of undivided interests in assets and make non pro rata distributions of assets.
E.
To commingle and make investments in common for trusts created by this
document if the interests of the trusts are accounted for separately, and to merge or
consolidate a trust with any other trust having substantially the same provisions.
F.
To divide a trust into two or more separate trusts.
G.
To allocate assets with different characters and/or different income tax
bases to different beneficiaries, and to make tax elections without regard to the relative
interests of beneficiaries even if the result may be an advantage or disadvantage to one or
more beneficiaries; provided however, this authority may not be used to enlarge or shift
any beneficial interest except as an incidental consequence of the discharge of fiduciary
duties. Allocations and elections made in good faith shall not require equitable
adjustments.
H.
To purchase and/or retain assets without regard to the “prudent investor”
rule, or to a requirement to hold productive assets (except as to the Marital Trust) or to
diversify investments.
I.
To change the situs of any trust created by this document to a different state
or country (and to the extent necessary or appropriate, move the trust assets) if the
Trustee believes it to be in the best interests of the trust and the beneficiaries. The
Trustee may elect that the law of the new jurisdiction will govern the trust to the extent
necessary or appropriate. The Trustee shall not be required to provide notice of such
change to beneficiaries under any provision of the Virginia Uniform Trust Code or the
law of any other state or country governing the administration of the trust. No such
change in situs or governing law may be made if it would increase the class of
beneficiaries, cause an asset passing into the Marital Trust to not qualify for the marital
deduction or give a beneficial interest or economic benefit to a person not already a
beneficiary.
J.
A Trust Advisor may authorize the Trustee to amend a trust created by this
document, but only if the amendment is required to insure that the trust qualifies as a
“see-through trust” in accordance with IRS Code and Regs. §1.401(a)(9)-4, A-5(b), so
that the trust beneficiary will qualify as Grantor’s Designated Beneficiary in accordance
with Regs. §1.401(a)(9)-4, A-5(a) or to meet other tax planning objectives. No
amendment may be made that would increase the class of beneficiaries or give a
beneficial interest or economic benefit to a person not already a beneficiary.
XV.
GENERATION-SKIPPING TRANSFER TAX PROVISIONS14
The following powers are granted to the Trust Advisor, in addition to those
granted in other portions of this document:
A.
The Trust Advisor may divide a trust into two separate trusts, one exempt
from generation-skipping transfer tax and the other subject to generation-skipping
transfer tax.

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B.
The primary beneficiary of a trust that is subject, in whole or in part, to
generation-skipping transfer tax will have the power, with the consent of the Trust
Advisor, to withdraw, during the beneficiary’s lifetime, any part or all of the assets in
such trust that would otherwise be subject to the generation-skipping transfer tax.
C.
The Trust Advisor need not consider the advisability of dividing a trust or
consenting to a withdrawal until the primary beneficiary requests the consent in writing.
The Trust Advisor may but need not give consent until the primary beneficiary delivers a
draft of the proposed consent to the Trust Advisor along with an analysis of the pros and
cons of consenting and calculations of the tax and substantive effects of the proposed
consent. Good faith determinations of the Trust Advisor whether or not to consent to a
withdrawal shall bind all persons interested in the trust.
XVI.
LIMITATION OF POWERS15
A.
Notwithstanding anything in this document to the contrary, any provision
of this document and any power or discretion granted to a Trustee by this document, or
now or hereafter conferred upon a Trustee generally, shall be void to the extent that it
may be construed or administered after the death of the Grantor so as to:
1.
Cause Grantor’s estate to lose the tax benefit afforded by the marital
deduction with respect to an outright gift to Grantor’s spouse, or that portion of qualified
terminable interest property (QTIP) which is elected to qualify for the marital deduction.
2.
Cause that portion of the Marital Trust not elected to qualify for the
marital deduction to be included in the estate of Grantor’s spouse for federal estate tax
purposes.
3.
Permit a Trustee to make a discretionary distribution that is not
limited by an ascertainable standard related to health, education, maintenance or support,
unless approved by a Trust Advisor.
4.
Permit a Trustee to make a discretionary distribution that discharges
a legal obligation of the Trustee, including but not limited to an obligation to support
and/or educate a beneficiary.
5.
Permit a payment to or for the benefit of any person if such payment
will both discharge a legal obligation and, on account of such discharge, cause there to be
imposed a federal tax on generation-skipping transfers.
B.
If a limitation contained in this document would prevent the exercise of a
power or discretion by a Trustee, but it could be exercised without violating the
restrictions contained in this Article by that Trustee acting jointly with an independent
Trustee or with an adverse Trustee, or by an Trust Advisor acting alone or an adverse
Trustee acting alone, then the Trustee may appoint such a Trustee or Trust Advisor to
exercise that power or discretion.
XVII.
MISCELLANEOUS16
A.
In the event that Grantor’s spouse and Grantor die under circumstances
where there is no sufficient evidence that they died otherwise than simultaneously, it shall
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be conclusively presumed in determining the distribution of property, and whether or not
distribution is controlled by the terms of this document, that Grantor’s spouse survived
Grantor. Except for Grantor’s spouse, a person who is not established by clear and
convincing evidence to have survived an event by 120 hours shall be deemed to have
predeceased the event.
B.
“Descendants” means children, grandchildren, great-grandchildren, etc.,
and includes persons adopted prior to reaching age twenty-one (21) if they were born in a
year after the birth of Grantor’s oldest descendant living at Grantor’s death.
“Descendants” does not include children born out of wedlock unless the parent
voluntarily provides parental care and/or support for the child or recognizes the child for
inheritance purposes in writing.
[There are two issues here. First, a child who is legally adopted in a Court
proceeding (as opposed to a stepchild, who has no legal status for inheritance purposes) is
treated for inheritance purposes the same as a natural child. The foregoing language
simply prohibits someone from adopting an adult.
Second, under current Virginia law a person born out of wedlock will
inherit by, through or from the mother if the mother has no Will. Such a child will also
inherit by, through or from the father if the father has no Will and the parents participated
in a marriage ceremony (valid or invalid) before or after the birth, or paternity is
established by clear and convincing evidence as set forth in the Virginia statutes.
You may change the above results and make your own choice to include or
exclude stepchildren, adopted children and/or children born out of wedlock.]
C.
A gift to descendants “per stirpes” means the gift is divided equally among
the members of the first generation of descendants in which at least one descendant is
living at the specified time, with each living member taking one share and any deceased
member’s child (or children in equal shares) taking the share to which the deceased
member would have been entitled, and likewise down the generations. No share shall be
allocated for a deceased child leaving no descendant surviving at the specified time.
[If no children are surviving the assets are divided equally among the
grandchildren.]
D.
Unless the context otherwise requires, income beneficiaries include
beneficiaries then entitled or permitted (whether in the discretion of the Trustee or not) to
receive income.
E.
“Trustee” means “Trustees” if appropriate in the context of its usage.
F.
When discretion is granted, that discretion does not authorize action beyond
the bounds of a reasonable judgment. When “absolute” discretion is granted, action
beyond the bounds of a reasonable judgment may be taken as long as the action is not
dishonest, motivated other than by the accomplishment of the purposes of this document,
or arbitrary without an exercise of judgment.
G.
Health, education, maintenance and support shall be construed to be
ascertainable standards for federal estate and gift tax purposes such that the exercise,
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release or lapse of a power limited by such standard will not be taxable for federal estate
or gift tax purposes.
H.
“Retirement Benefit” means a trust’s interest in one of the following types
of assets if payable to the trust as beneficiary or owned by the trust: a qualified or
nonqualified annuity; a benefit under a qualified or nonqualified plan of deferred
compensation; an account in or benefit payable under a pension, profit-sharing, stock
bonus, or other qualified retirement plan; an individual retirement account or trust; and
benefits under a plan that is established under IRC §408, §408A, §457, §403, §401, or
similar provisions of the Internal Revenue Code.
I.
“Deferrable Retirement Benefit” means a Retirement Benefit that is subject
to the Minimum Distribution Rules and as to which a designated beneficiary of the
Retirement Benefit has the option (under the terms of the plan or by transferring the
Retirement Benefit to an inherited IRA) to take distributions in annual installments over
the life expectancy of the oldest trust beneficiary. Benefits payable under a plan that is
not subject to the Minimum Distribution Rules (such as, under current law, a
“nonqualified deferred compensation plan”) are not Deferrable Retirement Benefits.
J.
Deferrable Retirement Benefits shall not be used to pay Grantor’s debts,
taxes, administration expenses or other claims against Grantor’s estate; nor for estate,
inheritance or other transfer taxes due on account of Grantor’s death, unless there are no
other assets with which to pay such obligations.
K.
After September 30 of the calendar year following the calendar year of
Grantor’s death, Deferrable Retirement Benefits may not be distributed to Grantor’s
estate, a charity or any other non-individual beneficiary, but only to an individual or to a
trust which is a “see-through trust” in accordance with the IRS Code and Regs., so that a
trust beneficiary qualifies as the Designated Beneficiary, unless under the distribution
plan in this document there are no individuals or “see-through trusts” eligible to receive
such benefits. This prohibition shall not apply to a gift or expense which is expressly
directed to be funded with Deferrable Retirement Benefits by this document.
L.
If Grantor’s spouse survives Grantor, and this Trust is the beneficiary of
Deferrable Retirement Benefits, those benefits, other than Roth IRAs, shall be allocated
or distributed first to the portion of the Marital Trust elected as QTIP, then to the portion
of the Marital Trust not elected as QTIP. If this Trust is the beneficiary of a Roth IRA, it
shall be allocated or distributed first to the portion of the Marital Trust not elected as
QTIP, then to the portion of the Marital Trust elected as QTIP.
M.
If Grantor’s spouse predeceases Grantor and a trust created by this
document is subject to generation-skipping transfer tax, that trust shall be funded to the
maximum extent possible with Deferrable Retirement Benefits, other than Roth IRAs,
which shall be allocated or distributed to individual beneficiaries or trusts which: 1) are
not subject to generation-skipping transfer tax; and 2) are “see-through trusts” in
accordance with the IRS Code and Regs., so that each trust beneficiary qualifies as the
Designated Beneficiary.
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N.
Charitable gifts shall be funded not later than September 30 of the year
following the Grantor’s death to the maximum extent possible with Deferrable
Retirement Benefits.2
O.
If a charity designated as a beneficiary has been misnamed, the Trustee
shall have authority to determine the intended charity. If a condition of a gift cannot be
carried out by the charity, the Trustee may modify or remove the condition in order to
permit the gift to be made. If a named charity is no longer in existence at Grantor’s
death, the Trustee is directed to select an alternate charitable beneficiary with a similar
mission to receive the gift. The Trustee has absolute discretion to make these decisions.
P.
If this Agreement has been revoked, but at the Grantor’s death an insurance
policy or any other assets are payable to the Trustee or the Trust, such insurance proceeds
or other assets shall be paid to Grantor’s estate.
XVIII. WAIVER OF THE RULE AGAINST PERPETUITIES17
The rule against perpetuities shall not apply to this Trust or to any of the following
created by this document: any trust, interest created in property held in trust, power of
appointment over property held in a trust created by this document or power of
appointment over property granted by this document.
XIX.
IN TERROREM
If a person who would receive a benefit as a result of Grantor’s death (outright or
as the beneficiary of a trust) directly or indirectly contests the validity of any provision of
Grantor’s Will or of this Trust, that person and all of that person’s descendants will be
treated as having predeceased the Grantor and will forfeit all benefits that would have
passed to that person as a result of Grantor’s death, whether by reason of Grantor’s Will,
this Trust, a beneficiary designation or otherwise. This provision will not apply to a suit
for construction or for aid and direction.
XX.
GOVERNING LAW
This document shall be governed and construed according to the laws of Virginia.
WITNESSES:

GRANTOR:

____________________________

______________________________ (SEAL)
JOHN J. SMITH

____________________________

2

The Trustee should satisfy such charitable bequests to comply with Treasury Regulation
§1.401(a)(9)-4, A-3 and A-4 in order to preserve the Trust as a “see-through trust.” Adapted
from Natalie Choate, Form 4.2, Appendix B, Life and Death Planning for Retirement Benefits,
7th Edition, 2011.

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TRUSTEES:
______________________________ (SEAL)
JOHN J. SMITH
______________________________ (SEAL)
MARY M. JONES
COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
The foregoing document was acknowledged before me on March _____, 2013 by
JOHN J. SMITH as Grantor and Trustee.
_______________________________________
Notary Public
COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
The foregoing document was acknowledged before me on March _____, 2013 by
MARY M. JONES as Trustee.
_______________________________________
Notary Public
2013-19 Revocable Trust for married client (marital trust created).docx
3/9/13 wlb

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TRUST OF JOHN J. SMITH
ENDNOTES

1

FAMILY MEMBERS. Reciting the names of family members and defining their
relationships is important to avoid ambiguity in the later sections of the Trust.
2
RESERVED RIGHTS. These rights assure that the Trust is revocable and subject to
your complete control during your lifetime, even if you appoint someone else as Trustee.
3
TRUSTEES. This mainly covers Trustees during your lifetime and at death, when the
Trustee will wind up this phase of the Trust and distribute its assets to the successor trust
or trusts.
4
DISTRIBUTION PROVISIONS DURING GRANTOR’S LIFETIME. You use the
income and principal titled in the name of the Trust just as you currently use income and
principal titled in your name. If you resign as Trustee in favor of the successor Trustee,
you have the power to direct the Trustee how income and principal are to be used. If you
become incompetent the successor Trustee will take over and make distributions during
your lifetime as provided in this Article.
5
GIFTS DURING GRANTOR’S LIFETIME. This provision permits the financial
Agent to use trust funds to make gifts when there are no assets outside of the Trust which
are appropriate to use for gifts.
6
DEBTS, TAXES AND OTHER CHARGES. These provisions allocate taxes and
expenses among the beneficiaries.
7
PETS. Your Executor will be charged with the duty of placing your pets with a family
if the pets are in good health or can be restored to good health. If the pets cannot be
restored to good health and euthanasia is the humane alternative, the pets will be
euthanized.
8
GIFTS OF TANGIBLE PROPERTY.
In law, all property is divided into two categories, real property and personal
property. Real property includes land and buildings, and everything else is personal
property.
Personal property is again divided into two categories, tangible and intangible.
Tangible property includes things with physical existence, such as furniture,
clothing, jewelry, automobiles, etc.
9.
DISPOSITION OF TRUST UPON GRANTOR’S DEATH. If your spouse is
surviving all the assets pass to your spouse/into the Marital Trust. If your spouse is not
surviving, all the assets pass into individual trusts for your children.
10
MARITAL TRUST (QTIP Trust). Most of the Marital Trust provisions are required
by the tax law. All of the income must be paid to your spouse, but the Trustee’s authority
to distribute principal to your spouse is optional. The Marital Trust may be divided into
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two trusts for estate tax purposes. One would contain the amount exempt from estate tax
at your death, which would also be exempt from estate tax at your spouse’s subsequent
death. The other would contain the non-exempt amount which was elected to be
deducted on your estate tax return and included in your spouse’s estate upon your
spouse’s subsequent death.
11.
TRUSTS FOR DESCENDANTS. The children do not inherit outright, but in trust.
Each child has a separate Trust, controls the management and investment of the assets in
the Trust, and as Trustee is authorized to make income and principal distributions to pay
for his or her health, support and educational expenses and those of his or her
descendants.
Keeping the property in trust helps to preserve it from creditors and disaffected
spouses. It also keeps the trust assets (subject to certain limits) out of the beneficiary’s
estate, which could result in an enormous tax saving to grandchildren.
12
TRUSTEE ADMINISTRATIVE PROVISIONS. These provisions deal with issues
related to management, Trustee fees, etc.
13
TRUSTEE POWERS. These Code sections contain pages and pages of detailing very
broad and flexible powers which may be exercised by Trustees, which are incorporated
into this document by reference. The additional powers which are included are intended
to save time and money and give even more flexibility to the fiduciaries.
14.
GENERATION-SKIPPING TRANSFER TAX PROVISIONS. If a child dies after
creation of a trust but prior to receiving his or her full distribution from the trust, and that
distribution instead would pass to the deceased child’s children, the termination of the
child’s interest and the transfer of the distribution to the grandchildren could be taxable at
40% as a generation-skipping transfer. This provision attempts to avoid or minimize the
tax.
[If trusts are for beneficiaries who are not Testator’s children] If a beneficiary who is a
generation younger than you dies after creation of a trust but prior to receiving his or her
full distribution from the trust, and that distribution instead would pass to the deceased
beneficiary’s children, the termination of the beneficiary’s interest and the transfer of the
distribution to the next generation of beneficiaries could be taxable at 45% as a
generation-skipping transfer. This provision attempts to avoid or minimize the tax.
15
LIMITATION OF POWERS. The most important deduction available against estate
taxes is the marital deduction. This “savings clause” attempts to insure that no provisions
of this document inadvertently jeopardize the tax planning in the document.
16
MISCELLANEOUS. These definitions help assure that there is no confusion or
ambiguity about who you intend to be your beneficiaries and how and under what
circumstances they are to receive property.

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17

RULE AGAINST PERPETUITIES. This rule prohibits any trust from lasting longer
than a “life or lives in being” at the time of your death, plus 21 years. Virginia now
permits the waiver of this rule, which is what this language does.

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AMENDMENT AND RESTATEMENT
OF THE
JOHN J. SMITH TRUST
Dated MARCH 15, 2013

Effective as of
March 15, 2013

William L. Babcock, Jr. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
703-518-8400
wlb@willtrustestate.com

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TABLE OF CONTENTS
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.

FAMILY MEMBERS .................................................................................................. 1
RESERVED RIGHTS .................................................................................................. 1
TRUSTEES OF THE JOHN J. SMITH TRUST ........................................................ 1
DISTRIBUTION PROVISIONS DURING GRANTOR’S LIFETIME ................... 2
GIFTS DURING GRANTOR’S LIFETIME .............................................................. 2
DEBTS, TAXES AND OTHER CHARGES.............................................................. 2
PETS .............................................................................................................................. 3
GIFTS OF TANGIBLE PROPERTY AT GRANTOR’S DEATH ........................... 4
CASH GIFTS AT GRANTOR’S DEATH.................................................................. 5
DISPOSITION OF TRUST REMAINDER UPON GRANTOR’S
DEATH .......................................................................................................................... 5
XI.
MARITAL TRUST (QTIP TRUST) ........................................................................... 7
XII.
FAMILY TRUST........................................................................................................ 10
XIII. TRUSTS FOR DESCENDANTS .............................................................................. 13
XIV. TRUSTEE ADMINISTRATIVE PROVISIONS ..................................................... 16
XV.
TRUSTEE POWERS.................................................................................................. 18
XVI. GENERATION-SKIPPING TRANSFER TAX PROVISIONS ............................. 19
XVII. LIMITATION OF POWERS ..................................................................................... 20
XVIII. MISCELLANEOUS ................................................................................................... 20
XIX. WAIVER OF THE RULE AGAINST PERPETUITIES ......................................... 23
XX.
IN TERROREM .......................................................................................................... 23
XXI. GOVERNING LAW................................................................................................... 23

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AMENDMENT AND RESTATEMENT OF THE
JOHN J. SMITH TRUST DATED MARCH 15, 2013
This Amendment and Restatement effective on March _____, 2013, by and
between JOHN J. SMITH, Grantor, and JOHN J. SMITH and MARY M. JONES, jointly
and severally, Trustees (sometimes referred to in the singular). Either Trustee may act
alone.
WHEREAS, the Trust was originally created on March 15, 2013; and
WHEREAS, the Grantor reserved the right to amend the Trust; and
WHEREAS, the Trust provides that to be effective an amendment must be made
in writing but need not be signed by the Trustee unless the amendment changes the duties
or compensation of the Trustee; and
WHEREAS, the Grantor is now amending and restating the Trust in full in this
document.
The Grantor amends the Trust by canceling the terms set forth in the original Trust
document dated March 15, 2013 and in any amendments and restatements made prior to
this date, and restating the terms of the Trust in full in this document.
The Grantor and the Trustees agree as follows:
I.
FAMILY MEMBERS1
A.
MARY M. JONES is Grantor’s spouse. Grantor has two children, JOHN J.
SMITH, JR. and MEREDITH L. SMITH. References to Grantor’s children in this
document are to them and any children subsequently born to or adopted by Grantor
References to Grantor’s descendants are to Grantor’s children and their descendants.
Grantor’s spouse has two children from a previous marriage, BRADFORD JONES and
ELIZABETH JONES.
II.
RESERVED RIGHTS2
This Agreement and the Trust are revocable, and may be amended or revoked, in
whole or in part, by Grantor. To be effective an amendment or revocation must be made
in a writing signed by Grantor. No signature or consent need be obtained from the
Trustee, except that no amendment that changes the duties or compensation of the
Trustee shall bind the Trustee until accepted in writing by the Trustee.
III.
TRUSTEES OF THE JOHN J. SMITH TRUST3
A.
JOHN J. SMITH and MARY M. JONES are the Trustees. Their power and
discretion may be exercised and discharged by them acting jointly or by either of them
acting alone.
B.
Upon the resignation, incapacity or death of one of them, the other will
continue as sole Trustee with full authority.
C.
Upon the resignation, incapacity or death of both of them, JOHN
RELIABLE will become the Trustee.
D.
Upon the resignation, incapacity or death of both of them, Grantor’s
children will become the Trustees. Their power and discretion must be exercised and

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discharged by them acting jointly, and all checks and other documents must be signed by
both of them. Upon the resignation, incapacity or death of one of them while serving as
Trustee, the other will continue as sole Trustee, with full authority.
E.
Upon the incapacity or death of JOHN J. SMITH and MARY M. JONES,
___________________ will have the power to remove the Trustee and appoint a
successor Trustee, contingent upon his/her having obtained, prior to his removal of the
Trustee then serving, a written agreement to serve as successor Trustee by a bank or trust
company licensed to conduct trust business in Virginia.
IV.
DISTRIBUTION PROVISIONS DURING GRANTOR’S LIFETIME4
A.
The Trustee shall pay out or retain Trust income and principal as directed
by the Grantor.
B.
If the Grantor is declared incapable of managing the Trust the Trustee shall
pay so much of the Trust income and/or principal to or for the benefit of Grantor and
Grantor’s spouse and any dependents of the Grantor as is appropriate to provide for
health, education, maintenance and support, taking into account their accustomed manner
of living and the income and principal available to them from other sources.
V.
GIFTS DURING GRANTOR’S LIFETIME5
A.
The Trustee shall, at the oral or written direction of the Grantor, distribute
principal from the Trust to third parties as gifts.
B.
In addition, the Trustee shall, if Grantor’s Attorney-in-Fact (“Agent”) has
been granted gifting authority in the Durable Financial Power of Attorney appointing the
Agent and has requested a principal distribution for the purpose of making gifts in
accordance with that gifting authority:
1.
Distribute principal from the Trust to the Agent for that purpose, or
2.
Distribute principal directly to the donee as a gift.
C.
The Trustee may rely upon the representations of the Agent as to the gifting
authority of the Agent and need not monitor the disposition of a gift if it is distributed to
the Agent rather than to the donee.
VI.
DEBTS, TAXES AND OTHER CHARGES6
A.
Upon the death of the Grantor the Trust will become irrevocable.
B.
If Grantor’s probate estate (excluding income) is insufficient to pay written
charitable pledges, funeral expenses, claims against the estate, expenses of administering
the estate, death taxes chargeable to the estate and pre-residuary legacies and devises
given by Will, the Trustee will make available to Grantor’s Executor or pay directly such
sums as the Executor certifies are due and the Trustee determines are payable under the
terms of this document. The Trustee may rely on the determination of Grantor’s
Executor as to the amount and the party to be paid.
C.
If Grantor’s spouse survives Grantor, funeral expenses, debts and expenses
of administration of Grantor’s estate and of this Trust that are allowed as estate tax
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deductions will be charged against the Marital Gift. Such obligations that are not allowed
as estate tax deductions will be charged against the Family Gift. If Grantor’s spouse does
not survive Grantor, such obligations will be charged against the general assets of the
Trust before distributions to beneficiaries or successor trusts.
D.
If Grantor’s spouse survives Grantor, transfer, estate, inheritance,
succession and other death taxes payable by reason of Grantor’s death in respect of
property passing under this Trust (not including generation-skipping transfer tax on a
direct skip, which will be charged against the distribution to the beneficiary or successor
trust that causes that tax to be payable) will be charged first against the Family Gift, and
if insufficient then against the Marital Gift. If Grantor’s spouse does not survive Grantor,
such taxes will be charged against the general assets of the Trust before distributions to
beneficiaries or successor trusts.
E.
Unless there are no other trust funds available, such taxes will not be
charged against a gift which qualifies for the estate tax charitable deduction.
F.
Property received by this Trust or by a trust created by this Trust as a result
of Grantor’s death shall be considered passing under this Trust. Such taxes in respect of
property not passing under this Trust, payment of which is not directed by this Trust or
Grantor’s Will or another document signed by Grantor, shall be apportioned against and
paid by the persons in possession of that property or benefited thereby, in the manner
provided by the Virginia apportionment statutes. Beneficiaries of income tax deferred
retirement benefits may use other funds of theirs rather than those in such accounts to pay
any such taxes.
G.
If Grantor’s spouse survives the Grantor the DEBTS, TAXES AND
OTHER CHARGES shall be allocated to the Family Gift and the Marital Gift after
division of the Trust. [this minimizes the marital gift if the values increase, thereby
maximizing the amount passing into an exempt trust for estate and GST tax planning
purposes] [USE ONLY WITH FRACTIONAL]
BE CAREFUL IF THERE IS A LARGE RETIREMENT ACCOUNT PASSING
DIRECTLY TO BENEFICIARIES.
IT WOULD HAVE TO PAY ITS
PROPORTIONATE SHARE OF THE TAX, WHICH WOULD CAUSE GREATER
INCOME TAX. PAYMENT FROM OTHER ASSETS WOULD NOT TRIGGER
INCOME TAX.
VII.
PETS7
A.
If Grantor’s spouse does not survive Grantor, Grantor directs the Trustee
under this document to place any pet Grantor owns at the time of Grantor’s death with
IRVING COLLIER. If IRVING COLLIER fails to survive Grantor, or is unable or
unwilling to accept a pet Grantor owns, Grantor directs the Trustee to place that pet with
the first of the following individuals who is available and willing to accept that pet:
THOMAS RUTHERFORD. If none of the individuals Grantor has listed in this
Paragraph A are able or willing to accept that pet, Grantor directs the Trustee to place

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that pet with a responsible individual or family (that is, in a private, non-institutionalized
setting) where the pet will be cared for in a reasonable and loving manner.
B.
Prior to initiating such efforts to place Grantor’s pet, Grantor directs the
Trustee to consult a veterinarian to ensure that the pet is or can be brought into generally
good health. A pet that cannot be restored to generally good health or whose suffering
cannot be alleviated shall be euthanized and the remains shall be disposed of in the
discretion of the Trustee.
C.
The individual or family who receives a pet under this Article will also
receive a cash gift of FIVE THOUSAND DOLLARS (5,000) per pet. Grantor requests
but does not require that the money be used for the care and maintenance of Grantor’s
pet. A written receipt given by the individual who accepts Grantor’s pet and the cash gift
shall be a full discharge of the Trustee.
D.
The cost of veterinary services, temporary boarding, placement,
transportation and other expenses of caring for a pet during the administration of
Grantor’s estate, or to otherwise carry out the purposes of this Article, shall be paid as a
cost of administration of Grantor’s estate.
VIII.
GIFTS OF TANGIBLE PROPERTY AT GRANTOR’S DEATH8
Upon Grantor’s death the Trustee is directed to distribute furniture, furnishings,
personal effects, automobiles and other tangible personal property as follows:
A.
If Grantor has left a written list of tangible personal property to be
distributed at Grantor’s death, and that property is not otherwise specifically bequeathed
in a Will or codicil of Grantor, that list shall be given effect to the extent it describes
tangible personal property and intended recipients with reasonable certainty and is signed
by Grantor, even though it does not satisfy the requirements for a Will or codicil.
B.
The Trustee is directed to distribute the rest of Grantor’s furniture,
furnishings, personal effects, automobiles and other tangible personal property to
Grantor’s spouse.
C.
If Grantor’s spouse does not survive Grantor, the Trustee is directed to
distribute the rest of Grantor’s furniture, furnishings, personal effects, automobiles and
other tangible personal property (in kind, or if the Trustee determines that in kind
distribution is not appropriate for some or all of that property, then after sale), in as nearly
equal portions as deemed practicable by the Trustee, to those of Grantor’s children who
survive Grantor.
D.
The Trustee shall have discretion to deliver to a relative, friend or guardian
of a minor child some portion or all of said property left to that child, to be held for the
use and benefit of the child and later distribution. A written receipt given by such
relative, friend or guardian shall be a full discharge of the Trustee.
E.
Valuations and divisions in kind shall be in the discretion of the Trustee,
whose decisions shall be final. Expenses of distribution (including storing, handling,
packing, insuring and shipping) shall be paid as a cost of administration.

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IX.
CASH GIFTS AT GRANTOR’S DEATH
Upon Grantor’s death, the Trustee shall make the following distributions of cash
cash and waive the requirement that interest be paid on the gifts if they are not paid
within 12 months of death:
A.
________ THOUSAND DOLLARS ($ ,000) to _____________, per
stirpes. If he/she predeceases the Grantor and is not survived by descendants, this gift
shall be distributed ___________.
B.
________ THOUSAND DOLLARS ($ ,000) to _____________. If he/she
predeceases the Grantor, this gift shall be distributed ____________.
C.
If as a result of Grantor’s death CHARITY does not receive TEN
THOUSAND DOLLARS ($10,000) (from any source, but specifically including an IRA
or qualified plan), the Trustee is directed to distribute to the CHARITY as much as is
needed to make the total received by the CHARITY equal TEN THOUSAND
DOLLARS ($10,000).
D.
If an amount less than what is specified above for a beneficiary passes to
that beneficiary outside of this Trust as a result of Grantor’s death (from any source, but
specifically including an IRA or qualified plan), the Trustee is directed to distribute the
amount of any deficiency to that beneficiary. [MAKE SURE THE CLIENT SIGNS A
RETIREMENT ACCOUNT BENEFICIARY DESIGNATION FORM GIVING THE
SAME CASH AMOUNT TO THE BENEFICIARY.]
DISPOSITION OF TRUST REMAINDER UPON GRANTOR’S DEATH9
Upon Grantor’s death:
A.
Trust Assets are defined as the assets of the Trust at Grantor’s death, plus
other assets received by the Trustee as a result of Grantor’s death Trust Assets are
defined as the assets belonging to this revocable Trust at Grantor’s death, plus assets
passing to this Trust as a result of Grantor’s death, and that portion of direct pay assets
passing to charitable beneficiaries named in this document as a result of Grantor’s death,
less GIFTS OF TANGIBLE PROPERTY AT GRANTOR’S DEATH and GIFTS OF
CASH AT GRANTOR’S DEATH, less GIFTS OF TANGIBLE PROPERTY AT
GRANTOR’S DEATH, less gifts related to Grantor’s pets, less CASH GIFTS AT
GRANTOR’S DEATH.
B.
Upon Grantor’s death, if Grantor’s spouse survives the Grantor, the Trustee
will divide the Trust Assets into the Marital Gift and the Family Gift.
C.
Debts, expenses and taxes shall be allocated to the Family Gift and the
Marital Gift after division of the Trust Assets. [this minimizes the marital gift if the
values increase, thereby maximizing the amount passing into an exempt trust for estate
and GST tax planning purposes] [USE ONLY WITH FRACTIONAL. SIMILAR
LANGUAGE ALSO APPEARS IN DEBTS, ETC. DECIDE WHETHER TO RETAIN
IN BOTH PLACES.]
X.

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D.
The Marital Gift will be a fractional share of the Trust Assets. The
numerator of the fraction will equal the smallest value of the Trust Assets that, if allowed
as a federal estate tax marital deduction, would result in the least possible federal estate
tax and state death tax being payable by reason of Grantor’s death. The denominator of
the fraction will equal the value of the Trust Assets. In establishing the values for the
numerator and denominator the values finally determined in the federal estate tax
proceeding relating to Grantor’s estate will be used.
E.
If the Marital Gift has a value at the time of Grantor’s death of less than
FIVE HUNDRED THOUSAND DOLLARS ($500,000), the Marital Gift will be
distributed outright to Grantor’s spouse. If the Marital Gift has a value at the time of
Grantor’s death of FIVE HUNDRED THOUSAND DOLLARS or more, the Marital Gift
will be administered in accordance with the terms of the MARITAL TRUST Article of
this document.
F.
The Family Gift will consist of the remaining fractional share of the Trust
Assets. Any assets of the Trust at Grantor’s death, or received by the Trustee as a result
of Grantor’s death, which are not included in Grantor’s gross estate for federal estate tax
purposes, will be added to the Family Gift. The Family Gift will be administered in
accordance with the terms of the FAMILY TRUST Article of this document.
G.
Property may be allocated to the Marital Gift and the Family Gift in cash
and/or in kind, in whole or in part, non-pro rata, in installments or at one time, and for
such purposes any asset distributed in kind will be valued at its date of distribution value.
To the extent possible, the Trustee will not allocate to the Marital Gift any assets upon
which a foreign death tax is payable. The Trustee may not fund the Family Trust with
Deferrable Retirement Benefits unless there are no other assets that can be used to fund
the Family Trust. The Trustee may allocate other assets as the Trustee deems to be in the
best interests of the beneficiaries.
H.
Net income (including realized capital gain) received on Trust Assets, when
distributed, will be allocated proportionately to the Marital and Family Gifts.
I.
The division of the Trust Assets will first be determined by the Trustee in
accordance with the provisions of this Article. Then if there has been a disclaimer
causing additional property to pass under the Family Gift, it will be permitted to increase
the size of the Family Gift beyond the amount that would otherwise pass under the
formula. If for any reason other than as set forth in the preceding sentence the Family
Gift is over-funded (the assets passing to it exhaust the exemption equivalent amount and
would cause federal estate taxes to be payable) and reducing the Family Gift would
reduce the federal estate tax, the Trustee is directed to pay out of the Family Gift into the
Marital Gift an amount sufficient to reduce Grantor’s federal estate tax to the lowest
possible amount.
J.
If Grantor’s spouse does not survive the Grantor, the Trustee will distribute
the assets belonging to the Trust at Grantor’s death, plus other assets received by the
Trustee as a result of Grantor’s death, less DEBTS, TAXES AND OTHER CHARGES,
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less GIFTS OF TANGIBLE PROPERTY AT GRANTOR’S DEATH, less gifts related to
Grantor’s pets, less CASH GIFTS AT GRANTOR’S DEATH, per stirpes, to Trusts for
the Grantor’s descendants living on the date of Grantor’s death. The Trusts will be
administered in accordance with the TRUSTS FOR DESCENDANTS Article of this
document.
XI.
MARITAL TRUST (QTIP TRUST)10
A.
Trustees and Trust Advisors.
1.
Grantor’s spouse will be the Trustee.
2.
At any time after Grantor’s death Grantor’s spouse may appoint a
Trustee to serve upon the resignation, incapacity or death of Grantor’s spouse, or to serve
initially if Grantor’s spouse declines to serve.
3.
If Grantor’s spouse does not appoint a successor Trustee, then upon
the declination of Grantor’s spouse to serve as Trustee, or upon the resignation,
incapacity or death of Grantor’s spouse while serving as Trustee, MARY
DEPENDABLE will become the Trustee.
4.
Grantor’s spouse may remove Trustees and appoint one or more
successor Trustees, including herself, making such an appointment effective at any time,
including upon the resignation, incapacity or death of any Trustee.
5.
If there are no other applicable provisions in this Article for the
appointment of a successor Trustee, and Grantor’s spouse fails, refuses or is unable to
appoint a successor Trustee, Grantor’s then living children who are over the age of
THIRTY (30), acting by majority/unanimously, will have the right to appoint one or
more successor Trustees, including one or more of themselves.
6.
The Trustee may appoint a Trust Advisor to make those decisions
regarding distributions that are reserved to the Trust Advisor by this Article. The Trustee
must appoint a Trust Advisor if the Trust or a portion of the Trust may be subject to
generation-skipping transfer tax.
7.
A Trust Advisor must be independent, as defined in §674(c), from
the beneficiaries of the Trust, and not be related or subordinate, as defined in §672(c), to
the beneficiaries of the Trust. In addition, if the Trust Advisor is an individual, that
individual must be at least THIRTY (30) years old and one of the following: experienced
in business, finance or investments; a CFP; a CPA; or an attorney.
8.
Decisions of the Trust Advisor shall be within the absolute
discretion of the Trust Advisor. A Trust Advisor will be entitled to reimbursement for
expenses and reasonable compensation.
B.
Commencing with the date of Grantor’s death, the Trustee is directed to
pay to Grantor’s spouse the net income of the Marital Trust, in quarterly or other
convenient installments (but at least annually), for and during the life of Grantor’s
spouse.
C.
The Trustee is authorized to pay to Grantor’s spouse so much of the
principal of the Marital Trust as is appropriate for health, education, maintenance and
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support, taking into consideration the manner of living to which Grantor’s spouse has
been accustomed, the income received from the Marital Trust and the income and
principal that may be available to or for Grantor’s spouse from other sources. The
Trustee is directed to disregard the interests of the remainder beneficiaries in making
such decisions.
D.
If there is a Trust Advisor for the Marital Trust, the Trustee may request a
decision from the Trust Advisor as to whether it is appropriate for:
1.
The Trustee to make a distribution of principal to Grantor’s spouse
for a purpose other than health, education, maintenance or support. The Trust Advisor is
directed to disregard the interests of the remainder beneficiaries in making such
decisions. If after reviewing the circumstances the Trust Advisor determines that a
proposed distribution is appropriate, the Trustee is directed to make that distribution.
2.
The Marital Trust to be terminated. If after reviewing the
circumstances the Trust Advisor determines that the size of the Marital Trust does not
warrant the cost of continuing, or its administration would be otherwise impractical or
inappropriate, the Trust Advisor shall approve the proposed termination. The Trust
Advisor is directed to disregard the interests of the remainder beneficiaries when making
this decision. Upon receiving approval for termination of the Trust its assets shall be
distributed to Grantor’s spouse. Upon such distribution the interests of all succeeding
beneficiaries, whether vested or contingent, shall be terminated.
E.
Upon the death of Grantor’s spouse:
1.
Except to the extent the Will of Grantor’s spouse contains a different
direction for the payment of death taxes which specifically refers to this Marital Trust,
the Trustee shall make available to the personal representative of Grantor’s spouse from
the principal of the Marital Trust, the amount the personal representative determines to be
equal to the excess of (a) the transfer, estate, inheritance, succession and other death taxes
(not including Chapter 13 tax on a direct skip) which become payable by reason of the
death of Grantor’s spouse, over (b) those taxes which would become payable by reason
of the death of Grantor’s spouse if no part of the property belonging to the Marital Trust
had been included in the tax computation. The Trustee shall pay this amount at such
times as the personal representative of Grantor’s spouse may request in writing. The
Trustee shall be fully protected in relying upon the determination of the personal
representative of Grantor’s spouse as to the amount payable.
2.
If only part of the Marital Trust is elected as qualified terminable
interest property, such payment shall be made from the part that is so elected. Any
amount paid under this Paragraph shall be in satisfaction of any recovery to which
Grantor’s spouse or the estate of Grantor’s spouse shall be entitled under §2207A, as
amended.
3.
The balance of the Marital Trust shall be distributed, per stirpes, to
trusts for the Grantor’s descendants living on the date of death of Grantor’s spouse. The

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trusts shall be administered in accordance with the TRUSTS FOR DESCENDANTS
Article of this document.
F.
Notwithstanding anything in this document to the contrary, a power granted
to the Trustee to retain or invest in unproductive property shall be limited by the right of
Grantor’s spouse to require the Trustee to make property productive or to convert it to
productive property within a reasonable time. Unproductive property includes Deferrable
Retirement Benefits.
G.
In lieu of making property productive or converting unproductive property,
the Trustee may distribute quarterly to Grantor’s spouse other assets from the Marital
Trust, the value of which is equal to the income that would have been produced during
the quarter if the property had been made productive or converted to income producing
property.
H.
The Trustee shall have the right at any time to withdraw part or all of the
assets in a Deferrable Retirement Benefit.
I.
The Trustee must each year withdraw from Deferrable Retirement Benefits
payable to the Marital Trust an amount which is equal to the greater of: (i) the net
income of those Deferrable Retirement Benefits; and (ii) the minimum required
distribution.
J.
The Trustee shall treat distributions from a Deferrable Retirement Benefit
as income of the Marital Trust to the extent that the distribution represents income
generated or deemed to be generated by such Deferrable Retirement Benefit,
notwithstanding the treatment of such portion of the distribution under any law
concerning the determination of income and principal for trust accounting purposes, and
the Trustee shall not charge to such income an expense properly chargeable to the nonincome portion of the distribution.
K.
Part or all of the Marital Trust may be elected as qualified terminable
interest property. The Trustee may not fund the portion of the Trust which is not elected
as qualified terminable interest property with Deferrable Retirement Benefits unless there
are no other assets that can be used to fund that portion of the Trust. The Trustee shall, to
the extent possible, make distributions of principal, if any, to Grantor’s spouse and pay
all death taxes on both trusts payable by reason of the death of Grantor’s spouse, from the
trust as to which the election has been made.
L.
In the event Grantor’s spouse disclaims any portion of the income interest
in the Marital Trust, the disclaimer of the income interest shall also disclaim the principal
relating to that income interest, and the disclaimed interest (income and principal) shall
be distributed It is intended that the property comprising the Marital Trust qualify for the
federal estate tax marital deduction to the extent so elected. No provision of this
document that would prevent such qualification shall apply to the elected portion of the
Marital Trust, and no power or discretion (except the power to make the QTIP election
itself) shall be exercised except in a manner consistent with this intent.

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M.
The Marital Trust shall not be liable for the debts of a beneficiary, to
transfer, assignment or encumbrance by a beneficiary, or to the control of a beneficiary’s
spouse.
A.

XII.
FAMILY TRUST11
Trustees and Trust Advisors.
1.
1.
I nominate JOHN RELIABLE as the Trustee of the Family

Trust.
2.
2.
If he fails to qualify or complete its administration, I
nominate MARY DEPENDABLE as Trustee. Grantor’s spouse will be the Trustee.
3.
At any time after Grantor’s death, Grantor’s spouse may appoint a
Trustee to serve upon the resignation, incapacity or death of Grantor’s spouse, or to serve
initially if Grantor’s spouse declines to serve.
4.
If Grantor’s spouse does not appoint a successor Trustee, then upon
the declination of Grantor’s spouse to serve as Trustee, or upon the resignation,
incapacity or death of Grantor’s spouse while serving as Trustee, MARY
DEPENDABLE will become the Trustee.
5.
Grantor’s spouse may remove Trustees and appoint one or more
successor Trustees, including herself, making such an appointment effective at any time,
including upon the resignation, incapacity or death of any Trustee.
6.
If there are no other applicable provisions in this Article for the
appointment of a successor Trustee, and Grantor’s spouse fails, refuses or is unable to
appoint a successor Trustee, Grantor’s then living children who are over the age of
TWENTY-FIVE (25), acting by majority/unanimously, will have the right to appoint one
or more successor Trustees, including one or more of themselves.
7.
The Trustee may appoint a Trust Advisor to make those decisions
regarding distributions that are granted to a Trust Advisor. The Trustee must appoint a
Trust Advisor if the Family Trust or a portion of the Family Trust may be subject to
generation-skipping transfer tax.
8.
________________ will be the Trust Advisor for the Family Trust.
At any time after Grantor’s death, __________________ may appoint a person or entity
to serve as Trust Advisor upon his/her resignation, incapacity or death, or to serve
initially if he/she declines to serve. A successor Trust Advisor will likewise have the
power to appoint a successor.
9.
A Trust Advisor must be independent, as defined in §674(c), from
the beneficiaries of the Trust, and not be related or subordinate, as defined in §672(c), to
the beneficiaries of the Trust. In addition, if the Trust Advisor is an individual, that
individual must be at least TWENTY-FIVE (25) years old and one of the following:
experienced in business, finance or investments; a CFP; a CPA; or an attorney.
10.
Decisions of the Trust Advisor shall be within the absolute
discretion of the Trust Advisor. A Trust Advisor will be entitled to reimbursement for
expenses and reasonable compensation.
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B.
The beneficiaries of the Family Trust shall be Grantor’s spouse and
Grantor’s descendants.
C.
The Trustee shall distribute so much of the net income and principal of the
Trust to or for their benefit as is appropriate for health, education, maintenance and
support.
D.
When making decisions in accordance with the above standards, the
Trustee:
1.
Is directed not to make distributions to Grantor’s descendants until
the health, education, maintenance and support in accustomed manner of living of
Grantor’s spouse are provided for first.
2.
After Grantor’s spouse, is directed to give priority first to Grantor’s
children, then to grandchildren and then to subsequent generations in sequence.
3.
Is directed generally to treat the members of each generation equally,
but may favor one beneficiary over others in the same generation or in different
generations if such action is deemed reasonably warranted by the Trustee because of the
health, support or educational needs of that beneficiary.
4.
Shall take into consideration the manner of living to which the
beneficiary has been accustomed.
5.
May take into consideration or may disregard the income of the
beneficiary
6.
Is not required to preserve principal for the remainder beneficiaries.
7.
May not make any distribution that would discharge a legal
obligation of the Trustee, including, but not limited to, any obligation to support and/or
educate a beneficiary.1
8.
Shall have discretion to treat principal distributions as
advancements, by stating in writing that they are advancements.
E.
If there is a Trust Advisor for the Family Trust, the Trustee may request a
decision from the Trust Advisor as to whether it is appropriate for:
1.
The Trustee to make a distribution of income and/or principal to or
for the benefit of one or more beneficiaries of the Family Trust for a purpose other than
health, education, maintenance or support, and for such distribution to be treated as an
1

Virginia law imposes an obligation on a parent to support his or her children under the age of
18. Va. Code §20-61. Discharge of a legal obligation of support is considered a payment to
creditors and would therefore be the exercise of a general power of appointment under IRC
§2041(b)(1). If a Trustee has a general power of appointment over the Trust assets the Trust
assets would be included in the Trustee’s estate at death. Not good. This provision avoids that
problem by prohibiting a Trustee from discharging his or her legal obligation of support
(clothing, shelter and food), but leaving open the ability to pay for anything above and beyond
legal support – such as private school, music lessons, soccer clinics, cell phones, toys, etc., etc.
Treas. Reg. §20.2041-1(c)(1)(b) states that “a power of appointment is not a general power if by
its terms it is” . . . “expressly not exercisable in favor of the decedent or his creditors.”

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advancement. If after reviewing the circumstances the Trust Advisor determines that a
proposed distribution is appropriate, the Trustee is directed to make that distribution.
2.
The Trustee to make a distribution of income and/or principal to or
for the benefit of the parent, legal guardian or other person raising a beneficiary to
reimburse that person for lost income and for additional travel, household or other
expenses incurred as a result of raising and caring for the beneficiary. It is intended,
without limiting the generality of the foregoing, to permit the Trust Advisor to direct the
Trustee to pay some portion or all of the cost of such things as a larger automobile or
additional automobile, a larger or more suitable dwelling, the remodeling or renovation of
an existing dwelling and the construction of an addition to an existing dwelling. If after
reviewing the circumstances the Trust Advisor determines that a proposed distribution is
appropriate, the Trustee is directed to make that distribution.
3.
The Family Trust to be terminated. If after reviewing the
circumstances the Trust Advisor determines that the size of the Family Trust does not
warrant the cost of continuing, or its administration would be otherwise impractical or
inappropriate, the Trust Advisor shall approve the proposed termination of the Family
Trust and determine if its assets should be distributed to one or more of: the Grantor’s
spouse, the Grantor’s descendants, trusts for one or more of them, and in what
proportions. The interests of remainder beneficiaries are to be disregarded when making
these determinations. Upon receiving approval for termination of the Trust and
instructions as to its distribution among the beneficiaries, the Trustee shall terminate the
Trust and distribute its assets in accordance with those instructions. Upon such
distribution the interests of all succeeding beneficiaries, whether vested or contingent,
shall be terminated.
F.
Unless sooner terminated, upon the death of Grantor’s spouse the Family
Trust will terminate and the Trustee shall distribute the remaining assets of the Family
Trust, per stirpes, to Trusts for the Grantor’s descendants living on the date of death of
Grantor’s spouse. In making such division, the Trustee shall not make adjustments for
any inequality of previous distributions of income or principal; provided however,
advancements shall be adjusted for, but without interest being charged and without
recovery being sought from a beneficiary to whom advancements made exceeded that
beneficiary’s ultimate share. The trusts shall be administered in accordance with the
TRUSTS FOR DESCENDANTS Article of this document.
A. A distribution of funds upon termination of the Family Trust for a person or to
a trust for a person for whom a Trust created under the provisions of the TRUSTS FOR
DESCENDANTS Article of this document is already in existence shall be added to that
Trust.
G.
It is intended that the Family Trust not be includible for federal estate tax
purposes in the estate of Grantor’s spouse, or any other beneficiary serving as Trustee,
and all provisions of this document shall be construed to carry out this intent.

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H.
The Family Trust shall not be liable for the debts of a beneficiary, to
transfer, assignment or encumbrance by a beneficiary, or to the control of a beneficiary’s
spouse.
XIII.
TRUSTS FOR DESCENDANTS12
A.
Trustees and Trust Advisors.
1.
JOHN RELIABLE will be the Trustee. Upon the resignation,
incapacity or death of the Trustee, MARY DEPENDABLE will become the Trustee.
2.
BURKE & HERBERT BANK & TRUST COMPANY will be the
Trustee of a Trust created for __________________, and notwithstanding any other
provision of this document, she may not serve as a Trustee, appoint a Trustee or remove a
Trustee of a Trust created for her.
3.
Notwithstanding the foregoing appointment of a Trustee/Trustees for
the Trusts for Descendants, upon the funding of the Trust, or upon reaching age THIRTY
(30), whichever is later, the primary beneficiary of the Trust: will become the Trustee of
that Trust; may appoint a Trustee to serve upon his or her resignation, incapacity, or
death, or to serve initially if the primary beneficiary declines to serve; and may remove
Trustees and appoint one or more successor Trustees, including himself or herself.
4.
If the primary beneficiary of the Trust is under age THIRTY (30)
and no Trustee has been appointed for that Trust, the primary beneficiary’s parent may
appoint the Trustee, who may be the parent, and may remove Trustees and appoint
successor Trustees to fill vacancies or to take office upon the resignation, incapacity or
death of a Trustee.
5.
If the Trustee of a Trust for a Descendant is not the primary
beneficiary of the Trust, the Trustee shall have discretion to appoint the primary
beneficiary as a Co-Trustee or the sole Trustee of the Trust. The Trustee shall also have
discretion, on one or on multiple occasions, to divide the Trust into separate trusts, in
amounts or proportions the Trustee deems appropriate, and appoint the primary
beneficiary as the Co-Trustee or sole Trustee of one or more of those separate trusts.
6.
The Trustee may appoint a Trust Advisor to make those decisions
reserved to a Trust Advisor. The Trustee must appoint a Trust Advisor if the Trust or a
portion of the Trust may be subject to generation-skipping transfer tax.
7.
A Trust Advisor must be independent, as defined in §674(c), from
the beneficiaries of the Trust, and not be related or subordinate, as defined in §672(c), to
the beneficiaries of the Trust. In addition, if the Trust Advisor is an individual, that
individual must be at least THIRTY (30) years old and one of the following: experienced
in business, finance or investments; a CFP; a CPA; or an attorney.
8.
Decisions of the Trust Advisor shall be within the absolute
discretion of the Trust Advisor. A Trust Advisor will be entitled to reimbursement for
expenses and reasonable compensation.

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9.
If a person or entity serving as Trustee meets the requirements of a
Trust Advisor in this document, that person or entity will have the powers and discretion
granted by this document to Trustees and to Trust Advisors.
B.
The beneficiaries of a Trust for Descendants shall be the person for whom
the Trust was created (the “primary beneficiary”) and the descendants of that person.
C.
The Trustee shall distribute so much of the net income and principal of the
Trust to or for their benefit each year as is appropriate for health, education, maintenance
and support.
D.
When making decisions regarding the distributions in accordance with the
above standards, the Trustee:
1.
Is directed not to make distributions to the descendants of the
primary beneficiary until the health, education, maintenance and support of the primary
beneficiary are provided for first.
2.
After the primary beneficiary, is directed to give priority to the
children of the primary beneficiary and then to subsequent generations in sequence.
3.
Is directed generally to treat the members of each generation equally,
but may favor one beneficiary over others in the same generation or in different
generations if such action is deemed appropriate by the Trustee because of the health,
support or educational needs of that beneficiary.
4.
Shall take into consideration the manner of living to which the
beneficiary has been accustomed.
5.
May take into consideration or may disregard the income and
principal that may be available to or for the beneficiary from other sources.
6.
Is not required to preserve principal for the descendants of the
primary beneficiary.
E.
Shall have discretion to treat principal distributions as advancements, by
stating in writing that they are advancements. May not make any distribution that would
discharge a legal obligation of the Trustee, including, but not limited to, any obligation to
support and/or educate a beneficiary.2
F.
If the Trust has a Trust Advisor, the Trustee may request a decision from
the Trust Advisor as to whether it is appropriate for:
1.
The Trustee to make a distribution of income and/or principal to or
for the benefit of one or more beneficiaries for a purpose other than health, education,
2

Virginia law imposes an obligation on a parent to support his or her children under the age of 18. Va. Code §2061. Discharge of a legal obligation of support is considered a payment to creditors and would therefore be the
exercise of a general power of appointment under IRC §2041(b)(1). If a Trustee has a general power of appointment
over the Trust assets the Trust assets would be included in the Trustee’s estate at death. Not good. This provision
avoids that problem by prohibiting a Trustee from discharging his or her legal obligation of support (clothing,
shelter and food), but leaving open the ability to pay for anything above and beyond legal support – such as private
school, music lessons, soccer clinics, cell phones, toys, etc., etc. Treas. Reg. §20.2041-1(c)(1)(b) states that “a
power of appointment is not a general power if by its terms it is” . . . “expressly not exercisable in favor of the
decedent or his creditors.”

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maintenance or support, and for such distribution to be treated as an advancement. If
after reviewing the circumstances the Trust Advisor determines that a proposed
distribution is appropriate, the Trustee is directed to make that distribution.
2.
The Trustee to make a distribution of income and/or principal to or
for the benefit of the parent, legal guardian or other person raising a beneficiary to
reimburse that person for lost income and for additional travel, household or other
expenses incurred as a result of raising and caring for the beneficiary. It is intended,
without limiting the generality of the foregoing, to permit the Trust Advisor to direct the
Trustee to pay some portion or all of the cost of such things as a larger automobile or
additional automobile, a larger or more suitable dwelling, the remodeling or renovation of
an existing dwelling and the construction of an addition to an existing dwelling. If after
reviewing the circumstances the Trust Advisor determines that a proposed distribution is
appropriate, the Trustee is directed to make that distribution.
3.
The Trust to be terminated. If after reviewing the circumstances the
Trust Advisor determines that the size of the Trust does not warrant the cost of
continuing, or its administration would be otherwise impractical or inappropriate, the
Trust Advisor shall approve the proposed termination of the Trust and determine if its
assets should be distributed to one or more of: the primary beneficiary, the descendants
of the primary beneficiary, trusts for one or more of them, and in what proportions. The
interests of remainder beneficiaries are to be disregarded when making these
determinations. Upon receiving approval for termination of the Trust and instructions as
to its distribution among the beneficiaries, the Trustee shall terminate the Trust and
distribute its assets in accordance with those instructions. Upon such distribution the
interests of all succeeding beneficiaries, whether vested or contingent, shall be
terminated.
G.
After reaching age EIGHTEEN (18) the primary beneficiary may by Will
or revocable trust direct how the assets of the Trust will pass at the death of the primary
beneficiary, and after reaching age THIRTY (30) the primary beneficiary may gift Trust
assets during the primary beneficiary’s lifetime by delivering to the Trustee a document
signed by the primary beneficiary, with the signature notarized, directing what assets are
to be gifted and to whom. In order to be effective the documents exercising these rights
must make specific reference to this limited power of appointment, as the power
contained in the JOHN J. SMITH TRUST dated March 15, 2013, as amended, and
comply with the following restrictions:
1.
The primary beneficiary may not direct that the assets pass, directly
or indirectly, to the primary beneficiary making the appointment, his or her estate, the
creditors of either, a charity or any other non-individual. The primary beneficiary may
not direct how a life insurance policy owned by the Trust will pass or name the
beneficiary of a life insurance policy owned by the Trust.
2.
The assets may be given to any other individuals, in any proportions,
and may be in further trust or outright, provided that a Deferrable Retirement Benefit
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may only be appointed to an individual who is younger than the primary beneficiary of
the trust created upon Grantor’s death and/or a trust for his or her benefit which qualifies
as a “see-through trust” in accordance with IRS Code and Regs. §1.401(a)(9)-4, A-5(b),
so that the trust beneficiary will qualify as the Designated Beneficiary in accordance with
Regs. §1.401(a)(9)-4, A-5(a).
3.
It is recommended that the primary beneficiary not exercise this
limited power of appointment to create a further power of appointment without first
receiving expert advice, so that the assets are not includible in the primary beneficiary’s
estate unless that is the intended result.
4.
Unless within NINETY (90) days after the death of the primary
beneficiary the Trustee has actual notice of the existence of a Will or revocable trust
exercising this limited power of appointment, the Trustee may, without incurring liability
to an appointee, proceed as if such power had not been exercised; provided however, this
sentence shall not bar the right which an appointee may have to enforce the appointment
against the persons who receive the property.
H.
If the primary beneficiary has not directed by Will or revocable trust how
the assets of his or her Trust will pass at death, those assets will be distributed, per
stirpes, to Trusts for the primary beneficiary’s descendants living at the death of the
primary beneficiary. If there are none, the assets will be distributed, per stirpes, to Trusts
for Grantor’s my descendants living at the death of the primary beneficiary. The Trusts
shall be administered in accordance with this Article; provided that a distribution payable
to a Trust for a person for whom a Trust created under this Article is already in existence
shall be added to that Trust. If in accordance with the foregoing distribution provisions a
Deferrable Retirement Benefit would be distributable to a Trust for a beneficiary who is
older than the primary beneficiary of the Trust created upon Grantor’s death, those
benefits shall instead be distributed directly to the beneficiary free of trust.
I.
It is intended that Trusts for Descendants not be includible in the estate of
the primary beneficiary for federal estate tax purposes and the provisions of this
document shall be construed to carry out this intent. Notwithstanding the foregoing,
assets subject to the generation-skipping transfer tax will be included as provided in the
GENERATION-SKIPPING TRANSFER TAX Article of this document.
J.
No Trust shall be liable for the debts of a beneficiary, to transfer,
assignment or encumbrance by a beneficiary, or to the control of a beneficiary’s spouse.
XIV.
TRUSTEE ADMINISTRATIVE PROVISIONS13
A.
If there is no other applicable provision in this document for the
appointment of a Co-Trustee or a successor Trustee, the Trustee then serving may appoint
a Co-Trustee and may appoint a successor Trustee to take office upon the death,
resignation or incapacity of the Trustee then serving.
B.
If there is no other applicable provision in this document for the
appointment of a Co-Trustee or a successor Trustee and the Trustee then serving has
failed, refused or is unable to appoint a Co-Trustee or a successor Trustee, Grantor’s then
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living children who are over the age of TWENTY-FIVE (25), acting by
majority/unanimously, will have the right to appoint a Co-Trustee and a successor
Trustee, and may name themselves.
C.
A Trustee may resign by giving thirty (30) days written notice.
D.
Acceptance of trusteeship by a Trustee not a party to this Agreement shall
be evidenced by an instrument in writing.
E.
An individual serving as a Trustee will cease to serve as Trustee upon the
issuance of a certification by a physician that the individual is incapable of managing the
trust. Each individual Trustee, either by formally accepting appointment or by serving as
Trustee, directs health care providers to release to any other Trustee and to any income
beneficiary of the trust for which the person is serving as Trustee (“Information
Recipients”) all of the Trustee’s medical information relevant to a determination whether
the individual is capable of managing the Trust, and if requested will sign releases to that
effect. A Trustee who: (1) fails within thirty (30) days of a written request to undergo an
examination to determine whether the individual is capable of managing the Trust; (2)
fails within ten (10) days of such exam to release the results; or (3) fails within ten (10)
days of a written request to disclose existing medical information, shall be deemed to
have resigned, provided that there is a reasonable basis to make the request and that only
one such request may be made every eighteen (18) months. The cost of the examination
shall be borne by the Trust for which the individual is acting as Trustee.
F.
No bond or security will be required of any Trustee.
G.
While the Grantor is living the Trustee will make annual reports to the
Grantor. After Grantor’s death Trustees will furnish copies of this document to Grantor’s
spouse and Grantor’s children and will make annual reports to Grantor’s spouse and
Grantor’s children. Trustees of the Family Trust the Marital Trust the Family Trust and
the Marital Trust will furnish copies of this document to Grantor’s spouse and Grantor’s
children and will make annual reports to Grantor’s spouse and Grantor’s children.
Trustees of a Trust for Descendants will furnish the primary beneficiary with a copy of
this document and annual reports. Annual reports will include a list of assets and
liabilities at then-current market value and all receipts and disbursements for the year,
including trustee compensation. Trustees will not be obligated to provide copies of this
document or annual reports or any other information to any other persons or entities, but
may do so in the absolute discretion of the Trustees.
H.
Trustees will not be required to file an inventory or accounts with the
Commissioner of Accounts or any other public official or court.
I.
Individual Trustees will be entitled to reasonable compensation, based on
the duties and responsibilities assumed and the time and effort expended. An individual
Trustee’s fee that does not exceed the published fee schedule of a bank or trust institution
licensed to do business in Virginia shall be conclusively deemed reasonable. Individual
Trustees may be paid fees that exceed such published fees if they demonstrate that the fee
sought is reasonable. Individual Trustees will also be entitled to reimbursement for
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accounting, tax preparation, legal and investment management fees as expenses, which
shall not be considered a part of the fees paid to the Trustee. A corporate Trustee shall
receive compensation in accordance with its published fee schedule in effect when the
services are rendered. If both an individual and a corporate fiduciary serve as Trustees,
each will be entitled to a fee as set forth in this paragraph. If two individuals serve as
Trustees, each will be entitled to the fee (ONE-HALF (1/2) of the fee) set forth in this
paragraph.
J.
A Trustee may require as a condition precedent to the payment of a
discretionary distribution that a beneficiary furnish his or her own certification or other
evidence of health, income, assets and need for such distribution, in form and content
satisfactory to the Trustee. The Trustee shall be entitled to rely upon the certification of
the beneficiary and shall not be required to make inquiry as to the accuracy of the facts
certified. The Trustee will not be prohibited from making such inquiry or from relying
on other sources of information.
K.
If a person or entity serving as Trustee meets the definition of a Trust
Advisor in this document, that person or entity will have the powers and discretion
granted by this document to Trustees and to Trust Advisors.
XV.
TRUSTEE POWERS14
Trustees (except as otherwise expressly stated in this document) have all the powers
and discretion granted by this document, by law, and by Va. Code §§64.2-105 and 64.2777 as in force at the time the action is taken, exercisable in a fiduciary capacity,
including the following:
A.
To buy and sell real estate and all other types of property.
B.
To borrow money and encumber assets to secure such borrowing.
C.
To pay all or any part of joint taxes due on income tax returns filed with
Grantor’s spouse.
D.
To make distributions in cash or in kind or partly in each, make
distributions of undivided interests in assets and make non pro rata distributions of assets.
E.
To commingle and make investments in common for trusts created by this
document if the interests of the trusts are accounted for separately, and to merge or
consolidate a trust with any other trust having substantially the same provisions.
F.
To divide a trust into two or more separate trusts.
G.
To allocate assets with different characters and/or different income tax
bases to different beneficiaries, and to make tax elections without regard to the relative
interests of beneficiaries even if the result may be an advantage or disadvantage to one or
more beneficiaries; provided however, this authority may not be used to enlarge or shift
any beneficial interest except as an incidental consequence of the discharge of fiduciary
duties. Allocations and elections made in good faith shall not require equitable
adjustments.

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H.
To purchase and/or retain assets without regard to the “prudent investor”
rule, or to a requirement to hold productive assets (except as to the Marital Trust) or to
diversify investments.
I.
To change the situs of any trust created by this document to a different state
or country (and to the extent necessary or appropriate, move the trust assets) if the
Trustee believes it to be in the best interests of the trust and the beneficiaries. The
Trustee may elect that the law of the new jurisdiction will govern the trust to the extent
necessary or appropriate. The Trustee shall not be required to provide notice of such
change to beneficiaries under any provision of the Virginia Uniform Trust Code or the
law of any other state or country governing the administration of the trust. No such
change in situs or governing law may be made if it would increase the class of
beneficiaries, cause an asset passing into the Marital Trust to not qualify for the marital
deduction or give a beneficial interest or economic benefit to a person not already a
beneficiary.
J.
A Trust Advisor may authorize the Trustee to amend a trust created by this
document, but only if the amendment is required to insure that the trust qualifies as a
“see-through trust” in accordance with IRS Code and Regs. §1.401(a)(9)-4, A-5(b), so
that the trust beneficiary will qualify as Grantor’s Designated Beneficiary in accordance
with Regs. §1.401(a)(9)-4, A-5(a) or to meet other tax planning objectives. No
amendment may be made that would increase the class of beneficiaries or give a
beneficial interest or economic benefit to a person not already a beneficiary.
XVI.
GENERATION-SKIPPING TRANSFER TAX PROVISIONS15
The following powers are granted to the Trust Advisor, in addition to those
granted in other portions of this document:
A.
The Trust Advisor may divide a trust into two separate trusts, one exempt
from generation-skipping transfer tax and the other subject to generation-skipping
transfer tax.
B.
The primary beneficiary of a trust that is subject, in whole or in part, to
generation-skipping transfer tax will have the power, with the consent of the Trust
Advisor, to withdraw, during the beneficiary’s lifetime, any part or all of the assets in
such trust that would otherwise be subject to the generation-skipping transfer tax.
C.
The Trust Advisor need not consider the advisability of dividing a trust or
consenting to a withdrawal until the primary beneficiary requests the consent in writing.
The Trust Advisor may but need not give consent until the primary beneficiary delivers a
draft of the proposed consent to the Trust Advisor along with an analysis of the pros and
cons of consenting and calculations of the tax and substantive effects of the proposed
consent. Good faith determinations of the Trust Advisor whether or not to consent to a
withdrawal shall bind all persons interested in the trust.

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XVII.
LIMITATION OF POWERS16
A.
Notwithstanding anything in this document to the contrary, any provision
of this document and any power or discretion granted to a Trustee by this document, or
now or hereafter conferred upon a Trustee generally, shall be void to the extent that it
may be construed or administered after the death of the Grantor so as to:
1.
Cause Grantor’s estate to lose the tax benefit afforded by the marital
deduction with respect to an outright gift to Grantor’s spouse, or that portion of qualified
terminable interest property (QTIP) which is elected to qualify for the marital deduction.
2.
Cause assets of the Family Trust to be included in the estate of
Grantor’s spouse for federal estate tax purposes.
3.
Cause assets of a Trust to be included in the estate of a descendant of
Grantor’s or Grantor’s spouse; provided however, assets subject to the generationskipping transfer tax may be included as provided in the GENERATION-SKIPPING
TRANSFER TAX PROVISIONS Article of this document.
4.
Cause a trust holding a Deferrable Retirement Benefit to fail to
qualify as a “see-through trust” in accordance with the Internal Revenue Code and
Treasury Regulations, including Treas. Reg. §1.401(a)(9)-4.
5.
Permit a Trustee to make a discretionary distribution that is not
limited by an ascertainable standard related to health, education, maintenance or support,
unless approved by a Trust Advisor.
6.
Permit a Trustee to make a discretionary distribution that discharges
a legal obligation of the Trustee, including but not limited to an obligation to support
and/or educate a beneficiary.
7.
Permit a payment to or for the benefit of any person if such payment
will both discharge a legal obligation and, on account of such discharge, cause there to be
imposed a federal tax on generation-skipping transfers.
B.
If a limitation contained in this document would prevent the exercise of a
power or discretion by a Trustee, but it could be exercised without violating the
restrictions contained in this Article by that Trustee acting jointly with an independent
Trustee or with an adverse Trustee, or by an Trust Advisor acting alone or an adverse
Trustee acting alone, then the Trustee may appoint such a Trustee or Trust Advisor to
exercise that power or discretion.
XVIII. MISCELLANEOUS17
A.
In the event that Grantor’s spouse and Grantor die under circumstances
where there is no sufficient evidence that they died otherwise than simultaneously, it shall
be conclusively presumed in determining the distribution of property, and whether or not
distribution is controlled by the terms of this document, that Grantor’s spouse survived
Grantor. Except for Grantor’s spouse, a person who is not established by clear and
convincing evidence to have survived an event by 120 hours shall be deemed to have
predeceased the event.
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B.
“Descendants” means children, grandchildren, great-grandchildren, etc.,
and includes persons adopted prior to reaching age twenty-one (21) if they were born in a
year after the birth of Grantor’s oldest descendant living at Grantor’s death.
“Descendants” does not include children born out of wedlock unless the parent
voluntarily provides parental care and/or support for the child or recognizes the child for
inheritance purposes in writing.
[There are two issues here. First, a child who is legally adopted in a Court
proceeding (as opposed to a stepchild, who has no legal status for inheritance purposes) is
treated for inheritance purposes the same as a natural child. The foregoing language
simply prohibits someone from adopting an adult.
Second, under current Virginia law a person born out of wedlock will
inherit by, through or from the mother if the mother has no Will. Such a child will also
inherit by, through or from the father if the father has no Will and the parents participated
in a marriage ceremony (valid or invalid) before or after the birth, or paternity is
established by clear and convincing evidence as set forth in the Virginia statutes.
You may change the above results and make your own choice to include or
exclude stepchildren, adopted children and/or children born out of wedlock.]
C.
A gift to descendants “per stirpes” means the gift is divided equally among
the members of the first generation of descendants in which at least one descendant is
living at the specified time, with each living member taking one share and any deceased
member’s child (or children in equal shares) taking the share to which the deceased
member would have been entitled, and likewise down the generations. No share shall be
allocated for a deceased child leaving no descendant surviving at the specified time.
[If no children are surviving the assets are divided equally among the
grandchildren.]
D.
Unless the context otherwise requires, income beneficiaries include
beneficiaries then entitled or permitted (whether in the discretion of the Trustee or not) to
receive income.
E.
“Trustee” means “Trustees” if appropriate in the context of its usage.
F.
When discretion is granted, that discretion does not authorize action beyond
the bounds of a reasonable judgment. When “absolute” discretion is granted, action
beyond the bounds of a reasonable judgment may be taken as long as the action is not
dishonest, motivated other than by the accomplishment of the purposes of this document,
or arbitrary without an exercise of judgment.
G.
Health, education, maintenance and support shall be construed to be
ascertainable standards for federal estate and gift tax purposes such that the exercise,
release or lapse of a power limited by such standard will not be taxable for federal estate
or gift tax purposes.
H.
“Retirement Benefit” means a trust’s interest in one of the following types
of assets if payable to the trust as beneficiary or owned by the trust: a qualified or
nonqualified annuity; a benefit under a qualified or nonqualified plan of deferred
________
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21

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compensation; an account in or benefit payable under a pension, profit-sharing, stock
bonus, or other qualified retirement plan; an individual retirement account or trust; and
benefits under a plan that is established under IRC §408, §408A, §457, §403, §401, or
similar provisions of the Internal Revenue Code.
I.
“Deferrable Retirement Benefit” means a Retirement Benefit that is subject
to the Minimum Distribution Rules and as to which a designated beneficiary of the
Retirement Benefit has the option (under the terms of the plan or by transferring the
Retirement Benefit to an inherited IRA) to take distributions in annual installments over
the life expectancy of the oldest trust beneficiary. Benefits payable under a plan that is
not subject to the Minimum Distribution Rules (such as, under current law, a
“nonqualified deferred compensation plan”) are not Deferrable Retirement Benefits.
J.
Deferrable Retirement Benefits shall not be used to pay Grantor’s debts,
taxes, administration expenses or other claims against Grantor’s estate; nor for estate,
inheritance or other transfer taxes due on account of Grantor’s death, unless there are no
other assets with which to pay such obligations.
K.
After September 30 of the calendar year following the calendar year of
Grantor’s death, Deferrable Retirement Benefits may not be distributed to Grantor’s
estate, a charity or any other non-individual beneficiary, but only to an individual or to a
trust which is a “see-through trust” in accordance with the IRS Code and Regs., so that a
trust beneficiary qualifies as the Designated Beneficiary, unless under the distribution
plan in this document there are no individuals or “see-through trusts” eligible to receive
such benefits. This prohibition shall not apply to a gift or expense which is expressly
directed to be funded with Deferrable Retirement Benefits by this document.
L.
If Grantor’s spouse survives Grantor, and this Trust is the beneficiary of
Deferrable Retirement Benefits, those benefits, other than Roth IRAs, shall be allocated
or distributed to the Marital Trust. If this Trust is the beneficiary of a Roth IRA, it shall
be allocated or distributed to the Family Trust.
M.
If Grantor’s spouse predeceases Grantor and a trust created by this
document is subject to generation-skipping transfer tax, that trust shall be funded to the
maximum extent possible with Deferrable Retirement Benefits, other than Roth IRAs,
which shall be allocated or distributed to individual beneficiaries or trusts which: 1) are
not subject to generation-skipping transfer tax; and 2) are “see-through trusts” in
accordance with the IRS Code and Regs., so that each trust beneficiary qualifies as the
Designated Beneficiary.
N.
Charitable gifts shall be funded not later than September 30 of the year
following the Grantor’s death to the maximum extent possible with Deferrable
Retirement Benefits.3

3

The Trustee should satisfy such charitable bequests to comply with Treasury Regulation
§1.401(a)(9)-4, A-3 and A-4 in order to preserve the Trust as a “see-through trust.” Adapted

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O.
If a charity designated as a beneficiary has been misnamed, the Trustee
shall have authority to determine the intended charity. If a condition of a gift cannot be
carried out by the charity, the Trustee may modify or remove the condition in order to
permit the gift to be made. If a named charity is no longer in existence at Grantor’s
death, the Trustee is directed to select an alternate charitable beneficiary with a similar
mission to receive the gift. The Trustee has absolute discretion to make these decisions.
P.
If this Agreement has been revoked, but at the Grantor’s death an insurance
policy or any other assets are payable to the Trustee or the Trust, such insurance proceeds
or other assets shall be paid to Grantor’s estate.
XIX.
WAIVER OF THE RULE AGAINST PERPETUITIES18
The rule against perpetuities shall not apply to this Trust or to any of the following
created by this document: any trust, interest created in property held in trust, power of
appointment over property held in a trust created by this document or power of
appointment over property granted by this document.
XX.
IN TERROREM
If a person who would receive a benefit as a result of Grantor’s death (outright or
as the beneficiary of a trust) directly or indirectly contests the validity of any provision of
Grantor’s Will or of this Trust, that person and all of that person’s descendants will be
treated as having predeceased the Grantor and will forfeit all benefits that would have
passed to that person as a result of Grantor’s death, whether by reason of Grantor’s Will,
this Trust, a beneficiary designation or otherwise. This provision will not apply to a suit
for construction or for aid and direction.
XXI.
GOVERNING LAW
This document shall be governed and construed according to the laws of Virginia.
WITNESSES:

GRANTOR:

____________________________

______________________________ (SEAL)
JOHN J. SMITH

____________________________
TRUSTEES:
______________________________ (SEAL)
JOHN J. SMITH
______________________________ (SEAL)
MARY M. JONES

from Natalie Choate, Form 4.2, Appendix B, Life and Death Planning for Retirement Benefits,
7th Edition, 2011.

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COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
The foregoing document was acknowledged before me on March _____, 2013 by
JOHN J. SMITH as Grantor and Trustee.
_______________________________________
Notary Public

COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
The foregoing document was acknowledged before me on March _____, 2013 by
MARY M. JONES as Trustee.
_______________________________________
Notary Public

2013-20 Revocable Trust for married client (family & marital trusts created).docx
3/9/13 wlb

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TRUST OF JOHN J. SMITH
ENDNOTES

1

FAMILY MEMBERS. Reciting the names of family members and defining their
relationships is important to avoid ambiguity in the later sections of the Trust.
2
RESERVED RIGHTS. These rights assure that the Trust is revocable and subject to
your complete control during your lifetime, even if you appoint someone else as Trustee.
3
TRUSTEES. This mainly covers Trustees during your lifetime and at death, when the
Trustee will wind up this phase of the Trust and distribute its assets to the successor trust
or trusts.
4
DISTRIBUTION PROVISIONS DURING GRANTOR’S LIFETIME. You use the
income and principal titled in the name of the Trust just as you currently use income and
principal titled in your name. If you resign as Trustee in favor of the successor Trustee,
you have the power to direct the Trustee how income and principal are to be used. If you
become incompetent the successor Trustee will take over and make distributions during
your lifetime as provided in this Article.
5
GIFTS DURING GRANTOR’S LIFETIME. This provision permits the financial
Agent to use trust funds to make gifts when there are no assets outside of the Trust which
are appropriate to use for gifts.
6
DEBTS, TAXES AND OTHER CHARGES. These provisions allocate taxes and
expenses among the beneficiaries.
7
PETS. Your Executor will be charged with the duty of placing your pets with a family
if the pets are in good health or can be restored to good health. If the pets cannot be
restored to good health and euthanasia is the humane alternative, the pets will be
euthanized.
8
GIFTS OF TANGIBLE PROPERTY.
In law, all property is divided into two categories, real property and personal
property. Real property includes land and buildings, and everything else is personal
property.
Personal property is again divided into two categories, tangible and intangible.
Tangible property includes things with physical existence, such as furniture,
clothing, jewelry, automobiles, etc.
9.
DISPOSITION OF TRUST UPON GRANTOR’S DEATH. If your spouse is
surviving all the assets pass into the Marital Trust. If your spouse is not surviving, all the
assets pass into individual trusts for your children.
10
MARITAL TRUST (QTIP Trust). Most of the Marital Trust provisions are required
by the tax law. All of the income must be paid to your spouse, but the Trustee’s authority
to distribute principal to your spouse is optional. The Marital Trust may be divided into
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I-166

two trusts for estate tax purposes. One would contain the amount exempt from estate tax
at your death, which would also be exempt from estate tax at your spouse’s subsequent
death. The other would contain the non-exempt amount which was elected to be
deducted on your estate tax return and included in your spouse’s estate upon your
spouse’s subsequent death.
11
FAMILY TRUST. One purpose of the Family Trust is to protect your assets (and your
children) by delaying the distribution of those assets until your children have finished
school, started a career and become mature enough to handle a substantial amount of
money. In the interim the trustee is authorized to make cash distributions and to pay for
health, support and educational expenses.
The assets passing into the Family Trust will equal the exempt amount
($5,250,000 in 2013, unknown for future years) less any administration expenses which
are not deducted on the federal estate tax return and less any estate taxes paid (although
the document is designed so that no such taxes should be payable). This gift will not
cause any tax to be paid by your estate, and because your spouse does not directly own or
control the Family Trust or its assets, the Family Trust assets will not be taxable in your
spouse’s estate upon your spouse’s subsequent death, even if they have appreciated in
value to an amount greater than the exempt amount.
12.
TRUSTS FOR DESCENDANTS. The children do not inherit outright, but in trust.
Each child has a separate Trust, controls the management and investment of the assets in
the Trust, and as Trustee is authorized to make income and principal distributions to pay
for his or her health, support and educational expenses and those of his or her
descendants.
Keeping the property in trust helps to preserve it from creditors and disaffected
spouses. It also keeps the trust assets (subject to certain limits) out of the beneficiary’s
estate, which could result in an enormous tax saving to grandchildren.
13
TRUSTEE ADMINISTRATIVE PROVISIONS. These provisions deal with issues
related to management, Trustee fees, etc.
14
TRUSTEE POWERS. These Code sections contain pages and pages of detailing very
broad and flexible powers which may be exercised by Trustees, which are incorporated
into this document by reference. The additional powers which are included are intended
to save time and money and give even more flexibility to the fiduciaries.
15.
GENERATION-SKIPPING TRANSFER TAX PROVISIONS. If a child dies after
creation of a trust but prior to receiving his or her full distribution from the trust, and that
distribution instead would pass to the deceased child’s children, the termination of the
child’s interest and the transfer of the distribution to the grandchildren could be taxable at
40% as a generation-skipping transfer. This provision attempts to avoid or minimize the
tax.

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[If trusts are for beneficiaries who are not Testator’s children] If a beneficiary who is a
generation younger than you dies after creation of a trust but prior to receiving his or her
full distribution from the trust, and that distribution instead would pass to the deceased
beneficiary’s children, the termination of the beneficiary’s interest and the transfer of the
distribution to the next generation of beneficiaries could be taxable at 45% as a
generation-skipping transfer. This provision attempts to avoid or minimize the tax.
16
LIMITATION OF POWERS. The most important deduction available against estate
taxes is the marital deduction. This “savings clause” attempts to insure that no provisions
of this document inadvertently jeopardize the tax planning in the document.
17
MISCELLANEOUS. These definitions help assure that there is no confusion or
ambiguity about who you intend to be your beneficiaries and how and under what
circumstances they are to receive property.
18
RULE AGAINST PERPETUITIES. This rule prohibits any trust from lasting longer
than a “life or lives in being” at the time of your death, plus 21 years. Virginia now
permits the waiver of this rule, which is what this language does.

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LAW OFFICE OF

WILLIAM L. BABCOCK, JR. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
William L. Babcock, Jr.

tel. 703-518-8400
fax 703-518-8401

wlb@willtrustestate.com

Kiersten L. Jensen
klj@willtrustestate.com

James A. Gillis
jag@willtrustestate.com

January 5, 2011
VIA EMAIL ONLY (Clients@yahoo.com)
John J. Smith
Mary M. Jones
123 Main Street
Alexandria, VA 22314
Re: Estate Planning Documents
Dear John and Mary:
Listed below are the draft documents enclosed for Mr. Smith. Mrs. Smith’s
documents will be a mirror image.
In the Will concentrate on __________________________.
In the Trust first read the Article headed Disposition of Trust Remainder Upon
Grantor’s Death, then concentrate on understanding the ________________.
We will go over your questions in detail when we meet. OR We will go over your
questions in as much detail as you feel necessary when you call.
The documents enclosed are as follows:
1. Estate Planning Worksheets (4 pages). The diagrams illustrate how your
assets pass under the new documents.
2. Will, including endnotes containing a summary of the purpose and/or
contents of each Article.
3. Revocable Trust, also with endnotes.
4. Trusts for Descendants “Operating Manual.”
5. Durable Financial Power of Attorney.
6. Advance Medical Directive. This document does not take the place of a Do
Not Resuscitate (DNR) order, which can only be issued by a physician.
Under the new plan the Family Trust will be funded (after expenses) with the
deceased spouse’s assets, up to the amount of the exemption from estate tax applicable at
that time ($5,250,000 for 2013). Those assets escape estate tax at the first death and at the
second death, even if they have increased in value. The Marital Trust will be the amount in

I-169

John J. Smith
Mary M. Jones
January 5, 2011
Page 2

excess of the exempt amount that passes into the Family Trust. The assets of the Marital
Trust are included in the surviving spouse’s estate.
After the first death the surviving spouse will own his or her assets and the joint
assets free of any restrictions. The spouse as Trustee manages both the Family Trust and
the Marital Trust. The income and principal of the Family Trust may be distributed among
the surviving spouse and children for health, education and support. All of the income of
the Marital Trust must be paid to the surviving spouse each year, and the principal is
available for the health, education and support of the spouse.
Upon the second death, the assets of the Family and Marital Trusts will be divided
into separate Trusts for your children. At age 25, the child becomes the Trustee, manages
the Trust assets, has access to the income and principal for health, education and support of
the child and the child’s descendants, and may by signing a Will control how the Trust
assets pass at the child’s death.
IF THIS IS A BLENDED MARRIAGE AND THE ASSETS ARE TO PASS
OUTRIGHT TO THE SURVIVING SPOUSE, INCLUDE WORDING SUCH AS:
THE SURVIVING SPOUSE WILL HAVE ABSOLUTE CONTROL OVER THE
ULTIMATE DISPOSITION OF ALL OF YOUR ASSETS, AND MAY CHANGE THE
CURRENT ESTATE PLAN TO EXCLUDE ANY OR ALL OF THE CURRENT
BENEFICIARIES.
You are scheduled to be here on Friday, March 15, 2013 at 10:00 a.m. for the
document signing. PLEASE CALL AT LEAST TWO DAYS PRIOR TO THAT DATE to
discuss any questions you may have. That will give us time to make any final changes
needed prior to your appointment and have the documents ready for signing when you
arrive here.
OR
Please read the enclosed documents and note all of your questions and comments on
them in preparation for our appointment to review them on Thursday, February 28, 2013 at
10:00 a.m.
Very truly yours,

William L. Babcock, Jr.
Enclosures
2013-21 letter forwarding draft documents.docx

I-170

CLIENT
Estate Planning Worksheets
(Recommended re-titling of assets and re-designation of beneficiaries)
ASSET
Residence
Mortgage:
Net:
Other real estate
Mortgage:
Net:
Stocks/Bonds
Checking/Sav/MM
Annuities
Ben:
Retirement assets (H) Ben:
401K
IRA
Ben:
Life Ins (H)
Retirement assets (W)
401K
IRA
Life Ins (W)
Automobiles
Furniture, jewelry, etc.
Other assets
TOTALS:

DETAIL

HUSBAND

Joint or payable to
spouse

WIFE

600,000
0
600,000

600,000

100,000
25,000
55,000
0

100,000
25,000
55,000

125,000
25,000
50,000

125,000
25,000
50,000

125,000
25,000
50,000
25,000
25,000

125,000
25,000
50,000
25,000
25,000

150,000
50,000

proof

2013-22B Assets ($1,230,000).xlsx

VALUE

1,230,000
1,230,000

I-171

0

0

1,230,000

3/28/2013

CLIENT
Estate Planning Worksheets
(Recommended re-titling of assets and re-designation of beneficiaries)
ASSETS

DISTRIBUTION 1

Funeral, attn fees & exp.
1.7%
$20,910

HUSBAND
$0
Joint or payable to spouse
$1,230,000

SURVIVOR
$1,230,000

WIFE
$0
$1,230,000

DISTRIBUTION 2*

Estimated Estate Tax
$0
Beneficiaries
$1,209,090

$1,230,000

$1,230,000

* Assuming survivor does not change his or her Will

2013-22C Illustration ($1,230,000).xlsx

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3/28/2013

CLIENT
Estate Planning Worksheets
(Recommended re-titling of assets and re-designation of beneficiaries)
Column A

Column B

Column C

Column D

Taxable
amount
over

Taxable
amount
not over

Tax on
amount in
column A

Rate of tax on
excess over
amount in
column A
0.18
0.20
0.22
0.24
0.26
0.28
0.30
0.32
0.34
0.37
0.39
0.40

0
10,000
0
10,000
20,000
1,800
20,000
40,000
3,800
40,000
60,000
8,200
60,000
80,000
13,000
80,000
100,000
18,200
100,000
150,000
23,800
150,000
250,000
38,800
250,000
500,000
70,800
500,000
750,000
155,800
750,000
1,000,000
248,300
1,000,000
--------345,800
SURVIVOR
1,230,000
Funeral, attn fees & exp.
20,910
Federal taxable estate
1,209,090
Column A amount
1,000,000 Column C tax
Excess over Col A
209,090 Column D rate
Total tentative tax:
Tax credit on the first $5,250,000
Estimated Estate Tax

2013-22D Fed tax ($1,230,000).xlsx

I-173

40%

345,800
83,636
429,436
2,045,800
0

3/28/2013

CLIENT
Estate Planning Worksheets
(Recommended re-titling of assets and re-designation of beneficiaries)
ASSET
Residence
Mtg:
Net:
Other Residence
Mtg:
Net:
Stocks/Bonds
Checking/Sav/MM
Annuities
Retirement assets
401K
IRA
Life Ins
Automobiles
Furniture, jewelry, etc.
Other assets
TOTALS:

DETAIL

CLIENT

Joint or Direct
Pay

750,000
150,000
600,000

600,000

225,000
600,000
85,000
0

225,000
600,000
85,000

250,000
25,000

Ben:
Ben:
Ben:
Ben:

350,000
250,000
1,000,000
55,000
55,000
3,220,000
3,220,000

proof

2013-22E Assets ($3,220,000).xlsx

VALUE

I-174

0
350,000
250,000
1,000,000
55,000
55,000
1,620,000

1,600,000

3/28/2013

CLIENT
Estate Planning Worksheets
(Recommended re-titling of assets and re-designation of beneficiaries)
ASSETS

DISTRIBUTION

CLIENT
$1,620,000

Funeral, attn fees & exp.
0.6%
$19,320

Beneficiaries
$1,600,680

2013-22F Illustration ($3,220,000).xlsx

Joint or Direct Pay
$1,600,000

Beneficiaries
$1,600,000

$3,220,000

$3,220,000

I-175

3/28/2013

CLIENT
Estate Planning Worksheets
(Recommended re-titling of assets and re-designation of beneficiaries)
Column A

Column B

Column C

Column D

Taxable
amount
over

Taxable
amount
not over

Tax on
amount in
column A

Rate of tax on
excess over
amount in
column A
0.18
0.20
0.22
0.24
0.26
0.28
0.30
0.32
0.34
0.37
0.39
0.40

0
10,000
20,000
40,000
60,000
80,000
100,000
150,000
250,000
500,000
750,000
1,000,000

10,000
0
20,000
1,800
40,000
3,800
60,000
8,200
80,000
13,000
100,000
18,200
150,000
23,800
250,000
38,800
500,000
70,800
750,000
155,800
1,000,000
248,300
--------345,800
3,220,000
19,320
3,200,680
1,000,000 Column C tax
2,200,680 Column D rate

CLIENT
Funeral, attn fees & exp.
Federal taxable estate
Column A amount
Excess over Col A
Total tentative tax:
Tax credit on the first $5,250,000
Estimated Estate Tax

2013-22G Fed tax ($3,220,000).xlsx

I-176

40%

345,800
880,272
1,226,072
2,045,800
0

3/28/2013

CLIENT
Estate Planning Worksheets
(Recommended re-titling of assets and re-designation of beneficiaries)
ASSET
Residence
Mortgage:
Net:
Other real estate
Mortgage:
Net:
Stocks/Bonds
Checking/Sav/MM
Annuities
Ben:
Retirement assets (H)
401K
IRA
Life Ins (H)
Retirement assets (W)
401K
IRA
Life Ins (W)
Automobiles
Furniture, jewelry, etc.
Other assets
TOTALS:

DETAIL

VALUE

HUSBAND

H's TRUST

WIFE

W's TRUST

Joint or
Payable to
Spouse

1,200,000
600,000
600,000

600,000

350,000
1,200,000
525,000
0

350,000

500,000
150,000

Ben:
Ben:
Ben:

W, Marital Trust
W, Marital Trust
Trust, W

400,000
200,000
1,200,000

Ben:
Ben:
Ben:

H, Marital Trust
H, Marital Trust
Trust, H

350,000
100,000
1,200,000
35,000
50,000

proof

2013-22H Assets ($6,210,000).xlsx

600,000
250,000

600,000
250,000

25,000

400,000
200,000
1,200,000
350,000
100,000
1,200,000

6,210,000
6,210,000

0

I-177

2,050,000

35,000
50,000

0
2,050,000
2,110,000
* assuming spouse disclaims

3/28/2013

CLIENT
Estate Planning Worksheets
(Recommended re-titling of assets and re-designation of beneficiaries)
ASSETS

HUSBAND'S DEATH

HUSBAND
$0

Funeral, attn fees & exp.
1.0%
$20,500

H's TRUST
$2,050,000

Marital Trust (bypass portion)
($5,250,000 less expenses)
$2,029,500

WIFE'S DEATH

probate
Trusts for Descendants
$2,029,500

income (mandatory) &
principal (discretionary)

Marital Trust (taxable portion)
$0
Joint or Payable to Spouse
$2,110,000

Funeral, attn fees & exp.
0.5%
$20,800

income (mandatory) &
principal (discretionary)

WIFE
$0

WIFE
$2,110,000

Estimated Estate Tax
$0

W's TRUST
$2,050,000

W's TRUST
$2,050,000

Wife's Beneficiaries
$4,139,200

$6,210,000

$6,210,000

$6,210,000

2013-22I Illustration ($6,210,000).xlsx

I-178

3/28/2013

CLIENT
Estate Planning Worksheets
(Recommended re-titling of assets and re-designation of beneficiaries)
Column A

Column B

Column C

Column D

Taxable
amount
over

Taxable
amount
not over

Tax on
amount in
column A

Rate of tax on
excess over
amount in
column A
0.18
0.20
0.22
0.24
0.26
0.28
0.30
0.32
0.34
0.37
0.39
0.40

0
10,000
0
10,000
20,000
1,800
20,000
40,000
3,800
40,000
60,000
8,200
60,000
80,000
13,000
80,000
100,000
18,200
100,000
150,000
23,800
150,000
250,000
38,800
250,000
500,000
70,800
500,000
750,000
155,800
750,000
1,000,000
248,300
1,000,000
--------345,800
Marital Trust (taxable portion)
0
WIFE
2,110,000
W's TRUST
2,050,000
Funeral, attn fees & exp.
20,800
Federal taxable estate
4,139,200
Column A amount
1,000,000 Column C tax
Excess over Col A
3,139,200 Column D rate
Total tentative tax:
Tax credit on the first $5,250,000
Estimated Estate Tax
WIFE
2,110,000
W's TRUST
2,050,000
Funeral, attn fees & exp.
20,800
Federal taxable estate
4,139,200
Column A amount
1,000,000 Column C tax
Excess over Col A
3,139,200 Column D rate
Total tentative tax:
Tax credit on the first $5,250,000
Estimated Estate Tax

2013-22.J Fed tax ($6,210,000).xlsx

I-179

40%

40%

345,800
1,255,680
1,601,480
2,045,800
0

345,800
1,255,680
1,601,480
2,045,800
0

3/28/2013

CLIENT
Estate Planning Worksheets
(Income)
Husband

Wife

Joint

Salary
Pension
Social Security
Other
Totals

0

0

0

Total income

0

2013-22K Income.xlsx

I-180

3/28/2013

LAW OFFICE OF

WILLIAM L. BABCOCK, JR. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
William L. Babcock, Jr.

tel. 703-518-8400
fax 703-518-8401

wlb@willtrustestate.com

Kiersten L. Jensen
klj@willtrustestate.com

James A. Gillis
jag@willtrustestate.com

TRUSTS FOR DESCENDANTS “OPERATING MANUAL”

GENERAL PRINCIPLES
After your death, or after the death of the surviving spouse, and after taxes and
expenses are calculated and paid, your assets are divided into separate Trusts, one for each
of your children.
The Trusts must be administered (managed) as set forth in your Will or revocable
trust creating the Trusts. If a question arises that is not addressed in the document itself, the
Virginia statutes related to trusts and/or the Virginia case law may be consulted for the
answer.
THE TRUSTEE
The Trust is managed by its Trustee, who will be your child if he or she has reached
the age specified in your document.
When a child is the Trustee of his or her Trust the child will also have the power to
name the person or institution he or she would like to manage the Trust in the event of his or
her incapacity or death.
If your child has not reached the specified age at the time the Trust for that child is
set up, the Trust is managed by the person or persons designated in your document.
BENEFICIARIES
The beneficiaries of the Trust are the child, who is called the “primary beneficiary,”
and the child’s descendants.
The Trustee has the power to distribute the income and principal of the Trust to or
for the benefit of the beneficiaries for their “health, education, maintenance and support.”
The TRUSTS FOR DESCENDANTS Article provides guidelines for the Trustee to use in
making distribution decisions.
A “Trust Advisor” is a person who is not a relative or an employee of a beneficiary
of the Trust who is at least 25 years old and one of the following: experienced in business,
finance or investments; a CFP; a CPA; or an attorney.

I-181

If the Trustee wishes to make a distribution for something other than health,
education, maintenance or support, the Trustee may appoint a Trust Advisor for the Trust
and ask for a decision whether a distribution for some other purpose is “appropriate.” The
same process may be used to make distributions to the parent, legal guardian or other person
raising a minor beneficiary or caring for an elderly or disabled beneficiary.
If a Trust becomes too small or for some other reason becomes “impractical or
inappropriate,” a Trust Advisor appointed for that purpose may direct that the Trust be
terminated, and to whom the remaining assets should be distributed.
The child may control how the Trust assets pass at the child’s death by signing a Will
making specific reference to the Trust. If the child does not direct to whom the assets pass
at the child’s death, they will be divided into separate Trusts for the child’s children and be
managed in the same manner as they had been for the parent. If the primary beneficiary has
no children the assets usually pass to siblings or the children of deceased siblings.
The Trust assets, in part if not in whole, will not be includable in the taxable estate of
your child for federal estate tax purposes, and they should have significant (although not
perfect) protection from creditors of your child and from claims by a child’s spouse.
A child becomes the Trustee of his or her Trust at the age specified in your
document, and if a child of yours dies leaving a child under that age, your child’s Will can
name the person who will be the Trustee until your grandchild reaches that age, and can
change that age and any or all of the other terms of the Trust as well. If the deceased child
did not provide what to do with his or her Trust assets in a Will, the surviving parent of that
grandchild may name the Trustee, but not change the Trust terms.
After your death, your children should seek the advice of a trusts and estates attorney
to provide guidance about setting up Trust accounts, engaging a CPA for the income tax
work, managing the assets and making distributions to themselves and their descendants.
There should be no need for continuing legal services once they understand how to operate
the Trust, nor for a CPA to prepare tax returns after the initial return if the Trust assets are
cash and securities.
MECHANICS
The Trustee (the child, if the child is old enough to serve as Trustee) will:
Obtain an Employer Identification Number (“EIN”) for the Trust from IRS. This can
be done on the internet in a few minutes.
Set up an account or accounts in the name of the Trust. If the child is John Jones it is
the John Jones Trust. The most flexible vehicle is a brokerage account, which can hold
stocks, bonds, mutual funds, CDs, cash, etc. and can include a checking account. As many
other accounts as the Trustee wants can be established.

2

I-182

Deposit the assets coming from your estate or trust into the account(s). No assets
may be added to the Trust from any other source at any time.
Real property is deeded to the child as Trustee of his or her Trust. If one of the assets
is an interest in a partnership or limited liability company that interest is changed on the
books of the company to show it is held by the child’s Trust.
Manage, buy and sell assets for the Trust as deemed appropriate over the years.
Make distributions of income and/or principal to one or more of the beneficiaries
(who are the primary beneficiary and his or her descendants) each year; or make payments
directly to third parties on behalf of beneficiaries, such as tuition payments for school.
When the Trustee signs a check he or she signs as Trustee. The same signature is used with
contracts and all other documents used to conduct any business or financial transaction on
behalf of the Trust. This is just the same as the president of a corporation signing on behalf
of the corporation, or a general partner signing on behalf of a partnership.
Operate the Trust on a calendar year basis for income tax purposes and file income
tax returns on April 15.
Sign a Will designating how the Trust assets will pass at the child’s death. If there is
no such direction in the child’s Will, the Trust assets will be divided and distributed to
successor Trusts for the child’s children, and operated under the same terms. If your child
has minor children, your child may name the Trustee to serve until your child’s child
becomes old enough to become the Trustee, and your child may also change that age from
whatever is stated in your Will or Trust creating the original Trusts.
THE SINGLE MOST IMPORTANT CONCEPT FOR THE CHILD TO
UNDERSTAND ABOUT THE TRUST IS THAT ASSETS SHOULD ONLY BE
REMOVED FROM THE TRUST IF THEY ARE GOING TO BE CONSUMED.
A common misconception is that if the child (primary beneficiary) would like to
purchase a second home, start a business, etc. the child can and should use the assets from
the Trust to do this. The child can do this but if the Trust assets are going to be used to
purchase or invest in an asset that may retain its value in the future, the purchase or
investment should be made in the name of the Trust. If the Trust makes the purchase full
flexibility to buy and sell that asset in the future is retained by the child as Trustee, and
protection from creditors and predators is maintained since the asset is owned by the Trust.
Removing assets from the Trust and placing them in the name of the child removes them
from this protection, and exposes them to inclusion in the child’s estate for estate tax
purposes if there continues to be an estate tax.
If on the other hand cash will be removed because it will be spent on a vacation, or a
gift, or for living expenses, or for any other purpose, that would make sense (assuming there
is no other source for the funds needed) because none of the Trust protections would be lost
– the funds will be consumed and there would be nothing to protect.

3

I-183

INCOME TAX AND INCOME TAX RETURNS
Trusts are required to have a calendar year for income tax purposes, so federal
income tax returns for trusts are due on April 15. The federal returns are made on Form
1041. The Virginia returns are made on Form 770 and are due on May 1.
If the Trust makes no distributions to its beneficiaries during the year, all of the
ordinary income (interest, dividends and rent) it receives during the year will be taxable to
the Trust. If the Trust distributes cash or property to beneficiaries during the calendar year,
or within 65 days after the year end, the ordinary income of the Trust is deemed to have
been distributed to the beneficiaries and is deducted from the Trust’s income and added to
the child’s income. If only part of the income of the Trust is distributed, some tax will be
paid by the Trust and some by the beneficiaries who received the income.
Capital gains tax is normally paid by the Trust.
I hope this has been helpful.
2013-23 Trusts for Descendants Operating Manual.doc
3/9/12 wlb

4

I-184

LAW OFFICE OF

WILLIAM L. BABCOCK, JR. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
William L. Babcock, Jr.

tel. 703-518-8400
fax 703-518-8401

wlb@willtrustestate.com

Kiersten L. Jensen
klj@willtrustestate.com

James A. Gillis
jag@willtrustestate.com

March 15, 2013
BY HAND
John J. Smith
Mary M. Jones
123 Main Street
Alexandria, VA 22314
Re:

Estate Planning Documents

Dear John and Mary:
You have been given an envelope containing the originals of each of the Wills,
restated revocable Trusts, Durable Financial Powers of Attorney and Advance Medical
Directives signed by you here today. The originals should be kept in a joint safe deposit
box in Virginia. PLEASE DESTROY THE ORIGINALS AND THE COPIES OF
THE PRIOR VERSIONS OF THESE DOCUMENTS.
This letter and its enclosures have been placed in a second envelope, which should
be kept at home among your important papers. The enclosures are as follows:
1. The original of this letter.
2. Copies of each of the documents listed in the first paragraph of this letter.
The copies should have notes on them stating the location of the originals.
3. Estate Planning Worksheets (4 pages). The calculations are estimates based
on the figures you have supplied and do not take into account income taxes.
The date of death figures will vary from these, perhaps dramatically, based
on the value of your assets, how they are titled, the beneficiaries named on
life insurance, IRA, pension and other non-probate assets, and the tax law
then in effect. For this reason it is wise for you to update these calculations
on a periodic basis and check with me if there are any substantial changes.
4. Memorandum Gift of Tangible Personal Property form, with instructions,
which has also been emailed to you. email when drafting letter
5. Beneficiary designation language for your retirement accounts. You should
obtain change of beneficiary forms from each company holding an IRA or

I-185

John J. Smith
Mary M. Jones
March 15, 2013
Page 2

6.

7.

other tax deferred retirement account (Keogh, 401k, 457, pension, profit
sharing, thrift savings, etc.). Sign the company form, write “SEE
ATTACHED SHEET” in the designation spaces for both the primary
beneficiary and the secondary (contingent) beneficiary, and then staple my
form to the company form. Request a written confirmation that the
designation has been accepted. THIS IS A CRITICAL STEP TO INSURE
THAT YOUR ASSETS ARE DISTRIBUTED AS YOU HAVE
PLANNED.
Memorandum regarding the funding and operation of a revocable Trust. A
revocable Trust is designed to minimize probate expenses, and keep private
the value of your estate and the identity of your beneficiaries. To do that
your real estate, major cash holdings and other investment assets should be
transferred to the Trust. This memo discusses how to transfer various types
of assets to a revocable Trust.
Certification of Trust forms for each of you for use in creating accounts in
the names of the Trusts.

In order to obtain the full benefit of the revocable Trusts your assets need to be
transferred to the Trusts.
If real estate is to be transferred, I charge $____ to prepare and record a new deed
and I will need a copy of the existing deed to do so. AFTER THE NEW DEED IS
RECORDED YOU MUST BE SURE THAT THE CASUALTY AND LIABILITY
INSURANCE COVERING THE PROPERTY IS AMENDED TO SHOW THE
TRUSTEES OF THE TRUST AS ADDITIONAL INSUREDS. A TELEPHONE CALL
TO YOUR INSURANCE AGENT SHOULD BE ALL THAT IS NEEDED, ALTHOUGH
YOU SHOULD HAVE A WRITTEN CONFIRMATION FROM THE INSURANCE
COMPANY SENT TO YOU. There can be additional paperwork and cost when refinancing a house held in a revocable trust, so if you plan on re-financing or purchasing
another home in the foreseeable future I would defer this transfer.
For estate tax planning purposes I recommend that you transfer your house to your
Trusts. That way 1/2 of the house value could be used to help fund the $5,250,000 bypass
amount at the first death and reduce the potential estate taxes at the second death.
There are, however, considerations other than the estate tax.
If title to 1/2 of the house passes into the Trust created by the deceased spouse at the
first death, the house appreciates in value, and is then sold, the Trust will have a stepped up
basis for its 1/2 of the house as of the date of the first death, but any gain after that on the

I-186

John J. Smith
Mary M. Jones
March 15, 2013
Page 3

1/2 interest owned by the Trust cannot be offset with the $250,000 capital gains tax
exclusion available to individuals, because that portion of the house is owned by a trust and
not an individual.
Usually the best solution to the capital gains tax problem is for the surviving spouse
to purchase for cash the 1/2 of the house which passes into the Trust. That way the entire
house will be owned by an individual and be eligible for the $250,000 capital gains tax
exemption. If cash is not available we can use a note for the purchase. Using other assets
such as stocks, bonds or mutual funds which have appreciated in value to fund the purchase
might trigger capital gain to the spouse.
There is no problem if the surviving spouse’s exclusion of $250,000 will be fully
utilized when the property is sold. This would happen if the house has appreciated by
$500,000 or more since it was purchased. As an example, assume a couple buys a home for
$100,000, one spouse dies, 1/2 of the house passes into a trust and then the house is sold for
$600,000. The gain is $500,000. The surviving spouse owns 1/2 of the house and will have
a capital gain of $250,000. That gain is excluded from tax. There is no exclusion for the
Trust’s gain but none of the spouse’s exclusion has been wasted. The key is that all of the
surviving spouse’s exclusion has been used and none wasted. If the gain on the sale were
only $400,000, resulting in a gain of $200,000 for the surviving spouse, then $50,000 of the
surviving spouse’s exclusion would have been wasted because it could not be used against
$50,000 of the trust’s gain.
When title to the house is changed from tenants by the entireties to ownership
equally by your revocable Trusts it does not lose its protection from individual creditors.
IF WILLS ARE USED RATHER THAN REVOCABLE TRUSTS:
Another factor to consider is that if title to the house is changed from tenants by the
entireties to tenants in common the house will lose its protection from individual creditors.
A creditor of one spouse could not reach any part of the house. Only someone with a
judgment against both of you could reach the house. With ownership as tenants in common,
if one spouse is sued his or her half of the house would be subject to the claims of that
spouse’s creditors. The other half of course would not be liable. This may or may not be an
issue of concern.
You should be able to handle the other transfers yourselves, and that is the most costeffective way to proceed. Use the assets worksheet as a guide for the allocation of
ownership between you and your Trusts and for the beneficiaries to be designated on the
retirement accounts and life insurance. If you have questions or problems or would like for
us to handle the transfers for you we can do so at our regular hourly rates.

I-187

John J. Smith
Mary M. Jones
March 15, 2013
Page 4

Your goal for estate planning purposes should be for the survivor to have taxable
assets of less than the amount exempt from estate tax ($5,250,000).
You should obtain a change of beneficiary form for each life insurance policy.
Name your spouse as the primary beneficiary.
You should obtain a change of beneficiary form for each life insurance policy.
Name the “(YOUR NAME) Trust dated March 15, 2013, as amended,” as the primary
beneficiary.
Name your children as the secondary beneficiaries if your spouse predeceases you
and provide what happens to the child’s share if one of them predeceases you. Request a
written confirmation that the designation has been accepted.
Name the “the Trusts for Descendants created by my Will (revocable Trust), in the
proportions created by my Will (revocable Trust)” as the secondary beneficiary if your
spouse predeceases you. Request a written confirmation that the designation has been
accepted.
You need to be sure that there are sufficient assets in each of your individual names
to maximize the estate tax savings upon the second death. Under the law in 2013, the first
spouse to die needs $5,250,000 in his or her name to maximize estate tax savings, but as the
exemption is increased due to cost of living adjustments, that funding amount should
increase. I recommend that your assets be re-titled in accordance with the Estate Planning
Worksheets.
YOU SHOULD CONTACT ME PERIODICALLY AS THE ESTATE TAX
LAW CHANGES TO BE SURE YOUR DOCUMENTS AND THE ALLOCATION
OF YOUR ASSETS ARE STILL APPROPRIATE.
You should review your estate planning documents every 3 to 5 years and whenever
there is a material change in the value of your estate, or a birth, death, marriage, divorce,
adoption or other change related to the beneficiaries or fiduciaries, or a change in the tax
laws. You should not attempt to alter a document by lining through any portion or writing
in additional provisions, because doing that would probably result in the need for an
expensive court proceeding to determine the validity and effect of the alteration, and in rare
circumstances could even invalidate the entire document.
This concludes the planning and preparation of your estate planning documents. We
will not be reviewing your estate planning on a periodic basis or with every change in the
laws. It will be your responsibility to have your plan reviewed in the future to be sure it is
still appropriate to your circumstances. We will, however, be glad to evaluate your planning
and recommend changes that may be desirable if you ask us to do so in the future.

I-188

John J. Smith
Mary M. Jones
March 15, 2013
Page 5

You should review your estate planning documents every 3 to 5 years and whenever
there is a material change in the value of your estate, or a birth, death, marriage, divorce,
adoption or other change related to the beneficiaries or fiduciaries, or a change in the tax
laws. You should not attempt to alter a document by lining through any portion or writing
in additional provisions, because doing that would probably result in the need for an
expensive court proceeding to determine the validity and effect of the alteration, and in rare
circumstances could even invalidate the entire document.
If a person named as a beneficiary, agent, executor, etc. in your documents, or
anyone else, requests copies of documents or other information from your file we will not
release any copies of documents or other information until we have contacted you to obtain
your permission. If we cannot locate you by mail, phone or email and we feel it is
appropriate under the circumstances known to us, we have your permission to release copies
of your documents and other information in our discretion.
We have not retained any original documents of yours. We will retain copies of your
estate planning documents in paper and/or electronic form, and may also have copies of
documents supplied by you. We have your permission to use our judgment to determine
when to destroy any such copies in our file.
It was a pleasure working with you and I hope that if you wish to make revisions to
your estate plan in the future you will call. Should you, a family member or an
acquaintance need a lawyer for any reason you should not hesitate to call. If it is not an
estate planning or administration matter we can help locate a suitable lawyer for that
particular matter within the local legal community. We also have contacts outside the local
area if that is the need.
If there is a death in one of your families you should contact me. There are
numerous estate administration decisions that can have a major impact on the overall
benefits to the family, and some of those decisions require an early assessment of the
situation. Examples would be the use of disclaimers to re-position assets, and the timing of
distributions to take advantage of the alternate valuation date for estate tax purposes. Either
of those items alone can result in tens of thousands of dollars of savings to the beneficiaries.
It is also crucial that trusts be properly set up and funded, and IRA/retirement account
paperwork be completed. None of these are matters that would be apparent to a person who
does not have both training and experience in estate administration.

I-189

Initials

Initials

John J. Smith
Mary M. Jones
March 15, 2013
Page 6

If you have any questions, please let me know.
Very truly yours,
William L. Babcock, Jr.
2013-24 Letter enclosing signed documents.docx
3/9/13 wlb

I-190

MEMORANDUM GIFT OF TANGIBLE PERSONAL PROPERTY
I make the following gifts at the time of my death, if the beneficiary survives me:

Description of Item or Category of
Tangible Personal Property

Primary Beneficiary
(including address and relationship)

Secondary Beneficiary
(if Beneficiary predeceases you)
(write “lapse” if none)

1.
2.
3.
4.
5.
6.
7.
8.
[use additional sheet(s) if necessary]
If a Memorandum dated earlier than this one makes a gift of the same property to a different beneficiary, the gift in
this Memorandum shall be given effect rather than the preceding gift.

Date: _______________________

2013-25 Tangibles Memo - single.docx

____________________________________________
Signature

I-191

MEMORANDUM GIFT OF TANGIBLE PERSONAL PROPERTY
(Page #____ of #____)

Description of Item or Category of
Tangible Personal Property

[continued from prior page]

Primary Beneficiary
(including address and relationship)

Secondary Beneficiary
(if Beneficiary predeceases you)
(write “lapse” if none)

9.
10.
11.
12.
13.
14.
15.
16.
If a Memorandum dated earlier than this one makes a gift of the same property to a different beneficiary, the gift in
this Memorandum shall be given effect rather than the preceding gift.

Date: _______________________

2013-25 Tangibles Memo - single.docx

____________________________________________
Signature

I-192

INSTRUCTIONS
Your Will authorizes the use of a separate memorandum to dispose of tangible personal property. If you want to use
such a memorandum, you should follow these instructions:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

11.

Furniture, furnishings, personal effects, automobiles, boats, airplanes and other tangible personal property may be
disposed of by the memorandum.
It may not be used for gifts of money, evidences of indebtedness, documents of title, securities or real estate.
The memorandum should not include items already specifically disposed of in your Will.
You should describe each item so that it is not confused with a similar item and can be positively identified by a third
party.
Each beneficiary should be identified by his or her proper name and relationship to you. The address of the
beneficiary should be added if the beneficiary is not closely related to you.
You should name a secondary beneficiary if the primary beneficiary does not survive you.
If there is no secondary beneficiary, write “lapse” in that column.
If you use this form without re-typing it and do not use all of the lines, draw a diagonal line across the unused spaces.
The memorandum should be dated and signed by you using BLUE INK.
Put the original in your safe deposit box with your other estate planning documents, keep a copy at home and
PLEASE SEND A COPY TO ME so that I can be sure you did not violate some obscure rule which would cause an
unintended result.
If you want to add or subtract from the memorandum after signing, the best practice is to prepare a new document
which incorporates the changes and destroy the prior one (original and copies).

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MEMORANDUM GIFT OF TANGIBLE PERSONAL PROPERTY
I make the following gifts at the time of my death if the beneficiary survives me:
GIFTS TAKING EFFECT ONLY IF MY SPOUSE DOES NOT SURVIVE ME:
Primary Beneficiary
Description of Item or Category of
(including address and relationship
Tangible Personal Property
if not Spouse or Child)
1.

Secondary Beneficiary
(if Beneficiary predeceases you)
(write “lapse” if none)

2.
3.
4.
5.
6.
7.
8.
9.
If a Memorandum dated earlier than this one makes a gift of the same property to a different beneficiary, the gift in this
Memorandum shall be given effect rather than the preceding gift.
Date: _______________________

2013-26 Tangibles Memo - married.docx

____________________________________________
Signature

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GIFTS TAKING EFFECT WHETHER OR NOT MY SPOUSE SURVIVES ME:
Description of Item or
Primary Beneficiary
Category of Tangible
(including address and relationship
Personal Property
if not Spouse or Child)
1.

Secondary Beneficiary
(if Beneficiary predeceases you)
(write “lapse” if none)

2.
3.
4.
5.
6.
7.
8.
9.
If a Memorandum dated earlier than this one makes a gift of the same property to a different beneficiary, the gift in this
Memorandum shall be given effect rather than the preceding gift.

Date: _______________________

2013-26 Tangibles Memo - married.docx

____________________________________________
Signature

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INSTRUCTIONS
Your Will authorizes the use of a separate memorandum to dispose of tangible personal property. If you want to use
such a memorandum, you should follow these instructions:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

11.

Furniture, furnishings, personal effects, automobiles, boats, airplanes and other tangible personal property may be
disposed of by the memorandum.
It may not be used for gifts of money, evidences of indebtedness, documents of title, securities or real estate.
The memorandum should not include items already specifically disposed of in your Will.
You should describe each item so that it is not confused with a similar item and can be positively identified by a third
party.
Each beneficiary should be identified by his or her proper name and relationship to you. The address of the
beneficiary should be added if the beneficiary is not closely related to you.
You should name a secondary beneficiary if the primary beneficiary does not survive you.
If there is no secondary beneficiary, write “lapse” in that column.
If you use this form without re-typing it and do not use all of the lines, draw a diagonal line across the unused spaces.
The memorandum should be dated and signed by you using BLUE INK.
Put the original in your safe deposit box with your other estate planning documents, keep a copy at home and
PLEASE SEND A COPY TO ME so that I can be sure you did not violate some obscure rule which would cause an
unintended result.
If you want to add or subtract from the memorandum after signing, the best practice is to prepare a new document
which incorporates the changes and destroy the prior one (original and copies).

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DO NOT DESIGNATE TO A PECUNIARY FORMULA GIFT. THE ACCOUNT IS
INCOME IN RESPECT OF A DECEDENT AND FUNDING WILL TRIGGER
INCOME TAX ON THE ENTIRE ACCOUNT
THE SPOUSE MAY NOT HAVE A LIMITED POWER OF APPOINTMENT IN THE
FAMILY TRUST IF A DISCLAIMER WILL BE USED TO PASS THESE ASSETS
INTO THE FAMILY TRUST
**ALWAYS PRINT THESE IN THE FIRST DRAFT**
JOHN J. SMITH
BENEFICIARY DESIGNATION FOR
RETIREMENT ACCOUNT
A.
The beneficiary of my Retirement Account will be my spouse.
B.
If my spouse disclaims the right to receive the Retirement Account, the
beneficiary of my account will be the Trustee of the Family Trust created by the JOHN J.
SMITH TRUST dated March 15, 2013, as amended.
C.
If my spouse does not survive me or if my spouse disclaims both the right
to receive the Retirement Account outright and the right to receive benefits from the
account as part of the Family Trust, my Retirement Account shall be distributed, per
stirpes, to Trusts for my descendants who survive me. The Trusts shall be held and
administered in accordance with the TRUSTS FOR DESCENDANTS Article of the
JOHN J. SMITH TRUST dated March 15, 2013, as amended. For beneficiary designation
and distribution purposes, each Trust will be treated as a separate account of the Trust’s
primary beneficiary.
D.
The Custodian, Trustee or Plan Administrator of the account will not be
responsible for determining any division of the account that may be required by this
designation and will have no liability to any person for complying with instructions
received from the Trustee. Any division of the account necessary to comply with this
designation shall be determined by the Trustee.
Signed on _______________________

____________________________________
JOHN J. SMITH
Owner of Retirement Account

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INFORMATION AND INSTRUCTIONS FOR
ADMINISTERING A REVOCABLE (LIVING) TRUST
TO:

JOHN SMITH and MARY JONES

FROM:

William L. Babcock, Jr.
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
703-518-8400

DATE:

March 15, 2013

Upon the signing of your revocable inter vivos (living) Trusts you have completed
the formative stages of a sophisticated estate plan. In order for the benefits of the Trusts
to be realized, you, as the Trustees of the Trusts, must properly administer the Trusts.
That is not a difficult task, but you must understand some basic principles about the
operation of the Trusts.
The following information and instructions are designed to give you both general
and specific suggestions.
I. PURPOSE.
A revocable (living) trust can be used as a mechanism to: avoid the expense of
petitioning a Court for the appointment of a guardian to act on your behalf in the event of
your disability; provide management for your assets held in the name of your Trusts by
your successor Trustees during any time you may be unable to do so yourself; avoid
probate expenses on the assets held by the Trusts upon your death; and provide privacy
for your estate plan.
II. FUNDING.
You must make certain that assets are transferred to the Trusts; otherwise the
purposes above will not be achieved. It will also be necessary to make sure that
subsequently acquired property be placed in the Trusts.
Transfer of property to the Trusts is accomplished just as if the property were being
given to another person, even though you will be giving it to yourself as Trustee of the
Trust. For legal purposes a revocable trust is a separate entity, although for tax purposes it is
not, and you as Trustees retain complete control over the assets held in the Trusts.
Trust assets should be titled in the following format:
JOHN J. SMITH TRUST
MARY M JONES TRUST

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You should sign documents and checks as follows:
JOHN J. SMITH TRUST
By: John J. Smith, Trustee
or
By: Mary M. Jones, Trustee

MARY M. JONES TRUST
By: Mary M. Jones, Trustee
or
By: John J. Smith, Trustee
III.

RECOMMENDED TITLING OF ASSETS.
The Estate Planning Worksheets enclosed with my instruction letter to you dated
March 15, 2013 contain recommendations as to how you should hold title to your assets
for estate planning purposes, and the letter explains in detail how to handle certain of the
transfers. The letter also gives you specific information about beneficiary designations.
This memo provides additional, more generic information.
IV. TRANSFERS OF ASSETS.
A.
Tangible Personal Property. Tangible personal property includes
such things as household goods, furniture, furnishings, clothing, jewelry, cars, boats,
planes, etc. To the extent it is not held jointly, your Trust (and tangibles memo if you
decide to create and sign one) controls the disposition of tangible personal property upon
your death.
B.
Stocks and Bonds. Registration of stocks and bonds can be most
easily accomplished by a stockbroker. If you have an existing account with a brokerage
firm, you should simply request that the account be changed from your name individually
into the name of the Trust. That will transfer all assets within the account into the Trust.
Most brokers require that a copy of the Trust or certain parts of it be provided before they
will make this transfer. Instead of that try to use the Certification of Trust form that you
have been given.
If you hold actual stock certificates and/or bonds in your safe deposit box,
my advice is that you put them in a brokerage account. Using the account means you get
one consolidated statement each month and one 1099 form in January for all your
dividends and interest for the past year. You also get all dividends and interest promptly
credited to the account and earning interest immediately, and you can quickly and easily
buy and sell the assets in the account.

2

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C.
Subchapter S Stock. Subchapter S stock is stock in a privately
owned corporation (fewer than 100 stockholders). A revocable Trust may hold
Subchapter S stock, but no changes should be made to the Trust without checking with
me first. A wrong move can cause the Corporation’s Subchapter S election to be
automatically terminated, with adverse consequences to the Corporation and the
stockholders.
D.
Subchapter C Stock.
Stock in closely held Subchapter C
corporations should be re-issued in the name of your revocable Trust. There are no
complications with this type of stock as there are with “Sub S” stock.
E.
Promissory Notes. Notes are transferred to the Trust by endorsing
the original note “Without recourse, pay to the order of the JOHN J. SMITH TRUST [or
the MARY M. JONES TRUST]” and then signing your name exactly as it is typed on the
front of the note.
F.
Limited Partnership and LLC Interests. These interests may usually
be transferred using a simple assignment to the Trust. This assignment should describe
the interest with particularity and state that it is being transferred to the Trust. The
general partner/manager should be notified so that the partnership or LLC documents
(normally Schedule A attached to the partnership or operating agreement) reflect that the
Trust is now the new owner and is a limited partner or member rather than merely an
assignee.
G.
Bank Accounts. Checking and savings accounts, CDs, etc., can be
transferred by obtaining a new signature card from the financial institution in which these
assets are held. Be careful with certificates of deposit. There should be no prepayment
penalty for such a transfer, but make sure before the transfer is made. If there is a
penalty, simply change the title after the CD matures but before reinvesting it.
H.
IRAs and Other Income Tax Deferred Retirement Accounts. Due to
IRS restrictions these accounts cannot be “owned” by the Trust, but the Trust may be
named as the beneficiary. I have provided you with the appropriate language for the
beneficiary designations.
I.
Real Estate. It is sometimes desirable to have individually owned
real estate deeded to the Trust. I charge $225 to prepare and record a new deed for
property located in Virginia. In order to do so I will need a copy of the existing deed. If
you acquire any other real estate you should let me know before it is purchased so I can
advise you whether it should be titled in one or both of your Trusts.
If you own property outside of Virginia and it is left out of the Trust an
ancillary probate proceeding might be required in that other state, as well as in Virginia,
in order to complete the administration of your estate. It is therefore even more important

3

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that such property, if it is not held jointly with survivorship, be deeded to the Trust. Such
deeds must be prepared by a lawyer in the state where the property is located.
Sometimes extra paperwork and conveyances are needed when re-financing
real estate held in a revocable Trust.
Property owned as tenants by the entireties by a husband and wife that is
transferred into their revocable trusts will retain immunity from the claims of their separate
non-federal creditors under Va. Code §55-20.1.
If your personal residence is re-titled in your names as tenants in common or
in your trusts, after the first death the Trust as the owner of 1/2 of the property will not be
able to take advantage of the capital gains tax exclusion on the sale of its portion of the
residence because the Trust is not a person and the capital gains tax exclusion covers only a
person owning a residence, not a trust (See Letter Ruling 200104005). The portion of the
property held by the Trust will have a stepped up basis at death, so the Trust’s capital gain
would be 1/2 of the total gain on the property after the first death. A possible solution
would be for the surviving spouse to purchase the portion of the property held in the Trust
promptly after the first death for cash or a note. Then the entire personal residence would
be owned by the surviving spouse and the spouse’s entire $250,000 exclusion would be
available.
The potential capital gains problem is not a problem if the surviving spouse’s
exclusion of $250,000 will already be fully utilized when the property is sold. Assume
couple buys home for $100,000 and it is now worth $600,000. If 1/2 goes into trust, and
then there is a sale for $600,000 (or more), the surviving spouse’s 1/2 will have a capital
gain of $250,000 covered by his or her exclusion. The Trust’s gain won’t be covered but
none of surviving spouse’s exclusion has been wasted. If the property is sold for $500,000
or less, resulting in a gain of $200,000 for the surviving spouse, then $50,000 of the
surviving spouse’s exclusion would have been wasted.
J.
Life Insurance. You should obtain change of beneficiary forms from
each life insurance company. Fill in your spouse’s name as the primary beneficiary and
your children as the secondary beneficiaries.
K.
Life Insurance. You should obtain change of beneficiary forms from
each life insurance company. Name the “(YOUR NAME) TRUST dated March 15, 2013,
as amended” as the beneficiary.
L.
Life Insurance. You should obtain change of beneficiary forms from
each life insurance company. Fill in your spouse’s name as the primary beneficiary.
Designate the “Trustee(s) of the Trusts for Descendants created by my revocable Trust”
as the secondary beneficiary.
Be sure the company sends you a written confirmation that the designation
has been accepted.

4

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V.

INCOME TAX RETURN.
So long as a trust is revocable and you are either the sole Trustee or a Co-Trustee,
no separate tax identification number is needed, and no separate tax return for the Trust
need be filed. Use your regular social security number when the “Trust's I.D. Number” is
requested by banks and other institutions which report interest or dividends to the
government. The income of a revocable Trust is reported on a regular personal Form
1040 tax return.
After one of you has died the trust or trusts created out of the revocable trust will
be separate income tax entities and will be required to file income tax returns from that
time forward.
When your successor Trustee sets up and funds the Trusts for your children, each
Trust will have a separate tax identification number and be a separate taxpayer.
VI. PROTECTING TRUST ASSETS.
IF REAL ESTATE IS TRANSFERRED TO THE TRUST, THE LIABILITY
AND CASUALTY INSURANCE CURRENTLY COVERING THE PROPERTY
SHOULD BE AMENDED TO NAME THE TRUSTEE(S) AND SUCCESSOR(S) AS
ADDITIONAL INSUREDS. A TELEPHONE CALL TO YOUR INSURANCE AGENT
SHOULD BE ALL THAT IS NEEDED, ALTHOUGH YOU NEED TO HAVE A
WRITTEN CONFIRMATION FROM THE INSURANCE COMPANY SENT TO YOU.
VII. “BEARER” ASSETS.
If you own any assets in “bearer” form (such as bearer bonds or gold bullion, etc.)
and want them to be owned by the Trust, it is important that you put those assets in a
separate safe deposit box in the name of the Trust. If the safe deposit box is held in the
name of the Trust it will be clear that the bearer assets are owned by the Trust, and the
successor Trustee will be able to gain entrance to the box without the necessity of a court
order, if he or she has signed the signature card at the bank.
VIII. GIFTS.
You can give $13,000 per year per donee, with no adverse tax consequences to
you or the donee. There are other more sophisticated gifting mechanisms for moving
larger amounts of money. They are more complicated, usually involving the use of
irrevocable trusts, but in the right circumstances can produce outstanding results. Call
me if you are interested in making such larger gifts, either to individuals or charities.
IX. FUNERAL ARRANGEMENTS.
These arrangements should not be made in a Will or Trust, because often by the
time these documents have been examined the funeral has been completed. If you have
any particular instructions or wishes regarding the disposition of your body or the form or
content of a memorial service, they should be written out and placed in your Will file at

5

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home with the copy of your Will and Trust (not with the original documents in the safe
deposit box).
X. ARRANGEMENTS ASSUMING IMPENDING DEATH.
There are planning steps which can create substantial estate tax and administrative
savings which might be justified in the event of a terminal illness. Planning at that time
can be difficult, but it is almost always very effective, and often has a positive
psychological impact on the person facing the terminal illness.
XI. ESTATE ADMINISTRATION.
The documents prepared for you provide numerous options for the Executor and
Trustee. It is important for the choices to be recognized and understood and for informed
decisions to be made. Early professional advice can avoid costly and time-consuming
errors in administration, and insure the most favorable results of the planning you have
done.
XII. REVIEW.
Your estate planning documents have been planned and drafted based on the
information you have provided and the current state of the substantive and tax laws. You
should review your documents whenever there is a material change in the value of your
estate, a birth, death, marriage, divorce, adoption or other change in the beneficiaries,
executors, trustees or guardians, or a change in the tax laws.
I will not be reviewing your estate planning on a periodic basis or with every
change in the laws. It will be your responsibility to review your documents from time to
time to be sure they are still appropriate to your circumstances, and of course I will be
happy to answer any technical questions you may have.
XIII. FOLLOW UP QUESTIONS.
If questions arise from time to time concerning the administration of the Trust,
please do not hesitate to contact me.

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CERTIFICATION OF TRUST
In accordance with VA Code §64.2-804
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

The JOHN J. SMITH TRUST was signed on March 15, 2013, was amended and
restated in full on March 15, 2013, and remains in full force.
JOHN J. SMITH is the Grantor.
JOHN J. SMITH and MARY M. JONES are the Trustees currently serving, either of
whom may act alone.
The Trustees’ address is 123 Main Street, Alexandria, VA 22314.
The Trustees have all the powers authorized by VA Code §§64.2-777 and 64.2-105.
The Trust is revocable by JOHN J. SMITH.
Either Trustee may act alone on behalf of the Trust and may authenticate the Trust.
The taxpayer identification number for the Trust is the Grantor’s social security
number, which is ________________________.
Trust property may be held in the name of either Trustee, both Trustees, or in the
name of the Trust.
The Trust has not been revoked, modified or amended in any manner that would
cause the representations contained in this Certification of Trust to be incorrect.
VA Code §64.2-804 states that: A person who in good faith enters into a transaction
in reliance upon a certification of trust may enforce the transaction against the trust
property as if the representations contained in the certification were correct. A
person making a demand for the trust instrument in addition to a certification of trust
or excerpts is liable for damages if the court determines that the person did not act in
good faith in demanding the trust instrument.

________________________
Date

______________________________________
Trustee

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DEED TO TRUSTEE
[For Fairfax County change title to: DEED OF GIFT]
THIS DEED made this _____ day of __________, 2013, by and between JOHN
J. SMITH and MARY M. JONES, husband and wife, parties of the first part, Grantors,
and JOHN J. SMITH and MARY M. JONES as Trustees of the JOHN J. SMITH
TRUST dated March 15, 2013, as amended (the “Trust”), parties of the second part,
Grantee, and MARY M. JONES and JOHN J. SMITH as Trustees of the MARY M.
JONES TRUST dated March 15, 2013, as amended (the “Trust”), parties of the third
part, Grantee.
WHEREAS, JOHN J. SMITH has created and is the beneficiary of the JOHN J.
SMITH TRUST dated March 15, 2013; and
WHEREAS, MARY M. JONES has created and is the beneficiary of the MARY
M. JONES TRUST dated March 15, 2013.
WITHOUT CONSIDERATION the parties of the first part grant and convey
with GENERAL WARRANTY to the parties of the second part an undivided one-half
(1/2) interest, and to the parties of the third part an undivided one-half (1/2) interest, in
the land, improvements and appurtenances located in the City of Alexandria, Virginia
and described as follows:
[property description]
AND BEING the property conveyed to the Grantors by Deed dated
January 14, 1989 and recorded January 15, 1989 in Deed Book
1234 at Page 67 among the land records of the City of Alexandria
County, Virginia.
This conveyance is made of property which immediately prior to this conveyance
was held by Grantors, who are husband and wife, as tenants by the entireties, and in
accordance with Virginia Code §55-20.2 the property conveyed retains its immunity
from the claims of their separate creditors.
TO HAVE AND TO HOLD the land and premises, together with all rights,
ways, appurtenances and easements, in fee simple, in accordance with §55-17.1 of the
Code of Virginia, as amended, and upon the trusts and for the uses and purposes set
forth herein and in the Trust, as amended from time to time.
Full power and authority is granted to the Trustee, as if the Trustee were the
owner in fee simple and without the necessity of authorization from any beneficial
owner, to: protect and conserve the property; to sell, contract to sell and grant options to
purchase the property on any terms; exchange the property for other real or personal
property upon any terms; convey the property to any grantee, with or without
consideration; mortgage, execute a deed of trust on, pledge or otherwise encumber the
property; lease, contract to lease, grant options to lease and amend leases on the

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property, for any period of time, for any rental and upon any other terms and conditions;
and release, convey or assign any other right, title or interest in the property.
No party dealing with the Trustee in relation to the property and no party to
whom the property shall be contracted to be sold, leased, mortgaged or conveyed by the
Trustee, shall: (a) be obligated to see to the application of any purchase money, rent or
money borrowed or otherwise advanced on the property; (b) be obligated to see that the
terms of the Trust have been complied with; (c) be obligated to inquire into the authority
of the Trustee; or (d) be privileged to inquire into the terms of the Trust.
Every deed, mortgage, lease or other instrument executed by the Trustee in
relation to the property shall be conclusive evidence in favor of every person claiming
any right, title or interest, that: (a) at the time of delivery of the instrument the Trust was
in full force and effect; (b) the instrument was executed in accordance with the terms
and conditions of the Trust and is binding upon all beneficiaries of the Trust; (c) the
Trustee was authorized and empowered to execute and deliver the instrument; and (d) if
there has been an appointment of a successor Trustee, such successor has been properly
appointed and is vested with all the title, estate, rights, powers, duties and obligations of
the predecessor, provided that an instrument is recorded among the land records which is
subscribed, sworn to and acknowledged by a successor Trustee, and that instrument sets
forth that the Trustee has died, resigned, been removed or is incapacitated, and further
sets forth that the affiant is the successor Trustee as appointed in accordance with the
terms of the Trust.
No Trustee will have any personal liability or obligation arising from ownership
as Trustee of the legal title to the property, or with respect to any act done or contract
entered into or indebtedness incurred by the Trustee in dealing with the property, or in
otherwise acting as Trustee. The Trustee will only be responsible for discharging such
liabilities or obligations to the extent that Trust property or Trust funds are in the actual
possession of the Trustee.
The interest of every beneficiary under the Trust shall be personal property, and
no beneficiary shall have any right, title or interest in the real property held by the
Trustee, but only in the earnings and proceeds arising from the rental, sale or other
disposition of the property as provided in the Trust.
The powers, discretion and duties of the Trustees of each Trust may be exercised
and discharged by the Trustees of that Trust acting jointly or by either of them acting
alone, and in either event shall have the same force and effect as if exercised and
discharged by them acting jointly.
This conveyance is made subject to deeds of trust, conditions, covenants,
agreements, restrictions, reservations, party wall rights, easements, rights of way, and all
other matters of record applicable to the property hereby conveyed.

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_____________________________ (SEAL)
JOHN J. SMITH
_____________________________ (SEAL)
MARY M. JONES
COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
The foregoing instrument was acknowledged
_______________________ by JOHN J. SMITH, Grantor.

before

me

on

__________________________________
Notary Public

COMMONWEALTH OF VIRGINIA,
CITY OF ALEXANDRIA, to-wit:
The foregoing instrument was acknowledged
_______________________ by MARY M. JONES.

before

me

__________________________________
Notary Public
THIS DEED PREPARED WITHOUT A TITLE EXAMINATION
OR THE ISSUANCE OF TITLE INSURANCE
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on

CONSIDERATION: None
TAX MAP ID: [required]
Transfer Exempt per §58.1811.A.12

PREPARED BY:
RETURN TO:

William L. Babcock, Jr. Esq.
(VSB#12966)
William L. Babcock Jr. PC
526 King Street Suite 518
Alexandria VA 22314-3143

GRANTEE(S):

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John J. Smith, Trustee
Mary M. Jones, Trustee
123 Main Street
Alexandria VA 22314

PROPERTY ADDRESS:
123 Main Street
Alexandria VA 22314

LAW OFFICE OF

WILLIAM L. BABCOCK, JR. PC
526 King Street, Suite 518
Alexandria, Virginia 22314-3143
William L. Babcock, Jr.

tel. 703-518-8400
fax 703-518-8401

wlb@willtrustestate.com

Kiersten L. Jensen
klj@willtrustestate.com

James A. Gillis
jag@willtrustestate.com

April 20, 2013
VIA EMAIL ONLY (Clients@yahoo.com)
John J. Smith
Mary M. Jones
123 Main Street
Alexandria, VA 22314
Re: Estate Planning
Dear John and Mary:
In order to insure that your assets are distributed as you have planned it is
important that you complete the steps recommended in my letter to you dated March 15,
2013. I have enclosed a copy of that letter as a reminder.
If you would like for us to handle any of the recommended actions we can of course
do so at our regular hourly rates. If that is the case just give us a call.
There will be no further follow-up; if we do not hear from you we will assume
these tasks have been completed.
Best regards.
Very truly yours,
William L. Babcock, Jr.
Enclosure

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LAST WILL AND TESTAMENT
OF
«Husbands_name_in_caps»
[Simple Will]

II-1

LAST WILL1
AND
TESTAMENT
OF
«Husbands_name_in_caps»
I, «Husbands_name_in_caps»,2 of «City», Virginia,3 make this will4 and revoke all my
earlier wills and codicils. 5

1

According to Va Code § 64.2-100 the word “Will” shall extend to a testament and to a codicil and to
an appointment by will, or by writing in the nature of a will, in exercise of power; and also to any
other testamentary disposition.
2

The testator’s name should appear here the same way he or she intends to sign the Will. It may be a
good idea to include any other names or alternate spellings of the testator’s name here, i.e. also
known as …, to prevent confusion at death.

3

This will does not set forth either “domicile” or “residence” which are sometimes used
interchangeably. According to Professor Rodney Johnson, domicile means “physical presence in the
state with the unqualified intention of remaining permanently in Virginia” while residence refers to
“the mere location of a living site at which the testator has been physically present.” The formal
requirements of a will for personal property located in Virginia are determined by the testator’s
domicile. Va Code § 64.2-407, 408. A will must meet the Virginia formalities in order to convey land
located within the Commonwealth. See, Rice v. Jones, 8 Va (4 Call) 89 (1786). Domicile or the
presence of assets within Virginia are jurisdictional for probate of a will. Va Code § 64.2-443. See
French v. Short, 207 Va 548 (1966).
4

Publication of a will, or a declaration, is not required for validity in Virginia. It is done here to show
testamentary intent.
5

This is a permitted form of revocation, by subsequent instrument, as allowed by Va Code § 64.258.1. A will or codicil can also be revoked by physical act (destruction or obliteration) or in part, by
divorce. Va Code § 64.2-42. This clause revokes “all” prior testamentary documents, which the
author believes to be the better practice. See Timberlake v. State Planters Bank, 201 Va 950 (1960)
for the hazards of revoking only a specified prior will. Compare Virginia’s revival statute Va Code
§64.2-411. If a testator executes a subsequent will without expressly revoking a prior will or codicil,
the prior will or codicil is revoked only to the extent it is inconsistent with the later will. See Gordon
v. Whitlock. 92 Va 723 (1896) and Bradshaw v. Bangley, 194 Va 794 (1953).

II-2

On the date this will is executed, I am married to «Wifes_name_in_lower_case» and we
have «Number_of_children» children of our marriage, «Childrens_name», who are now living. 6

6

Part of the elements of testamentary capacity is to know the natural objects of the testator’s
bounty and their claims upon him/her. This clause assists the testator in meeting this
requirement. The other elements are that the testator has the ability to know: (1) the general
extent of his or her property; (2) that he/she is making a will and how the testator wishes to
disperse of his or her property; and (3) the ability to interrelate the three factors above
Tucker v. Sandbridge, 85 Va 546 (1888); Thompson v. Carlton, 221 Va 845 (1981). This
section also allows the drafter to identify adopted children or step-children as takers under
the will by defining the words “children”, “descendants” or “issue”. Testamentary capacity is
only required at the time the will is made. See Eyber v. Dominion National Bank, 249 F.
Supp. 531 (W.D.Va 1966). Evidence of sickness or impaired intellect at other times is
insufficient standing alone to render a will invalid. See Gilmer v. Brown, 186 Va 630 (1947).

II-3

ARTICLE ONE
DISTRIBUTION OF ESTATE
A. Tangible Personal Property.
(1)

At my death, I direct that my Executor distribute any and all items of tangible

personal property, not otherwise specifically named in this will, to the beneficiaries as may be set
forth in any written list or statement, signed by me, and in existence at the time of my death, as
provided in §64.2-104 of the Virginia Code (1950), as amended, or its successor. Such list or
statement may be in existence at the time of execution of this will, or it may be prepared by me
thereafter and altered or amended by me in writing from time to time. The date of preparation of
such list or statement by me shall not affect the validity of such writing or any distribution
designated therein. 7
(2)

I give and bequeath8 my painting by Gustav Klimt, entitled “The Kiss” to my

daughter, <Name>. If she is a minor at the time of my death I direct my Executor to deliver such

7

The adoption of the tangible property memorandum is 1995 allows the testator to incorporate
a list made at any time. Under the doctrine of incorporation by reference, a memorandum
referred to in a will must be in existence at the time the will is made in order to be valid.
Under this statute the list must only be signed by the testator and adequately describe the
tangible personal property and intended recipients. See Va Code §64.2-104 for a list of
documents that may be incorporated by reference into a will, power of attorney or trust.

8

A bequest is a testamentary gift of personal property.
A legacy is a testamentary gift of money.
A specific bequest is a gift of a specific article that is identifiable and distinguishable from
all other personal property and can be satisfied only by the delivery of that particular thing.

II-4

painting to <Name> to hold the same as custodian for my daughter, under the Virginia Uniform
Transfers to Minors Act9
(3)

I give and bequeath my remaining household furnishings, personal effects,

automobiles, and all other tangible personal property to my wife, «Wifes_name_in_lower_case», if
she survives me. If my wife shall not survive me, I give my tangible personal property in equal
shares, one share to each of my children, «Childrens_name», who survive me, and one share to the
then living descendants, per stirpes,10 of any children who do not survive me, subject only to the
provisions of Article Five of this will. The property passing under this paragraph does not include
assets (other than passenger automobiles) my Executor determines were held by me primarily for
business or investment purposes. 11

B. Personal Residences.
I give and devise12 all my interest in residences held in whole or in part for personal use by
me or my family, including all adjoining real property, to my wife, «Wifes_name_in_lower_case»,
9

Va Code § 64.2-1901, et seq. A transferor who transfers property to an individual under the age of
twenty-one years pursuant to Va Code § 64.2-1903 or § 64.2-1904 may expressly provide that the
custodian shall deliver, convey or pay the property to the individual on the individual’s attaining the
age of twenty-one by the inclusion of the parenthetical “(21)” after the words “Virginia Uniform
Transfers to Minors Act” or substantially similar language. Va Code § 64.2-1908 (D).
10

Failure to provide a taker of property in the even of death may trigger the default provisions of
Virginia’s anti-lapse statute, Va Code § 64.2-418.
11

This language indicated the intent only to deal with personal, non-business property. Any desire to
bequeath business or investment property should be made by separate reference, or by default, the
residuary clause.
12

A devise is a testamentary disposition of real property. Title passes immediately to the devisee upon
probate of the will, subject only to divestment by the executor in order to satisfy debts of the estate.
See Coles Heirs v. Jamison, 112 Va 311 (1911); But see Yamada v. McLeod, 243 Va 426 (1992) 15
Wm & Mary L.Rev. 949 (1975) offers a well reasoned discussion of an executor’s powers over real
estate.

II-5

if she survives me. If my wife shall not survive me, this devise shall lapse and pass as part of my
residuary estate. This gift includes any interest in a condominium or cooperative unit if it is a
personal residence at my death.13

C. Residuary Estate.14
I give the residue of my real and personal estate to my wife, «Wifes_name_in_lower_case»,
if she survives me. If my wife shall not survive me, then in such event,15 I give the residue of my
real and personal estate in equal shares one share to each of my children, «Childrens_name», who
survive me, and one share to the then living descendants, per stirpes, of any children who do not
survive me, subject only to the provisions of Article Five of this will.

D. Adoption.
A person related by or through adoption shall take under my will as if related by or through
birth, except that a person adopted after reaching age twenty-one (21) and descendants of such
person shall not so take.16

13

Prevents confusion as to whether a cooperative share in realty or personalty.

14

Functions to dispose the whole of testator’s estate and to prevent intestacy. See Harrison,
Wills and Administration (2nd Ed.) § 311. Whenever possible, the residuary will be construed
to pass property not other wised disposed by the will. Owens v. Bank of Glade Springs, 195
Va 1138 (1954).
15

See Anti-lapse comments in Footnote 10 above. Alternate takers also provide an additional
hedge against intestacy.
16

Adoption laws in effect at testator’s death control the rights of the adopted child. See Mott
v. National Bank of Commerce, 190 VA 1006 (1959). An adopted child inherits from and
through the adoptive parents, not the natural parents (unless the child is adopted by a stepparent). See Va Code § 64.2-102. The restriction for adoption after 21 prevents “gaming the
system” and altering the testator’s intent.

II-6

E. Takers in Default.
If at any time there is no living beneficiary designated to receive the assets of my estate
under the foregoing provisions of this Article, my Executor shall distribute the assets of my estate to
those persons who would be my distributees under the laws of Virginia then in effect as if I had then
died without a will, unmarried and owning the assets.17

17

See Va Code §§ 64.2-200 and 64.2-201 for the laws of descent and distribution.

II-7

ARTICLE TWO
PAYMENT OF CHARGES
A. Debts18 and Funeral Expenses.19
My Executor shall pay or arrange for the payment of my legally enforceable debts,20 my
charitable pledges,21 the expenses of my funeral and burial (including any headstone or marker),22
and the costs of administration of my estate. My Executor shall not seek contribution from my wife,
«Wifes_name_in_lower_case», toward the payment of our joint debts or obligations.23

18

The testator cannot prevent payment of enforceable debts nor alter the order or priority of payment
of debts, especially in an insolvent estate. In such and event, the provisions of Va Code § 64.2-105
prevail. The testator can specify the source of payment of such debts. Virginia requires that personal
property from the residuary estate is first used to pay the decedent’s debts and a contrary intent must
be made clear from the terms of the document.
19

Funeral expenses and expenses of administration are debts of the estate and not personal obligations
of the decedent/testator.
20

An executor cannot waive a statute of limitations for enforcement of debts, but the testator can. This
clause will exonerate or direct payments of all enforceable debts, even those secured by real estate. If
the testator desires that a parcel of real estate be conveyed subject to a debt, the language of the will
must be explicit.
21

Recommended to comply with the testator’s personal intent to honor these obligations. Omit the
language if no pledges are ever made or if it is not the intent to honor outstanding obligations to
charities at death.

22

Funeral expenses may be paid by the Executor prior to qualification. Va Code § 64.2-511. These
expenses are payable (subject to the limitations of Va Code § 64.2-528, when applicable) whether
referred to or not, and must be “reasonable” and reasonableness rests upon the facts of each particular
case. See, Scott Funeral Home v. First National Bank of Danville, 211 Va 128 (1970). A monument
or headstone or marker have not, technically, been incorporated as funeral expenses under Virginia
common law.
23

Prevents requirement that the Executor seek contributions for joint obligations with the spouse and
this clause should be modified if a contrary intent is held by the testator.

II-8

If my wife, «Wifes_name_in_lower_case», wishes to retain any residence or other real property
subject to a mortgage or similar indebtedness and so advises my Executor in writing within six (6)
months after my death, my Executor may elect not to pay the indebtedness.24

B. Taxes.
My Executor shall pay or arrange for the payment of all estate, inheritance, and similar taxes
payable by reason of my death as a cost of administering my estate without apportionment.25 This
direction to pay taxes includes taxes on assets not passing under this will and interest on taxes. My
Executor shall take advantage of any specific provisions for payment of estate, inheritance, and
similar taxes made by my wife or any other person.

24

Prevents exoneration of the residence debt. This would allow the surviving spouse to either
elect to pay off the mortgage or to preserve the cash assets of the estate for investment
purposes and allow the spouse to take the real property subject to the debt. The interest rate
and size of the mortgage will be crucial factors in making this decision.
25

If the testator makes no statement in his or her will, or in inter vivos written documents,
concerning the source from which federal estate tax is to be paid. Va Code § 64.2-540
apportions the burden among persons receiving property included within the gross estate.
See, Alexandria National Bank v. Thomas, 213 Va 620 (1973) and Lynchburg College v.
Central Fidelity Bank, 242 Va 292 (1991). Failure to keep this rule in mind can drastically
alter the benefits intended by the testator. The draftsperson should always consider and
provide in the will the source of payments of death taxes. The terms of the will control the
default provisions of the statute. Va Code § 64.2-543. See, Baylor v. National Bank of
Commerce, 194 Va 1 (1952).

II-9

ARTICLE THREE
EXECUTOR PROVISIONS
A. Executor.
I

name

«Husbands_executor_1my_life»,

to

be

my

Executor.26

If

«Husbands_heshe_executor» is unable or unwilling to serve, I name «Husbands_executor_2», to
be my Executor. I direct that no surety or security be required on the bond of my Executor or any
Trustee named herein.27 The term, "Executor," as used herein, shall be deemed to include the terms,
"Executrix," "Co-Executors" and "Trustee."

My Executor shall be entitled to reasonable

compensation for services rendered in the administration of my estate.28

26

The Executor is named or nominated in the will, but appointed by the Clerk of Court, ex parte or by
the Court. Va Code § 64.2-444. Va Code § 64.2-1416 provides that powers vested in the three (3) or
more fiduciaries may be exercised by a majority.
27

All Executors and Trustees are bonded. Va Code § 64.2-1412 and §64.2-610. Unsecured bond is
customarily set at twice the value of the personal estate. Secured bond is set at or slightly above the
value of the personal estate. Va Code § 64.2-504.
28

In a memorandum dated December 17, 2004, the Standing Committee Regarding Commissioners of
Accounts asked the Virginia Circuit Court Judges to approve the following compensation guidelines
for executors:
5% on the first $400,000
4% on the next $300,000
3% on the next $300,000
2% on amounts over $1,000,000
5% on income receipts (excluding capital gains)
If the estate exceeds $10,000,000 the executor must consult with the Commissioner of Accounts to
receive approval on any fee on the excess amount. However, where all parties who are affected by the
amount of compensation are competent to contract, understand the issues involved and agree in
writing on the amount of compensation. Commissioners of Account are to honor that agreement.
Gray, “2004-05 Virginia Developments in Estate Planning and Administration.” 24th Annual Trusts
and Estates Seminar, Virginia Law Foundation (2005).

II-10

B. Executor's Management Powers.
My Executor shall have the powers granted by law and the powers in Virginia Code Section
64.2-105. I incorporate that section in my will by this reference.29 My Executor may borrow money
for any purpose that my Executor considers to be in the best interests of my estate.30 My Executor
may secure such borrowings with assets of my estate. My Executor may make all tax elections and
allocations my Executor considers appropriate, and any elections or allocations made in good faith
shall not be subject to challenge by any beneficiary.

C. Certain Investments.
I may hold assets at my death that would not meet the standard in Virginia as suitable
investments to be held by my Executor. My Executor may nevertheless retain the assets for as long
as my Executor considers appropriate, even if the assets represent an over-concentration or do not
meet the standard of prudence.31 My Executor may invest the assets of my estate in money market
funds or other mutual funds affiliated with my Executor. The compensation of my Executor from
the

fund

shall

not

reduce

the

compensation

of

my

Executor

under

this

will.32

29

Incorporation of powers prevents lengthy recitation within the document. Unless otherwise
provided. The powers include the power of sale, granting the executor power of divestment over real
estate if sale is needed to pay debts of the decedent, administrative expenses or specific bequests.
Powers may be disclaimed by the fiduciary. If no powers are granted, the Circuit Court having
jurisdiction over the decedent’s will, may grant such powers upon application of the personal
representative. Va Code § 64.2-106.
30

A fiduciary has implied powers necessary to administer the estate, but is primarily a liquidator,
conservator and distributor. The power to borrow is usually not readily implied. This express grant of
power allows the Executor more flexibility in making economic decisions regarding when or how to
liquidate assets. See also Va Code § 64.2-105(1)(f), which is incorporated in this will by reference.

31

Va Code § 64.2-781, the Prudent Investor Act, will control unless exoneration is granted to the
personal representative.

32

This clause is generally used for banks and trust companies and is designed to eliminate the
prohibition against “self-dealing”.

II-11

D. Survivorship Accounts.
Any interests that I may have in any bank, savings and loan, or credit union accounts that are
titled jointly in my name and in the name of any other person or persons are hereby declared to be
the sole property of the surviving joint owner or owners, as the case may be, and my Executor shall
make no claim against them on account thereof.33

ARTICLE FOUR
SURVIVORSHIP
My wife, «Wifes_name_in_lower_case», shall be deemed to have survived me if, in the
opinion of my Executor, there is no sufficient evidence that we have died otherwise than
simultaneously.34 I shall be deemed to have survived any other beneficiary named in this will if we
die simultaneously or if, in the opinion of my Executor, there is no evidence that such beneficiary
survived me by more than one hundred twenty (120) hours.35

33

Va Code § 64.2-515. See also Va Code § 6.2-613.

34

The author traditionally utilizes this language to deem the spouse with the lowest asset
total to survive. In non-taxable estates, this allows the marital deduction to be used and the
“surviving” spouse’s estate can shelter this amount with the applicable exclusion amount. In
taxable estates, disclaimers can minimize federal estate taxation.
35

See the Virginia version of the Uniform Simultaneous Death Act at Va Code § 64.2-2200
et seq. “… an individual who is not established by clear and convincing evidence to have
survived the individual by 120 hours is deemed to have predeceased the other. Va. Code §
64.2-2201. The 120 hour survival requirement can be waived by a will or trust document. Va
Code § 64.2-2205.

II-12

ARTICLE FIVE
INTERESTS VESTING IN CERTAIN BENEFICIARIES
A. Beneficiaries Under Certain Age.
Whenever any interest vests in a beneficiary under age «Age», my Executor, acting as my
Trustee, may hold the interest in trust. My Trustee may pay to or for the benefit of such beneficiary
as much of the net income or principal of the trust as my Trustee may deem appropriate for the
beneficiary's support, health, maintenance and education. When the beneficiary reaches age «Age»,
my Trustee shall distribute the trust assets to the beneficiary. If the beneficiary dies before reaching
that age, my Trustee shall distribute the trust assets to the beneficiary's estate.36

B. Beneficiaries Under Impairment.
Whenever any interest vests in a beneficiary, who, in the opinion of my Executor, is unable
to manage financial affairs by reason of a physical or mental impairment,37 my Executor, acting as
my Trustee, may hold the interest in trust. As my Trustee, my Executor shall have no obligation to
inquire into or seek a judicial determination of (1) the ability of any beneficiary to manage financial
affairs, or (2) the existence of any physical or mental impairment. My Trustee may pay to or for the
benefit of the beneficiary as much of the net income or principal of the trust as my Trustee may
deem appropriate for the beneficiary's support, health, maintenance and education. When the
beneficiary has reached age «Age» and, in the opinion of my Trustee, is able to manage financial

36

This “bare bones” trust provision should be expanded as circumstances warrant.

37

Consider defining “physical or mental impairment” when family dynamics are continuous.
See Va Code § 64.2-900 et. seq. for statutory definitions.

II-13

affairs, my Trustee shall distribute the trust assets to the beneficiary. If the beneficiary dies before
the trust is terminated, my Trustee shall distribute the trust assets to the beneficiary's estate.

C. Distribution to Custodian.
My Executor may also distribute any interest vesting in a beneficiary under age twenty-one
(21) to a custodian under the Virginia Uniform Transfers to Minors Act (21).38 My Executor may
also distribute any interest vesting in a beneficiary who is "incapacitated" as that term is defined in
Virginia Code Section 55-34.1, et seq., to a Custodial Trustee under the Virginia Uniform Custodial
Trust Act.

D. Accountings.
I hereby direct that my Trustee shall not be required to file annual accountings with any
court as otherwise required by Virginia law.39

ARTICLE SIX
GUARDIANSHIP
I name my wife, «Wifes_name_in_lower_case», to be guardian of the person of my minor
children. If my wife does not serve, I name «Guardian_2», or either of them, to be guardians of the
person of minor children. I request that no security be required on the bond of any guardian.40
38

Va Code § 64.2-1908 (D) et seq. sets forth the requirements of the Virginia Uniform
Transfers to Minors Act. The author prefers to extend custodianship to age 21 rather than 18.
39

Va Code § 64.2-1307.

40

One function of a will is to nominate a suitable person to act as a guardian of the person of
a minor. The father or mother is the natural guardian of the person. Va Code § 64.2-1700.
Failure to nominate a guardian may result in litigation over the care and custody of minor
children as the appointment of a guardian is left to the courts. Va Code § 64.2-1702. A minor
over the age of 14 may nominate a guardian. Va Code § 64.2-1705.

II-14

I have signed and sealed my will, consisting of nine (9)41 typewritten pages on March 27,
2013.

_____________________________________________[SEAL]42
«Husbands_name_in_lower_case»

41

The author uses several methods to discourage the addition of pages after execution, such
as identifying the scope of the will (number of pages) and initialing each page. Neither
method is required under the Virginia statures governing the making of a will. See, Va Code
§ 64.2-100 et seq. The testimonium also supports one element of testimony capacity –
knowing that you are making a will. See Footnote 6.
42

See Va Code § 64.2-403; The signature must be made “in such manner as to make it
manifest that the name is intended as a signature.” For attested wills, a signature appearing at
any place on the will creates a presumption that it was intended as a signature. See
Murguiondo v. Nowlans’s Ex’r 115 Va 160 (1913) and Presbyterian Home v. Bowman, 165
Va 484 (1933). Avoid any question by signing the will at it’s logical end. A signature under
seal is not required under Virginia law. It is included here to prove that old habits are hard to
break.

II-15

The testator signed, sealed, and declared this instrument as the testator's will in our presence
on the date shown above. At the testator's request we have signed our names as witnesses. All of
this occurred at the same time, and we and the testator were present together throughout.43

Witness44

Address

Witness

Address

43

At least two (2) competent witnesses are required for a validly attested will in Virginia. Va
Code § 64.2-403. There is a prima facie presumption that the matters set forth in the
attestation clause actually happened. See, Clarke v. Dunnavent. 37 Va (10 Leigh) 13 (1839).
44

No witness is rendered incompetent by reason of having an interest in the will as either an
executor or beneficiary. Va Code § 64.2-405. See also Va Code § 8.01-396 (no person
incompetent to testify due to interest).

II-16

STATE OF VIRGINIA
CITY OF VIRGINIA BEACH

)
) ss.
)

Before me, the undersigned authority, on this day personally appeared
«Husbands_name_in_lower_case», John Doe and Jane Doe, known to me to be the testator and
witnesses, respectively, whose names are signed to the attached instrument; and, all of these persons
being by me first duly sworn, «Husbands_name_in_lower_case», the testator, declared to me and to
the witnesses in my presence that such instrument is his Last Will and Testament and that he had
willingly signed and executed it in the presence of such witnesses as his free and voluntary act for
the purposes therein expressed, and such witnesses stated before me that the foregoing will was
executed and acknowledged by the testator as his Last Will and Testament in the presence of such
witnesses who, in his presence and at his request, and in the presence of each other did subscribe
their names thereto as attesting witnesses on the day of the date of such will, and that the testator, at
the time of the execution of such will, was over the age of eighteen (18) years and of sound and
disposing mind and memory.45

Testator

Witness

Witness

Subscribed, sworn, and acknowledged before me by «Husbands_name_in_lower_case», the
testator; subscribed and sworn before me by John Doe and Jane Doe, witnesses, on March 27, 2013.

Notary Public
(SEAL)
My commission expires:

45

The requirements for this self-proving affidavit are found in Va Code § 64.2-454 and an
alternate method in Va Code § 64.2-453.

II-17

LAST WILL AND TESTAMENT
OF
«Husbands_name_in_caps»
[“Pour-Over” Will]

II-18

LAST WILL
AND
TESTAMENT
OF
«Husbands_name_in_caps»

I, «Husbands_name_in_caps», of «City», Virginia, make this will and revoke all my earlier
wills and codicils.
On the date this will is executed, I am married to «Wifes_name_in_lower_case» and we
have «Number_of_children» children of our marriage, «Childrens_name», who are now living.

ARTICLE ONE
DISTRIBUTION OF ESTATE
A. Tangible Personal Property.
I give and bequeath my household furnishings, personal effects, automobiles, and all other
tangible personal property to my wife, «Wifes_name_in_lower_case», if she survives me. If my
wife does not survive me, I give this property to my surviving descendants, per stirpes. The
property passing under this paragraph does not include assets (other than passenger automobiles) my
Executor determines were held by me primarily for business or investment purposes.

B. Personal Residences.
I give and devise all my right, title and interest in residences held in whole or in part for
personal use by me or my family, including all adjoining real property, to my wife,
«Wifes_name_in_lower_case», if she survives me. If my wife shall not survive me, this devise shall

II-19

lapse and pass as a part of my residuary estate. This gift includes any interest in a condominium or
cooperative unit if it is a personal residence at my death.

C. Residuary Estate.
I give the residue of my real and personal estate to the Trustee under The
«Husbands_name_in_lower_case» «Name_of_trust_doc» dated March 27, 2013, to be held in trust
under the terms of such trust in effect at my death. The trust was in existence at the time of
execution of this will.46

D. Adoption.
A person related by or through adoption shall take under my will as if related by or through
birth, except that a person adopted after reaching age twenty-one (21) and descendants of such
person shall not so take.

ARTICLE TWO
PAYMENT OF CHARGES
A. Debts and Funeral Expenses.
My Executor shall pay or arrange for the payment of my legally enforceable debts, my
charitable pledges, the expenses of my funeral and burial (including any headstone or marker), and
the costs of administration of my estate. My Executor shall not seek contribution from my wife,
«Wifes_name_in_lower_case», toward the payment of our joint debts or obligations. If my wife,
«Wifes_name_in_lower_case», wishes to retain any residence or other real property subject to a
mortgage or similar indebtedness and so advises my Executor in writing within six (6) months after
my death, my Executor may elect not to pay the indebtedness.
46

A bequest or devise to pour-over to a trust is effective even if the trust is amendable or
revocable. See Va Code § 64.2-426 (C).

II-20

B. Taxes.
My Executor shall pay or arrange for the payment of all estate, inheritance, and similar taxes
payable by reason of my death as a cost of administering my estate without apportionment. This
direction to pay taxes includes taxes on assets not passing under this will and interest on taxes. My
Executor shall take advantage of any specific provisions for payment of estate, inheritance, and
similar taxes made by my wife or any other person.

ARTICLE THREE
EXECUTOR PROVISIONS
A. Executor.
I

name

«Husbands_executor_1my_life»,

to

be

my

Executor.

If

«Husbands_heshe_executor» is unable or unwilling to serve, I name «Husbands_executor_2», to
be my Executor. I direct that no surety or security be required on the bond of my Executor or any
Trustee named herein. The term, "Executor," as used herein, shall be deemed to include the terms,
"Executrix," "Co-Executors" and "Trustee."

B. Executor's Management Powers.
My Executor shall have the powers granted by law and the powers in Virginia Code Section
64.2-105. I incorporate that section in my will by this reference. My Executor may borrow money
for any purpose that my Executor considers to be in the best interests of my estate. My Executor
may secure such borrowings with assets of my estate. My Executor may make all tax elections and
allocations my Executor considers appropriate, and any elections or allocations made in good faith
shall not be subject to challenge by any beneficiary.

C. Certain Investments.
II-21

I may hold assets at my death that would not meet the standard in Virginia as suitable
investments to be held by my Executor. My Executor may nevertheless retain the assets for as long
as my Executor considers appropriate, even if the assets represent an over-concentration or do not
meet the standard of prudence. My Executor may invest the assets of my estate in money market
funds or other mutual funds affiliated with my Executor. The compensation of my Executor from
the fund shall not reduce the compensation of my Executor under this will.

D. Survivorship Accounts.
Any interests that I may have in any bank, savings and loan, or credit union accounts that are
titled jointly in my name and in the name of any other person or persons are hereby declared to be
the sole property of the surviving joint owner or owners, as the case may be, and my Executor shall
make no claim against them on account thereof.

ARTICLE FOUR
SURVIVORSHIP
My wife, «Wifes_name_in_lower_case», shall be deemed to have survived me, if, in the
opinion of my Executor, there is no sufficient evidence that we have died otherwise than
simultaneously. I shall be deemed to have survived any other beneficiary named in this will if, in the
opinion of my Executor, there is no sufficient evidence that such beneficiary survived me by more
than one hundred twenty (120) hours.

II-22

ARTICLE FIVE
INTERESTS VESTING IN CERTAIN BENEFICIARIES
A. Beneficiaries Under Certain Age.
Whenever any interest vests in a beneficiary under age «Age», my Executor, acting as my
Trustee, may hold the interest in trust. My Trustee may pay to or for the benefit of such beneficiary
as much of the net income or principal of the trust as my Trustee may deem appropriate for the
beneficiary's support, health, maintenance and education. When the beneficiary reaches age «Age»,
my Trustee shall distribute the trust assets to the beneficiary. If the beneficiary dies before reaching
that age, my Trustee shall distribute the trust assets to the beneficiary's estate.

B. Beneficiaries Under Impairment.
Whenever any interest vests in a beneficiary, who, in the opinion of my Executor, is unable
to manage financial affairs by reason of a physical or mental impairment, my Executor, acting as my
Trustee, may hold the interest in trust. As my Trustee, my Executor shall have no obligation to
inquire into or seek a judicial determination of (1) the ability of any beneficiary to manage financial
affairs, or (2) the existence of any physical or mental impairment. My Trustee may pay to or for the
benefit of the beneficiary as much of the net income or principal of the trust as my Trustee may
deem appropriate for the beneficiary's support, health, maintenance and education. When the
beneficiary has reached age «Age» and, in the opinion of my Trustee, is able to manage financial
affairs, my Trustee shall distribute the trust assets to the beneficiary. If the beneficiary dies before
the trust is terminated, my Trustee shall distribute the trust assets to the beneficiary's estate.

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C. Distribution to Custodian.
My Executor may also distribute any interest vesting in a beneficiary under age twenty-one
(21) to a custodian under the Virginia Uniform Transfers to Minors Act (UTMA). My Executor
may also distribute any interest vesting in a beneficiary who is "incapacitated" as that term is defined
in Virginia Code Section 64.2-900, et seq., to a Custodial Trustee under the Virginia Uniform
Custodial Trust Act.

D. Accountings.
I hereby direct that my Trustee shall not be required to file annual accountings with any
court as otherwise required by Virginia law.

ARTICLE SIX
GUARDIANSHIP
I name my wife, «Wifes_name_in_lower_case», to be guardian of the person of my minor
children. If my wife does not serve, I name «Guardian_2», or either of them, to be guardians of the
person of my minor children. I request that no security be required on the bond of any guardian.

I have signed and sealed my will, consisting of eight (8) typewritten pages, on March 27,
2013.

[SEAL]
«Husbands_name_in_lower_case»

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The testator signed, sealed, and declared this instrument as the testator's will in our presence
on the date shown above. At the testator's request we have signed our names as witnesses. All of
this occurred at the same time, and we and the testator were present together throughout.

Witness

Address

Witness

Address

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STATE OF VIRGINIA
CITY OF VIRGINIA BEACH

)
) ss.
)

Before me, the undersigned authority, on this day personally appeared
«Husbands_name_in_lower_case», John Doe and Jane Doe, known to me to be the testator and
witnesses, respectively, whose names are signed to the attached instrument; and, all of these persons
being by me first duly sworn, «Husbands_name_in_lower_case», the testator, declared to me and to
the witnesses in my presence that such instrument is his Last Will and Testament and that he had
willingly signed and executed it in the presence of such witnesses as his free and voluntary act for
the purposes therein expressed, and such witnesses stated before me that the foregoing will was
executed and acknowledged by the testator as his Last Will and Testament in the presence of such
witnesses who, in his presence and at his request, and in the presence of each other did subscribe
their names thereto as attesting witnesses on the day of the date of such will, and that the testator, at
the time of the execution of such will, was over the age of eighteen (18) years and of sound and
disposing mind and memory.

Testator

Witness

Witness

Subscribed, sworn, and acknowledged before me by «Husbands_name_in_lower_case», the
testator; subscribed and sworn before me by John Doe and Jane Doe, witnesses, on March 27, 2013.

Notary Public
(SEAL)
My commission expires:

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THE «CLIENT_LAST_NAME_IN_CAPS» FAMILY
JOINT DECLARATION OF TRUST

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THE «CLIENT_LAST_NAME_IN_CAPS» FAMILY
JOINT DECLARATION OF TRUST47

We, «Husbands_name_in_caps» and «Wifes_name_in_caps», of «City», Virginia, make
this Joint Declaration of Trust dated March 27, 2013 (hereinafter sometimes referred to herein as the
“Trust,” “Agreement,” “Declaration,” or “Declaration of Trust.” The name of the trust shall be the
«Client_Last_Name_in_caps» Family Joint Declaration of Trust dated March 27, 2013.48

ARTICLE I
CREATION AND DISPOSITION OF TRUST
A. Creation of Trust.
We declare that we hold as Trustees the assets listed on the attached Schedule. If one of us
resigns as Trustee, dies, or is unable to manage business or financial affairs, the other shall continue
to serve as sole Trustee. In the event both of us resign as Trustees, both of us die, or upon our joint
inability to manage business or financial affairs, «Trustee» shall have the right to become our
successor Trustee and shall be vested with the same authority and duties upon written acceptance of
fiduciary duties.49 Our successor Trustee shall have no obligation to inquire into or seek a judicial
47

This form is intended for families who will not be subjected to the Federal Estate Tax. In
2013, families with taxable estates under $5,250,000.00 will not be subject to federal estate
tax. See Internal Revenue Code (“I.R.C.”) §2001. The American Taxpayer Relief Act of
2012 adjusts the $5,000,000 exemption amount for inflation.
48

This will aid in the identification of the trust for incorporation by reference under the
“pour-over” provisions of the will and for re-titling or funding the trust during the grantors’
lifetime.

49

Naming multiple alternates preserves the grantor’s control over the principal of the trust.
See Article V for the provisions relating to Trustees.
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determination of our ability to manage business or financial affairs.50 Our successor Trustee may
assume that we have that ability unless and until written notice to the contrary is received from our
physicians. Our successor Trustee shall not be responsible for or required to inquire into any
fiduciary actions occurring before such Trustee's appointment. Our successor Trustee or we ("our
Trustee") shall administer all of the assets in trust under the terms of this Declaration.

B. Trust During Our Joint Lifetimes.
During our joint lifetimes, our Trustee shall accumulate the income and retain the principal
of the trust except as either of us, jointly or individually, may otherwise direct. If at any time, in the
opinion of our Trustee, both of us are unable to so direct, our Trustee may pay income or principal as
our Trustee may deem necessary to provide for our support, health and maintenance and to pay our
obligations.51

C. Disposition at the First Death.
When one of us shall die, our Trustee may pay to the decedent's Executor funds needed to
pay all judicially enforceable debts, the expenses of last illness, if any, costs of administration and
transfer taxes of the first of us to die52 as provided in Article Four of this Agreement. During the
lifetime of the survivor, our Trustee shall pay the net income of the trust to the survivor in at least

50

See Va Code §64.2-700 et seq. of the Uniform Trust Code (UTC) effective July 1, 2006.
Failure to set out provisions in the trust cause resort to the UTC as the default rules
governing trusts.
51

Use of the trust to provide for management and control of trust assets in the event of the
grantor’s disability mandates the use of this language.
52

See footnote 18. The provisions of Va Code §64.2-528 do not apply to trusts. If there are
limited funds, the drafter may wish to incorporate directions to the Trustee regarding
payment and priority of debts.

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quarter-annual installments and shall pay to the survivor as much of the principal of the trust as the
survivor may direct, or if in the opinion of our Trustee, the survivor is unable to direct, as much of
the principal of the Trust as our Trustee may deem appropriate to provide for the survivor's support,
health and maintenance and to pay the survivor’s obligations.

D. Disposition at Survivor's Death.
At the death of the survivor of us (i.e., the “Division Date”), our Trustee shall:
(1)

Distribute any and all items of tangible personal property, not otherwise specifically

named in this trust, to the beneficiaries as may be set forth in any written list or statement, signed by
either of us, and in existence at the time of the death of the survivor of us, as provided in §64.2-40053
of the Virginia Code as amended, or its successor. Such list or statement may be in existence at the
time of execution of this trust, or may be prepared by either of us thereafter and altered, or amended
by either of us in writing from time to time. The date of preparation of such list or statement by
either of us shall not affect the validity of such writing or any distribution designated therein.54
(2)

After payment of those charges and expenses permitted in Article Four herein, divide

the remaining trust assets in equal shares for each of our then living children and the then living
descendants, per stirpes, of any of our children who are not then living, and shall distribute the trust
assets as directed by the provisions of Articles Two and Three herein.55

53

Former Section 55-7.2 revoked.

54

See footnote 7.

55

Alternate provision for disposition to others, bequests to friend, family or charity, or other
disposition of property, should be inserted here.

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ARTICLE TWO
DISTRIBUTION OF TRUST ASSETS56
A. Distribution at Survivor’s Death.
(1)

Our Trustee shall pay as much of the net income and principal of each child's trust

share to or for the benefit of such child as our Trustee deems appropriate for any purpose. Without
limiting our Trustee, our purpose is to provide for the support, health, maintenance and education57
of our child. The term "education" as used herein shall include college, graduate school, or
vocational training, provided adequate progress towards a degree or completion of course
requirements is made, as measured by the policies of the institution attended.58 Our Trustee shall
annually add any undistributed income to principal.59
(2)

When a child attains the age of twenty-five (25), or at both of our deaths if such child

has already attained that age, our Trustee shall distribute to such child upon his or her written request
one-third

56

(1/3)

of

the

remaining

principal

of

such

child’s

trust

share.

This Article is utilized when a descendant’s share is to be held or managed in trust.

57

These provisions mirror the “ascertainable standards” set forth in I.R.C. Code §2044 and
Reg. 1-2044-1(c)(2). If the trustee is independent, as defined in I.R.C. §674 (C) and not
related or subordinate as defined in I.R.C. §672 (c) the trustee may distribute or accumulate
income and principal of the trust without reference to these ascertainable standards.
58

The author prefers to define education in a way that takes the Trustee’s prejudices
regarding a beneficiary’s choices of study out of the picture, but also restricting the
“professional student” syndrome.
59

The compressed income tax rates that apply to trusts generally mandate that the Trust
distribute out all income to the beneficiaries who, presumably, will be in a lower income tax
bracket. If income is not distributed, the Trustee must do something with it.

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(3)

When a child attains the age of thirty (30), or at both of our deaths if such child has

already attained that age, our Trustee shall distribute to such child upon his or her written request
one-half (1/2) of the remaining principal of such child’s trust share.
(4)

When a child attains the age of thirty-five (35), or at both of our deaths if such child

has already attained that age, our Trustee shall distribute the remaining principal and any
undistributed income of such child's trust share to the child, outright and free of trust.60
(5)

If a child shall die before attaining the age of thirty-five (35), our Trustee shall

distribute the share for such deceased child as the child may appoint by specific reference to that
certain power of appointment granted by the provisions of Article Seven (B) herein.61 Our Trustee
shall distribute the unappointed assets of such deceased child's trust share to the then living
descendants, per stirpes, of such deceased child62 subject to the provisions of Article Three herein.
If such deceased child shall have no then living descendants, our Trustee shall distribute such trust
share to our then living descendants, per stirpes, except that the share for a descendant of ours for
whom a separate trust is in existence under this Agreement shall be added to such trust.

60

The distribution of the trust is personal to each family. This language merely exhibits one
possible method of distribution. In this case the beneficiary is given three “bites at the apple”
or “three strikes and you’re out”, depending on whether you are an optimist or a pessimist.
61

See I.R.C. § 2041 for inclusion in the child’s estate sing a general power of appointment.
In large estates this may avoid the Generation Skipping Transfer Tax (GSTT) on property
over which a general power of appointment exists. I.R.C. §2601 et seq..
62

The anti-lapse provision of Va Code §64.2-418 do not technically apply to trusts. The
drafter should take great care to craft language that adequately describes alternate takers in
the event of a lapse.

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B. Takers in Default.
If at any time there is no living beneficiary designated to receive the assets of any trust under
the foregoing provisions of this Article, our Trustee shall distribute the assets of such trust one-half
(1/2) to those persons who would be the distributees of «Husbands_name_in_lower_case» under the
laws of Virginia then in effect as if he had then died without a will, unmarried, and owning the
assets,

and

one-half

(1/2)

to

those

persons

who

would

be

the

distributees

of

«Wifes_name_in_lower_case» under the laws of Virginia then in effect as if she had then died
without a will, unmarried, and owning the assets.63

63

Any alternate takers can be listed here, such as charities, friends or other family members.
This provision incorporate the laws of descent and distribution under Va Code §§64.2-200
and 64.2-201.

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ARTICLE THREE
INTERESTS VESTING IN CERTAIN BENEFICIARIES
A. Beneficiaries Under Certain Age.
Whenever any trust interest vests in a beneficiary under age «Age», our Trustee may hold
the interest in trust. Our Trustee may pay to or for the benefit of such beneficiary as much of the net
income or principal of the trust as our Trustee may deem appropriate for the beneficiary's support,
health, maintenance and education. When such beneficiary reaches age «Age», our Trustee shall
distribute the assets of the beneficiary’s trust to the beneficiary. If the beneficiary dies before
reaching that age, our Trustee shall distribute the assets of the beneficiary’s trust to the beneficiary's
estate.64

B. Beneficiaries Under Impairment.
Whenever any trust interest vests in a beneficiary, who, in the opinion of our Trustee, is
unable to manage financial affairs by reason of a physical or mental impairment,65 our Trustee may
hold the interest in trust. Our Trustee shall have no obligation to inquire into or seek a judicial
determination of (1) the ability of any beneficiary to manage financial affairs, or (2) the existence of
any physical or mental impairment. Our Trustee may pay to or for the benefit of the beneficiary as
much of the net income or principal of the trust as our Trustee may deem appropriate for the
beneficiary's support, health, maintenance and education. When the beneficiary has reached age
«Age» and, in the opinion of our Trustee, is able to manage financial affairs, our Trustee shall

64

See footnote 36.

65

See footnote 37.

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distribute the assets to the beneficiary. If the beneficiary dies before the trust is terminated, our
Trustee shall distribute the assets to the beneficiary's estate.

C. Distribution to Custodian.
Our Trustee may also distribute any interest vesting in a beneficiary under age twenty-one
(21) to a custodian under the Virginia Uniform Transfers to Minors Act (UTMA).66 Our Trustee
may also distribute any interest vesting in a beneficiary who is "incapacitated" as that term is defined
in Virginia Code Section 64.2-900 et seq., 1950, to a Custodial Trustee under the Virginia Uniform
Custodial Trust Act.

D. Postponement of Vesting of Interest.
The provisions of this Article shall not postpone vesting of any interest in the beneficiary.67

66

See footnote 38.

67

This provision is consistent with Virginia common law, which favors early vesting of
rights and interests. See also Mullins v. Simmons, 235 Va 194 (1988).

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ARTICLE FOUR
DEBTS, TAXES AND OTHER CHARGES
At either or both of our deaths, our Trustee may68 pay to or upon the order of our Executor
funds needed to pay our legally enforceable debts, our charitable pledges, funeral and burial
expenses,69 costs of administration, transfer taxes and specific bequests under our wills. Our Trustee
may rely upon our Executor as to the amount of the charges. The decision of our Trustee whether to
provide funds shall be final. Assets that are not included in our gross estates shall not be used for
such payments.70 Except as may be otherwise provided herein, the payments shall not be charged
against the share of any beneficiary.71

68

The drafter may wish to change the permissive word “may” with the mandatory “shall”,
depending on personal preference or upon desire to provide funds for the payment of debts,
etc.
69

Again, the provisions of Title 64.2 of the Va Code as relating to wills do not technically
apply to trusts and the duty to pay funeral expenses, as an obligation of a decedent’s estate is
imposed upon the personal representative of the estate.
70

Obviously the requirement to use funds to pay debts or expenses of a decedent’s estate will
cause the trust assets to be included in the estate. Reg. §20-2042-1(b).

71

See Va Code §64.2-540 regarding apportionment of estate tax liability. This provision
makes clear that estate debts and expenses of administration are paid “off the top” and not
apportioned amount the trust beneficiaries in the same percentage their interest related to the
whole trust corpus.

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Notwithstanding any other provision hereof, our Trustee may not distribute to or for the
benefit of our estates, any charity or any other non-individual beneficiary any benefits payable to this
trust under any qualified retirement plan, individual retirement account or other retirement
arrangement subject to the "minimum distribution rules" of Section 401(a)(9) of the Internal
Revenue Code (“I.R.C.”) or comparable provisions of law. It is our intent that all such retirement
benefits be distributed to or held for only individual beneficiaries within the meaning of I.R.C.
Section 401(a)(9) and applicable regulations. Accordingly, we direct that such benefits may not be
used or applied for payment of our debts, taxes and other claims against our "estates." This
paragraph shall not apply to any charitable bequest which is specifically directed to be funded with
retirement benefits by other provisions of this Agreement.72

72

In PLR 9809059 the IRS indirectly implied that the ability to utilize qualified retirement
plan assets to pay estate debts or charges of administration can cause all of the qualified plan
proceeds to be treated as payable to the estate, since an estate is not an individual as defined
in I.R.C. §401 and 408, and the Regulations. This unfortunately accelerates the income
taxation of the qualified plan proceeds. This clause is intended to address this issue.

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ARTICLE FIVE
FIDUCIARIES
A. Resignation of Successor Trustee.
Either of us may resign as Trustee by written notice delivered to the other Trustee, if living,
or if only one of us is living and serving as Trustee, to the then current income beneficiaries of the
Trust.73 Any other Trustee acting hereunder may resign by written notice delivered to both of us, if
living, or to the survivor if only one of us is living, or if neither of us are living, to the then current
income beneficiaries of the Trust. The resignation shall be effective upon either the written
acceptance74 of fiduciary duties by the successor Trustee next named in this Declaration of Trust or
the appointment of a successor Trustee pursuant to Paragraph B of this Article.75

B. Successor Trustee.
If any Trustee resigns or ceases to serve during either of our lifetimes, both of us acting
jointly, or the survivor of us, may appoint a successor Trustee. The appointment of a successor
Trustee shall be effective upon the written acceptance of fiduciary duties by the successor Trustee.
73

Current Virginia law does not explicitly set out a manner for an inter vivos trustee to resign. Va
Code §64.2-1424 appears to apply to testamentary trustees only as his or her resignation shall be
made “by the court in which or before the clerk of which he qualified….” Va Code §64.2-712,
authorizes court proceedings to “appoint or remove” trustees. See Va Code §55-547.04 of the
Virginia Uniform Trust Code regarding “Vacancy in Trusteeship”. Since the new Uniform Trust
Code represents default provisions in the absence of language in the instrument, the careful drafter
will provide for such contingencies.
74

See Va Code §64.2-754. A trustee accepts the trusteeship by substantially complying with a method
of acceptance provided in the terms of the trust or, if the instrument is silent, by accepting delivery of
the Trust property, exercising powers of performing duties of a trustee, or otherwise indicating
acceptance of the trusteeship.
75

Conditioning the resignation on the appointment and acceptance of duties by the successor trustee
prevents failure of the trust or gaps in administration. See also, Va Code §64.2-760.

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If no successor Trustee is appointed, a successor corporate Trustee or licensed attorney or law
firm76 may be appointed as provided by law upon application of the resigning Trustee.

C. Actions of Predecessor.
No Trustee serving under this Declaration shall be responsible for or required to inquire into
any fiduciary actions occurring before such Trustee's appointment.77

D. Compensation.
Any successor corporate Trustee or licensed attorney or law firm shall receive for its services
the compensation specified in its published fee schedule in effect at the time services are rendered,
and such compensation may vary from time to time based on such schedule. Any individual Trustee
shall be entitled to reasonable compensation annually for services rendered as Trustee. “Reasonable
compensation” shall be defined as an amount not to exceed one percent (1%) of the principal and
income under administration during any calendar year. If more than one individual Trustee shall
serve, reasonable compensation shall be divided ratably among all such individual Trustees.78

94

Va Code §64.2-755. A trustee shall give bond only if the court finds that a bond is needed
to protect the interest of the beneficiaries or is required by the terms of the trust.
95

Va Code §64.2-763.

96

See Va Code §64.2-775 re: duly to inform and report as to irrevocable trusts, and § 64.2772 re: duties to keep records. No express requirement to make or provide accountings is
otherwise imposed upon a trustee of a revocable trust.

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E. Fiduciary Powers.
1.

In addition to the powers granted by law,79 we grant our Trustee those powers set
forth in Virginia Code Section 64.2-105,80 and 64.2-778 and we incorporate those
Code Sections in this Agreement by this reference.

2.

If any asset donated to this trust does not meet the requirements of the prudent
investor standard set forth in Virginia Code Section 64.2-781, our Trustee may
nevertheless retain the asset for so long as our Trustee may deem appropriate.81

3.

Our Trustee may borrow money (including borrowings from any corporate Trustee
or its affiliates) for any purpose deemed in the best interests of any trust under this
Agreement and secure such borrowings with any assets of such trust.82 Our Trustee
may invest the trust assets in a money market or other short-term fund whether or not
our Trustee (or affiliates of any corporate Trustee) is the sponsor, advisor, manager
or custodian of, or provides services to, such fund.83 The compensation received by
our Trustee (or affiliates of any corporate Trustee) for services rendered to such fund
shall not reduce the compensation of our Trustee under this Agreement.84

5.

We expressly grant to our Trustee the right, power, and authority to mortgage,
encumber, pledge, and create a security interest in any of our trust assets, whether
real, personal, or mixed, and to secure any of our indebtedness, or that of either
spouse, whether jointly or individually, whether now or hereafter incurred, and we
specifically authorize and empower our Trustee to execute, acknowledge, and deliver
to the lender of such funds a deed of trust or other security instrument, in such form
as the lender may reasonably require, conveying as collateral for such extension of
credit, all of the right, title and interest possessed by this trust in any asset, whether

II-40

real or personal, as security for an indebtedness of either of us, jointly or
individually.85
6.

In the event more than one Trustee shall be appointed to act, each Trustee may act
independently of the others in all matters affecting the trust assets.86

F. Merger.
Our Trustee may, without notice to any qualified beneficiary, merge or consolidate for
administrative purposes any trust under this Agreement with any other trust made by either of us or
any other person having the same Trustee and substantially the same disposition provisions.87

G. Fiduciary Discretion.
The powers and discretion granted to our Trustee are exercisable only in a fiduciary capacity
and may not be used to enlarge or shift any beneficial interest except as an incidental consequence of
the discharge of fiduciary duties. Our Trustee may make discretionary payments to the beneficiaries
of any trust in unequal shares and may, but shall not be required to, consider other resources
available to any beneficiary.88 Our Trustee may make tax elections without regard to the relative
interests of any beneficiaries and may, but shall not be required to, make equitable adjustments
among beneficiaries.

H. Restrictions on Individual Trustees.
No individual serving as Trustee shall have a voice in any discretionary decision to distribute
income or principal of any trust in order to discharge a legal obligation of the individual or for the
individual's pecuniary benefit, except as limited by the ascertainable standards of health,
maintenance, support and education enumerated herein or as allowed by the I.R.C. Section 2041 or
regulations issued thereunder.89

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I. Termination of Small Trusts.
If at any time after both of our deaths the size of any trust under this Agreement is so small
that, in the opinion of our Trustee, the trust is uneconomical to administer, our Trustee may, without
notice to qualified beneficiaries, terminate the trust and distribute the assets to the person then
authorized to receive trust income, or if more than one person is authorized to receive trust income,
to the one or ones of them our Trustee may deem appropriate and in such shares as our Trustee may
deem appropriate.90

J. Removal of Trustee.
After both of our deaths, the beneficiary of any trust created solely for such beneficiary
herein shall have the right to remove the acting Trustee and to appoint a successor Trustee of the
beneficiary's particular trust or fund, provided, however, that such Successor Trustee must be a trust
company or bank possessing trust powers and authorized to do business in the state of the
beneficiary's domicile.91 Such right of removal may be exercised by any beneficiary over the age of
eighteen (18) years, or by the parent or other adult person responsible for any beneficiary under the
age of eighteen (18) years. Such right of removal shall be continuing and may be exercised by the
beneficiary or the parent or other adult person responsible for such beneficiary under eighteen (18)
years of age by written notice to the Trustee, which notice of removal shall specify the successor
Trustee and certify the successor Trustee’s willingness to serve as such. Within thirty (30) days after
receiving notice, the Trustee so removed shall deliver all assets then held to the successor Trustee,
shall have full acquittance for all assets so delivered, and shall have no further duties under this
Declaration.

K. Change of Situs.

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Our Trustee may change the situs of this trust (and to the extent necessary or appropriate,
move the trust assets) to a state or country other than the one in which the trust is then administered
if our Trustee believes the change to be in the best interests of the trust or the beneficiaries.92 Our
Trustee may elect that the law of such other jurisdiction shall govern the trust to the extent necessary
or appropriate under the circumstances.93

L.

Trustee Bond.

No Trustee nominated and appointed herein shall be required to post any bond or other
surety or security for the faithful performance of any fiduciary duties.94 Every Trustee shall have the
obligation of performing and exercising all of its duties in a fiduciary manner.95

M. Accountings.
Our Trustee shall not be required to file accountings with any court or public official. After the
death of both of us, our Trustee shall provide an annual accounting to any beneficiary of any
trust created herein upon receipt of a written request by such beneficiary.96

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ARTICLE SIX
RESERVED RIGHTS
A. Revocation.
Each of us reserves the independent right to revoke97 this Declaration or to withdraw trust
assets by a writing (other than a will) signed by the one of us revoking the Declaration or
withdrawing assets and delivered to our Trustee. The right to revoke or withdraw may be exercised
by either of us even if the other of us is opposed to the revocation or withdrawal. Upon revocation
of this Declaration, our Trustee shall deliver the trust assets to us in equal shares if we both are
living, or all to the survivor of us if only one of us is living.

B. Amendment.
We reserve the right to amend this Declaration by a writing (other than a will) signed by both
of us and delivered to our Trustee during our joint lifetimes.98 Following the death of the first of us,
the survivor reserves the right to amend this Agreement by a writing (other than a will) signed by the
survivor and delivered to our Trustee. The duties or compensation of our Trustee shall not be
changed without the consent of our Trustee.99

97

Under common law, reservation of the right to revoke was required, otherwise the trust
was deemed irrevocable. Under §65-4.2-751, unless the terms of a trust expressly provide
that the trust is irrevocable, the settler may revoke or amend a trust created after July 1, 2006.
This section also sets out the rights of joint settlers of a trust.
98

Consistent with Va Code §64.2-751 (B)(1), if community property is involved.

99

These powers may only be exercised by an agent under a valid power of attorney if
authorized by the trust instrument or by the court for good cause shown. Va Code §64.2-751
(E).

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C. Additions to Trust.
We reserve for ourselves and any other person the right to make insurance policies payable
to the Trustee and to transfer acceptable assets to our Trustee. Assets transferred to our Trustee by
any person (other than us) may be withdrawn by such person at any time during his or her lifetime,
and our Trustee shall segregate the assets for accounting purposes, but need not separate them
physically.

ARTICLE SEVEN
GENERATION-SKIPPING TRANSFER TAX PROVISIONS100
A. Separate Trusts.
To minimize the generation-skipping transfer tax, our Trustee may divide any trust into two
separate trusts, one fully exempt from generation-skipping transfer tax and the other not. Our
Trustee shall allocate to the trust to be exempt from generation-skipping transfer tax the maximum
fractional share of assets that can be allocated to this trust to establish this trust with an inclusion
ratio of zero. Our Trustee shall allocate to the trust to be subject to generation-skipping transfer tax
the remaining fractional share of assets to establish this trust with an inclusion ratio of one.

B. Child's General Power of Appointment Over Nonexempt Trust.
If any separate trust for a child of ours has an inclusion ratio of one and the distribution of
that trust would otherwise result in generation-skipping transfer tax, the child shall have the power,
by specific reference to this general power of appointment in the child's will, to appoint the assets
(including any undistributed income) of that trust only to the creditors of the child's estate.

100

See I.R.C. §2601 et seq.

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C. Payment of Child's Transfer Taxes on Nonexempt Trust.
Unless the child provides otherwise by specific reference to this paragraph in a will or other
writing, our Trustee shall pay any transfer taxes attributable at the child's death to the assets
(including any undistributed income) of any trust over which the child has a general power of
appointment from the unappointed principal of that trust according to this computation: the actual
taxes payable by the child's estate, less the taxes that would be payable if the assets of that trust were
excluded from the child's gross estate. Our Trustee shall pay this amount to the child's estate or
directly to the taxing authorities and may rely upon the child's personal representative for the amount
due.

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ARTICLE EIGHT
MISCELLANEOUS PROVISIONS

A. Spendthrift Provisions.
To the maximum extent permitted by law, the principal and income of any trust created
herein shall not be liable for the debts of any beneficiary or subject to voluntary or involuntary
alienation or anticipation by a beneficiary, except as otherwise provided.101

B. Adoption.
A person related to us by or through adoption shall take under this Declaration as if the
person were related to us by or through birth, except that a person adopted after reaching age twentyone (21) and descendants of such person shall not so take.102

C. Disclaimer.
Any beneficiary or the legal representative of any beneficiary shall have the right, within the
time prescribed by law,103 to disclaim any benefit or power under this Agreement. Any transfer
taxes incurred at either of our deaths and attributable to a qualified disclaimer of property included in
either of our gross estates shall be paid from the disclaimed property.

The transfer taxes

101

See Va Code §64.2-743. Reference to a “spendthrift trust” or words of similar import are
sufficient to restrain both voluntary and involuntary transfers of the beneficiary’s interest.
102

See Footnote 16.

103

See Va Code §64.2-2600 et seq. the “Uniform Disclaimer of Property Interests Act.”
Generally, there is no time limit under the Virginia Act to disclaim property interests. For a
tax qualified disclaimer, see I.R.C. §2518 (b) and Reg. §25.2518-2.

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attributable to a qualified disclaimer shall be the difference between (1) the actual taxes payable at
either of our deaths, and (2) the taxes that would be payable if the disclaimer were not made.104

D. Construction of Terms.
Where appropriate to the context, pronouns or other terms expressed in one number and
gender shall be deemed to include the other number and genders. References to transfer taxes shall
include gift, estate, inheritance and similar taxes, as well as generation-skipping transfer taxes. Taxrelated terms shall be construed in the context of the federal revenue laws in effect at our death.

E. Rule Against Perpetuities.105
Anything in this trust notwithstanding, no trust created hereunder shall continue beyond
twenty-one (21) years after the death of the last to die of those beneficiaries who were living at the
time of the death of the survivor of us, or the maximum period allowed by law in the jurisdiction of
situs of the trust,106 whichever shall be greater, and upon the expiration of such period all trusts shall
terminate and the assets thereof shall be distributed outright to those beneficiaries and in the same
proportions as designated in the trust.

104

This apportionment of taxation should take precedence over the prior language in Article
Four.
105

Va Code §55-13.3 states: the rule against perpetuities shall not apply to any trust or any
interest created in personal property held in such trust … when the instrument, by its terms,
provides that the rule against perpetuities shall not apply to such trust. See Alternative
Paragraph E.
106

See Va Code §55-12.1, “Uniform Statutory Rule Against Perpetuities.” These provisions
apply to non-vested property interests created on or after July 1, 2000. 90 years in Virginia
appears to be the maximum Va Code §55-12.1 (A)(2).

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E. Rule Against Perpetuities. [Alternate]
The rule against perpetuities shall not apply to this trust or to any of the following created by
this document” any trust, trust share, interest created in property held in trust, power of appointment
over property held in a trust created by this documents or power of appointment over property
granted in this document.

F. Situs, Multiple Counterparts.
This Declaration is made or delivered in Virginia and shall be governed by its laws unless
the situs is changed pursuant to the provisions of Article Five (K) herein. This Declaration is signed
in more than one counterpart, each of which is an original.107

107

Assists third parties in honoring multiple documents.

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WITNESS our signatures and seals.

«Husbands_name_in_lower_case»
Grantor and Trustee

«Wifes_name_in_lower_case»
Grantor and Trustee

STATE OF VIRGINIA
CITY OF VIRGINIA BEACH, to-wit:
The foregoing instrument was acknowledged before me on March 27, 2013 by
«Husbands_name_in_lower_case» and «Wifes_name_in_lower_case».

Notary Public

My Commission Expires:

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SCHEDULE A
TO THE «CLIENT_LAST_NAME_IN_CAPS» FAMILY JOINT
DECLARATION OF TRUST108
A.

All furniture, furnishings, fixtures and personal items now and hereafter located in all
real property referred to in this Agreement and attachments, or in any other location,
it
being
the
intention
of
«Husbands_name_in_lower_case»
and
«Wifes_name_in_lower_case» to transfer all, or substantially all of our assets,
present and future, to this Agreement in order to have little or no probate estate. We
may, however, leave a written memorandum with our other important papers
devising specific items of personalty to certain beneficiaries. Any such memoranda
shall be given effect.

B.

All life insurance policies on the life of either «Husbands_name_in_lower_case» or
«Wifes_name_in_lower_case», identifying copies of which are attached.

C.

All real property referred to in the attached copies of deeds.

D.

All stocks, bonds, and other securities, identifying copies of which are attached.

E.

Contents of safety deposit boxes.

Bank:

Box number:

Address:
Bank:

Box number:

Address:
F.

Accounts as listed herein, or identifying copies of which are attached:

Checking:

108

This schedule is not a substitute for proper funding of a trust. Actual title must be changed
by deed, beneficiary designations, etc. This is helpful in locating assets subject to
administration however.
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Savings:

Brokerage:

Certificates of Deposit:

Money Market Accounts:

Mutual Funds:

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G.

Other items in trust:
ITEMS
Date added/Initials

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
SEE ATTACHED SCHEDULE A CONTINUED

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Date deleted/Initials

THE

«Husbands_name_in_caps»
DECLARATION OF TRUST

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DECLARATION OF TRUST
I, «Husbands_name_in_caps», of «City», Virginia, make this Declaration of Trust
(hereinafter sometimes referred to herein as “Trust,” “Declaration,” “Declaration of Trust” or
“Agreement”) dated March 27, 2013.

The name of the trust created herein is the

«Husbands_name_in_lower_case» Declaration of Trust (“Trust”).
During my lifetime, this Declaration of Trust shall be a grantor trust as that term is defined in
Sections 671-679 of the Internal Revenue Code (“I.R.C.”) and the Treasury Regulations issued
thereunder.109 The tax identification number of this Declaration of Trust shall be
I am married to «Wifes_name_in_lower_case».

.110

My «Number_of_children» children,

«Childrens_name», are living on the date of this Agreement.

ARTICLE ONE
CREATION AND DISPOSITION OF TRUST
A. Creation of Trust.
This

Declaration

of

Trust

is

made

on

March

27,

2013,

between

«Husbands_name_in_lower_case», as Grantor, and «Husbands_name_in_lower_case» and
«Wifes_name_in_lower_case», as original Trustees. Either original Trustee may act independently
of

the

other

in

all

matters

affecting

the

Trust

assets.111

109

Grantor trust status is preferred for income tax purposes during the lifetime, as the trust is not a
separate taxpayer until it is irrevocable.

110

Insert the grantor’s social security number here.

111

If unanimity of action is preferred, delete this sentence. See Va Code §64.2-1416 for provisions
relating to three (3) or more fiduciaries.

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In the event that either original Trustee shall resign, die or become unable to manage business or
financial affairs, then the remaining original Trustee may serve alone. If both original Trustees
resign, die or become unable to serve as Trustee, then «Husbands_trustee_after_spouse», shall
have the right to become my successor Trustee.
My successor Trustee shall have no obligation to inquire into or seek a judicial determination
of my ability to manage business or financial affairs, and may assume that I have that ability unless
and until written notice to the contrary is received from my physician. My successor Trustee shall
not be responsible for or required to inquire into any fiduciary actions occurring before such
Trustee's appointment.

The original Trustees, or my successor Trustee ("my Trustee"), shall

administer all the assets in trust under the terms of this Declaration.

B. Trust During my Lifetime.
During my lifetime, my Trustee shall accumulate the income and retain the principal of the
Trust except as I may otherwise direct. If at any time, in the opinion of my Trustee, I am unable to
so direct, my Trustee may pay income or principal as my Trustee may deem necessary to provide for
my support, health and maintenance, and to pay my obligations.

C. Disposition at My Death.
If my wife, «Wifes_name_in_lower_case», survives me, my Trustee shall divide the Trust
Assets into separate trusts called the QTIP Marital Trust and the Family Trust as directed in Article
Five. If my wife does not survive me, all such assets shall constitute the Family Trust.112 The Trust
Assets are the assets in the Trust at my death and other assets my Trustee receives by reason of my

112

This language will be important if the decedent’s taxable estate exceeds the applicable
exclusion amount of $5,000,000 (as adjusted for inflation after 2010).
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death, excluding assets used to pay charges as later provided. My Trustee shall administer the QTIP
Marital Trust and the Family Trust as provided in Articles Two and Three, respectively.

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ARTICLE TWO
QTIP MARITAL TRUST113

A. During My Wife's Life.
My Trustee shall pay the net income of the QTIP Marital Trust quarterly or more frequently
to or for the benefit of my wife, «Wifes_name_in_lower_case», during her life. My Trustee may
also pay to my wife or for her benefit as much of the principal of the QTIP Marital Trust as my
Trustee considers appropriate for any purpose. My purpose is to provide for my wife's support,
health and maintenance, but this shall not limit my Trustee's discretion, except as may be restricted
by the provisions of Article Seven (J) herein.

B. Distributions at My Wife's Death.
At my wife's death, my Trustee shall distribute to my wife's estate any accrued or
undistributed income of the QTIP Marital Trust. My Trustee shall add to the Family Trust the
remaining assets of the QTIP Marital Trust not used to pay taxes as later provided; but, if the value
of the assets of the QTIP Marital Trust not used to pay taxes would exceed my wife's generationskipping transfer tax exemption allocated to the QTIP Marital Trust, my Trustee shall distribute the
excess portion to my then living descendants, per stirpes, subject to the provisions of Article Four of
this Agreement.

113

See I.R.C. 2056 (b) (7) for the requirements of a valid QTIP trust.

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ARTICLE THREE
FAMILY TRUST

A. During My Wife's Life.
My Trustee shall pay the net income of the Family Trust quarterly or more frequently to my
wife, «Wifes_name_in_lower_case», during her life and may pay to my wife or for her benefit as
much of the principal of the Family Trust as my Trustee considers appropriate for my wife's support,
health, and maintenance. I recommend (but do not require) that my Trustee first exhaust the
principal of the QTIP Marital Trust before making discretionary payments of principal to my wife
from the Family Trust.114
My Trustee may also pay to or for the benefit of my children (and any other child born to my
wife and me) and their descendants as much of the principal of the Family Trust as my Trustee
considers appropriate for their support, health, maintenance and education.115 The term, "education,"
as used herein shall include college, graduate school, or vocational training, provided adequate
progress towards a degree or completion of course requirements is made, as measured by the
policies of the institution attended.116
114

If the grantor prefers the marital trust (which will be subject to taxation at the spouse’s
death) to be exhausted before distributions are made to the Family Trust, this language
should be modified to require, rather than recommend, exhaustion of the marital trust.
115

These are traditional “ascertainable standards” found in I.R.C. §2514(c). When a Trustee
is also a beneficiary, the power to distribute, limited by and ascertainable standard, is not a
general power of appointment and will not cause the trust corpus to be taxed in the
Trustee/beneficiary’s estate.

116

The author prefers this definition as it removes a Trustee’s pre-conceived notions as to
“adequate progress” and allows the college or school to define that term.

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B. Withdrawal Right.117
During her life, my wife, «Wifes_name_in_lower_case», may direct my Trustee in writing,
on any "withdrawal date," to pay her a portion of the principal of the Family Trust. The total
distributions made to my wife in any one calendar year, including the year of my death, pursuant to
this right of withdrawal under this Agreement and any other instrument under which my wife
possesses a lapsing withdrawal power shall not exceed the greater of Five Thousand Dollars
($5,000.00) or Five percent (5%) of the aggregate value of the principal of the Family Trust and any
other trust subject to such power of withdrawal on the date of the first withdrawal right of that year.
The withdrawal right shall not be cumulative from year to year.
The term, "withdrawal date," shall be defined as any of the following dates in any year,
including the year of my death: January 1, March 1, June 1 and/or September 1.118 To the extent the
power to withdraw is not exercised, it shall lapse and shall not be further exercisable until the next
withdrawal date, but in no event shall such right to withdraw be deemed cumulative from year to
year.
If the references to "Five Thousand Dollars ($5,000.00)" or "Five percent (5%)" in I.R.C.
Section 2514(e), or its successor, are changed by amendment, the provisions herein shall be
correspondingly changed.

117

This “5x5” power is an exception to the power of appointment rules. If a spouse is also the
Trustee, this is the maximum invasion, other than for ascertainable standards, that may be
granted. Any greater power would cause inclusion of the Family Trust in the spouse’s estate.
See I.R.C. §2514(e).
118

The “5x5” power amount will be included in the spouse’s estate if death occurs while the
power may be exercised. In this provision, the spouse’s estate will only be taxed on the
“5x5” amount if death occurs on one of four designated dates.

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C. Division Date.
The Division Date shall be the later of my death or my wife’s death.

D. Distribution at the Division Date.
(1)

At the Division Date, I direct that my Trustee distribute any and all items of tangible

personal property, not otherwise specifically named in this Declaration of Trust, to the beneficiaries
as may be set forth in any written list or statement, signed by me, and in existence at the time of my
death, as provided in Section 64.2-400119 of the Code of Virginia, as amended, or its successor (the
“Virginia Code”). Such list or statement may be in existence at the time of execution of this trust, or
may be prepared by me thereafter and altered, or amended by me in writing from time to time. The
date of preparation of such list or statement by me shall not affect the validity of such writing or any
distribution designated therein.
(2)

At the Division Date, my Trustee shall divide the remaining assets of the Family

Trust (including any undistributed income, and assets received from the QTIP Marital Trust or other
sources) into equal shares, one share for each then living child of mine and one share for each
deceased child of mine having a descendant then living. My Trustee shall distribute the share of any
living child of mine to such child, outright and free of trust, subject to the terms and provisions set
forth in Article IV herein. My Trustee shall distribute the share of any deceased child of mine to the
child's then living descendants, per stirpes, subject to the provisions of Article Four herein.

119

See Footnote 53.

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E. Takers in Default.
If at any time there is no living beneficiary designated to receive the assets of any trust under
the foregoing provisions of this Article, my Trustee shall distribute the assets of such trust to those
persons who would be my distributees under the laws of Virginia then in effect as if I had then died
without a will, unmarried and owning the assets.

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ARTICLE FOUR
INTERESTS VESTING IN CERTAIN BENEFICIARIES

A. Beneficiaries Under Certain Age.
Whenever any trust interest vests in a beneficiary under age «Age», my Trustee may hold or
continue to hold the interest in trust. My Trustee may pay to or for the benefit of such beneficiary as
much of the net income or principal of the trust as my Trustee may deem appropriate for the
beneficiary's support, health, maintenance and education. When the beneficiary reaches age «Age»,
my Trustee shall distribute the assets of the beneficiary’s trust to the beneficiary. If the beneficiary
dies before reaching that age, my Trustee shall distribute the assets of the beneficiary’s trust to the
beneficiary's estate.

B. Beneficiaries Under Impairment.
Whenever any trust interest vests in a beneficiary, who, in the opinion of my Trustee, is
unable to manage financial affairs by reason of a physical or mental impairment, my Trustee may
hold or continue to hold the interest in trust. My Trustee shall have no obligation to inquire into or
seek a judicial determination of (1) the ability of any beneficiary to manage financial affairs, or (2)
the existence of any physical or mental impairment. My Trustee may pay to or for the benefit of the
beneficiary as much of the net income or principal of the trust as my Trustee may deem appropriate
for the beneficiary's support, health, maintenance and education. When the beneficiary has reached
age «Age», and, in the opinion of my Trustee, is able to manage financial affairs, my Trustee shall
distribute the assets of the beneficiary’s trust to the beneficiary. If the beneficiary dies before the

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trust is terminated, my Trustee shall distribute the assets of the beneficiary’s trust to the beneficiary's
estate.

C. Distribution to Custodian.
My Trustee may also distribute any interest vesting in a beneficiary under age twenty-one
(21) to a custodian under the Virginia Uniform Transfers to Minors Act (UTMA). My Trustee may
also distribute any interest vesting in a beneficiary who is "incapacitated" as that term is defined in
Virginia Code Section 64.2-900 et seq., 1950, to a Custodial Trustee under the Virginia Uniform
Custodial Trust Act.

D. Postponement of Vesting of Interest.
The provisions of this Article shall not postpone vesting of any interest in the beneficiary.

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ARTICLE FIVE
DIVISION INTO FAMILY TRUST AND QTIP MARITAL TRUST

A. Division and Purpose.
If my wife, «Wifes_name_in_lower_case», survives me, my Trustee shall divide the Trust
Assets into the Family Trust and the QTIP Marital Trust in the manner described in this Article. By
so dividing the Trust Assets, I intend to minimize estate taxes payable at my death and my wife's
death by taking advantage of my available unified credit and/or applicable exclusion amount.

B. Family Trust.
The Family Trust shall be a fractional share of the Trust Assets. The numerator of the
fraction shall equal the largest value of the Trust Assets that can pass free of federal estate tax by
reason of the unified credit or the applicable exclusion amount,120 the credit and/or deduction for
state death taxes (to the extent the use of such credit, deduction, or exclusion amount does not
increase state death taxes) allowable to my estate, and any applicable exclusions from my gross
estate after reduction by reason of (1) my adjusted taxable gifts, (2) other dispositions of property
included in my gross estate for which no marital, charitable, or other deduction is allowed in
computing my federal estate tax, and (3) administration expenses and other charges to principal that
are not claimed and allowed as federal estate tax deductions. The denominator of the fraction shall
equal the value of the Trust Assets based upon values as finally determined for federal estate tax
purposes.

120

See I.R.C. §2501.

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C. QTIP Marital Trust.
The QTIP Marital Trust shall be the fractional share of the Trust Assets remaining after
computing the Family Trust fractional share.121

D. Disclaimer of QTIP Marital Trust.
A disclaimer122 by or on behalf of my wife, «Wifes_name_in_lower_case», of all or any part
of the QTIP Marital Trust (or the failure of my Executor to make a qualified terminable interest
property election for all or any part of the QTIP Marital Trust) shall not reduce the fractional share
computed for the Family Trust under this Article. Estate and inheritance taxes incurred at my death
and attributable to a qualified disclaimer by or on behalf of my wife of property included in my gross
estate shall not reduce the fractional share computed for the Family Trust under this Article.

E. Allocation of Assets.
My Trustee shall transfer any assets not included in my gross estate to the Family Trust.123
Those assets shall not be considered Trust Assets to be divided under this Article. My Trustee shall
not allocate to the QTIP Marital Trust fractional share any assets that cannot qualify for the federal
estate tax marital deduction.124

121

This allocation reduces estate tax to zero by filling the Family Trust, excluded from
taxation, first with excess assets allocated to the QTIP trust, and therefore deferred by the
unlimited marital deduction.
122

This should be a tax code disclaimer under I.R.C. §2518, rather than under Va Code
§64.2-2600.
123

See Reg §2056 (a) – 2(b)(1).

124

Ibid.

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To the extent possible, my Trustee shall not allocate assets upon which a foreign death tax is
payable to the QTIP Marital Trust fractional share. In other respects, my Trustee may allocate assets
as my Trustee considers to be in the best interests of the beneficiaries and shall value each asset on
the date of allocation.

F. Allocation of Income.
My Trustee shall allocate income earned on the Trust Assets after my death (whether earned
before or after the assets are in the possession of my Trustee), and income earned on assets used to
pay charges to the Family Trust and the QTIP Marital Trust, according to the same fractional shares
determined pursuant to this Article.

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ARTICLE SIX
PAYMENT OF CHARGES

A. Payment of My Debts and Other Charges.
At my death, my Trustee may pay to or upon the order of my Executor funds needed to pay
my legally enforceable debts, my charitable pledges, funeral and burial expenses, costs of
administration, transfer taxes and specific bequests under my will. My Trustee may rely upon my
Executor as to the amount of the charges. The decision of my Trustee whether to provide funds shall
be final. Assets that are not included in my gross estate shall not be used for such payments. Except
as may be otherwise provided herein, the payments shall not be charged against the share of any
beneficiary.

B. Restrictions on Use of Qualified Retirement Plan Assets.
Notwithstanding any other provision hereof, my Trustee may not distribute to or for the
benefit of my estate, any charity or any other non-individual beneficiary (as those terms may be
defined in the I.R.C. or the Treasury regulations issued thereunder) any benefits payable to this trust
under any qualified retirement plan, individual retirement account or other retirement arrangement
subject to the "minimum distribution rules" of I.R.C. Section 401(a)(9) or comparable provisions of
law. It is my intent that all such retirement benefits be distributed to or held for only individual
beneficiaries within the meaning of I.R.C. Section 401(a)(9) and applicable regulations.
Accordingly, I direct that such retirement benefits shall not be used or applied for payment of my
debts, taxes and other claims against my "estate." This paragraph shall not apply to any charitable

II-68

bequest which is specifically directed to be funded with retirement benefits by other provisions of
this Agreement.125

C. Payment of My Wife's Estate Taxes.
Unless my wife, «Wifes_name_in_lower_case», provides otherwise by specific reference to
this paragraph in a will or other writing, my Trustee shall pay any estate and inheritance taxes
attributable at my wife's death to the qualifying part of the QTIP Marital Trust from the qualifying
part according to this computation: the actual taxes payable by my wife's estate, less the taxes that
would be payable if the qualifying part of the QTIP Marital Trust were excluded from her gross
estate. My Trustee shall pay this amount to my wife's estate or directly to the taxing authorities and
may

125

rely

upon

my

wife's

personal

See Footnote 72.

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representative

for

the

amount

due.

ARTICLE SEVEN
FIDUCIARIES

A. Resignation of Trustee.
My wife and I reserve the right to resign as Trustee hereunder. Any successor Trustee may
resign by written notice to me, or if I am not living, the adult beneficiaries authorized to receive trust
income and the adult persons responsible for any minor beneficiaries authorized to receive trust
income. The resignation shall be effective upon either the written acceptance of fiduciary duties by
the successor Trustee next named in this Declaration or the appointment of a successor Trustee
pursuant to Paragraph B of this Article.

B. Successor Trustee.
During my life, I reserve the right to appoint successor Trustees. After my death or
resignation as Trustee, if all successor Trustees named herein resign or cease to serve, a majority of
the adult beneficiaries authorized to receive trust income or if there are none, a majority of the
parents or other adult persons responsible for any minor or legally incompetent beneficiaries
authorized to receive trust income may appoint any competent person or persons or any bank or trust
company having trust powers as successor Trustee. The appointment shall be effective upon written
acceptance of fiduciary duties by the successor Trustee. If no successor Trustee is so appointed, a
successor corporate Trustee or licensed attorney or law firm may be appointed as provided by law
upon application of the resigning Trustee or any beneficiary.

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C. Actions of Predecessor.
No Trustee serving under this Agreement shall be responsible for or required to inquire into
any fiduciary actions occurring before such Trustee’s appointment.

D. Compensation.
Any corporate Trustee or licensed attorney or law firm serving hereunder shall receive for its
services the compensation specified in its published fee schedule in effect at the time it renders
services, and such compensation may vary from time to time based on that schedule. My individual
Trustee shall be entitled to a reasonable compensation annually for services rendered as Trustee.
“Reasonable compensation” shall be defined as an amount not to exceed one percent (1%) of the
principal and income under administration during any calendar year. If more than one individual
Trustee shall serve, reasonable compensation shall be divided ratably among all such individual
Trustees.

E. Fiduciary Powers.
1.

In addition to the powers granted by law, I grant my Trustee those powers set forth in
Virginia Code Sections 64.2-105 and 64.2-778, and I incorporate those Code
Sections in this Agreement by this reference.

2.

If any asset donated to this trust does not meet the requirements of the prudent
investor standard set forth in Virginia Code Section 64.2-781, my Trustee may
nevertheless retain the asset for so long as my Trustee may deem appropriate.

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3.

My Trustee may borrow money (including borrowings from any corporate Trustee or
its affiliates) for any purpose deemed in the best interests of any trust under this
Agreement and secure such borrowings with any assets of such trust.

4.

My Trustee may invest the Trust Assets in a money market or other short-term fund
whether or not my Trustee (or affiliates of any corporate Trustee) is the sponsor,
advisor, manager or custodian of, or provides services to, such fund.

The

compensation received by my Trustee (or affiliates of any corporate Trustee) for
services rendered to such fund shall not reduce the compensation of my Trustee
under this Agreement.
5.

I expressly grant to my Trustee the right, power, and authority to mortgage,
encumber, pledge, and create a security interest in any of my Trust Assets, whether
real, personal, or mixed, and to secure any of my indebtedness, or that of my spouse,
whether jointly or individually, whether now or hereafter incurred, and I specifically
authorize and empower my Trustee to execute, acknowledge, and deliver to the
lender of such funds a deed of trust or other security instrument, in such form as the
lender may reasonably require, conveying as collateral for such extension of credit,
all of the right, title and interest possessed by this Trust in any asset, whether real or
personal, as security for an indebtedness of mine or my spouse.

6.

In the event more than one Trustee shall be appointed to act, each Trustee may act
independently of the other in all matters affecting the Trust Assets.

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F. Merger.
My Trustee may merge or consolidate for administrative purposes any trust under this
Agreement with any other trust made by me or any other person having the same Trustee and
substantially the same disposition provisions.

G. Termination of Small Trusts.
If at any time after the Division Date the size of any trust under this Agreement is so small
that, in the opinion of my Trustee, the trust is uneconomical to administer, my Trustee may terminate
the trust and distribute the assets to the person then authorized to receive trust income, or if more
than one person is authorized to receive trust income, to the one or ones of them my Trustee may
deem appropriate and in such shares as my Trustee may deem appropriate.

H. Allocation of Assets.
Assets allocated to one trust or share may be of different character or have different income
tax bases than assets allocated to another trust or share.

I. Fiduciary Discretion.
The powers and discretion granted to my Trustee are exercisable only in a fiduciary capacity
and may not be used to enlarge or shift any beneficial interest except as an incidental consequence of
the discharge of fiduciary duties. My Trustee may make discretionary payments to the beneficiaries
of any trust in unequal shares and may, but shall not be required to, consider other resources
available to any beneficiary. My Trustee may make tax elections without regard to the relative

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interests of any beneficiaries and may, but shall not be required to, make equitable adjustments
among beneficiaries.

J. Restrictions on Individual Trustees.
No individual serving as Trustee shall have a voice in any discretionary decision to distribute
income or principal of any trust in order to discharge a legal obligation of the individual or for the
individual's pecuniary benefit, except as limited by the ascertainable standards of health, education,
maintenance and support or as allowed by I.R.C. Section 2041 or regulations issued thereunder.

K. Removal of Trustee.
After the Division Date, the beneficiary of any trust created herein solely for such
beneficiary shall have the right to remove the acting Trustee and to appoint a successor Trustee of
the beneficiary's particular trust or fund. The successor Trustee must be a trust company or bank
possessing trust powers and authorized to do business in the state of the beneficiary's domicile. This
right of removal may be exercised by any beneficiary over the age of eighteen (18) years, or by the
parent or other adult person responsible for any beneficiary under the age of eighteen (18) years.
This right of removal shall be continuing and may be exercised by the beneficiary or the parent or
other adult person responsible for such beneficiary under eighteen (18) years of age by written notice
to the Trustee, which notice of removal shall specify the successor Trustee and certify the successor
Trustee’s willingness to serve as such. Within thirty (30) days after receiving notice, the Trustee so
removed shall deliver all assets then held to the successor Trustee, and shall have full acquittance for
all assets so delivered and shall have no further duties under this Declaration.

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L. Change of Situs.
My Trustee may change the situs of this Trust (and to the extent necessary or appropriate,
move the Trust Assets) to a state or country other than the one in which the Trust is then
administered, if my Trustee believes the change to be in the best interests of the Trust or the
beneficiaries. My Trustee may elect that the law of such other jurisdiction shall govern the Trust to
the extent necessary or appropriate under the circumstances.

M. Bond.
My Trustee shall not be required to post bond, surety or security for its service as
Trustee. Every Trustee shall have the obligation of performing and exercising all of its duties in
a fiduciary manner.

N. Accountings.
My Trustee shall not be required to file accountings with any court or public official.
After my death, my Trustee shall provide an annual accounting to any beneficiary of any trust
created

herein

upon

receipt

of

a

written

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request

by

such

beneficiary.

ARTICLE EIGHT
QTIP MARITAL TRUST ADMINISTRATION
A. Marital Deduction Requirements.
I intend that the QTIP Marital Trust qualify for the federal estate tax marital deduction, and
all

provisions

of

this

Agreement

shall

be

construed

accordingly.

My

wife,

«Wifes_name_in_lower_case», may direct my Trustee to make any unproductive assets of the QTIP
Marital Trust productive or convert them to assets that produce current income within a reasonable
time.126 In funding or administering the QTIP Marital Trust, my Trustee shall not exercise any
power in a manner that would infringe upon any legal requirement for the allowance of the marital
deduction.

B. Principal Distributions from QTIP Marital Trust.
If my Executor elects to qualify only part of the QTIP Marital Trust for the marital
deduction, my Trustee may by fractional division establish the qualifying part as a separate trust and
shall make all principal payments from the QTIP Marital Trust first from the qualifying part.

C. Retirement Payments.
If (1) this trust or my Trustee is named as the beneficiary of an interest held by me in one or
more plans which are qualified under I.R.C. Sections 401(a), 401(k), 403(a), (b) or (c), or one or
more individual retirement accounts or simplified employee pension plans qualified under I.R.C.
Sections 408 or 408A (hereinafter "Retirement Accounts"), (2) the beneficiary designation does not
specify the Family Trust as the beneficiary, and (3) my Trustee does not disclaim such interest(s),
126

I.R.C. §2056 (b)(7).

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then my Trustee shall allocate the benefits payable from such Retirement Accounts to the QTIP
Marital Trust, without under-funding the Family Trust, if possible.

Therefore, if Retirement

Account benefits become distributable to the QTIP Marital Trust, the following provisions shall
apply:
1.

Amount To Be Withdrawn and Distributed.

My Trustee shall withdraw from the Retirement Account(s), at least annually, the greater of
(i) the amount required to be distributed from such Retirement Account(s) under I.R.C. Section
401(a)(9), or (ii) that portion of the net income (up to, and including, all of the income) earned by the
Retirement Account(s) which my wife, «Wifes_name_in_lower_case», directs my Trustee to
withdraw from such account(s). In addition, my wife shall have the right, exercisable at any time and
from time to time during the year, to compel my Trustee to distribute to her all sums which were
withdrawn from the Retirement Account(s) pursuant to the immediately preceding sentence.
2.

Qualifying Income Interest.

My Trustee shall take all steps necessary to assure that the interest of my wife qualifies as a
qualifying income interest for life pursuant to I.R.C. Section 2056(b)(7).
3.

Principal and Income Allocations.

My Trustee shall allocate to the income of the QTIP Marital Trust that portion of Retirement
Account withdrawals which are actually distributed to (or for the benefit of) my wife pursuant to her
direction in accordance with paragraph C.1 of this Article. As permitted by Reg.
Section 20.2056(b)-5(f)(8), my Trustee shall accumulate and add to the principal of the QTIP
Marital Trust all other distributions received by that trust from a Retirement Account.

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4.

Underproductive Property.

My wife shall have the power to direct my Trustee to compel any Retirement Account from
which distributions are made to the QTIP Marital Trust to be invested in income-producing assets.
5.

Power to Accelerate Distributions.

My Trustee shall elect an option under each Retirement Account which allows my Trustee,
in my Trustee’s discretion, to accelerate distributions and to receive one or more lump sum
payments from each Retirement Account, so that my Trustee has the flexibility to withdraw
principal from each account. If such an option is not available under the Retirement Account
arrangement, my Trustee shall take all steps necessary to cause such Retirement Account to be
transferred to an individual retirement account which (1) offers such flexibility, (2) is titled in the
participant's name, and (3) is qualified under I.R.C. Sections 408 or 408A (as long as such transfer is
not treated as a taxable distribution for income tax purposes).

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ARTICLE NINE
RIGHTS RESERVED BY ME
A. Additional Contributions.
I reserve for myself and any other person, the right to make insurance policies payable to my
Trustee and to transfer additional assets to my Trustee. The transferor may withdraw any assets
transferred to my Trustee at any time. My Trustee shall segregate any assets contributed by a third
person for accounting purposes, but need not separate them physically.

B. Revocation and Amendment.
I reserve the right to revoke or amend this Agreement, or to withdraw assets of this Trust, by
a writing (but not a will) signed by me and delivered to my Trustee during my lifetime. Any
amendment that changes the duties or compensation of my Trustee shall require the consent of my
Trustee. If this Agreement has been revoked but at my death any assets are payable to my Trustee,
my Trustee shall distribute the assets to my estate.

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ARTICLE TEN
GENERATION-SKIPPING TRANSFER TAX PROVISIONS

A. Separate Trusts.
To minimize the generation-skipping transfer tax, my Trustee may divide any trust into two
separate trusts, one fully exempt from generation-skipping transfer tax and the other not. My
Trustee shall allocate to the trust to be exempt from generation-skipping transfer tax the maximum
fractional share of assets that can be allocated to this trust to establish this trust with an inclusion
ratio of zero. My Trustee shall allocate to the trust to be subject to generation-skipping transfer tax
the remaining fractional share of assets to establish this trust with an inclusion ratio of one.

B. Child's General Power of Appointment Over Nonexempt Trust.
If any separate trust for a child of mine has an inclusion ratio of one and the distribution of
that trust would otherwise result in generation-skipping transfer tax, the child shall have the power,
by specific reference to this general power of appointment in the child's will, to appoint the assets
(including any undistributed income) of that trust only to the creditors of the child's estate.

C. Payment of Child's Transfer Taxes on Nonexempt Trust.
Unless a child provides otherwise by specific reference to this paragraph in a will or other
writing, my Trustee shall pay any transfer taxes attributable at the child's death to the assets
(including any undistributed income) of any trust over which the child has a general power of
appointment from the unappointed principal of that trust according to this computation: the actual

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taxes payable by the child's estate, less the taxes that would be payable if the assets of that trust were
excluded from the child's gross estate. My Trustee shall pay this amount to the child's estate or
directly to the taxing authorities and may rely upon the child's personal representative for the amount
due.

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ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS

A. Protection from Claims.
To the maximum extent permitted by law, the principal and income of any trust created
herein shall not be liable for the debts of any beneficiary or subject to voluntary or involuntary
alienation or anticipation by a beneficiary, except as otherwise provided.

B. Survivorship.
My wife, «Wifes_name_in_lower_case», shall be deemed to have survived me if, in the
opinion of my Trustee, there is no sufficient evidence we have died otherwise than simultaneously. I
shall be deemed to have survived any other beneficiary named herein if, in the opinion of my
Trustee, there is no sufficient evidence that such beneficiary survived me by more than one hundred
twenty (120) hours.

C. Adoption.
A person related to me by or through adoption shall take under this Agreement as if related
to me by or through birth, except that a person adopted after reaching age twenty-one (21) and
descendants of such person shall not so take.

D. Disclaimer.
Any beneficiary or the legal representative of any beneficiary shall have the right, within the
time prescribed by law, to disclaim any power or right to receive property under this Agreement. All

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or any fractional part of the QTIP Marital Trust disclaimed by or on behalf of my wife,
«Wifes_name_in_lower_case», shall be added to the Family Trust. My wife shall have the same
interest in such added property as she has in the other property in the Family Trust (unless she also
disclaims her interest in the Family Trust). My Trustee shall pay any additional estate or inheritance
taxes attributable to any disclaimer of the QTIP Marital Trust or other property qualifying for the
marital deduction from the disclaimed property according to this computation: the actual taxes
payable at my death, less the taxes that would be payable if the disclaimer were not made.

E. Construction of Terms.
Where appropriate to the context, pronouns or other terms expressed in one number and
gender shall be deemed to include the other number and genders. References to transfer taxes shall
include gift, estate, inheritance and similar taxes, as well as generation-skipping transfer taxes. Taxrelated terms shall be construed in the context of the federal revenue laws in effect at my death.

F. Rule Against Perpetuities.
Anything in this trust notwithstanding, no trust created hereunder shall continue beyond
twenty-one (21) years after the death of the last to die of those beneficiaries who were living at the
time of my death or the maximum period allowed by law in the jurisdiction or situs of the trust,
whichever shall be greater, and upon the expiration of such period all trusts shall terminate and the
assets thereof shall be distributed outright to those beneficiaries and in the same proportions as
designated in the trust.

G. Situs, Multiple Counterparts.

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This Agreement is made or delivered in Virginia and shall be governed by its laws unless the
situs is changed pursuant to the provisions of Article Seven (L) herein. This Agreement may be
signed in more than one counterpart, each of which is an original.
WITNESS our signatures and seals:

(SEAL)
«Husbands_name_in_lower_case»
Grantor and Trustee

(SEAL)
«Wifes_name_in_lower_case»
Trustee

STATE OF VIRGINIA
CITY OF VIRGINIA BEACH

)
) ss.
)

The foregoing instrument was acknowledged before me on March 27, 2013 by
«Husbands_name_in_lower_case», Grantor and Trustee, and by «Wifes_name_in_lower_case»,
Trustee.

Notary Public
(SEAL)
My commission expires:

ARTICLE ___
NO CONTEST

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If any beneficiary hereunder contests the validity of my will, this Agreement, or any
provision thereof, or institutes or joins in (except as a party defendant), any proceeding to contest
the validity of my will, this Agreement or to prevent any provision thereof from being carried out
in accordance with its terms (regardless of whether or not such proceedings are instituted in good
faith and with probable cause), then all benefits provided for such beneficiary shall be forfeited,
and the remainder of such benefits I give to the remaining beneficiaries of this Agreement (other
than such contestant) in the proportion that the share of each such beneficiaries bears to the
aggregate of the effective shares of all residuary beneficiaries under this trust.128

128

Virginia courts will enforce a no contest clause, and may do so even if there is not a valid gift over. However,
it is highly recommended that the drafter not flirt with disaster (or malpractice liability) and give the maximum
effect to the grantor/trustee’s wishes by drafting appropriate gift over language. According to Professor Rodney
Johnson, there is no case in Virginia deciding that good faith and probable cause will excuse a contest and prevent
the operation of the no contest condition. The author notes that a no contest clause will not be an effective deterrent
if there is nothing for the contesting beneficiary to lose by mounting a challenge to the will or trust. When using
such a clause, it is recommended that a significant enough gift be employed to cause a potential contestant to “think
twice” before litigating.

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ARTICLE ____
QUALIFIED SUBCHAPTER S TRUST

A. Creation.
If any trust created herein shall hold corporate stock for which a valid election to be taxed
under Subchapter S of the Internal Revenue Code ("Sub-S Stock"129has been made, and such
election is in existence at the time such corporate stock is first transferred to or owned by
such trust, then, in such event, I authorize my Trustee to divide the Trust Assets in such a
manner as to create or establish a separate trust for each beneficiary of Sub-S Stock, to be
designated as a Qualified Subchapter S Trust (QSST),130 for each such beneficiary.

B. Administration of QSST.
With respect to each QSST so created, my Trustee shall pay to the beneficiary:
1. All of the net income of the QSST in convenient installments, but at least annually;
and
2. So much of the principal (including all or none) of the QSST as my Trustee deems
appropriate for any purpose, adding to principal any income not so paid or expended, but at least
an amount equal to the federal and state income taxes imposed upon the beneficiary of such
QSST with respect to any income or gain of any Sub-S Stock owned by the QSST that is
allocated to the QSST principal under applicable trust accounting principles.
129
130

I.R.C Section 1361, et seq.
I.R.C. Section 1361(c)(2).

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C. Intent.
Any QSST created hereunder is intended to be an eligible S Corporation shareholder
under the Internal Revenue Code and all provisions of such QSST shall be construed consistently
with this intent. After my death, I authorize and empower my Trustee to amend or modify any
QSST created under this Article in any manner necessary to qualify such QSST as an eligible S
Corporation shareholder under the current provisions of the Internal Revenue Code or any
pertinent regulations then issued.

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ARTICLE ____
GENERAL POWER MARITAL TRUST131

A. During My Wife's Lifetime.
My Trustee shall pay the net income of the General Power Marital Trust to my wife,
«Wifes_name_in_lower_case», during her lifetime in quarterly or more frequent installments and
may pay to her or for her benefit as much of the principal of the General Power Marital Trust as my
Trustee may deem appropriate for any purpose, including, but not limited to, her support, health and
maintenance. During her lifetime, my wife may direct my Trustee, in writing, to distribute to her all
or any portion of the principal of the General Power Marital Trust.

B. General Power of Appointment.
At my wife's death, my Trustee shall distribute the assets (including any undistributed
income) of the General Power Marital Trust as my wife may direct by specific reference to this
general power of appointment in her will. My wife may appoint, outright or in further lawful trust,
to any persons, including her estate.

131

Substitute for QTIP Article in non-joint trust. This Article qualifies for the unlimited marital
deduction under I.R.C. Section 2056(b)(5).

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C. Distribution of Remaining Assets.
My Trustee shall add to the Family Trust any un-appointed assets of the General Power
Marital Trust not used to pay taxes as later provided; but, if the value of these un-appointed assets
not used to pay taxes would exceed my wife's generation-skipping transfer tax exemption allocated
to the General Power Marital Trust, my Trustee shall distribute the excess portion to my then living
descendants, per stirpes, subject to the provisions of Article ___ 132of this Agreement.

132

Insert the Article Number for the trust dealing with interests vesting in minor beneficiaries.

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SELECTED ETHICS ISSUES FOR THE ESTATE PLANNER
ACTEC COMMENTARIES AND VIRGINIA LAW
Robert L. Freed, Esquire
George B. Shepherd, Jr., Esquire
Rebecca C. Bowen, Esquire

Freed & Shepherd, P.C.
Richmond, Virginia1

INTRODUCTION
I.A

Sources of Information.
I.A.1 The American College of Trust and Estate Counsel ("ACTEC")
Commentaries can be found on the ACTEC web site at
http://www.actec.org/public/ShowResourcesPublic.asp. We would like to
thank ACTEC for their permission to reprint text from the ACTEC
Commentaries.
I.A.2 The American Bar Association (the "ABA") Model Rules can be found at
the ABA’s website at http://www.abanet.org/cpr/e2k/home.html.
I.A.3 The Virginia State Bar ("VSB") maintains a professional responsibility
web page, http://www.vsb.org/profguides/index.html. A link on that page
entitled "Ethics Opinions and Information" will take you to
http://www.vsb.org/profguides/opinions.html, which contains a link to
"Tom's LEO Summaries" and to "Virginia CLE Home Page." Also see the
link to "Answering Your Questions about Legal Ethics" by Anne P.
Michie, Assistant Ethics Counsel ["Anne Michie, FAQs"] at
http://www.vsb.org/profguides/FAQ_leos/LegalEthicsFAQs.html.
I.A.4 "Tom's LEO Summaries" located on the McGuire Woods LLP's website at
http://www.mcguirewoods.com/services/leo/ contains summaries of
Virginia's and the ABA's Legal Ethics Opinions (LEOs), prepared by
Thomas E. Spahn, Esquire, McGuireWoods LLP, Richmond, Virginia
(Spahn). These summaries are arranged chronologically and by topic.
Tom was a member of the VSB committee responsible for the
promulgation of the Virginia Rules of Professional Conduct, and was a

1

Used with the gracious permission of the authors.

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member of the VSB committee that revised the Consolidation of Part Six,
Section IV, Paragraph 13, Rules of the Virginia Supreme Court,
Disciplinary Board Rules of Procedure and Council Rules of Disciplinary
Procedure. Tom’s web site provided most of the information and many of
the summaries of LEOs contained in this paper, for which the authors are
extremely grateful.
I.A.5 The "Virginia CLE Home Page" contains a link, mentioned above, to
http://www.vacle.org/leo.htm that as of the date of this paper contains
LEOs 1360 through 1826. These opinions are available in electronic
format as a result of the work of James M. McCauley, Virginia State Bar
Ethics Counsel. For Mr. McCauley’s other very useful web site, see
http://members.aol.com/jmccauesq/ethics/.
I.B

History.
I.B.1

Model Rules of Professional Conduct. The ABA adopted the original
Canons of Professional Ethics in 1908 to provide a professional standard
to serve as a model of the regulatory law governing the legal profession.
The original Canons of Professional Ethics have been revised, amended,
and redrafted over the last century, and have evolved into the present day
Model Rules of Professional Conduct (the AMRPC). The MRPC was
adopted by the ABA House of Delegates in 1983, and the MRPC and
Comments have been amended on fourteen occasions since their adoption
with the most recent revisions adopted in 2002.

I.B.2

ACTEC Commentaries on the MRPC.
I.B.2.a ACTEC is an association of lawyers that are skilled and
experienced in the area of estate planning and collectively work
toward the improvement of laws and procedures in the areas of
estate planning and professional responsibility.
I.B.2.b ACTEC developed Commentaries on selected rules of the MRPC
to provide particularized guidance regarding the professional
responsibilities of lawyers engaged in trusts and estates practices.
The current Fourth Edition of the Commentaries (2006), focuses
on amendments to the MRPC promulgated by the Ethics 2000
Commission (ABA Commission on Evaluation of the MRPC).

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I.B.3

Va. Rules. On January 1, 2000, the Virginia Code of Professional
Responsibility (the Code) was replaced by the Virginia Rules of
Professional Conduct (the Va. Rules) that set out the responsibilities of
those practicing in the legal profession in the Commonwealth of Virginia.
Although the Va. Rules are similar to the MRCP, amendments specific to
Virginia make the Va. Rules different from the MRCP in many aspects.
The Va. Rules can be found in Rules of the Supreme Court of Virginia,
Part 6, ' II, effective January 1, 2000.

I.B.4

LEOs. Legal Ethics Opinions ("LEOs") are written informal advisory
opinions issued by the Standing Committee on Legal Ethics. Caution:
LEOs cited in this paper that cite the former Code must be carefully
analyzed by application of the Va. Rules.

I.B.5

Interpretations.
I.B.5.a The preamble to the Va. Rules provides that the word "should"
when used in reference to a lawyer’s actions represents an
aspirational rather than a mandatory standard.
I.B.5.b The preambles to the MRPC and the ACTEC Commentary both
provide that: The Rules of Professional Conduct are rules of
reason. They should be interpreted with reference to the purposes
of legal representation and of the law itself. Some of the Rules are
imperatives, cast in the terms 'shall' or 'shall not.' These define
proper conduct for purposes of professional discipline. Others,
generally cast in the term 'may,' are permissive and define areas
under the Rules in which the lawyer has discretion to exercise
professional judgment. . . . Many of the Comments use the term
'should.' Comments do not add obligations to the Rules but provide
guidance for practicing in compliance with the Rules.

I.C

Scope of the Va. Rules. The preamble to the Va. Rules provides that:
I.C.1

[14] These Rules follow the same format as the current American Bar
Association Model Rules of Professional Conduct (AABA Model
Rules@), rather than the former American Bar Association Model Code of
Professional Responsibility (ABA Model Code), or the former Virginia
Code of Professional Responsibility (Virginia Code). Although
interpretation of similar language in the ABA Model Rules by other states’

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courts and bars might be helpful in understanding Virginia’s Rules, those
foreign interpretations should not be binding in Virginia.
I.C.2 [15] The Rules presuppose a larger legal context shaping the lawyer’s role.
That context includes court rules and statutes relating to matters of
licensure, laws defining specific obligations of lawyers and substantive
and procedural law in general. Compliance with the Rules, as with all law
in an open society, depends primarily upon understanding and voluntary
compliance, secondarily upon reinforcement by peer and public opinion
and finally, when necessary, upon enforcement through disciplinary
proceedings. The Rules do not, however, exhaust the moral and ethical
considerations that should inform a lawyer, for no worthwhile human
activity can be completely defined by legal rules. The Rules simply
provide a framework for the ethical practice of law.

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II.

COMPETENCE (HYPOTHETICAL #1)
Hypothetical #1A: How competent of an estate planner do I have to be?
Hypothetical #1B: May I hold myself out to be a specialist in estate planning?
II.A

ACTEC Commentary on MRPC 1.1: Competence.
II.A.1 A lawyer who initially lacks the skill or knowledge required to meet the
needs of a particular client may overcome that lack through additional
research and study. The needs of the client may also be met by involving
another lawyer or other professional who possesses the requisite degree of
skill or knowledge.
II.A.2 The lawyer should be candid with the client regarding the lawyer's level of
competence and need for additional research and preparation, which
should be taken into account in determining the amount of the lawyer's
fee. See ACTEC Commentary on MRPC 1.5 (Fees).
II.A.3 A lawyer may, with the client's informed consent, limit the scope of the
representation to those areas in which the lawyer is competent. See MRPC
1.2(c). [Note that Va. Rule 1.2(b) similarly allows a lawyer to limit the
objectives of the representation if the client consents after consultation.]
II.A.4 Competence requires that a lawyer handle a matter with diligence and
keep the client reasonably informed during the active phase of the
representation. See MRPC 1.3 (Diligence) and MRPC 1.4
(Communication).

II.B

Va. Rules. Va. Rule 1.1 and MRPC 1.1 are identical.

II.C

Comment to Va. Rule 1.1.
II.C.1 Legal Knowledge and Skill. [1] In determining whether a lawyer employs
the requisite knowledge and skill in a particular matter, relevant factors
include the relative complexity and specialized nature of the matter, the
lawyer's general experience, the lawyer's training and experience in the
field in question, the preparation and study the lawyer is able to give the
matter and whether it is feasible to refer the matter to, or associate or
consult with, a lawyer of established competence in the field in question.
In many instances, the required proficiency is that of a general

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practitioner. Expertise in a particular field of law may be required in some
circumstances.
II.C.2 [2] A lawyer need not necessarily have special training or prior
experience to handle legal problems of a type with which the lawyer is
unfamiliar. A newly admitted lawyer can be as competent as a practitioner
with long experience. Some important legal skills, such as the analysis of
precedent, the evaluation of evidence and legal drafting, are required in all
legal problems. Perhaps the most fundamental legal skill consists of
determining what kind of legal problems a situation may involve, a skill
that necessarily transcends any particular specialized knowledge. A lawyer
can provide adequate representation in a wholly novel field through
necessary study. Competent representation can also be provided through
the association of a lawyer of established competence in the field in
question.
II.C.3 [4] A lawyer may accept representation where the requisite level of
competence can be achieved by reasonable preparation. This applies as
well to a lawyer who is appointed as counsel for an unrepresented person.
See also Va. Rule 6.2.
II.C.4 Thoroughness and Preparation. [5] Competent handling of a particular
matter includes inquiry into and analysis of the factual and legal elements
of the problem, and use of methods and procedures meeting the standards
of competent practitioners. It also includes adequate preparation. The
required attention and preparation are determined in part by what is at
stake; major litigation and complex transactions ordinarily require more
elaborate treatment than matters of lesser consequence.
II.C.5 Maintaining Competence. [6] To maintain the requisite knowledge and
skill, a lawyer should engage in continuing study and education. The
Mandatory Continuing Legal Education requirements of the Rules of the
Supreme Court of Virginia set the minimum standard for continuing study
and education which a lawyer licensed and practicing in Virginia must
satisfy. If a system of peer review has been established, the lawyer should
consider making use of it in appropriate circumstances.

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II.D

LEOs.
II.D.1 LEO 1515 (1994). A lawyer should undertake representation only in
matters in which the lawyer can act with competence and demonstrate the
specific legal knowledge, skill, efficiency, and thoroughness in
preparation employed in acceptable practice by lawyers undertaking
similar matters. DR 6-l0l(A) under the Code (now Va. Rule 1.1). A lawyer
may not limit his liability to his client for his personal malpractice. DR 6l02(A), now Va. Rule 1.8(h).
II.D.2

II.D.3 LEO 1412 (1991). Va. Rule 1.8(h) generally prohibits a lawyer from
prospectively limiting his liability to a client for malpractice, except that a
lawyer may make such an agreement with a client of which the lawyer is
an employee as long as the client is independently represented in making
the agreement. A lawyer may not contractually define services which
constitute the practice of law as not amounting to legal services and
thereby limit his professional liability. Under some circumstances and at
the client’s request, a lawyer may properly include an exculpatory
provision in a document drafted by the lawyer for the client that appoints
the lawyer to a fiduciary office. (An exculpatory provision is one that
exonerates a fiduciary from liability for certain acts and omissions
affecting the fiduciary estate.) The lawyer ordinarily should not include
an exculpatory clause without the informed consent of an unrelated client.
An exculpatory clause is often desired by a client who wishes to appoint
an individual nonprofessional or family member as fiduciary. Va. Rule
1.8.
II.D.4 LEO 1325 (1990). Standards for competence of Virginia attorneys serving
as fiduciaries are governed by Virginia law. However, when an attorney
acts as a fiduciary and violates his or her duty in a manner that would
justify disciplinary action had the relationship been that of attorney/client,
the attorney may be disciplined under the Code (now the Va. Rules).
II.E

Virginia Cases.
II.E.1 Copenhaver v. Rogers, 238 Va. 361, 384 S.E.2d 593 (1989). In this action
brought by a decedent's grandchildren against the decedent's estate
planning attorney for alleged negligence, the court held that lack of privity

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barred any cause of action in tort and the plaintiffs' allegations based on a
third-party beneficiary contract theory were insufficient to confer standing
to sue since the plaintiffs failed to show that they were "clearly intended"
beneficiaries of the testator's contract with the law firm.
II.E.2 Rutter v. Jones, Blechman, Woltz & Kelly, 264 Va. 310, 568 S.E.2d 693
(2002). Virginia is one of the very few "privity" jurisdictions left in the
country whose courts hold that no intended beneficiary may sue the
decedent's estate planning lawyer for alleged negligence when the
testator's estate plan fails to achieve its intended purposes as a result of the
estate planner's alleged negligence. Furthermore, Virginia retains its
consistent approach to this issue by refusing to permit the personal
representative of a decedent's estate (clearly "in privity" with the estate
planning lawyer) to bring a negligence action for an estate planning
lawyer's alleged failure to properly plan to avoid otherwise clearly
avoidable estate taxes by holding that, since the action for malpractice did
not arise until after the client had died, the personal representative (limited
under Virginia law to bringing only actions that arose before death) could
present no viable claim for malpractice.
II.F

Advertising.
II.F.1 Under Va. Rule 7.4, lawyers may state, announce, or hold themselves out
as limiting their practice in a particular area or field of law, but the
communication is subject to the false and misleading standard in Va.
Rules 7.1 and 7.2.
II.F.2 In addition, a lawyer shall not state or imply that the lawyer has been
recognized or certified as a specialist in estate planning unless he has been
certified as a specialist in a field of law by a named organization, provided
that the communication clearly states that there is no procedure in the
Commonwealth of Virginia for approving certifying organizations.
II.F.3 See Spahn, Topic No. 86 - Descriptions of certification and specialization
for LEOs on this issue decided under the Code.

II.G

Conclusion to Hypothetical #1.
II.G.1 In regard to Hypothetical #1A, competency in the area of estate planning
means more than the mere knowledge or skill to produce documents that
meet the proper formalities for a valid will, etc.

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II.G.1.a
The lawyer must also either be able to understand, or gain
an understanding of, a client's dispositive objectives and how such
objectives can be met, including but not limited to tax implications.
II.G.1.b
A competent lawyer must also ensure that he has obtained
accurate information from the client regarding citizenship, asset
ownership, asset values, as well as, beneficiary and survivorship
designations.
II.G.2 In determining whether a lawyer possess the requisite competence in an
estate planning matter, consideration of the client's particular objectives
and situation is imperative. For example:
II.G.2.a
Does the client desire a distribution other than the typical
situation of everything passing to a spouse, and then to her
children?
II.G.2.b
Are there any beneficiaries with special needs?

II.G.2.c
Will the client likely have a taxable estate that requires tax
planning?
II.G.3 In regard to Hypothetical #1B, a lawyer may hold himself out as being a
specialist in estate planning only if he has been certified as such by a
named organization. However, any communication stating that the lawyer
is an estate planning specialist certified by a certain organization must also
clearly state that there is no procedure in Virginia for approving certifying
organizations.

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III.

ENGAGEMENT LETTERS (HYPOTHETICAL #2)
Hypothetical #2: Do I need a written engagement letter?
III.A

ACTEC Commentary on MRPC 1.2: Scope of Representation and Allocation of
Authority Between Client and Lawyer.
III.A.1 In general, the client and lawyer, working together, are relatively free to
define the scope and objectives of the representation, including the extent
to which information will be shared among multiple clients and the nature
and extent of the obligations that the lawyer will have to the client.
III.A.2 If multiple clients are involved, the lawyer should discuss with them the
scope of the representation and any actual or potential conflicts and
determine the basis upon which the lawyer will undertake the
representation. As stated in the Comment to MRPC 1.7 (Conflict of
Interest: Current Clients) with respect to estate administration, "the lawyer
should make clear the lawyer's relationship to the parties involved."
III.A.3 In the estate planning context, the lawyer should discuss with the client the
functions that a personal representative, trustee, or other fiduciary will
perform in the client's estate plan. In addition, the lawyer should describe
to the client the role that the lawyer for the personal representative, trustee,
or other fiduciary usually plays in the administration of the fiduciary
estate, including the possibility that the lawyer for the fiduciary may owe
duties to the beneficiaries of the fiduciary estate. The lawyer should be
alert to the multiplicity of relationships and challenging ethical issues that
may arise when the representation involves employee benefit plans,
charitable trusts or foundations.

III.B

Va. Rules.
III.B.1 Va. Rule 1.2(a) and MRPC 1.2(a), while worded somewhat differently,
contain substantially the same requirements.

A comparison of Va. Rule 1.2(b) to MRPC 1.2(b) is as follows: (b) A
lawyer may limit the scopeobjectives of the representation if the limitation is
reasonable under the circumstances and the client gives informed consent. (dclient
consents after consultation. [underlined text represents Va. Rule 1.2(b) and strikeout
text represents MRPC 1.2(b)]

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III.B.2 Fees in Engagement Letters:
III.B.2.a
MRPC 1.5(b) provides: The scope of the representation and
the basis or rate of the fee and expenses for which the client will be
responsible shall be communicated to the client, preferably in
writing, before or within a reasonable time after commencing the
representation, except when the lawyer will charge a regularly
represented client on the same basis or rate. Any changes in the
basis or rate of the fee or expenses shall also be communicated to
the client.
III.B.2.b
Va. Rule 1.5(b) provides: The lawyer's fee shall be
adequately explained to the client. When the lawyer has not
regularly represented the client, the amount, basis or rate of the fee
shall be communicated to the client, preferably in writing, before
or within a reasonable time after commencing the representation.
III.C

ACTEC Engagement Letters. Engagement letters for various situations, cross
referenced to the ACTEC Commentaries, and checklists for their use, may be
found at http://www.actec.org/pubInfoArk/comm/engltrtoc.htm.

III.D

Conclusion to Hypothetical #2.
III.D.1 It is always advisable to use a written engagement letter as a way to set the
framework for the representation, avoid unrealistic expectations of the
client and the lawyer, and avoid other potential problems.
III.D.2 Engagement letters should always address fees and other expenses, along
with the timing of billing and expected payments.
III.D.3 Engagement letters should always address the scope of the anticipated
engagement. If the lawyer is representing multiple clients, use of an
engagement letter is particularly recommended so that the lawyer may
disclose in writing the scope of representation and any actual or potential
conflicts that may exist.
III.D.4 The engagement letter shall preferably be in writing; however, a written
agreement is needed:

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III.D.4.a
If there is a business transaction between the attorney and
client. See Va. Rule 1.8(a).

III.D.4.b
If there is a waiver of conflicts between concurrent clients under
Va. Rule 1.7. (Note that there is no requirement of a writing under
Va. Rule 1.9 for a conflict between a former client and a current
client).

IV.

FEES AND RETAINERS (HYPOTHETICAL #3)
Hypothetical #3: My client has given me a $5,000 "retainer" and signed my
standard engagement letter to pay me at my standard hourly rate. My client’s bill to
date is $400 at my standard rate, but most estate planning attorneys would have
charged about $250. My client has now fired me and wants her $5,000 back. How
much do I have to refund?
IV.A ACTEC Commentary on MRPC 1.5: Fees.
IV.A.1 Fees for legal services in trusts and estates matters may be established in a
variety of ways provided that the fee ultimately charged is a reasonable
one taking into account the factors described in MRPC 1.5(a) (Fees).
IV.A.2 Fees in such matters frequently are primarily based on the hourly rates
charged by the attorneys and legal assistants rendering the legal services
or upon a mutually agreed upon fee determined in advance. Based on the
revisions to MRPC 1.5 (Fees) in 2002, unless the lawyer has regularly
represented the client on the same basis or rate, the lawyer must advise the
client of the basis upon which the legal fees will be charged and obtain the
client's consent to the fee arrangement. As revised in 2002, the rule also
requires a lawyer to inform the client, preferably in writing, before or
within a reasonable time after commencing the representation, of the
extent to which the client will be charged for other items, including
duplicating expenses and the time of secretarial or clerical personnel.
IV.A.3 The ACTEC Commentaries are silent as to retainers.
IV.B

Va. Rules.

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IV.B.1 Va. Rule 1.5(a) and MRPC 1.5(a), while worded slightly differently, are
substantively similar.
IV.B.2 Va. Rule 1.5(b) and (c) and MRPC 1.5(b) and (c), while worded
differently, contain substantially the same requirements.
IV.C

Comment to Va. Rule 1.5.
IV.C.1 Basis or Rate of Fee. [1] When the lawyer has regularly represented a
client, they ordinarily will have evolved an understanding concerning the
basis or rate of the fee. In a new client-lawyer relationship, however, an
understanding as to the amount, basis, or rate of the fee should be
promptly established. It is not necessary to recite all the factors that
underlie the basis of the fee, but only those that are directly involved in its
computation. It is sufficient, for example, to state that the basic rate is an
hourly charge or a fixed amount or an estimated amount, or to identify the
factors that may be taken into account in finally fixing the fee. A written
statement concerning the fee reduces the possibility of misunderstanding.
IV.C.2 Furnishing the client with a simple letter, memorandum, receipt or a copy
of the lawyer's customary fee schedule may be sufficient if the basis or
rate of the fee is set forth.

IV.D Fees in general and LEOs.
IV.D.1 Retainers.
IV.D.1.a
The labels of payment as "retainers" or "guaranteed
minimum fees" are not dispositive, and any payment for fees not
yet rendered must be placed in a trust account and not removed
until the services are rendered. LEO 510 (1983).
IV.D.1.b
A retainer must be placed in a trust account and may be
transferred to the lawyer's account only as the fees are earned, and
money should remain in the trust account until any dispute is
resolved by appropriate legal means. LEO 1246 (1989).
IV.D.1.c
A lawyer may charge a "retainer" to "insure the attorney's
availability and as consideration for the lawyer's unavailability to
potential adverse party" where the client seeks to secure the
lawyer's employment "for representation of his interests in any

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matter which may arise in the future." On the other hand, a
"specific sum paid at the time an employment agreement is entered
into" to "secure the lawyer's legal services for a specific . . .
matter" is "deemed to be an advanced legal fee which has been
entrusted to the lawyer" but which still belongs to the client. LEO
1322 (1990).
IV.D.2 LEO 1606 (1994). The principles governing an attorney’s fees are as
follows:
IV.D.2.a
Fee contracts "are not construed as are other commercial
contracts."
IV.D.2.b

"All fees must be reasonable."

IV.D.2.c
Because the client "retains the absolute right to discharge
the lawyer at any time for any reason or without reason," a
discharged lawyer may only recover in quantum meruit for
services rendered which is valued by looking at the "reasonable
value of the services rendered, not to the benefit received by the
client."
IV.D.2.d
A lawyer must return all unearned fees if the representation
ends. A "retainer" is not a pre-payment for legal services, but
rather a payment made to insure a lawyer's availability for future
legal services.
IV.D.2.e

There may be no non-refundable advanced legal fee.

IV.D.2.f
Even if a lawyer and client agree to a fixed fee, the lawyer
must return any unused portion if the representation prematurely
ends (using a quantum meruit approach).
IV.D.3 LEO 1812 (2005). The arrangements between lawyers and clients are
"unique and not governed solely by principles that govern ordinary
commercial contracts." Although lawyers and clients may agree on an
alternative fee that applies when a client discharges a lawyer without
cause from a contingent fee arrangement, the alternative must meet the
reasonableness standard:
IV.D.3.a

when entered into;

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IV.D.3.b

when the client terminates the lawyer; and,

IV.D.3.c
when the client obtains a recovery in the lawsuit. A lawyer
discharged from a contingent fee arrangement without cause normally
recovers under a quantum meruit standard if the retainer agreement is
silent, or contains an alternative fee arrangement that would result in an
unreasonable fee.
IV.D.3.d
The following retainer agreement sentence was found to be
improper and misleading because it "actually appears to attempt to
set an hourly rate for a quantum meruit analysis," rather than
indicating that the lawyer will seek quantum meruit compensation
based on the referenced hourly rate: "In the event Client
terminates this agreement, the reasonable value of Attorney's
services shall be valued at $200 per hour for attorney time and $65
per hour for legal assistant time for all services rendered."
IV.D.3.e
The following retainer agreement sentence was found to be
improper and misleading because it does not fully explain "under
what circumstances law may permit the attorney to elect
compensation based on the agreed contingent fee or any settlement
offer made to client prior to termination": "In the alternative, the
Attorney may, where permitted by law, elect compensation based
on the agreed contingency fee for any settlement offer made to
Client prior to termination."
IV.E

Conclusion to Hypothetical #3.
IV.E.1 In Hypothetical #3, the attorney must return either $4,600 or $4,750 to the
client.
IV.E.2 First, the "retainer" is technically an "advanced legal fee" since it was a
fee paid in advance for particular legal services not yet performed. By
contrast, a "retainer" would be paid to ensure the attorney's availability
and in consideration for the lawyer's unavailability to potential adverse
parties.
IV.E.3 Upon discharge of the lawyer, the lawyer must refund to the client any
portion of an advanced legal fee not earned by the lawyer.

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IV.E.4 As an overriding principle regarding fees, the lawyer's fee must be
reasonable.
IV.E.4.a
Assuming that the engagement letter advises the client of
the basis upon which the fees will be charged, and the client has
consented to the fee arrangement, the lawyer has an argument that
$400 for his services is reasonable.
IV.E.4.b
However, the fact that a fee is stated in an engagement
letter is not dispositive of whether it is reasonable. It is probable
that $250 is a reasonable fee based on a quantum meruit basis since
that is the amount that would be charged by other attorneys.

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V.

USE OF PARALEGALS (HYPOTHETICAL #4)
Hypothetical #4: I am very busy and somewhat out of sorts. Client Jones is very
difficult, and I just don’t want to deal with him today. My paralegal is very
experienced, and Mr. Jones likes him. May my paralegal supervise the execution of
Mr. Jones’ Will, Trust Agreement, Power of Attorney, and Advance Medical
Directive without me present at the signing?
V.A

ACTEC Commentary on MRPC 1.1: Competence.
V.A.1 A lawyer should provide adequate training and supervision to the legal
and non-legal staff members for whom the lawyer is responsible. As
indicated by the Comment to MRPC 5.5, . . . the MRPCs do not prohibit
lawyers from employing paraprofessionals and delegating work to them.
The requirement of supervision is described in the Comment to MRPC 5.3
(Responsibilities Regarding Non-lawyer Assistants): Lawyers generally
employ assistants in their practice, including secretaries, investigators, law
student interns and paraprofessionals. Such assistants, whether employees
or independent contractors, act for the lawyer in rendition of the lawyer's
professional services. A lawyer should give such assistants appropriate
instruction and supervision concerning the ethical aspects of their
employment, particularly regarding the obligation not to disclose
information relating to the representation of the client, and should be
responsible for their work product. The measures employed in supervising
non-lawyers should take account of the fact that they do not have legal
training and are not subject to professional discipline.
V.A.2 A lawyer should provide adequate training, supervision and oversight of
the lawyer's staff in order to protect the interests of the lawyer's clients.
V.A.3 Supervising Execution of Documents.
V.A.3.a
Generally, the lawyer who prepares estate planning
documents for a client should supervise their execution.
V.A.3.a)1
Of course, he or she may arrange for another lawyer
to do so.
V.A.3.a)2
If it is not practical for a lawyer to supervise the
execution or if the client so requests, the lawyer may

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arrange for the documents to be delivered to the client with
written instructions regarding the manner in which they
should be executed. The lawyer should do so only if the
lawyer reasonably believes that the client is sufficiently
sophisticated and reliable to follow the instructions.
V.A.3.a)3
Note that in some jurisdictions the supervision of
the execution of estate planning documents constitutes the
practice of law, which a lawyer may not delegate to a nonlawyer member of the lawyer’s staff.
V.B

Va. Rules.
V.B.1 Va. Rule 5.3 and MRPC 5.3 are substantively identical.
V.B.2 Va. Rule 1.1 and MRPC 1.1 are identical.

V.C

Comment to Va. Rule 5.3. [1] Lawyers generally employ assistants in their
practice, including secretaries, investigators, law student interns, and
paraprofessionals. Such assistants, whether employees or independent contractors,
act for the lawyer in rendition of the lawyer’s professional services. A lawyer
must give such assistants appropriate instruction and supervision concerning the
ethical aspects of their employment, particularly regarding the obligation not to
disclose information relating to representation of the client, and should be
responsible for their work product. The measures employed in supervising nonlawyers should take account of the fact that they do not have legal training and are
not subject to professional discipline.

V.D

ABA Model Guidelines for the Utilization of Paralegal Services. The Standing
Committee on Paralegals of the ABA drafted, and the ABA House of Delegates
adopted, the ABA Model Guidelines for the Utilization of Legal Assistant
Services in 1991. The Model Guidelines were further revised in 2003. Under the
Model Guidelines:
V.D.1 A lawyer is responsible for all of the professional actions of a paralegal
performing services at the lawyer's direction and should take reasonable
measures to ensure that the paralegal's conduct is consistent with the
lawyer's obligations under the rules of professional conduct of the
jurisdiction in which the lawyer practices.

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V.D.2 The lawyer maintains responsibility for the work product. The Supreme
Court of Virginia upheld a malpractice verdict against a lawyer based in
part on negligent actions of a paralegal in performing tasks that evidently
were properly delegable. Musselman v. Willoughby Corp., 230 Va. 337,
337 S.E.2d 724 (1985).
V.D.3 A lawyer may not delegate to a paralegal responsibility for establishing an
attorney-client relationship, establishing the amount of a fee, or for a legal
opinion rendered to a client.
V.D.4 A lawyer is responsible for taking reasonable measures to ensure that
clients, courts, and other lawyers are aware that a paralegal, whose
services are utilized by the lawyer in performing legal services, is not
licensed to practice law.
V.D.5 A lawyer may identify paralegals by name and title on the lawyer's
letterhead and on business cards identifying the lawyer's firm.
V.D.6 A lawyer is responsible for taking reasonable measures to ensure that all
client confidences are preserved by a paralegal.
V.D.6.a

See Va. Rule 1.6 and MRPC 1.6.

V.D.6.b
LEO 1258 (1989). A lawyer must be careful to prevent
disclosure of confidential information when the lawyer's secretary
is married to the head of a real estate agency and plans to become a
real estate agent.
V.D.6.c
LEO 1800 (2004). A two-member law firm hiring a
secretary who until the previous week was the only secretary at
another two-member law firm representing a litigation adversary
will not be disqualified from the case, as long as the new firm:
warns the secretary not to reveal or use any client confidences
acquired at the old firm; advises all lawyers and staff not to discuss
the matter with the new secretary; screens the new secretary from
the litigation matter (including the new firm's files on the matter).
Although not mandating any specific steps, the Virginia Bar
recommends that the new firm "develop a written policy
statement" regarding such situations, and note the need for
confidentiality "on the cover of the file in question."

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V.D.7 A lawyer should take reasonable measures to prevent conflicts of interest
resulting from a paralegal's other employment or interests.
V.D.8 A lawyer may include a charge for the work performed by a paralegal in
setting a charge and/or billing for legal services.
V.D.9 A lawyer may not split legal fees with a paralegal nor pay a paralegal for
the referral of legal business. A lawyer may compensate a paralegal based
on the quantity and quality of the paralegal's work and the value of that
work to a law practice, but the paralegal's compensation may not be
contingent, by advance agreement, upon the outcome of a particular case
or class of cases.
V.D.9.a
LEO 767 (1986). A law firm may pay legal assistants on a
profit-sharing basis, and include legal assistants and other staff on
the firm letterhead as long as they are properly identified.
V.D.9.b
According to VSB Standing Committee on Legal Ethics,
Gp. 885 (1987), a non-lawyer may be paid based on the percentage
of profits from all fees collected by the lawyer.
V.D.9.c
LEO 1290 (1989). A law firm staff member may not solicit
business for the firm even if the non-lawyer is to receive no
additional compensation for the service (because the staff member
would be compensated with a regular salary for recommending or
securing employment for the law firm). A lawyer may never
delegate in-person solicitation to a non-lawyer, even acting under
the lawyer's supervision.
V.D.10 A lawyer who employs a paralegal should facilitate the paralegal's
participation in appropriate continuing education and pro bono publico
activities.
V.E

UPLs.
V.E.1 Under Va. Rule 5.5, a lawyer shall not assist a person who is not a
member of the bar in the performance of an activity that constitutes the
unauthorized practice of law.

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V.E.2 In UPL 147 (1991), the Virginia Committee on UPL addressed the use of
paralegals and law office staff in real estate closings. The Committee ruled
as follows:
V.E.2.a
It is not the unauthorized practice of law for a real estate
paralegal company [ACompany@] to provide assistance to an
attorney in closing real estate loans which have been referred to the
paralegal company by that attorney [AClosing Attorney@] using
the following procedure:
V.E.2.a)1
Closing Attorney receives sales contract from real
estate agents; reviews contract; opens file; determines
which items can be accomplished by Company (e.g.
survey, title insurance, private pay-off information);
contracts real estate agent; and forwards file to Company
for processing.
V.E.2.a)2
Company receives Closing Attorney’s file; requests
title search; orders survey; notifies lending institution; and
receives package from lending institution unless lending
institution sends package directly to Closing Attorney who
forwards package to Company.
V.E.2.a)3
Company completes non-legal documents (e.g. tax
information, name affidavit, W-9 forms, commitment letter,
HUD-1 statement); contacts client to determine name of
hazard insurance company.
V.E.2.a)4
Company forwards note and deed of trust requests
to Closing Attorney; if lending institution has completed
documents, Company provides those to Closing Attorney
for review prior to closing.
V.E.2.a)5
Company receives survey and forwards to title
insurance company. Upon receipt of title binder, same if
forwarded by Company to seller’s Attorney for completion
of deed and seller’s documents. Deed and seller’s
documents are reviewed by Closing Attorney and lender
prior to closing.

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V.E.2.a)6
Completed approved package carried by Company
to Closing Attorney for review prior to meeting with
clients. Single charge for closing is made and shown on
title examination line of HUD-1 statement. See also LEO
1220.
V.E.2.a)7
Clients meet with Closing Attorney to sign all
required documents; package is returned to Company with
any changes to be made noted by Closing Attorney;
documents requiring recordation are recorded by Company
with instructions from Closing Attorney; Company does
not record until Closing Attorney determines procedure
once any encumbrance is disclosed (emphasis added).
V.E.2.a)8
Following recording, Company assembles various
executed documents and certified copies of documents
required by lender and delivers same to lender within
required time.
V.E.2.a)9
Company writes disbursement checks out of
Closing Attorney’s escrow account upon request (Company
has no signatory power over Closing Attorney’s account);
Closing Attorney reviews and signs checks to be disbursed.
V.E.2.a)10
Upon receipt, Closing Attorney transmits recorded
instruments to Company which prepares cover letter for
Closing Attorney’s review and signature before forwarding
to appropriate individual/institution.
V.E.3 UPL 191 (approved by VSB Council June 18, 1998 and approved by the
Va. SC September 29, 1998) addresses the use of paralegals and law office
staff and certain activities in interaction with clients that are permissible.
V.E.3.a
An attorney may employ non-lawyer personnel to perform
delegated functions but they must act under the direct supervision
of a licensed attorney. The attorney must assure that any nonlawyer employee complies with the Code (now the Va. Rules).
The initial and continuing relationship with the client is the
responsibility of the attorney.

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V.E.3.b
A non-lawyer employee may participate in the gathering of
information from a client during an initial client interview as long
as the non-lawyer renders no legal advice. A non-lawyer
employee may not determine the validity of the client’s legal claim
since this is considered the practice of law.
V.E.3.c
A non-lawyer employee may answer factual questions
regarding fee agreements but may not give any advice about legal
ramifications of contract provisions. A non-lawyer may also be
involved in a limited role in settlement negotiations, but he or she
may not evaluate the offer or recommend to a client whether or not
to accept an offer.
V.E.4 Proposed UPL 183 provided that the conduct of real estate closings by
anyone other than an attorney would be the unauthorized practice of law,
and as such, would prohibit lay settlement services from conducting
closings for real estate sales and for any loans secured by real estate. In a
letter from the United States Department of Justice and the Bureau of
Competition of the Federal Trade Commission, those entities urged the
Virginia Bar to reject the proposed opinion because it would deprive
Virginia consumers of the choice to use a lay settlement service, which
would end competition and increase the cost of real estate closings for
consumers. Proposed UPL 183 was rescinded.
V.E.5 Allowing paralegals to supervise a will execution ceremony is
questionable because the delegation of responsibility may be considered a
violation of professional conduct rules proscribing the aiding of a nonlawyer in the practice of law. In Ethics Advisory Opinion 02-12, the
South Carolina Bar Ethics Advisory Committee held that a paralegal may
not execute estate planning documents without an attorney present. The
Committee stated:
V.E.5.a
It can be argued that since the form for a Health Care
Power of Attorney is created by statute, assisting a person in
completing and executing such a document is purely a matter of
facilitating that person's wishes. The enabling statutes do not
require the assistance of a lawyer, and indeed, hospital personnel,
senior service centers, councils on aging, and the like, routinely
advise persons on Health Care Powers of Attorney and assist in
their execution.

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V.E.5.b
On the other hand, we believe that there comes a time in
every transaction where a lawyer's advice and presence are
essential. "We are convinced that real estate and mortgage loan
closings should be conducted only under the supervision of
attorneys, who have the ability to furnish their clients legal advice
should the need arise and fall under the regulatory rules of this
court. Again the protection of the public is of paramount concern."
State v. Buyers Service Co., Inc., 292 S.C. 426, 357 S.E.2d 15
(1987).
V.E.5.c
When a client retains a lawyer for what may be considered
a routine transaction, that client clearly expects to receive more
than the mere blank form with instructions on how to complete it.
Furthermore, once retained, the lawyer must then provide
consultation. Because a lawyer has a duty to supervise a nonlawyer who is working under his or her direction, this supervision
should include the period during the execution of documents as
well. While it may be permissible for the paralegal alone to gather
information, we deem it not permissible for the paralegal alone to
assist the client in the execution of the documents outside of the
presence of the lawyer.
V.E.5.d
We further opine that once a client has consulted the
lawyer or the paralegal, the lawyer's duty to supervise the
paralegal (coupled with the lawyer's duty to advise and protect
the client) invokes the lawyer's intervention.
V.F

Conclusion to Hypothetical #4.
V.F.1 In Hypothetical #4, the paralegal should generally not supervise the
execution of Mr. Jones' estate planning documents without the attorney
present.
V.F.2 Although the situation has not been specifically addressed under Virginia
law in the context of the execution of estate planning documents, specific
guidelines have been set forth by UPL 147 for a real estate paralegal's
assistance to an attorney closing on real estate loans. In particular, the
attorney is required to meet with the clients to sign the required
documents.

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V.F.3 The response of the Department of Justice and the Bureau of Competition
of the Federal Trade Commission to Proposed UPL 183 does not have an
effect on UPL 147 or the question of whether a paralegal can oversee the
execution of estate planning documents without the attorney present.
V.F.3.aThe response to Proposed UPL 183 was based on its potentially
anti-competitive results. Allowing only attorneys to conduct real
estate closings had the potential to increase the costs to consumers
by: 1) forcing consumers who would not otherwise hire an attorney
for a real estate closing to do so; and, 2) causing the cost of the
lawyers' settlement services to increase by eliminating competition
from lay settlement services.
V.F.3.b
The concerns present with Proposed UPL 183 are not
present in the context of the execution of estate planning
documents.
V.F.4 It is clear under South Carolina Ethics Advisory Opinion 02-12 that the
paralegal may not execute Mr. Jones’ estate planning documents with an
attorney present.

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VI.

CLIENT FILES (HYPOTHETICAL #5)
Hypothetical #5: My client won’t pay me and wants her file, right now! (A) May I
continue to withhold her file? (B) What do I have to give her, if anything? (C) May I
charge her for the copying costs? (D) Do I have to take action right now?
VI.A ACTEC Commentary on MRPC 1.16: Declining or Terminating Representation.
Duties upon Withdrawal. Subparagraph (d) of MRPC 1.16 requires the
withdrawing lawyer to take "reasonably practicable" steps to protect the client's
interests and includes requirements for giving reasonable notice of the impending
withdrawal to the client, giving the client time to employ alternative counsel,
refunding any advanced but unearned fees and returning any papers and property
to which the client is entitled under applicable law.
VI.B

Va. Rules. Va. Rule 1.16 is substantially different from and more detailed than
MRPC 1.16. Va. Rule 1.16(e) is new and had no counterpart under the Code.
VI.B.1 Anne Michie, FAQs, AWhat if a client wants his file? Does it matter
whether he’s paid his bill or whether the matter is concluded?@
VI.B.1.a
Prior to January 1, 2000, a lawyer had to go searching
through the legal ethics opinions for advice on these file questions.
VI.B.1.b
However, on that date, Rule 1.16(e) went into effect; that
provision directly addresses how to handle the client’s file. Rule
1.16(e) breaks the contents into three categories.
VI.B.1.b)1
The first is "all original, client-furnished documents
and any originals of legal instruments or official
documents." Those documents are deemed to be the client’s
property, and the attorney must unconditionally return them
to the client upon request.
VI.B.1.b)2
The second category includes lawyer/client and
lawyer/third-party communications, copies of clientfurnished documents (unless the original has already been
returned), working and final drafts of legal instruments,
official documents, investigative reports, legal memoranda
and other attorney work product documents, research
materials and copies of prior bills. For this second category,

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a lawyer may charge the client for the expense of making a
copy of the items for his own retention.
VI.B.1.b)3
For both of these categories, an attorney must
provide the requested items regardless of whether the client
has paid his bill. The old common law lien on the client’s
file is, essentially, eviscerated by this rule. A lawyer can
certainly pursue all normal collection options against a
former client for unpaid fees; however, the retention of the
file must never be held up in exchange for payment of the
bill for fees, the copying cost, or other costs associated with
the representation.
VI.B.1.b)4
A third category presented in Rule 1.16(e) includes
copies of billing records and documents intended only for
internal use, such as memoranda prepared by the lawyer
discussing conflicts of interest, staffing considerations or
difficulties arising with the attorney/client relationship. A
lawyer is not required to provide those items to the client. It
is important to note that attorney work product is not in this
category. An attorney must provide copies of things like his
research notes, drafts of documents and outlines of case
strategies to the client upon request, as those items are
within the second category discussed above.
VI.B.1.c
This provision is a part of the general Rule 1.16, addressing
an attorney’s duties upon the end of the attorney/client
relationship. The intent of this rule is that an attorney be required
to provide the outlined items at the termination of the
representation, upon request of the client, one time.
VI.C

Comment to Va. Rule 1.16.
VI.C.1 Assisting the Client upon Withdrawal. [9] Even if the lawyer has been
unfairly discharged by the client, a lawyer must take all reasonable steps
to mitigate the consequences to the client. Whether or not a lawyer for an
organization may under certain unusual circumstances have a legal
obligation to the organization after withdrawing or being discharged by
the organization’s highest authority is beyond the scope of these Rules.

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VI.C.2 Retention of Client Papers or File When Client Fails or Refuses to Pay
Fees/Expenses Owed to Lawyer.
VI.C.2.a
[10] Paragraph (e) eschews a prejudiced standard in favor
of a more objective and easily-applied rule governing specific
kinds of documents in the lawyer’s files.
VI.C.2.b

VI.C.2.c
[11] The requirements of paragraph (e) should not be
interpreted to require disclosure of materials where the disclosure
is prohibited by law.
VI.D Conclusion to Hypothetical #5.
VI.D.1 Va. Rule 1.16(d) provides that Upon termination of representation, a
lawyer shall take steps to the extent reasonably practicable to protect a
client's interests, such as giving reasonable notice to the client, allowing
time for employment of other counsel, refunding any advance payment of
fee that has not been earned and handling records as indicated in
paragraph (e)@.
VI.D.2 Under Hypothetical #5, the lawyer must return certain parts of the file to
the client, and may not withhold the file for non-payment of fees and
costs.
VI.D.3 The following need to be returned:
VI.D.3.a
All original, client-furnished documents and all originals of
any legal instruments in the lawyer’s possession are the property of
the client and must be returned to the client upon request,
irrespective of whether or not the lawyer’s fees have been paid.
The lawyer may make copies of these documents at the lawyer’s
own expense.
VI.D.3.b
The lawyer must generally provide the client with copies of
all other documents and may bill the client for the costs associated
with copying these materials; however, the lawyer must still
provide the copies even if the client refuses to pay such costs.

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VI.D.3.c
Note that Va. Rule 1.16(e) specifically provides that the
lawyer has not met his or her obligation under this paragraph by
the mere provision of copies of documents on an item-by-item
basis during the course of the representation.
VI.D.4 The lawyer is not required to provide the client with copies of billing
records and documents intended for internal office use only.
VI.D.5 A lawyer can certainly pursue all normal collection options against a
former client for unpaid fees; however, the retention of the file must never
be held up in exchange for payment of the bill for fees, the copying cost,
or other costs associated with the representation.
VI.D.6 Under Va. Rule 1.16(e), everything required to be returned to the client
must be returned within a reasonable time. The facts and circumstances of
each case determines what constitutes a reasonable time.
VI.D.7

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VII.

INCAPACITATED OR DISABLED CLIENT (HYPOTHETICAL #6)
Hypothetical #6: My client appears to suffer from dementia and I fear that her
funds are being purloined by an unscrupulous member of the opposite sex, who is
not the client’s spouse. May I implement proceedings adverse to my client to
protect my client?
VII.A ACTEC Commentary on MRPC 1.14: Client with Diminished Capacity.
VII.A.1
Preventive Measures for Competent Clients. As a matter of
routine, the lawyer who represents a competent adult in estate planning
matters should provide the client with information regarding the devices
the client could employ to protect his or her interests in the event of
diminished capacity, including ways the client could avoid the necessity of
a guardianship or similar proceeding. Thus, as a service to a client, the
lawyer should inform the client regarding the costs, advantages and
disadvantages of durable powers of attorney, directives to physicians or
living wills, health care proxies, and revocable trusts. A lawyer may
properly suggest that a competent client consider executing a letter or
other document that would authorize the lawyer to communicate to
designated parties (e.g., family members, health care providers, a court)
concerns that the lawyer might have regarding the client's capacity. In
addition, a lawyer may properly suggest that a durable power of attorney
authorize the attorney-in-fact, on behalf of the principal, to give written
authorization to one or more of the client's health care providers and to
disclose information for such purposes upon such terms as provided in
such authorization, including health information regarding the principal,
that might otherwise be protected against disclosure by the Health
Insurance Portability and Accountability Act of 1996 (HIPAA). If the
client wishes the durable power of attorney to become effective at a date
when the client is unable to act for him- or herself, the lawyer should
consider how to draft that power in light of the restrictions found in
HIPAA.
VII.A.2
Implied Authority to Disclose and Act. Based on the interaction of
subsections (b) and (c) of MRPC 1.14, a lawyer has implied authority to
make disclosures of otherwise confidential information and take protective
actions when there is a risk of substantial harm to the client. Under those
circumstances, the lawyer may consult with individuals or entities that
may be able to assist the client, including family members, trusted friends,

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and other advisors. However, in deciding whether others should be
consulted, the lawyer should also consider the client’s wishes, the impact
of the lawyer’s actions on potential challenges to the client’s estate plan,
and the impact on the lawyer’s ability to maintain the client’s confidential
information. In determining whether to act and in determining what action
to take on behalf of a client, the lawyer should consider the impact a
particular course of action could have on the client, including the client’s
right to privacy and the client’s physical, mental and emotional wellbeing. In appropriate cases, the lawyer may seek the appointment of a
guardian ad litem, conservator or guardian or take other protective action.
VII.A.3
Risk and Substantiality of Harm. For the purposes of this rule, the
risk of harm to a client and the amount of harm that a client might suffer
should both be determined according to a different scale than if the client
were fully capable. In particular, the client’s diminished capacity increases
the risk of harm and the possibility that any particular harm would be
substantial. If the risk and substantiality of potential harm to a client are
uncertain, a lawyer may make reasonably appropriate disclosures of
otherwise confidential information and take reasonably appropriate
protective actions. In determining the risk and substantiality of harm and
deciding what action to take, a lawyer should consider any wishes or
directions that were clearly expressed by the client during his or her
competency. Normally, a lawyer should be permitted to take actions on
behalf of a client with apparently diminished capacity that the lawyer
reasonably believes are in the best interests of the client.
VII.A.4
Disclosure of Information. ABA Informal Opinion 89-1530 (1989)
stated the authority of an attorney to disclose confidential and nonconfidential information as follows:
[T]he Committee concludes that the disclosure by the lawyer of
information relating to the representation to the extent necessary to serve
the best interests of the client reasonably believed to be disabled is
impliedly authorized within the meaning of Model Rule 1.6. Thus, the
inquirer may consult a physician concerning the suspected disability.
The 2002 amendments to MRPC 1.14 support this conclusion.
VII.A.5
Determining Extent of Diminished Capacity. In determining
whether a client’s capacity is diminished, a lawyer may consider the
client’s overall circumstances and abilities, including the client’s ability to

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express the reasons leading to a decision, the ability to understand the
consequences of a decision, the substantive appropriateness of a decision,
and the extent to which a decision is consistent with the client’s values,
long-term goals, and commitments. In appropriate circumstances, the
lawyer may seek the assistance of a qualified professional.
VII.A.6
Lawyer Representing Client with Diminished Capacity May
Consult with Client’s Family Members and Others as Appropriate. If a
legal representative has been appointed for the client, the lawyer should
ordinarily look to the representative to make decisions on behalf of the
client. The lawyer, however, should as far as possible accord the
represented person the status of client, particularly in maintaining
communication. In addition, the client who suffers from diminished
capacity may wish to have family members or other persons participate in
discussion with the lawyer. The lawyer must keep the client’s interests
foremost. Except for disclosures and protective actions authorized under
MRPC 1.14, the lawyer should rely on the client’s directions, rather than
the contrary or inconsistent directions of family members, in fulfilling the
lawyer’s duties to the client. In meeting with the client and others, the
lawyer should consider the impact of a joint meeting on the attorney client
evidentiary privilege.
VII.A.7
Testamentary Capacity. If the testamentary capacity of a client is
uncertain, the lawyer should exercise particular caution in assisting the
client to modify his or her estate plan. The lawyer generally should not
prepare a will, trust agreement, or other dispositive instrument for a client
who the lawyer reasonably believes lacks the requisite capacity. On the
other hand, because of the importance of testamentary freedom, the lawyer
may properly assist clients whose testamentary capacity appears to be
borderline. In any such case the lawyer should take steps to preserve
evidence regarding the client's testamentary capacity. In cases involving
clients of doubtful testamentary capacity, the lawyer should consider, if
available, procedures for obtaining court supervision of the proposed
estate plan, including substituted judgment proceedings.
VII.A.8
Lawyer Retained by Fiduciary for Person with Diminished
Capacity. The lawyer retained by a person seeking appointment as a
fiduciary or retained by a fiduciary for a person with diminished capacity,
including a guardian, conservator, or attorney-in-fact, stands in a lawyerclient relationship with respect to the prospective or appointed fiduciary.
A lawyer who is retained by a fiduciary for a person with diminished

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capacity, but who did not previously represent the disabled person,
represents only the fiduciary. Nevertheless, in such a case the lawyer for
the fiduciary owes some duties to the disabled person. See ACTEC
Commentary on MRPC 1.2 (Scope of Representation and Allocation of
Authority Between Client and Lawyer). If the lawyer represents the
fiduciary, as distinct from the person with diminished capacity, and is
aware that the fiduciary is improperly acting adversely to the person’s
interests, the lawyer may have an obligation to disclose, to prevent, or to
rectify the fiduciary’s misconduct. See MRPC 1.2(d) (providing that a
lawyer shall not counsel a client to engage, or assist a client, in conduct
that the lawyer knows is criminal or fraudulent).
As suggested in the Commentary to MRPC 1.2, a lawyer who represents a
fiduciary for a person with diminished capacity or who represents a person
who is seeking appointment as such, should consider asking the client to
agree that, as part of the engagement, the lawyer may disclose fiduciary
misconduct to the court, to the person with diminished capacity, or to
other interested persons.
VII.A.9
Person With Diminished Capacity Who Was a Client Prior to
Suffering Diminished Capacity and Prior to the Appointment of a
Fiduciary. A lawyer who represented a client before the client suffered
diminished capacity may be considered to continue to represent the client
after a fiduciary has been appointed for the person. Although incapacity
may prevent a person with diminished capacity from entering into a
contract or other legal relationship, the lawyer who represented the person
with diminished capacity at a time when the person was competent may
appropriately continue to meet with and counsel him or her. Whether the
person with diminished capacity is characterized as a client or a former
client, the lawyer for the fiduciary owes some continuing duties to him or
her. See Ill. Advisory Opinion 91-24 (1991) (summarized in the
Annotations following the ACTEC Commentary on MRPC 1.6
(Confidentiality of Information)). If the lawyer represents the person with
diminished capacity and not the fiduciary, and is aware that the fiduciary
is improperly acting adversely to the person’s interests, the lawyer has an
obligation to disclose, to prevent, or to rectify the fiduciary’s misconduct.
VII.A.10
Wishes of Person With Diminished Capacity Who Is Under
Guardianship or Conservatorship When the Fiduciary is the Client. A
conflict of interest may arise if the lawyer for the fiduciary is asked by the
fiduciary to take action that is contrary either to the previously expressed

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wishes of the person with diminished capacity or to the best interests of
the person, as the lawyer believes those interests to be. The lawyer should
give appropriate consideration to the currently or previously expressed
wishes of a person with diminished capacity.
VII.A.11
May Lawyer Represent Guardian or Conservator of Current or
Former Client? The lawyer may represent the guardian or conservator of a
current or former client, provided the representation of one will not be
directly adverse to the other. See ACTEC Commentary on MRPC 1.7 and
MRPC 1.9. Joint representation would not be permissible if there is a
significant risk that the representation of one will be materially limited by
the lawyer’s responsibilities to the other. See MRPC 1.7(a)(2). Because of
the client’s, or former client’s, diminished capacity, the waiver option may
be unavailable. See MRPC 1.0(e) (defining informed consent).
VII.B ACTEC Commentary on MRPC 1.6: Confidentiality of Information.
VII.B.1
Client who Apparently has Diminished Capacity. The attorney for
a client who has or reasonably appears to have diminished capacity is
authorized to take reasonable steps to protect the interests of the client,
including disclosure of otherwise confidential information where
appropriate and not prohibited by state law or ethical rule.
VII.B.2
The attorney may disclose only information necessary to protect
the client’s interests.
VII.C ACTEC Commentary on MRPC 1.14.
VII.C.1
An attorney should always consider the wishes or directions that
were clearly expressed by a client during his or her competency.
VII.C.2
An attorney may represent the guardian or conservator of a current
or former client, provided that representation of one will not be directly
adverse to the other.
VII.D ABA Opinions.
VII.D.1
Disclosure by a lawyer of information related to representation to
the extent necessary to serve the best interests of the client who is
reasonably believed to be disabled is impliedly authorized within the

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meaning of Model Rule 1.6 so that the inquirer may consult a physician
concerning the disability. See ABA Informal Opinion 89-1530 (1989).
VII.D.2
An attorney may consult with a client’s family when the client
becomes incompetent and may even petition the court for appointment of
a guardian, but may not represent a third party petitioning for
appointment; but the lawyer may support the appointment of a guardian
who the lawyer expects to retain him as counsel. See ABA Formal
Opinion 96-404 (1996).
VII.E Va. Rules.
VII.E.1Va. Rule 1.6 has more specific and broader requirements of confidentiality
than MRPC 1.6.
VII.E.1.a
A comparison of Va. Rule 1.6(a) and MRPC 1.6(a) follows
[underlined text represents Va. Rule 1.6(a) and strikeout text
represents MRPC 1.6(a)]: (a) A lawyer shall not reveal
information relating to representation of a protected by the
attorney-client privilege under applicable law or other
information gained in the professional relationship that the
client has requested be held inviolate or the disclosure of which
would be embarrassing or would be likely to be detrimental to
the client unless the client gives informed consent consents
after consultation . . .
VII.E.1.b
Additionally, Va. Rule 1.6 is different from MRPC 1.6 in
its addition of subsection (c) dealing with an attorney’s duty to
reveal fraud.
VII.E.2Va. Rule 1.14 and MRPC 1.14, although worded slightly different, are
substantively similar.
VII.F Comment to Va. Rule 1.14.
VII.F.1 [1] The normal client-lawyer relationship is based on the assumption that
the client, when properly advised and assisted, is capable of making
decisions about important matters. When the client is a minor or suffers
from a diminished mental capacity, however, maintaining the ordinary
client-lawyer relationship may not be possible in all respects. In particular,
an incapacitated person may have no power to make legally binding

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decisions. Nevertheless, a client with diminished capacities often has the
ability to understand, deliberate upon, and reach conclusions about matters
affecting the client’s own well-being. For example, children as young as
five or six years of age, and certainly those of ten or twelve, are regarded
as having opinions that are entitled to weight in legal proceedings
concerning their custody. So also, it is recognized that some persons of
advanced age can be quite capable of handling routine financial matters
while needing special legal protection concerning major transactions.
VII.F.2 [2] The fact that a client suffers a disability does not diminish the lawyer’s
obligation to treat the client with attention and respect. If the person has no
guardian or legal representative, the lawyer often must act as de facto
guardian. Even if the person does have a legal representative, the lawyer
should as far as possible accord the represented person the status of client,
particularly in maintaining communication.
VII.F.3 [3] If the client has a legal representative, the lawyer should ordinarily
look to the representative for decisions on behalf of the client. If there is
no legal representative, the lawyer should seek such an appointment where
it would serve the client’s best interests. Thus, if a disabled client has
substantial property that should be sold for the client’s benefit, effective
completion of the transaction ordinarily requires appointment of a legal
representative. In many circumstances, however, appointment of a legal
representative may be expensive or traumatic for the client. Evaluation of
these considerations is a matter of professional judgment on the lawyer’s
part.
VII.F.4 [4] If the lawyer represents the guardian as distinct from the ward, and is
aware that the guardian is acting adversely to the ward’s interest, the
lawyer may have an obligation to prevent or rectify the guardian’s
misconduct. See Va. Rule 1.2(d).
VII.F.5 [5] Court Rules generally provide that minors or persons suffering mental
disability shall be represented by a guardian or next friend if they do not
have a guardian. However, disclosure of the client’s disability can
adversely affect the client’s interests. For example, raising the question of
disability could, in some circumstances, lead to proceedings for
involuntary commitment. The lawyer’s position in such cases is an
unavoidably difficult one. The lawyer may seek guidance from an
appropriate diagnostician.

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VII.G LEOs and VSB.
VII.G.1 LEO 908 (1987). A lawyer may withdraw from representing a client found

mentally incompetent, even if the client wants to appeal the commitment
order, as long as the lawyer believes that existing law supports the court's
order, but the lawyer must prosecute the appeal if the court denies the
withdrawal motion. [Va. Rule 1.14 provides guidance to lawyers
representing clients under a disability.]
VII.G.2
LEO 1769 (2003). A lawyer has been asked by the daughter of an
elderly, incompetent woman to represent the daughter in seeking
guardianship of her mother. The mother is currently a client of the lawyer.
VII.G.2.a
Under Va. Rule 1.7, a lawyer shall not represent a client if
the representation of that client will be directly adverse to another
existing client, unless: the lawyer reasonably believes the
representation will not adversely affect the relationship with the
other client; and each client consents after consultation.
VII.G.2.a)1 Applying Va. Rule 1.7(a) to the lawyer in the
present hypothetical presents insurmountable problems.
The committee found that the attorney could not fulfill
either of the two requirements listed under Va. Rule 1.7.
VII.G.2.a)1)a As for the first requirement, that the
representations not be adversely affected, it seems
unlikely that the representation of the mother in a
legal matter would not be adversely affected by a
finding of her incompetence.
VII.G.2.a)1)b Even were that hurdle cleared, the second
requirement cannot be met since there is no way for
an attorney on the one hand to argue that a client is
incompetent and, on the other hand, to argue that
the same client can provide valid consent.
VII.G.2.a)2 However, should the attorney actually consider his
client to be incompetent, that attorney can look to Va. Rule
1.14 for guidance.

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VII.G.2.a)2)a The rule suggests that the lawyer should, as
far as reasonably possible, maintain a normal clientlawyer relationship.
VII.G.2.a)2)b However, should the lawyer reasonably
believe that the client cannot adequately act in the
client's own interest, then the lawyer may seek the
appointment of a guardian or take other protective
action. Va. Rule 1.14(a) and (b).
VII.G.2.a)2)c Thus, should the attorney reasonably believe
that the mother cannot adequately act in her own
interest, he could seek the appointment of a
guardian.
VII.G.2.a)2)d Va. Rule 1.14(b) creates a narrow exception
to the normal responsibilities of a lawyer to his
client, in permitting the lawyer to take action that by
its very nature must be regarded as adverse to the
client; however Va. Rule 1.14 does not otherwise
derogate the lawyer’s responsibilities to the mother,
and certainly does not abrogate the lawyer-client
relationship.
VII.G.2.a)2)d)i
In particular, it does not
authorize a lawyer to represent a third party
in seeking to have a court appoint a guardian
for his client.
VII.G.2.a)2)d)ii
Such a representation would
necessarily have to be regarded as adverse to
the client and prohibited by Va. Rule 1.7(a).
VII.G.3
Anne Michie, FAQs, How should an attorney provide legal
services to a client who appears to have less than full mental capacity?
VII.G.3.a
Particularly in the practice area of elder law, attorneys
frequently face difficult issues as the mental competency of some
clients may be in decline. Rule 1.14, entitled "Client under a
Disability," provides specific guidance to attorneys in that
situation. Rule 1.14 discusses both the situation where a client’s
abilities are merely limited and where that client just cannot act in
his or her own best interest. The comments to Rule 1.14 provide

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helpful direction to an attorney making the difficult decision as to
what, if any, protective action he needs to take on behalf of his
client. Note that the rule does contemplate that such protective
action may include, where appropriate, seeking the appointment of
a guardian for the client. However, the attorney should not
represent some third party in bringing that guardianship petition
but instead should himself serve as petitioner. See LEO 1769
(2003).
VII.G.3.b
An attorney dealing with his client’s possible incapacity
should, throughout the course of the representation, be mindful of
Rule 1.14’s directive that the attorney "as far as reasonably
possible, maintain a normal client-lawyer relationship with the
client."
VII.H Conclusion to Hypothetical #6.
VII.H.1
Under Hypothetical #6, the lawyer may implement proceedings
adverse to the client if the lawyer reasonably believes that the client
cannot adequately act in her own interest.
VII.H.2
If there is no legal representative for the client already in place,
and if in the client's best interests, the lawyer should seek such an
appointment.
VII.H.3
When a client is under a disability or other impairment, the lawyer
must maintain a normal client-lawyer relationship with the client to the
fullest extent possible under Va. Rule 1.14(a).
VII.H.4
Whether a client is under a disability is determined on a case by
case basis and medical assistance may be necessary to make this
determination.
VII.H.5
Determining incapacity and then disclosing that incapacity will
often conflict with a lawyer's duty of confidentiality under Va. Rule 1.6.
However, disclosure is permissible to seek guidance from an "appropriate
diagnostician." Care must be taken to ensure that the person consulted
will protect the confidentiality of the client's condition until disclosure is
unavoidable.

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VII.H.6
The lawyer may not represent a family member or other individual
seeking to have the lawyer’s client declared incompetent.
VIII.

ATTORNEY IN OTHER ROLES (HYPOTHETICAL #7)
Hypothetical #7: I am an attorney but I am also licensed to sell insurance and
securities (or a certified public accountant). May I sell life insurance or accounting
services or any other products to my client?
VIII.A ACTEC Commentary on MRPC 1.8: Conflict of Interest: Current Clients:
Specific Rules.
VIII.A.1
Business Transactions with Client. MRPC 1.8(a) provides
mandatory procedural safeguards when a lawyer engages in business
transactions with a client. As explained in this Commentary, lawyers often
provide services for clients that could be considered business transactions
but should not be so considered. Like any lawyer, an estate lawyer who
desires to enter a business transaction with a client should follow the
procedures set forth in MRPC 1.8(a).
VIII.A.2
Prohibited Transactions. Unless the lawyer complies with the
requirements of MRPC 1.8(a), a lawyer generally should not enter into
purchase or sale transactions with a client or with the beneficiaries of a
fiduciary estate if the lawyer is serving as fiduciary or as counsel to the
fiduciary.
VIII.B ACTEC Commentary on MRPC 1.5: Fees.
VIII.B.1
No Rebates, Discounts, Commissions or Referral Fees. The lawyer
should not accept any rebate, discount, commission or referral fee from a
non-lawyer or a lawyer not acting in a legal capacity in connection with
the representation of a client.
VIII.B.1.a
Even with full disclosure to and consent by the client, such
an arrangement involves too great a risk of overreaching by the
lawyer and the potential for actual or apparent abuse.
VIII.B.1.b
The client is generally entitled to the benefit of any
economies that are achieved by the lawyer in connection with the
representation.

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VIII.B.1.c
The acceptance by the lawyer of a referral fee from a nonlawyer may involve an improper conflict of interest. See MRPC
1.7 (Conflict of Interest: Current Clients) and MRPC 1.8 (Conflict
of Interest: Current Clients: Specific Rules). In those jurisdictions
that permit referral fees between lawyers, the lawyer should
comply with the requirements of local law governing such matters,
including full disclosure to the client. A lawyer is generally
prohibited from sharing legal fees with non-lawyers. See MRPC
5.4 (Professional Independence).
VIII.C Va. Rules.
VIII.C.1
Va. Rule 1.8(a) and MRPC 1.8(a), while worded differently,
contain substantially the same requirements. Va. Rule 1.8(a) provides
that:
(a) A lawyer shall not enter into a business transaction with a client
or knowingly acquire an ownership, possessory, security or other
pecuniary interest adverse to a client unless:
VIII.C.1.a)1 the transaction and terms on which the lawyer
acquires the interest are fair and reasonable to the client and
are fully disclosed and transmitted in writing to the client in
a manner which can be reasonably understood by the client;
VIII.C.1.a)2 the client is given a reasonable opportunity to seek
the advice of independent counsel in the transaction; and
VIII.C.1.a)3
VIII.C.2

the client consents in writing thereto.

Va. Rule 1.5(a) and MRPC 1.5(a) are substantively similar.

VIII.C.3
Va. Rule 1.7 and MRPC 1.7, although worded slightly different,
are substantively identical.
VIII.D Comment to Va. Rule 1.8. [1] As a general principle, all transactions between
client and lawyer should be fair and reasonable to the client. In such transactions a
review by independent counsel on behalf of the client is often advisable.
VIII.D.1
Paragraph (a) does not, however, apply to standard commercial
transactions between the lawyer and the client for products or services that

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the client generally markets to others, for example, banking or brokerage
services, medical services, products manufactured or distributed by the
client, and utilities services.
VIII.D.2
In such transactions, the lawyer has no advantage in dealing with
the client, and the restrictions in paragraph (a) are unnecessary and
impracticable.
VIII.E LEOs. LEO 1754 (2001) addresses the situation of whether an attorney and life
insurance agent may share a commission.
VIII.E.1
Facts: Attorney’s practice is principally in the area of estate
planning. Attorney holds a life and health insurance license and is an
agent for Insurance Company. Attorney recommends that Client establish
an irrevocable life insurance trust. Attorney also discloses that he is a
licensed insurance agent and recommends that Attorney, Client and
Insurance Agent collaborate to design a comprehensive insurance plan for
Client. Attorney advises Client that Attorney will receive one-half of the
commission on the policy used to fund the trust. After disclosure, Client
approves placement of the insurance policy with Attorney and Insurance
Agent. Upon issuance of the policy, Insurance Company issues a check to
Attorney and a check to Insurance Agent for their shares of the insurance
commission.
VIII.E.2

Analysis:

VIII.E.2.a
The committee found that the appropriate and controlling
disciplinary rules to be as follows:
VIII.E.2.a)1

Va. Rule 1.7 Conflict of Interest: General Rule.

VIII.E.2.a)1)a A lawyer shall not represent a client if the
representation of that client may be materially
limited by the lawyer’s responsibilities to another
client or to a third person, or by the lawyer’s own
interests, unless:
VIII.E.2.a)1)a)i
the lawyer reasonably
believes the representation will not be
adversely affected; and
VIII.E.2.a)1)a)ii
the client consents after
consultation.

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VIII.E.2.a)2 Va. Rule 1.8. Conflict of Interest: Prohibited
Transactions.
VIII.E.2.a)2)a A lawyer shall not enter into a business
transaction with a client . . . unless:
VIII.E.2.a)2)a)i
the transaction and terms on
which the lawyer acquires the interest
VIII.E.2.a)2)a)i)a
are fair and
reasonable to the client and

VIII.E.2.a)2)a)i)b
are fully disclosed and transmitted in
writing to the client in a manner
which can be reasonably understood
by the client;
VIII.E.2.a)2)a)ii
the client is given a
reasonable opportunity to seek the advice of
independent counsel in the transaction; and
VIII.E.2.a)2)a)iii
the client consents in writing
thereto.
VIII.E.2.b
Previously, the committee held that an attorney may
receive reasonable compensation from a title insurance agency in
the form of legitimate fees based upon the attorney’s having
rendered services for the agency. See LEO 1564 (1994, revised
1995).
VIII.E.2.c
The committee found that the situation in LEO 1564 was
comparable to that of an attorney rendering a separate service to
the client in the design of a comprehensive insurance plan.
VIII.E.2.c)1 Since the basis of that payment is not related to
legal services but based on premiums paid for specific
insurance policies the committee found that the transaction
was not per se improper.
VIII.E.2.c)2 Va. Rule 1.7(b) seems to allow the lawyer to
provide the representation to the client as long as it is not

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limited by the lawyer’s own interests of promoting his
insurance business.
VIII.E.2.c)2)a Comment [4] to Va. Rule 1.7(b) seems
particularly helpful in outlining that the loyalty to a
client is impaired when a lawyer fails to consider or
recommend an appropriate course of action for a
client because of the lawyer’s own interests.
VIII.E.2.c)2)b That sort of conflict in effect forecloses
other alternatives that would be available to the
client.
VIII.E.2.c)3 To avoid such a conflict in the present situation, the
committee held that during the course of representing a
party in estate planning where insurance related products
are obtained from the attorney and insurance agent, it
would be improper for the attorney to engage in the
representation without full and adequate disclosure to the
client.
VIII.E.2.c)4 Comment [6] in Va. Rule 1.7 specifically addresses
the issue that a lawyer may not allow his business interests
to affect his representation of a client. The lawyer may not
refer clients to an enterprise in which the lawyer has an
undisclosed interest.
VIII.E.2.c)5 Furthermore, since the transaction will create a
business relationship between the attorney and the client,
Va. Rule 1.8(a) requires that:
VIII.E.2.c)5)a the transaction must be fair and reasonable,
and
VIII.E.2.c)5)b the terms fully disclosed to the client, in
writing.
VIII.E.2.c)5)c In addition, the client must be given a
reasonable opportunity to seek advice of
independent counsel and consent in writing to the
transaction.

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VIII.E.2.c)5)d The committee also held that the sufficiency
of the disclosure must be resolved in favor of the
client, and against the attorney, since it is the
attorney who seeks to profit in advising his client to
utilize the services of the business in which the
attorney has a pecuniary interest. See LEO 1564
(1994, revised 1995).
VIII.E.3
In conclusion, the committee held that the attorney may participate
in the compensation arrangement so long as the dictates of Va. Rules 1.7
and 1.8 are followed.
VIII.F Caveat. An attorney practicing in a dual capacity is subject to the Va. Rules even
when practicing in his or her non-lawyer function. See In the matter of Oliver
Stuart Chalifoux, VBS Docket No. 03-033-3680 (2003). In Chalifoux, the VSB
Disciplinary Board of the Virginia State Bar found that a lawyer-accountant could
not refuse to produce documents under a subpoena duces tecum issued by the
VSB. Chalifoux asserted that the tax returns were prepared by him in his nonlawyer capacity as a tax accountant.
VIII.F.1
The Disciplinary Board found that: Chalifoux blurred the capacity
in which he represented the clients and their business entity and the fact
that Chalifoux was also their accountant did not displace his role as their
lawyer. The Disciplinary Board then applied Va. Rule 1.16, which does
not permit a lawyer to withhold a client's files until the client's bill has
been paid to the lawyer (or until the client's bill has been paid to another
creditor). The Disciplinary Board stated that if a lawyer, acting in a
fiduciary capacity, violates his duty in a manner that would justify
disciplinary action had the relationship been that of an attorney-client, the
lawyer is subject to discipline under the Va. Rules, relying on LEO 1617
(1995).
VIII.F.2
The Disciplinary Board found that even if Chalifoux could
establish that he acted solely in his capacity as an accountant, he could not
avoid the production of documents sought by the subpoena duces tecum,
since he is a lawyer subject to the Va. Rules, even though he acted only in
his capacity as an accountant.
VIII.G Conclusion to Hypothetical #7.

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VIII.G.1
In Hypothetical #7, the lawyer may sell life insurance (or another
product) to a client, provided that the lawyer follows the provisions in Va.
Rule 1.8 (business transactions) and Va. Rule 1.7 (conflicts of interest).
VIII.G.2

Va. Rule 1.8(a) generally requires that:
VIII.G.2.a)1 the transaction is fair and reasonable to the client,
and fully disclosed and transmitted in writing in a manner
which can be reasonably understood by the client;
VIII.G.2.a)2 the client is given a reasonable opportunity to seek
the advice of independent counsel; and,
VIII.G.2.a)3

VIII.G.3

the client consents in writing.

Va. Rule 1.7(b) generally requires that:

VIII.G.3.a
the lawyer reasonably believes that representation of the
client will not be adversely affected by the lawyer's own interests;
and,
VIII.G.3.b

the client consents after consultation.

VIII.G.4
The overriding requirement in this situation is full and adequate
disclosure by the lawyer to the client.
VIII.G.5
Even if the lawyer acts solely in his capacity as a non-lawyer, the
Va. Rules will still apply to the lawyer.

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IX.

ATTORNEY NAMED AS FIDUCIARY (HYPOTHETICAL #8)
Hypothetical #8: Mrs. Moneybags, an elderly, rich, fully lucid and sharp woman, is
a new client. She has fallen in love with me, probably because of my good looks,
confident attitude, and persuasiveness. I sense that she may be willing to appoint
me as executor of her rather large estate and trustee of her trust. May I suggest to
her that she name me as executor and trustee, and may I draft the documents
naming me as fiduciary?
IX.A ACTEC Commentary. There is no commentary on this issue.
IX.B

ABA Opinions. ABA Opinion 426 (2002) found that lawyers may act as personal
representatives or trustees under documents the lawyer prepares, but: must obtain
a written consent if the lawyer's judgment would be significantly impaired; must
advise the client about how the lawyer's compensation will be calculated and
whether it is subject to some limits or court approval. Lawyers may also hire their
own firms to perform legal work in the administration of the trust or estate, in
which case the lawyers generally represent themselves, and not the beneficiaries
or the trust or estate as an entity. Even with consent, a lawyer serving as a
fiduciary may not take positions adverse to the interests of a beneficiary or the
entity. Lawyers acting as fiduciaries generally should not represent beneficiaries
in unrelated matters.

IX.C

LEOs.
IX.C.1 LEO 1358 (1990). Lawyers drafting a will or trust agreement must be very
careful in naming themselves as executors or trustees. It is likely to be
improper if the lawyer has not previously represented the client. At a
minimum, the lawyer has a duty to advise the client of fees that would be
charged by other executors or trustees. If the instrument requires that the
estate or trust hire the lawyer's firm for legal services, the client must
consent after full disclosure. If a lawyer acting as a fiduciary commits an
act that could be disciplined had the relationship been that of an attorney
and client, the lawyer-fiduciary may be disciplined by the Bar.
IX.C.2 LEO 1387 (1990). A lawyer acting as executor or trustee could hire the
lawyer's own law firm to represent an estate as long as the co-fiduciaries
consented. However, the firm would have to withdraw if the
executor/trustee had to be a witness in any later proceedings (unless the

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testimony involved a matter of formality or an uncontested matter, and
would not be rebutted by another party).

IX.D LEO 1515 (1994) outlines the principles governing a lawyer acting as an
executor or trustee. The opinion poses five specific questions that should
be asked when a lawyer considers serving as a fiduciary for a client:
IX.D.1 Draftsman as Fiduciary. Must there be a pre-existing attorney-client
relationship in addition to the attorney-client relationship arising out of the
preparation of the instrument in order for the attorney to be named as
executor or trustee or for the document to designate that the executor or
trustee engage the services of the attorney to provide legal services and, if
so, what must be the nature and quality of that attorney/client relationship?
IX.D.1.a
Although a pre-existing attorney/client relationship is not
required, a significant factor concerning the appropriateness of an
attorney being named as executor or trustee in a document drafted
by the attorney is whether the attorney draftsman took advantage
of his role as draftsman to secure such a nomination for the
attorney or another member of the attorney's firm. The naming of
the executor or trustee must be an informed and fully volitional act
of the client.
IX.D.1.b
Although the issue of whether or not undue influence was
exerted requires a factual determination, on a case-by-case basis,
the total lack of any pre-existing attorney/client relationship greatly
enhances the potential for a finding of undue influence. The
existence, duration, and nature of any earlier relationship would
obviously mitigate such a finding because, clearly, an attorney
with knowledge of the testator's/grantor's affairs, values, and estate
would be in a position to best serve the client's needs. See DR 5l0l(A) (now Va. Rule 1.7(b)).
IX.D.1.c
Furthermore, while the Virginia Code of Professional
Responsibility (now the Va. Rules) does not generally preclude inperson solicitation, see DR 2-l03(A) (now Va. Rule 7.3), it
prohibits it under certain circumstances and requires that the
attorney take into consideration the "physical, emotional or mental
state of the person to whom the [solicitation] communication is
directed and the circumstances in which the communication is

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made." Therefore, whether or not a pre-existing attorney/client
relationship is involved, in order to minimize the appearance of
undue influence, the attorney must consider carefully the
testator's/grantor's state of mind and health before recommending
himself or a member of his firm, for future employment as
executor or trustee.
IX.D.2 Disclosure of Fees. What disclosure, if any, must be made to the client by
the attorney with respect to fees that may be charged for the attorney's
service as contemplated by the instrument and, if disclosure is required,
when must the disclosure be made?
IX.D.2.a
DR 2-l05(A) (now Va Rule 1.7(b)) requires, in pertinent
part, that the attorney's fees be adequately explained to the client;
DR 5-l0l(A) (now Va Rule 1.7(b)) requires a client’s consent, after
full and adequate disclosure, to the attorney's financial interest
when that interest may affect the exercise of the attorney's
professional judgment on behalf of his client; and DR 6-l0l(C)
(now Va Rule 1.4(a) and 1.4(b)) requires an attorney to keep a
client reasonably informed about matters in which the attorney's
services are being rendered.
IX.D.2.b
Full disclosure of the attorney/draftsman's potential fees as
executor or trustee or legal counsel to the estate must be made to
the client prior to the execution of the instrument.
IX.D.2.c
It is advisable that the disclosure be made in written form,
signed by the testator/grantor, either in the will or trust agreement
itself or in a separate document. Note that Va. Rule 1.7(c)(4)
requires the consent to be memorialized in writing and Va. Rule
1.8(a)(3) requires the client to consent in writing.
IX.D.2.d
The attorney has a duty to suggest that the client investigate
potential fees of others who might otherwise provide such services.
IX.D.2.e
An attorney/draftsman who contemplates charging separate
fees for investment, tax or other services, over and above the fees
for executor/trustee, must also fully disclose those separate fees.
IX.D.3 Attorney/Fiduciary Retaining Own Law Firm as Attorney for Trust/Estate.
May an attorney/executor or trustee retain his law firm as attorney for a

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trust or estate for which he is serving as fiduciary? If it is proper to retain
the executor’s or trustee's own law firm, what limitations exist as to
compensation for each? Should this matter be disclosed to the
testator/grantor/client in the course of the preparation of the instrument?
IX.D.3.a
The attorney named as executor or trustee must disclose
and obtain the consent of the testator/grantor prior to the execution
of the trust/will when the attorney intends to or is considering
retaining his law firm as attorney for the trust or estate.
IX.D.3.b
IX.D.3.c
The disclosure must include the general compensation to be
paid to the law firm.
IX.D.3.d
The role of the attorney who serves as fiduciary to a trust or
estate and additionally engages his law firm as attorney for the
same entity presents a personal conflict as described by DR 5l0l(A) (now Va. Rule 1.7(b)). In such a situation, the attorney's
own financial, business, or personal interest may potentially affect
the exercise of his professional judgment on behalf of the trust or
estate.
IX.D.3.e
The committee has earlier opined that it is not per se
improper for an executor or trustee to engage his own law firm to
provide representation in legal matters relating to estate
administration. See LEO l387 (1990).
IX.D.3.f
LEO l353 (1990) found that it would not be improper for a
lawyer who is employed both as Assistant General Counsel to a
corporation and as "of counsel" to a law firm to retain the outside
law firm to provide legal services to the same corporate client.
The committee did opine, however, that full disclosure of the
conflict must be made, consent from the corporate client must be
received, the lawyer must not provide direct representation to the
corporate client through the law firm, that any of the fees received
by the firm from the corporate client, and communication between
the outside law firm and the corporation must be maintained with
other directors or employees of the corporation. LEO 1353 dealt
with a situation where the consent of the client could be readily
obtained. Clearly, if at the time of the preparation of the
document, the attorney/draftsman/executor/trustee makes a full and

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adequate disclosure of the possibility that the trustee/executor may
retain his firm as legal counsel and of the general compensation
that would be paid, and the testator/grantor/client consents, then
the personal conflict is cured. However, if the trustee/executor did
not obtain the consent of the now deceased testator/grantor/client,
either because it was not disclosed at the time the document was
drafted, or because the executor/trustee did not draft the document,
then the committee is of the opinion that, after full and adequate
disclosure, the conflict can be cured by the consent of all the
residual beneficiaries of the estate or all of the income
beneficiaries and vested remainder beneficiaries of the trust.
IX.D.4 Fiduciary Competence. As a matter of ethical consideration, do the Va.
Rules impose a minimum standard of competence upon attorneys serving
as fiduciaries?
IX.D.4.a
The standards for competence of Virginia attorneys serving
as fiduciaries are governed by Virginia law and . . . present a legal
question beyond the purview of the committee. LEO l325 adopted
the conclusions reached in ABA Formal Opinion 336 and found
that when an attorney assumes the responsibility of acting as a
fiduciary and violates his or her duty in a manner that would justify
disciplinary action had the relationship been that of attorney/client,
the attorney may be properly disciplined pursuant to the Code
(now the Va. Rules).
IX.D.4.b
DR 6-l0l(A) (now Va. Rule 1.1), in pertinent part mandates
that a lawyer should undertake representation only in matters in
which the lawyer can act with competence.
IX.D.4.c
The committee cautions that DR 6-l02(A) (now Va. Rule
1.8(h)) precludes a lawyer from limiting his liability to his client
for his personal malpractice.
IX.D.5 Suggestions for Fiduciaries. May Virginia attorneys initiate the
conversation with their clients as to who might be an appropriate fiduciary
for the client's trust or estate or who might provide appropriate legal
counsel to the estate, and, further, may the attorney suggest his willingness
to serve as such? Are there limitations on an attorney's ability to solicit
his designation as a fiduciary or future legal counsel to the estate?

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IX.D.5.a
DR 2-l03(A) (now Va. Rule 7.3), regarding a lawyer's
solicitation of professional employment, is applicable to the
question. In addition, Ethical Consideration 5-6 provides further
guidance in that it instructs that a lawyer should not consciously
influence a client to name him as executor, trustee, or lawyer in an
instrument. In those cases where a client wishes to name his
lawyer as such, care should be taken by the lawyer to avoid even
the appearance of impropriety.
IX.D.5.b
Although a conversation with the testator/grantor as to the
suitability of specific persons or entities to serve as fiduciaries or
legal counsel to the estate, and recommendations that a
professional fiduciary (e.g., a bank, attorney, or accountant) would
be preferable to or in addition to a lay person in certain instances,
is clearly in the nature of appropriate legal advice to a client, the
attorney's suggestion of his own willingness to serve in those
capacities would constitute solicitation for future employment.
IX.D.5.c
Although the Va. Rules do not generally preclude in-person
solicitation, DR 2-l03(A) (now Va Rule 7.3) does, however,
prohibit it if the communication has a substantial potential for or
involves the use of over persuasion or overreaching and requires
that the attorney take into consideration the "sophistication
regarding legal matters, [and] the physical, emotional or mental
state of the person to whom the [solicitation] communication is
directed and the circumstances in which the communication is
made." Therefore, the attorney must consider carefully the
testator's state of mind and health before soliciting future
employment as executor, trustee or legal counsel to the estate, in
order to minimize the appearance of undue influence.
IX.D.5.d

The same considerations apply:

IX.D.5.d)1
whether the document names the attorney as
executor or trustee, on the one hand, or directs that the
executor/trustee whom the client has designated engage the
services of the attorney.
IX.D.5.d)2
to the issue of waiving security on the executor's or
trustee's bond where the attorney or a member of the
attorney's firm is designated as trustee. Advice about the

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suitability of specific persons or entities to serve as
fiduciary should cover, in addition to competence and
personal service, matters of financial stability both for the
attorney and any agents with whom the attorney is expected
to deal.
IX.D.5.e
In addition, it is especially important to review with the
client who wishes to avoid probate the availability of alternate
fiduciary review procedures. Whether or not the client elects to
remain within the probate system, the attorney in all cases should
carefully review with the client the potential consequences of an
elective waiver of security on the bond of the fiduciary.
IX.D.6 Note that LEO 1515 was approved by the Virginia Supreme Court on
February 1, 1994.
IX.D.7 Observations:
IX.D.7.a
While most LEOs are nonbinding, LEO 1515 is one of the
few LEOs expressly approved by the Virginia Supreme Court and
thus has acquired the status of a decision of the court. As a result, it
is binding authority on Virginia lawyers.
IX.D.7.b
Although the opinion was issued under the now superseded
Code , the Va. Rules do not change the principles on which it is
based.
IX.E

LEO 1590 (1994). A lawyer prepared a decedent's will creating two trusts -- for
the decedent's son and daughter. The lawyer and the lawyer's wife (who is also a
lawyer) serve as trustees for both trusts. After the decedent died, the son and
daughter began to quarrel about the trusts. The lawyer represented the daughter in
a suit against the son. Because the Code applies to the lawyers' conduct as
trustees, the actual conflict between the son and the daughter precludes the lawyer
and his wife from continuing to serve as trustees.

IX.F

Application of Va. Rules. If a lawyer, acting in a fiduciary capacity, violates his
duty in a manner that would justify disciplinary action had the relationship been
that of an attorney-client, the attorney may be properly disciplined pursuant to the
Code (now the Va. Rules). See LEO 1617 (1995); discussion of Chalifoux, supra.

IX.G Conclusion to Hypothetical #8.

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IX.G.1 The lawyer should exercise great caution in suggesting his willingness to
serve as fiduciary under Mrs. Moneybag's estate planning documents.
Although the lawyer is not prohibited from naming himself as fiduciary
for Mrs. Moneybags' estate planning documents, he must be careful to
avoid the potential for persuasion or overreaching. One factor in this
regard is the absence of a pre-existing relationship, which could increase
the likelihood of a finding of improper influence. However, considering
that Mrs. Moneybags is fully lucid and sharp, even if elderly, it is probable
that you can overcome the undue influence problem.
IX.G.2 The lawyer must fully disclose the fees he will charge as fiduciary and the
fact that his financial interest could affect his professional judgment. He
should also advise Mrs. Moneybags to investigate the fees of others who
might provide similar services. These disclosures should be made in a
writing signed by Mrs. Moneybags as required by Va. Rule 1.8(a)(3) and
Va. Rule 1.7(b)(4).
IX.G.3 If the lawyer also intends to hire himself or his firm to provide separate
legal services to the estate or trust, a separate conflict of interest arises
which also requires full disclosure of the fees to be charged for such
services and a disclosure of the personal conflict which will arise from the
lawyer’s dual capacities and personal financial interests.
IX.G.4 As in Hypothetical #7, above, the lawyer must comply with Va. Rules
1.8(a) and 1.7(b).
IX.G.4.a

Va. Rule 1.8(a) generally requires that:

IX.G.4.a)1
the transaction is fair and reasonable to the client,
and fully disclosed and transmitted in writing in a manner
which can be reasonably understood by the client;
IX.G.4.a)2
the client is given a reasonable opportunity to seek
the advice of independent counsel; and,
IX.G.4.a)3
the client consents in writing.
IX.G.4.b

Va. Rule 1.7(b) generally requires that:

IX.G.4.b)1
the lawyer reasonably believes that representation
of the client will not be adversely affected by the lawyer's
own interests; and,

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IX.G.4.b)2

the client consents after consultation.

IX.G.4.c
The overriding requirement in this situation is full and
adequate disclosure by the lawyer to the client.
IX.G.5 Even if the lawyers acts solely in his capacity as a non-lawyer, the Va.
Rules will still apply to the lawyer.
IX.G.6 The lawyer must possess the competence required of a fiduciary. See LEO
1515 and Va. Rule 1.1.
IX.G.7 The lawyer must also meet the requirements of in-person communications
contained in Va. Rule 7.3(a)(2), which provides that:
(a) A lawyer shall not, by in-person communication, solicit employment . .
. from a non-lawyer who has not sought advice regarding employment of a
lawyer if: . . . (2) such communication has a substantial potential for or
involves the use of coercion, duress, compulsion, intimidation, threats,
unwarranted promises of benefits, over persuasion, overreaching, or
vexatious or harassing conduct, taking into account the sophistication
regarding legal matters, the physical, emotional or mental state of the
person to whom the communication is directed and the circumstances in
which the communication is made.
IX.G.8 Again, however, considering that Mrs. Moneybags is fully lucid and sharp,
even if elderly, it is probable that you can overcome the undue influence
problem.
X.

ATTORNEY'S REPRESENTATION OF A FIDUCIARY (HYPOTHETICAL #9)
Hypothetical #9: If I represent a fiduciary, who is my client, what obligations do I
owe to the fiduciary and beneficiaries?
X.A

ACTEC Commentary on MRPC 1.6: Confidentiality of Information.
X.A.1 Disclosure of a Fiduciary’s Commission of or Intent to Commit a Fraud
or Crime. When representing a fiduciary generally, the lawyer may
discover that the lawyer’s services have been used or are being used by the
client to commit a fraud or crime that has resulted or will result in
substantial injury to the financial interests of the beneficiary or
beneficiaries for whom the fiduciary is acting. If such fiduciary

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misconduct occurs, in most jurisdictions, the lawyer may disclose
confidential information to the extent necessary to protect the interests of
the beneficiaries. The lawyer has discretion as to how and to whom that
information is disclosed, but the lawyer may disclose confidential
information only to the extent necessary to protect the interests of the
beneficiaries.
X.A.2 Whether a given financial loss to a beneficiary is a substantial injury will
depend on the facts and circumstances. A relatively small loss could
constitute a substantial injury to a needy beneficiary. Likewise, a relatively
small loss to numerous beneficiaries could constitute a substantial injury.
In determining whether a particular loss constitutes a substantial injury,
lawyers should consider the amount of the loss involved, the situation of
the beneficiary, and the non-economic impact the fiduciary’s misconduct
had or could have on the beneficiary.
X.A.3 In the course of representing a fiduciary, the lawyer may be required to
disclose the fiduciary’s misconduct under the substantive law of the
jurisdiction in which the misconduct is occurring. For example, the elder
abuse laws of some states may require a lawyer who discovers the
lawyer’s conservator/client has embezzled money from an elderly,
protected person to disclose that information to state agencies even though
the lawyer’s services were not used in conjunction with the embezzlement.
Under such circumstances, MRPC 1.6(b)(6) (to comply with other law)
would authorize that disclosure.

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X.B

ACTEC Commentary on MRPC 1.2: Scope of Representation and Allocation of
Authority between Client and Lawyer.
X.B.1 Disclosure of Acts or Omissions by Fiduciary Client. In some jurisdictions
a lawyer who represents a fiduciary generally with respect to the fiduciary
estate may disclose to a court or to the beneficiaries acts or omissions by
the fiduciary that might constitute a breach of fiduciary duty. In deciding
whether to make such a disclosure, the lawyer should consider MRPC
1.8(b). See ACTEC Commentary on MRPC 1.6 (Confidentiality of
Information). In jurisdictions that do not require or permit such
disclosures, a lawyer engaged by a fiduciary may condition the
representation upon the fiduciary's agreement that the creation of a
lawyer-client relationship between them will not preclude the lawyer from
disclosing to the beneficiaries of the fiduciary estate or to an appropriate
court any actions of the fiduciary that might constitute a breach of
fiduciary duty. The lawyer may wish to propose that such an agreement be
entered into in order better to assure that the intentions of the creator of the
fiduciary estate to benefit the beneficiaries will be fulfilled. Whether or
not such an agreement is made, the lawyer for the fiduciary ordinarily
owes some duties (largely restrictive in nature) to the beneficiaries of the
fiduciary estate. The nature and extent of the duties of the lawyer for the
fiduciary are shaped by the nature of the fiduciary estate and by the nature
and extent of the lawyer's representation.
X.B.2 Duties to Beneficiaries. The nature and extent of the lawyer's duties to the
beneficiaries of the fiduciary estate may vary according to the
circumstances, including the nature and extent of the representation and
the terms of any understanding or agreement among the parties (the
lawyer, the fiduciary, and the beneficiaries). The lawyer for the fiduciary
owes some duties to the beneficiaries of the fiduciary estate although he or
she does not represent them. The duties, which are largely restrictive in
nature, prohibit the lawyer from taking advantage of his or her position to
the disadvantage of the fiduciary estate or the beneficiaries. In addition, in
some circumstances the lawyer may be obligated to take affirmative action
to protect the interests of the beneficiaries. Some courts have characterized
the beneficiaries of a fiduciary estate as derivative or secondary clients of
the lawyer for the fiduciary. The beneficiaries of a fiduciary estate are
generally not characterized as direct clients of the lawyer for the fiduciary
merely because the lawyer represents the fiduciary generally with respect
to the fiduciary estate.

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X.B.3 The scope of the representation of a fiduciary is an important factor in
determining the nature and extent of the duties owed to the beneficiaries of
the fiduciary estate. For example, a lawyer who is retained by a fiduciary
individually may owe few, if any, duties to the beneficiaries of the
fiduciary estate other than duties the lawyer owes to other third parties
generally. Thus, a lawyer who is retained by a fiduciary to advise the
fiduciary regarding the fiduciary's defense to an action brought against the
fiduciary by a beneficiary may have no duties to the beneficiaries beyond
those owed to other adverse parties or non-clients. In resolving conflicts
regarding the nature and extent of the lawyer's duties some courts have
considered the source from which the lawyer is compensated. The
relationship of the lawyer for a fiduciary to a beneficiary of the fiduciary
estate and the content of the lawyer's communications regarding the
fiduciary estate may be affected if the beneficiary is represented by
another lawyer in connection with the fiduciary estate. In particular, in
such a case, unless the beneficiary and the beneficiary's lawyer consent to
direct communications, the lawyer for the fiduciary should communicate
with the lawyer for the beneficiary regarding matters concerning the
fiduciary estate rather than communicating directly with the beneficiary.
See MRPC 4.2 (Communications with Persons Represented by Counsel).
However, even though a separately represented beneficiary and the
fiduciary are adverse with respect to a particular matter, the fiduciary and
a lawyer who represents the fiduciary generally continue to be bound by
duties to the beneficiary. Additionally, the lawyer's communications with
the beneficiaries should not be made in a manner that might lead the
beneficiaries to believe that the lawyer represents the beneficiaries in the
matter except to the extent the lawyer actually does represent one or more
of them.
X.C

Va. Rules. Va. Rule 1.6 is different from MRPC 1.6 in its addition of a section
dealing with an attorney’s duty to reveal fraud. The following provisions of Va.
Rule 1.6(c) do not appear in MRPC 1.6:
(c) A lawyer shall promptly reveal:
(1) the intention of a client, as stated by the client, to commit a crime and
the information necessary to prevent the crime, but before revealing such
information, the attorney shall, where feasible, advise the client of the
possible legal consequences of the action, urge the client not to commit
the crime, and advise the client that the attorney must reveal the client’s

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criminal intention unless thereupon abandoned, and, if the crime involves
perjury by the client, that the attorney shall seek to withdraw as counsel;
(2) information which clearly establishes that the client has, in the course
of the representation, perpetrated a fraud related to the subject matter of
the representation upon a tribunal. Before revealing such information,
however, the lawyer shall request that the client advise the tribunal of the
fraud. For the purposes of this paragraph and paragraph (b)(3),
information is clearly established when the client acknowledges to the
attorney that the client has perpetrated a fraud; or
(3) information concerning the misconduct of another attorney to the
appropriate professional authority under Rule 8.3. When the information
necessary to report the misconduct is protected under this Rule, the
attorney, after consultation, must obtain client consent. Consultation
should include full disclosure of all reasonably foreseeable consequences
of both disclosure and non-disclosure to the client.
X.D

LEOs and VSB.
X.D.1 LEO 1515 (1994). LEO 1515 outlines the principle governing a lawyer
acting as executor or trustee and provides that a pre-existing attorneyclient relationship is not necessary, but is one factor showing the propriety
of the lawyer's selection. The lawyer must fully disclose the fees that will
be charged (preferably in writing) and "has a duty to suggest that the client
investigate potential fees of others who might otherwise provide such
services." A lawyer acting as executor or trustee may hire the lawyer's
own law firm to represent him or her as long as there is full disclosure
(including "the general compensation to be paid to the law firm") and
consent (if the client is already dead, the beneficiaries can consent). A
lawyer acting as a fiduciary is governed by the Code. A lawyer may solicit
designation as a fiduciary as long as there is no overreaching or fraud.
X.D.2 LEO 1452 (1992). A lawyer retained by a personal representative of an
estate has an attorney-client relationship with the executor or other
personal representative and not the beneficiaries.
X.D.3

LEO 1599 (1994). A lawyer representing a person who is an executor and
one of two beneficiaries: does not have a conflict unless the lawyer also
represents the other beneficiary; must advise the client that
communications with the client as beneficiary may not be entitled to

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attorney-client privilege protection, because communications with the
client as fiduciary may similarly not be protected from disclosure to the
beneficiaries; has "no attorney-client relationship with the beneficiaries of
the estate other than the executor;" has no "derivative duty" to the other
beneficiary by virtue of the client's fiduciary duty (as executor) to the
other beneficiary, although the lawyer must "be alert to indications that
[the other beneficiary] does not understand the attorney's role;" may not
advise or represent the executor in actions that breach the executor's
fiduciary duty; does "not take on the executor's duties to the beneficiaries
simply by performing the executor's administrative tasks;" and, may not
charge for any services rendered to the client in the client's capacity as a
beneficiary.
X.D.4 LEO 1720 (1998). A lawyer who acted as co-administrator of an estate
did not represent the estate or the beneficiaries, but rather "was his own
client for practical purposes." After withdrawing as administrator, the
lawyer could not represent a beneficiary's executrix in litigation involving
estate assets (unless the successor administrator consented) because the
representation would be adverse to the estate and was "substantially
related" to the lawyer's previous representation of himself or herself as
administrator ("substantial relatedness between the matters in a former
representation and a current representation is a fact-specific inquiry from
case to case . . . in previous opinions, substantial relatedness depended
upon whether the same parties, the same subject matter, or the same issues
were present. The committee referred to cases to find substantial
relatedness in terms of the matters or the issues being essentially the same,
arising from substantially the same facts, being by-products of the same
transaction, or entailing a virtual congruence of issues of patently clear
relationship in subject matter."). On the other hand, the lawyer could
represent the beneficiary's executrix in litigation over real estate which
was never part of the probate estate and therefore not within the scope of
the lawyer's role as administrator. There may also be fiduciary duties or
statutes that would apply.
X.D.5 LEO 1473 (1992). Three co-executors each hired their own lawyer and a
fourth lawyer to represent the estate. The fourth lawyer had an attorneyclient relationship with all three executors. The executors later became
trustees, and began to quarrel. The fourth lawyer may not continue to
represent two of the executor/trustees unless the third one consented.

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X.D.6 LEO 1617 (1995). A lawyer acting as an executor, trustee, guardian,
attorney-in-fact or other fiduciary is bound by the Va. Rules. In discussing
a lawyer's duty to render accountings, the Bar concluded that the duty
varies with the type of fiduciary relationship. However, the duty of
accounting may not be waived.
X.D.7 LEO 1335 (1990). Because a lawyer acting in a fiduciary capacity is
governed by the Va. Rules, a lawyer acting as trustee may not undertake
activity the lawyer knows is unjustified.
X.D.8 LEO 340 (1979). A lawyer representing an estate may purchase an estate
asset if all interested parties consent. [Under Va. Rule 1.8(a), a lawyer
may not enter into a "business transaction" with a client unless: 1) the
transaction is fair and reasonable to the client; 2) the client is given an
opportunity to seek independent advice; and, 3) there has been full
disclosure and consent in writing.].
X.D.9 ABA Opinion 380 (1994). A lawyer representing a fiduciary owes a duty
to the fiduciary and not to the beneficiaries.
X.D.10 Anne Michie, FAQs, When a lawyer is hired by the executor of an estate,
who is the client?
X.D.10.a
Attorneys hired by executors are not always clear to whom
they owe duties of loyalty and confidentiality. Both the executor
and beneficiaries may interact with the attorney as if he represents
the interests of everyone involved. However, as outlined in LEOs
1452, 1599 and 1720, when an attorney is hired by the executor, he
represents that person in that role. He does not represent the
beneficiaries.
X.D.10.b
Nonetheless, beneficiaries are not always knowledgeable
on that point and may look to the attorney for advice and share
personal information with the attorney. An attorney always has a
duty to clarify his role whenever dealing with an unrepresented
person when that person is confused on the point. Rule 4.2.
Accordingly, where a beneficiary is under the impression that the
attorney is protecting that beneficiary’s individual interest, the
lawyer has an affirmative duty to clarify the matter. Also, while the
executor’s attorney does not represent the beneficiary personally,
he must, nonetheless, maintain awareness of the executor’s

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fiduciary duty to the beneficiaries and never assist in a breach of
that duty. LEO 1599.
X.E

Conclusion to Hypothetical #9.
X.E.1 An attorney hired by a fiduciary represents the fiduciary in that capacity,
and does not represent the beneficiaries. The attorney has an affirmative
duty to clarify to the beneficiaries that he does not represent their interests
in the event that the beneficiaries are confused on this point.
X.E.2 Although the attorney for an executor or trustee does not represent any of
the beneficiaries personally, he must nonetheless maintain awareness of
the executor's or trustee's fiduciary duty to the beneficiaries and never
assist the executor or trustee in a breach of that duty.
X.E.3 When an attorney serves in a fiduciary capacity, i.e., as an executor or
trustee, the attorney represents neither the estate nor the beneficiaries, but
is essentially his own client.
X.E.4 An attorney serving as a fiduciary is bound by the Va. Rules in such
capacity, and as such, the lawyer may not undertake any activity the
lawyer knows is unjustified.

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XI.

REPRESENTATION OF SPOUSES (HYPOTHETICAL #10)
Hypothetical #10: Husband and Wife Jones are both new clients and have
requested that you draft estate planning documents for them. Husband wants
everything to go to Wife upon his death and to their children equally should Wife
predecease him. Wife wants everything to go to Husband upon her death and to
their children equally should Husband predecease her. Since they appear to be very
much in love and in total agreement, you have not had them sign your ususal
spousal conflicts letter providing that you will disclose everything that a
communicating spouse tells you to the non-communicating spouse. Issues:
(1) May I prepare estate planning documents for Husband and Wife?
(2) What if Husband wants all of his assets to go to Son Jones if Wife does not
survive him, and Wife wants all of her assets to go to Daughter Jones if
Husband does not survive her?
(3) What if Husband wants to cut Wife out entirely from his estate and leave
everything to his mistress? Believe it or not Wife admits that she is aware of
the mistress!
XI.A ACTEC Commentary on MRPC 1.6: Confidentiality of Information.
XI.A.1 Joint and Separate Clients. Subject to the requirements of MRPCs 1.6
(Confidentiality of Information) and 1.7 (Conflict of Interest: General
Rule), a lawyer may represent more than one client with related, but not
necessarily identical, interests (e.g., several members of the same family,
more than one investor in a business enterprise). The fact that the goals of
the clients are not entirely consistent does not necessarily constitute a
conflict of interest that precludes the same lawyer from representing them.
See ACTEC Commentary on MRPC 1.7 (Conflict of Interest: General
Rule).
XI.A.2 Thus, the same lawyer may represent a husband and wife, or parent and
child, whose dispositive plans are not entirely the same. When the lawyer
is first consulted by the multiple potential clients the lawyer should review
with them the terms upon which the lawyer will undertake the
representation, including the extent to which information will be shared
among them.

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XI.A.2.a
In the absence of any agreement to the contrary (usually in
writing), a lawyer is presumed to represent multiple clients with
regard to related legal matters jointly with resulting full sharing of
information between the clients. The better practice in all cases is
to memorialize the clients’ instructions in writing and give a copy
of the writing to the client.
XI.A.2.b
The lawyer may wish to consider holding a separate
interview with each prospective client, which may allow the clients
to be more candid and, perhaps, reveal conflicts of interest that
would not otherwise be disclosed.
XI.A.3 Multiple Separate Clients. There does not appear to be any authority that
expressly authorizes a lawyer to represent multiple clients separately with
respect to related legal matters.
XI.A.3.a
However, with full disclosure and the informed consents of
the clients some estate planners regularly undertake to represent
husbands and wives as separate clients.
XI.A.3.b
Similarly, some estate planners also represent a parent and
child or other multiple clients as separate clients.
XI.A.3.c
A lawyer who is asked to provide separate representation to
multiple clients should do so with great care because of the stress it
necessarily places on the lawyer's duties of impartiality and loyalty
and the extent to which it may limit the lawyer's ability to advise
each of the clients adequately.
XI.A.3.d
For example, without disclosing a confidence of one spouse
the lawyer may be unable adequately to represent the other spouse.
XI.A.3.e
However, within the limits of MRPC 1.7 (Conflict of
Interest: General Rule), it may be possible to provide separate
representation regarding related matters to adequately informed
clients who give their consent to the terms of the representation.
XI.A.3.f
The lawyer's disclosures to, and the agreement of, clients
who wish to be separately represented should, but need not, be
reflected in a contemporaneous writing. Unless required by local
law such a writing need not be signed by the clients.

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XI.B

ACTEC Commentary on MRPC 1.7: Conflict of Interest: Current Clients.
XI.B.1 General Non-adversary Character of Estates and Trusts Practice;
Representation of Multiple Clients.
XI.B.1.a
It is often appropriate for a lawyer to represent more than
one member of the same family in connection with their estate
plans, more than one beneficiary with common interests in an
estate or trust administration matter, co-fiduciaries of an estate or
trust, or more than one of the investors in a closely held business.
See ACTEC Commentary on MRPC 1.6 (Confidentiality of
Information).
XI.B.1.b
In some instances the clients may actually be better served
by such a representation, which can result in more economical and
better coordinated estate plans prepared by counsel who has a
better overall understanding of all of the relevant family and
property considerations.
XI.B.1.c
The fact that the estate planning goals of the clients are not
entirely consistent does not necessarily preclude the lawyer from
representing them: Advising related clients who have somewhat
differing goals may be consistent with their interests and the
lawyer's traditional role as the lawyer for the "family". Multiple
representation is also generally appropriate because the interests of
the clients in cooperation, including obtaining cost effective
representation and achieving common objectives, often clearly
predominate over their limited inconsistent interests. Recognition
should be given to the fact that estate planning is fundamentally
non-adversarial in nature and estate administration is usually nonadversarial.
XI.B.2 Disclosures to Multiple Clients.
XI.B.2.a
Before, or within a reasonable time after, commencing the
representation, a lawyer who is consulted by multiple parties with
related interests should discuss with them the implications of a
joint representation (or a separate representation if the lawyer
believes that mode of representation to be more appropriate and
separate representation is permissible under the applicable local

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rules). See ACTEC Commentary on MRPC 1.6 (Confidentiality of
Information).
XI.B.2.b
In particular, the prospective clients and the lawyer should
discuss the extent to which material information imparted by either
client would be shared with the other and the possibility that the
lawyer would be required to withdraw if a conflict in their interests
developed to the degree that the lawyer could not effectively
represent each of them. The information may be best understood
by the clients if it is discussed with them in person and also
provided to them in written form, as in an engagement letter or
brochure.
XI.B.2.c
As noted in the ACTEC Commentary on MRPC 1.2 (Scope
of Representation and Allocation of Authority Between Client and
Lawyer), a lawyer may represent co-fiduciaries whose interests do
not conflict to an impermissible degree. A lawyer who represents
co-fiduciaries may also represent one or both of them as
beneficiaries so long as no disabling conflict arises.
XI.B.2.d
Before accepting a representation involving multiple parties
a lawyer may wish to consider meeting with the prospective clients
separately, which may allow each of them to be more candid and,
perhaps, reveal conflicts of interest.
XI.B.3 Joint or Separate Representation.
XI.B.3.a
As indicated in the ACTEC Commentary on MRPC 1.6
(Confidentiality of Information), a lawyer usually represents
multiple clients jointly.
XI.B.3.b
However, some estate planners regularly represent
husbands and wives as separate clients. They also undertake to
represent other related clients separately with respect to related
matters. Such representations should only be undertaken with the
informed consent of each client, confirmed in writing. See ACTEC
Commentaries on MRPC 1.0(e)) (defining informed consent) and
MRPC 1.0(b) (defining confirmed in writing). The writing may be
contained in an engagement letter that covers other subjects as
well.

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XI.C

Va. Rules.
XI.C.1 Va. Rule 1.7 and MRPC 1.7, although worded slightly different, are
substantively the same. Va. Rule 1.7 provides:
(a) Except as provided in paragraph (b), a lawyer shall not represent a
client if the representation involves a concurrent conflict of interest. A
concurrent conflict of interest exists if:
(1) the representation of one client will be directly adverse to
another client; or
(2) there is significant risk that the representation of one or more
clients will be materially limited by the lawyer's responsibilities to
another client, a former client or a third person or by a personal
interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of interest under
paragraph (a), a lawyer may represent a client if each affected client
consents after consultation, and:
(1) the lawyer reasonably believes that the lawyer will be able to
provide competent and diligent representation to each affected
client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by
one client against another client represented by the lawyer in the
same litigation or other proceeding before a tribunal; and
(4) the consent from the client is memorialized in writing.
XI.C.2 Va. Rule 1.6 and MRPC 1.6 are similar in many respects, but Va. Rule 1.6
is more specific. A comparison of Va. Rule 1.6(a) and MRPC 1.6(a)
follows [underlined text represents Va. Rule 1.6(a) and strikeout text
represents MRPC 1.6(a)]:
(a) A lawyer shall not reveal information relating to representation of
a protected by the attorney-client privilege under applicable law or
other information gained in the professional relationship that the

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client has requested be held inviolate or the disclosure of which would
be embarrassing or would be likely to be detrimental to the client
unless the client gives informed consentconsents after consultation....
XI.C.3 Va. Rule 1.4, entitled "Communication," provides:
(a) A lawyer shall keep a client reasonably informed about the status of a
matter and promptly comply with reasonable requests for information.
(b) A lawyer shall explain a matter to the extent reasonably necessary to
permit the client to make informed decisions regarding the representation .
..
XI.C.4 When representing a husband and wife, it is the interplay of these Va.
Rules that may cause ethical dilemmas.
XI.D LEOs.
XI.D.1 LEO 708 (1985). A lawyer may draft wills for both a wife and husband
although the provisions of the wills differ, as long as the lawyer may
adequately represent both parties' interests.
XI.D.2 LEO 728 (1985). If both the husband and wife consent, a lawyer may
represent both of them in preparing wills that preclude changing
beneficiaries following the death of the first to die.
XI.E

Conclusion to Hypothetical #10.
XI.E.1 An attorney may prepare estate planning documents for Husband and
Wife, but should take certain precautions in doing so.
XI.E.1.a
At the outset, the lawyer should explain to Husband and
Wife the terms of the lawyer's representation, including the extent
of confidentiality that will be maintained with respect to
communications made by each. In the absence of an agreement to
the contrary, the default rule is that the lawyer is presumed to
represent multiple clients with regard to related legal matters
jointly with resulting full sharing of information between the
clients.

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XI.E.1.b
Additionally, the lawyer should explain that he would be
required to withdraw from representation of both Husband and
Wife if a conflict of interest develops between them to the degree
that the lawyer cannot effectively represent the interests of both of
them.
XI.E.1.c

XI.E.1.d
This information should be conveyed to Husband and Wife
in written form, possibly in an engagement letter or agreement, and
should preferably be signed by Husband and Wife acknowledging
their consent. But, if there is or is likely to be a concurrent conflict,
Va. Rule 1.7(b)(4) requires the consent to be in writing.
XI.E.2 In the situation where Husband wants all of his assets to go to Son Jones if
Wife does not survive him, and Wife wants all of her assets to go to
Daughter Jones if Husband does not survive her, the lawyer may draft the
estate planning documents for both Husband and Wife since he may
adequately represent the interests of both.
XI.E.3 In the situation where Husband wants to cut Wife out of his estate and
leave everything to his mistress, the lawyer probably cannot represent
both Husband and Wife for the following reasons:
XI.E.3.a
A concurrent conflict exists. The interests of Husband and
Wife in this situation are directly adverse to each other.

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XI.E.3.b
However, suppose both clients are willing to consent to the
representation? It may be possible (although not prudent) for the
lawyer to continue representing both Husband and Wife. The
lawyer may be able to meet the requirements of Va. Rule 1.7(b)(1)
and (3), which provide:
(1) the lawyer reasonably believes that the lawyer will be
able to provide competent and diligent representation to
each affected client.
This may be difficult, but possible in the case of the
Jones.
(3) the representation does not involve the assertion of a
claim by one client against another client represented by
the lawyer in the same litigation or other proceeding before
a tribunal.
There is no claim or proceeding at present, but what
happens if the Husband dies immediately after
signing his documents. Surely the Wife will make a
claim for her elective share of his augmented estate.
Assuming that the requirements of both 1.7(b)(1) and (3) can be
met and both clients consent in writing, the lawyer may, but
probably should not, continue to represent both Husband and Wife
Jones.

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XII.

REPRESENTATION OF SPOUSES WITH ADVERSE INTERESTS (HYPOTHETICAL #11)
Hypothetical #11: Husband and Wife Jones are both new clients and have
requested that you draft estate planning documents for them. Since they appear to
be very much in love and in total agreement, you have not had them sign your usual
spousal conflicts letter providing that you will disclose everything that a
communicating spouse tells you to the non-communicating spouse. You have
prepared AI love you@ estate planning documents for Husband and Wife, but they
have not yet signed the documents. Husband now tells you that he wants a divorce.
(1) Do you have to communicate the Husband’s wish for a divorce to Wife? (2) Do
you have to withdraw from representation?
XII.A ACTEC Commentary on MRPC 1.6: Confidentiality of Information.
XII.A.1
Confidences Imparted by One Joint Client. A lawyer who receives
information from one joint client (the "communicating client") that the
client does not wish to be shared with the other joint client (the "other
client") is confronted with a situation that may threaten the lawyer's ability
to continue to represent one or both of the clients. As soon as practicable
after such a communication the lawyer should consider the relevance and
significance of the information and decide upon the appropriate manner in
which to proceed.
XII.A.1.a

The potential courses of action include, inter alia,

XII.A.1.a)1 taking no action with respect to communications
regarding irrelevant (or trivial) matters;
XII.A.1.a)2 encouraging the communicating client to provide
the information to the other client or to allow the lawyer to
do so; and,
XII.A.1.a)3 withdrawing from the representation if the
communication reflects serious adversity between the
parties.
XII.A.1.b

For example,

XII.A.1.b)1 A lawyer who represents a husband and wife in
estate planning matters might conclude that information
imparted by one of the spouses regarding a past act of

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marital infidelity need not be communicated to the other
spouse.
XII.A.1.b)2 On the other hand, the lawyer might conclude that
he or she is required to take some action with respect to a
confidential communication that concerns a matter that
threatens the interests of the other client or could impair the
lawyer's ability to represent the other client effectively
(e.g., "After she signs the trust agreement I intend to leave
her"; or, "All of the insurance policies on my life that name
her as beneficiary have lapsed").
XII.A.1.b)3 Without the informed consent of the other client the
lawyer should not take any action on behalf of the
communicating client, such as drafting a codicil or a new
will, that might damage the other client's economic
interests or otherwise violate the lawyer's duty of loyalty to
the other client.
XII.A.2
In order to minimize the risk of harm to the clients' relationship
and, possibly, to retain the lawyer's ability to represent both of them, the
lawyer may properly urge the communicating client himself or herself to
impart the confidential information directly to the other client. See
ACTEC Commentary on MRPC 2.1 (Advisor). In doing so the lawyer
may properly remind the communicating client of the explicit or implicit
understanding that relevant information would be shared and of the
lawyer's obligation to share the information with the other client. The
lawyer may also point out the possible legal consequences of not
disclosing the confidence to the other client, including the possibility that
the validity of actions previously taken or planned by one or both of the
clients may be jeopardized. In addition, the lawyer may mention that the
failure to communicate the information to the other client may result in a
disciplinary or malpractice action against the lawyer.
XII.A.3
If the communicating client continues to oppose disclosing the
confidence to the other client, the lawyer faces an extremely difficult
situation with respect to which there is often no clearly proper course of
action. In such cases the lawyer should have a reasonable degree of
discretion in determining how to respond to any particular case. In
fashioning a response the lawyer should consider his or her duties of
impartiality and loyalty to the clients; any express or implied agreement

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among the lawyer and the joint clients that information communicated by
either client to the lawyer or otherwise obtained by the lawyer regarding
the subject of the representation would be shared with the other client; the
reasonable expectations of the clients; and the nature of the confidence
and the harm that may result if the confidence is, or is not, disclosed. In
some instances the lawyer must also consider whether the situation
involves such adversity that the lawyer can no longer effectively represent
both clients and is required to withdraw from representing one or both of
them. See ACTEC Commentary on MRPC 1.7 (Conflict of Interest:
General Rule). A letter of withdrawal that is sent to the other client may
arouse the other client's suspicions to the point that the communicating
client or the lawyer may ultimately be required to disclose the information.
XII.B Use of Waivers.
XII.B.1
ACTEC Commentary on MRPC 1.7: Conflict of Interest: Current
Clients.
XII.B.1.a
Prospective Waivers. A client who is adequately informed
may waive some conflicts that might otherwise prevent the lawyer
from representing another person in connection with the same or a
related matter. These conflicts are said to be waivable. Thus, a
surviving spouse who serves as the personal representative of her
husband's estate may give her informed consent confirmed in
writing to permit the lawyer who represents her as personal
representative also to represent a child who is a beneficiary of the
estate. The lawyer also would need an informed consent from the
child that is confirmed in writing before undertaking such a dual
representation. However, a conflict might arise between the
personal representative and the beneficiary that would preclude the
lawyer from continuing to represent both, or either, of them.
XII.B.1.b
Overly broad waivers or waivers executed by an
inadequately informed client are of little, if any, value. As noted in
ABA Formal Opinion 93-378 (1993): [I]t would be unlikely that a
prospective waiver which did not identify either the potential
opposing party or at least a class of conflicting clients would
survive scrutiny. Even that information might not be enough if the
nature of the matter and its potential effect on the client were not
also appreciated by the client at the time the prospective waiver
was sought.

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XII.C LEOs.
XII.C.1
LEO 1487 (1992). A lawyer representing the executor of an estate
sought a general release from the widow. The Bar needed more facts
before determining whether an attorney-client relationship existed
between the lawyer and the widow. If it did, a general release would be
per se improper. Because the lawyer was acting as a fiduciary even if not
as a lawyer, "such a general release is not a good practice and does not
follow the spirit of the Disciplinary Rule."
XII.C.2
LEO 1561 (1993). A wife was injured in a car accident in which
her husband was killed. A lawyer represented her in suing the husband's
estate for negligence, and the case was settled. One year later, the wife
(now administratrix of her husband's estate) sued a third party, claiming
that it negligently caused the accident. The lawyer's current representation
of the wife against the third party does not violate the Code (now the Va.
Rules) because the wife "is in a position to waive any conflict both as
administratrix of the estate and on her own behalf."
XII.D Conclusion to Hypothetical #11.
XII.D.1
In the absence of an agreement to the contrary, the presumption is
that the lawyer represents Husband and Wife jointly and therefore, fully
shares information between the clients.
XII.D.2
In regard to whether the lawyer must disclose Husband's desire for
a divorce to Wife, the lawyer should first encourage Husband to disclose
this information to Wife. If Husband is not willing to do so, and unless an
agreement to the contrary exists between Husband and Wife, the lawyer
has an obligation to share the information with Wife since it threatens her
interests.
XII.D.2.a
As the lawyer represents the interests of both Husband and
Wife, the lawyer is required to take some sort of action with
respect to a matter that threatens the interests of the other client or
could impair the lawyer's ability to represent the other client
effectively. As such, the lawyer should not allow Husband and
Wife to execute their documents until he is sure that the intended
divorce is fully disclosed to Wife.

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XII.D.2.b

If Husband refuses to disclose:

XII.D.2.b)1 The lawyer has an obligation under Va. Rule 1.4 to
keep Wife reasonably informed.
XII.D.2.b)2 However, the lawyer also has a duty of
confidentiality to Husband under Va. Rule 1.6.
XII.D.2.b)3 If the lawyer's representation of Husband and Wife
is joint, then the lawyer must disclose the information to
Wife if Husband refuses to do so.
XII.D.2.b)4 If the lawyer's representation of Husband and Wife
is separate and they have signed an engagement letter or
other agreement, then the terms of the engagement letter or
agreement will control. If there is no engagement letter,
then the lawyer is faced with a potential conflict of interest
between concurrent clients.
XII.D.3
Under Va. Rule 1.7, a lawyer may not represent a client if the
representation involves a concurrent conflict of interest. Notwithstanding
the existence of a concurrent conflict of interest, a lawyer may represent a
client if each affected client consents after consultation, and:
XII.D.3.a
the lawyer reasonably believes that the lawyer will be able
to provide competent and diligent representation to each affected
client;
XII.D.3.b

the representation is not prohibited by law;

XII.D.3.c
the representation does not involve the assertion of a claim
by one client against another client represented by the lawyer in
the same litigation or other proceeding before a tribunal; and,
XII.D.3.d

the consent from the client is memorialized in writing.

XII.D.4
In any situation where a lawyer is representing a married couple in
estate planning, it is imperative that the lawyer always discuss the
potential for conflicts and discuss how confidential information of the
husband and wife will be disclosed to the other, absent an agreement to the

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contrary. The lawyer should always have the married couple acknowledge
their understanding of the above in writing.

XIII.

Terminating the Attorney-Client Relationship & Duties to Former Clients (Hypothetical
#12)
Hypothetical #12: Husband and Wife have signed the documents, and Husband
now tells me he wants a divorce. What do I need to do, if anything? May I
represent Husband in the divorce proceedings? May I prepare new documents for
Husband disinheriting Wife before the divorce? What about after the divorce?
XIII.A ACTEC Commentary on MRPC 1.16: Declining or Terminating Representation.
A representation may be terminated by the lawyer's completion of the legal
services or tasks mutually contemplated by the lawyer and client, such as, e.g., the
completion of an estate planning project for the client. Refer also to ACTEC
Commentary on MRPC 1.4 (Communication) and the concept of the dormant
representation.
XIII.B ACTEC Commentary on MRPC 1.4: Communication.
XIII.B.1
Termination of Representation. A client whose representation by
the lawyer is dormant becomes a former client if the lawyer or the client
terminates the representation. See MRPC 1.16 (Declining or Terminating
Representation) and MRPC 1.9 (Conflict of Interest: Former Client) and
the ACTEC Commentaries thereon. The lawyer may terminate the
relationship in most circumstances, although the disability of a client may
limit the lawyer's ability to do so. Thus, the lawyer may terminate the
representation of a competent client by a letter, sometimes called an "exit"
letter, that informs the client that the relationship is terminated. The
representation is also terminated if the client informs the lawyer that
another lawyer has undertaken to represent the client in trusts and estates
matters. Finally, the representation may be terminated by the passage of an
extended period of time during which the lawyer is not consulted.
XIII.B.2
In general, a lawyer may communicate with a former client
regarding the subject of the former representation and matters of potential
interest to the former client. See MRPC 7.3 (Direct Contact with
Prospective Clients) and MRPC 7.4 (Communication of Fields of
Practice).

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XIII.B.3
Example 1.4-1. Lawyer (L) prepared and completed an estate plan
for Client (C). At C's request L retained the original documents executed
by C. L performed no other legal work for C in the following two years
but has no reason to believe that C has engaged other estate planning
counsel. L's representation of C is dormant. L may, but is not obligated to,
communicate with C regarding changes in the law. If L communicates
with C about changes in the law, but is not asked by C to perform any
legal services, L's representation remains dormant. C is properly
characterized as a client and not a former client for purposes of MRPCs
1.7 and 1.9.
XIII.B.4
Example 1.4-2. Assume the same facts as in Example 1.4-1 except
that L's partner (P) in the two years following the preparation of the estate
plan renders legal services to C in matters completely unrelated to estate
planning, such as a criminal representation. L's representation of C with
respect to estate planning matters remains dormant, subject to activation
by C.
XIII.C ACTEC Commentary on MRPC 1.9: Duties to Former Clients.
XIII.C.1
The completion of the specific representation undertaken by a
lawyer often results in the termination of the lawyer-client relationship.
See ACTEC Commentary on MRPC 1.16 (Declining or Terminating
Representation). Thus, the completion of the administration of an estate
normally results in the termination of the representation provided by the
lawyer to the personal representative. The execution of estate planning
documents and implementation of the client's estate plan may, or may not,
terminate the lawyer's representation of the client with respect to estate
planning matters. In such a case, unless otherwise indicated by the lawyer
or client, the client typically remains an estate planning client of the
lawyer, albeit the representation is dormant or inactive. However,
following implementation of the client's estate plan, the lawyer or the
client may terminate the representation by giving appropriate notice, one
to the other. Even if the representation is terminated, the lawyer continues
to owe some duties to the former client. As stated in the Comment to
MRPC 1.9 (Duties to Former Clients), "[a]fter termination of a clientlawyer relationship, a lawyer has certain continuing duties with respect to
confidentiality and conflicts of interest.
XIII.C.2
The lawyer who formerly represented a client in connection with
an estate or trust matter may not, without the informed consent of the

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former client, confirmed in writing, represent another person in the same
or a substantially related matter if that person's interests are materially
adverse to those of the former client. For example, a lawyer who assisted a
client in establishing a revocable trust for the benefit of the client's spouse
and issue may not later represent another party in an attempt to satisfy the
new client's claims against the trust by invading the assets of the trust.
Similarly, the lawyer may not, without the informed consent of a former
client, confirmed in writing, use to the detriment of the former client any
confidential information that was obtained during the course of the prior
representation. See MRPC 1.7 (addressing the effectiveness of an advance
waiver); MRPC 1.10 (regarding disqualification of a firm with which the
lawyer is or was formerly associated). MRPC 1.9 may be implicated
following the termination of a joint representation.
XIII.C.3
Example 1.9-1. Lawyer (L) represented Husband (H) and Wife (W)
jointly in connection with estate planning matters. Subsequently H and W
were divorced in an action in which each of them was separately
represented by counsel other than L. L has continued to represent H in
estate planning and other matters. Because W is a former client, MRPC 1.9
imposes limitations upon L's representation of H or others. Thus, unless W
gives informed consents, confirmed in writing, MRPC 1.9(a) would
prevent L from representing H in a matter substantially related to the prior
representation in which H's interests are materially adverse to W's, such as
an attempt to modify or terminate an irrevocable trust of which W was a
beneficiary. Also, under MRPC 1.9(c), L could not disclose or use to W's
disadvantage information that L obtained during the former representation
of H and W in estate planning matters without W’s informed consent,
confirmed in writing. For example, L could not use on behalf of one of W's
creditors information that L obtained regarding W's financial condition or
ownership of property. Some estate planners who represented both
spouses in connection with estate planning matters prior to the
commencement of a dissolution proceeding decline to represent either of
them in estate planning matters during and after the proceeding.
XIII.C.4
As noted in the Comments to MRPC 1.9, matters are substantially
related for purposes of the Rule if they involve the same transaction or
legal dispute or if there otherwise is a substantial risk that confidential
factual information as would normally have been obtained in the prior
representation would materially advance the client’s position in the
subsequent matter. Information that has been disclosed to the public or to
other parties adverse to the former client ordinarily will not be

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disqualifying. Information acquired in a prior representation may have
been rendered obsolete by the passage of time, a circumstance that may be
relevant in determining whether two representations are substantially
related. In the case of an organizational client, general knowledge of the
client’s policies and practices ordinarily will not preclude a subsequent
representation; on the other hand, knowledge of specific facts gained in a
prior representation that are relevant to the matter in question ordinarily
will preclude such a representation.

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XIII.D Va. Rules.
XIII.D.1
Va. Rule 1.9 and MRPC 1.9 are worded differently, with the
primary difference being that Va. Rule 1.9 requires consent of both the
current and former client, while MRPC 1.9 requires consent of only the
former client. A comparison of Va. Rule 1.9 and MRPC 1.9 follows
[underlined text represents Va. Rule 1.9 and strikeout text represents
MRPC 1.9]:
(a) A lawyer who has formerly represented a client in a matter shall
not thereafter represent another person in the same or a substantially
related matter in which that person’s interests are materially adverse
to the interests of the former client unless both the present and former
client gives informed consent, confirmed in writing after consultation.
(b) A lawyer shall not knowingly represent a person in the same or a
substantially related matter in which a firm with which the lawyer
formerly was associated had previously represented a client
(1) whose interests are materially adverse to that person; and
(2) about whom the lawyer had acquired information protected by
Rules 1.6 and 1.9(c) that is material to the matter;
unless both the present and former client gives informed consent,
confirmed in writing after consultation.
(c) A lawyer who has formerly represented a client in a matter or
whose present or former firm has formerly represented a client in a
matter shall not thereafter:
(1) use information relating to or gained in the course of the
representation to the disadvantage of the former client except as these
RulesRule 1.6 or Rule 3.3 would permit or require with respect to a
client, or when the information has become generally known; or
(2) reveal information relating to the representation except as these
RulesRule 1.6 or Rule 3.3 would permit or require with respect to a
client.
XIII.D.2

Va. Rule 1.16(a) and MRPC 1.16(a) are substantively identical.

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XIII.D.3
Va. Rule 1.16(b) and MRPC 1.16(b), while worded differently,
contain substantially the same requirements, and a comparison of Va. Rule
1.16(b) to MRPC 1.16(b) follows [underlined text represents Va. Rule
1.16(b) and strikeout text represents MRPC 1.16(b)]:
(b) Except as stated in paragraph (c), a lawyer may withdraw from
representing a client if:
(1)
withdrawal can be accomplished without material
adverse effect on the interests of the client;, or if:
(21) the client persists in a course of action involving the
lawyer'‘s services that the lawyer reasonably believes is criminalillegal
or fraudulentunjust;
(32) the client has used the lawyer'‘s services to perpetrate a
crime or fraud;
(43) thea client insists upon taking actionpursuing an
objective that the lawyer considers repugnant or with which the
lawyer has a fundamental disagreementimprudent;
XIII.D.4
Va. Rule 1.16(c) and (d) and MRPC 1.16(c) and (d) while worded
differently, contain similar requirements.
XIII.D.5
Va. Rule 1.16(e) dealing with the return of records is not found in
MRPC 1.16.
XIII.D.6
Va. Rule 1.4 and MRPC 1.4 have some similar provisions but are
substantively different. Va. Rule 1.4 seeks to make a more complete
statement of a lawyer’s obligation to communicate.
XIII.D.7
A comparison of Va. Rule 1.4(a) to MRPC 1.4(a) follows
[underlined text represents Va. Rule 1.4(a) and strikeout text represents
MRPC 1.4(a)]:
(a) A lawyer shall:

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(1) promptly inform the client of any decision or circumstance with
respect to which the client’s informed consent, as defined in Rule
1.0(e), is required by these Rules;
(2) reasonably consult with the client about the means by which the
client’s objectives are to be accomplished;
(3) keep thea client reasonably informed about the status of thea
matter;
(4) and promptly comply with reasonable requests for information;
and
(5) consult with the client about any relevant limitation on the
lawyer’s conduct when the lawyer knows that the client expects
assistance not permitted by the Rules of Professional Conduct or
other law.
XIII.D.8
The additional language of Va. Rule 1.4(c), which does not appear
in MRPC 1.4 is as follows:
(c) A lawyer shall inform the client of facts pertinent to the matter and of
communications from another party that may significantly affect
settlement or resolution of the matter.
XIII.E LEOs and VSB.
XIII.E.1
LEO 1472 (1992). The lawyer for a divorced wife may not
represent the estate of the former husband.
XIII.E.2
LEO 1206 (1989). A lawyer serving as the executor of an estate
and representing three children in an action filed by a fourth may represent
all of the children in an unrelated real estate transaction if all consent.
XIII.E.3
Anne Michie, FAQs, Can an attorney represent a spouse in a
divorce where the attorney previously represented the couple jointly in
some other legal matter?
XIII.E.3.a
Satisfied clients usually return to former counsel when new
matters arise. This is generally a good thing. However, potential
conflicts of interest must be considered where the prior

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representation was part of joint representation of spouses.
Frequently, an attorney will have done estate planning, bankruptcy
or real estate work for a couple only to be contacted by one of the
spouses when the marriage is dissolving. Each of these new
representations must be analyzed regarding two rules: 1.6
governing client confidentiality and 1.9 regarding former clients.
Rule 1.9(a) prohibits an attorney from representing a party adverse
to a former client in a matter substantially related to the prior
representation. This prohibition is often not the hindrance to
accepting these new representations, as while the divorce certainly
is adverse to the former client, it is not usually "substantially
related" to the prior matter. Nevertheless, Rule 1.9(b), together
with Rule 1.6, may be the source of a conflict in many of these
instances. Rule 1.9(b) prohibits a lawyer from using confidential
information obtained during a prior representation to the
disadvantage of the former client.
XIII.E.3.b
Attorneys must consider whether any of the information
obtained during the first matter would be pertinent in the divorce.
If such information was received, then, under Rules 1.6 and 1.9(b),
the attorney may only represent one spouse in the divorce if the
other spouse consents to the use of that information against him or
her. See LEOs 569, 677, 707, 774, 792, 1032 and 1181, reaching
the same conclusions under the former Code of Professional
Responsibility.
XIII.F Conclusion to Hypothetical #12.
XIII.F.1
Once the lawyer completes the estate planning for the clients, the
lawyer's representation is generally considered terminated. To be safe, the
lawyer should send the client a "closed file letter" at the completion of the
estate planning to inform the client that the relationship has terminated.
XIII.F.2
If representation of Husband and Wife was joint, then there are no
issues with confidentiality between the two of them since information was
to have been shared. However, the lawyer may not use one spouse's
confidential information for the benefit of the other spouse.
XIII.F.3
Although the lawyer could possibly represent Husband in the
divorce proceedings, it would be advisable not to, and the lawyer may not
represent Husband without the informed consent of Wife to the use of any

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confidential information that the lawyer received from Wife during his
representation of her for estate planning.
XIII.F.4
In regard to the preparation of new estate planning documents for
Husband disinheriting Wife:
XIII.F.4.a
Prior to the divorce, the lawyer may represent the Husband
only with the informed consent of Husband and Wife because such
representation would be materially adverse to Wife’s interests. If
Wife is not willing to consent, then the lawyer may not represent
Husband in this regard.
XIII.F.4.b
After the divorce, the lawyer should still not represent
Husband. Under Virginia law, upon divorce, all gifts to a divorced
spouse under a will are extinguished and revocable beneficiary
designations are revoked, and therefore the lawyer’s representation
of Husband would not necessarily be materially adverse to Wife.
However, such revocation specifically does not apply to any trust
or any death benefit payable to or under any trust. Any change to a
trust of which the Husband's former Wife was a beneficiary would
be materially adverse to Wife, and would therefore require the
informed consent of Wife prior to lawyer’s representation of
Husband. The problem here, however, is that the lawyer may not
know that Wife’s interest are materially adverse until he has
already begun representation of Husband.
XIV. UNAUTHORIZED PRACTICE OF LAW IN OTHER JURISDICTIONS. (HYPOTHETICAL #13)
Hypothetical #13: You have represented the Smiths and their businesses in Virginia
for years. The Smiths have sold their businesses, their homes, and all their other
Virginia real estate. They maintain no residence or office in Virginia, and they have
retired and permanently moved to Florida. They just called and informed you of a
terrible rift with one of their children who they wish to disinherit and remove him
from all fiduciary positions under their estate planning documents. You also have
several other retired clients who live in Florida whose circumstances are similar to
the Smiths. May you redraft the Smiths’ estate planning documents?
XIV.A Va. Rule.
XIV.A.1

Rule 5.5 Unauthorized Practice Of Law.

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(a) A lawyer shall not:
(1)

practice law in a jurisdiction where doing so violates the
regulation of the legal profession in that jurisdiction; or

(2)

assist a person who is not a member of the bar in the
performance of activity that constitutes the unauthorized
practice of law.

XIV.A.2
Va. Comment: [1] The definition of the practice of law is
established by law and varies from one jurisdiction to another. Whatever
the definition, limiting the practice of law to members of the bar protects
the public against rendition of legal services by unqualified persons.
XIV.B Va. UPLs.
XIV.B.1
UPL 93 (5/2/1986) allowed a non-Virginia attorney to prepare
documents, conduct a settlement, and render advice on Virginia law in
relation to real estate located in Virginia.
XIV.B.2
UPL 122 (6/9/1988) provided that it would not be improper for a
non-Virginia lawyer to render advice in Pennsylvania to clients residing in
Virginia on matters not concerning Virginia law.
XIV.B.3
UPL 99 (12/19/1986) presented a fact pattern where Virginia
residents purchased a business located in Virginia. The buyer and seller
both agreed that an attorney in the District of Columbia would conduct the
closing. The attorney was licensed in the District of Columbia, but was
not admitted to practice in Virginia. The Committee found that the
situation did not constitute the unauthorized practice of law in Virginia.
XIV.B.4
UPL 100 (12/9/1986) presented the question of whether an
attorney licensed in the District of Columbia could move his practice to
Virginia and continue to practice without a Virginia license. The
attorney’s practice was largely legislative, governmental, and advisory in
nature, with little direct court practice. The attorney indicated that he
would not be engaged in any court or judicial practice and that he would
not hold himself out as being a member of the Virginia State Bar. The
Committee determined that the attorney would be practicing law in
Virginia, reasoning that one is deemed to be practicing law whenever he

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furnishes to another advice or service under circumstances which imply
his possession and use of legal knowledge or skill.
XIV.C Florida Law.
XIV.C.1
Rule 4-5.5 Unlicensed Practice of Law; Multijurisdictional
Practice of Law (based on MRPC 5.5).
(c) A lawyer admitted and authorized to practice law in another United
States jurisdiction . . . may provide legal services on a temporary basis in
Florida that:
(1) are undertaken in association with a lawyer who is admitted to
practice in Florida and who actively participates in the matter . . . .
(4) are not within subdivisions (c)(2) or (c)(3), and
(A) are performed for a client who resides in or has an
office in the jurisdiction in which the lawyer is authorized
to practice, or
(B) arise out of or are reasonably related to the lawyer's
practice in a jurisdiction in which the lawyer is admitted
to practice.
XIV.C.2
Note that the portion of Florida Rule 4-5.5 quoted above is
identical to its counterpart in MRPC 5.5, except that 4-5.5(c)(4)(A) is
added by Florida and is not found in the MRPC.
XIV.C.3

Florida Comment:

XIV.C.3.a
Other than as authorized by law, a lawyer who is not
admitted to practice in Florida violates subdivision (b) if the
lawyer establishes an office or other regular presence in Florida
for the practice of law. Presence may be regular even if the
lawyer is not physically present here. Such a lawyer must not hold
out to the public or otherwise represent that the lawyer is admitted
to practice law in Florida.
XIV.C.3.b
There are occasions in which a lawyer admitted and
authorized to practice in another United States jurisdiction or in a

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non-United States jurisdiction may provide legal services on a
temporary basis in Florida under circumstances that do not create
an unreasonable risk to the interests of his or her clients, the public,
or the courts. Subdivisions (c) and (d) identify such circumstances.
XIV.C.3.c
There is no single test to determine whether a lawyer's
services are provided on a "temporary basis" in Florida and may
therefore be permissible under subdivision (c). Services may be
"temporary" even though the lawyer provides services in Florida
on a recurring basis or for an extended period of time, as when the
lawyer is representing a client in a single lengthy negotiation or
litigation.
XIV.C.3.d
Subdivisions (c)(1) and (d)(1) recognize that the interests of
clients and the public are protected if a lawyer admitted only in
another jurisdiction associates with a lawyer licensed to practice in
Florida. For these subdivisions to apply, the lawyer admitted to
practice in Florida could not serve merely as a conduit for the outof-state lawyer, but would have to share actual responsibility for
the representation and actively participate in the representation.
XIV.C.3.e
Subdivision (c)(4) permits a lawyer admitted in another
jurisdiction to provide certain legal services on a temporary basis
in Florida that are performed for a client who resides or has an
office in the jurisdiction in which the lawyer is authorized to
practice or arise out of or are reasonably related to the lawyer's
practice in a jurisdiction in which the lawyer is admitted but are
not within subdivisions (c)(2) or (c)(3). These services include
both legal services and services that non-lawyers may perform but
that are considered the practice of law when performed by lawyers.
When performing services which may be performed by nonlawyers, the lawyer remains subject to the Rules of Professional
Conduct.
XIV.C.3.f

XIV.C.4
Florida Ethics Opinion 24894 (2003). A Florida attorney sought an
ethics opinion concerning the appropriate response he should give to outof-state counsel who wrote demand letters and other correspondence to the
Florida attorney’s clients. The communications indicated that the out-ofstate attorney was giving advice about Florida law. The Florida attorney

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refused to communicate with the non-Florida attorney and requested that a
Florida attorney be retained to handle the issue. The opinion found that the
Florida attorney acted appropriately in alerting the out-of-state practitioner
to avoid the unlicensed practice of law. In subsequent correspondence, the
Division Director clarified its position for the Florida Real Property,
Probate and Trust Law Section and advised that a Florida attorney is not
prohibited from reviewing documents, such as real estate or estate
planning documents, drafted by out-of-state attorneys.
XIV.C.5
Gathering the necessary information for a living trust is not the
practice of law and may be performed by non-lawyers. Florida Bar re:
Advisory Opinion - Non-lawyer Preparation of Living Trusts, 613 So.2d
426, 427 (Fla. 1992). However, going beyond the mere gathering of
information to answering specific legal questions, determining whether a
client needs a living trust, assembling, drafting and executing the trust
documents, and funding the living trust, is the practice of law and may not
be performed by non-lawyers. Florida Bar v. American Senior Citizens
Alliance, Inc., 689 So.2d 255, 259 (Fla. 1997).
XIV.D ACTEC Commentary on MRPC 5.5. A lawyer admitted to practice in one
jurisdiction (an admitted jurisdiction) who provides legal services in another
jurisdiction in which the lawyer is not admitted (a Anon-admitted jurisdiction@)
may violate the non-admitted jurisdiction’s proscriptions against the unauthorized
practice of law. If so, the lawyer is subject to discipline in both the admitted
jurisdiction and the non-admitted jurisdiction. MRPC 8.5 (Disciplinary
Authority; Choice of Law).
XIV.D.1
A lawyer may also choose to associate counsel in the non-admitted
jurisdiction. MRPC 5.5(c)(1).
XIV.D.1.a
By doing so, the lawyer gains a similar, though not as
expansive, safe harbor in which to practice. This safe harbor is
only available when the legal services the lawyer provides in the
non-admitted jurisdiction are provided on a temporary basis.
XIV.D.1.b
In addition, the associated counsel must actively participate
in the matter. Active participation is not defined in the Rule or the
comments.
XIV.D.1.c
Lawyers providing estate counseling services in a nonadmitted jurisdiction would meet this second requirement by

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associating local counsel for such matters as deed preparation, will
execution formalities, and similar services.
XIV.D.2

Threshold Requirement under MRPC 5.5(c): Temporary Basis.

XIV.D.2.a
If a lawyer desires to practice law in a non-admitted
jurisdiction, MRPC 5.5(c) provides that the lawyer may provide
legal services on a temporary basis. The term temporary basis is
not defined in the Rule. As noted in Comment 6 to Rule 5.5:
There is no single test to determine whether a lawyer’s services are
provided on a >temporary basis’ in this jurisdiction, and may
therefore be permissible under paragraph (c). Services may be
temporary even though the lawyer provides services in this
jurisdiction on a recurring basis, or for an extended period of time,
as when the lawyer is representing a client in a single lengthy
negotiation or litigation. Thus, Comment 6 suggests a liberal
interpretation of temporary basis. This is particularly important for
estate lawyers practicing in close proximity to another state. For
example, a Chicago lawyer providing estate counseling for Illinois
clients is likely to find multiple occasions to analyze and opine on
the laws of Wisconsin, Iowa, Indiana, and Michigan regarding
titling, tax, and similar issues. In addition, the Chicago lawyer may
need to prepare deeds and other documents according to the laws
of one or more of these jurisdictions. Provided the Chicago lawyer
otherwise complies with paragraph (c), the lawyer’s legal services
regarding the surrounding non-admitted jurisdictions would
constitute practicing law in those jurisdictions on a temporary
basis.
XIV.D.2.b
On the other hand, a lawyer who is engaged to provide
estate planning services by clients in a non-admitted jurisdiction
and makes personal visits to those clients on a recurring basis
should be cautious in relying upon MPRC 5.5(c). While Comment
6 might lead the courts in the non-admitted jurisdiction to interpret
temporary basis broadly, the comments are not binding. Thus, a
lawyer in such circumstances should consider the desirability of
joining the non-admitted jurisdiction’s bar.
XIV.D.3
Other Legal Services on a Temporary Basis. While the language
of paragraph (c) appears to state all of the exceptions available to a lawyer
seeking to practice law in a non-admitted jurisdiction on a temporary

II-178

basis, Comment 5 specifically provides: The fact that conduct is not
[stated in (c)(1) through (4)] does not imply that the conduct is or is not
authorized. Given the diversity of legal services that can be offered in
estate planning and administration matters, there may be other situations
in which a lawyer may provide legal services in a non-admitted
jurisdiction or concerning the laws of a non-admitted jurisdiction not
expressly covered in paragraphs (c)(1) through (4). In analyzing whether
the lawyer may act on a temporary basis with regard to the requested
services, the lawyer should consider whether or not the circumstances . . .
create an unreasonable risk to the interests of their clients, the public or the
courts. If the lawyer can demonstrate that there is no unreasonable risk,
the lawyer may proceed with the requested representation on a temporary
basis. In any event, the lawyer should consider seeking an opinion of the
non-admitted jurisdiction’s bar counsel.
XIV.E Conclusion to Hypothetical #13.
XIV.E.1
There is no clear answer as to whether a Virginia lawyer may draft
estate planning documents for a client in Florida.
XIV.E.2
In general, a lawyer may not practice law in a state in which he or
she is not admitted, and doing so constitutes both a violation of Va. Rule
5.5 and any unauthorized law practice rule in the foreign state.
XIV.E.2.a
The UPLs tend to focus on non-lawyers and foreign
lawyers practicing law in Virginia, as opposed to a Virginia lawyer
practicing law in a foreign state.
XIV.E.2.b
The lawyer should probably consult UPL opinions in the
state in which he or should would like to provide services.
XIV.E.3
Under Florida law, a Virginia lawyer may provide legal services in
Florida on a temporary [problematic] basis if:
XIV.E.3.a
Safest approach: the attorney is working in association
with a Florida lawyer who actively participates in the matter; or
XIV.E.3.b
Not applicable to the Smith facts: the client either resides
or has an office in Virginia; or
XIV.E.3.c
Potential, but risky: the services arise out of or are
reasonably related to the Virginia lawyer's practice in Virginia.

II-179

XIV.E.4

"Temporary Basis"

XIV.E.4.a
The Florida comments provide that there is no single test to
determine whether a lawyer's services are provided on a
"temporary basis" in Florida. Services may be "temporary" even
though the lawyer provides services in Florida on a recurring basis
or for an extended period of time, as when the lawyer is
representing a client in a single lengthy negotiation or litigation.
XIV.E.4.b
"Temporary" is not defined in the Florida Comments or in
the ACTEC Commentaries.
XIV.E.4.c

The ACTEC Commentaries hint that:

XIV.E.4.c)1 Like the Florida Comment, "services may be
‘temporary’ even though the lawyer provides services in
this jurisdiction on a recurring basis, or for an extended
period of time, as when the lawyer is representing a client
in a single lengthy negotiation or litigation. Thus, Comment
6 suggests a liberal interpretation of temporary basis.
XIV.E.4.c)2 This is particularly important for estate planning
lawyers practicing in close proximity to another state. For
example, a Chicago lawyer providing estate counseling for
Illinois clients is likely to find multiple occasions to
analyze and opine on the laws of Wisconsin, Iowa, Indiana,
and Michigan regarding titling, tax, and similar issues. In
addition, the Chicago lawyer may need to prepare deeds
and other documents according to the laws of one or more
of these jurisdictions. Provided the Chicago lawyer
otherwise complies with MRPC 5.5(c), the lawyer’s legal
services regarding the surrounding non-admitted
jurisdictions would constitute practicing law in those
jurisdictions on a temporary basis.
XIV.E.5
Arise out of or are reasonably related to the lawyer's practice in a
jurisdiction in which the lawyer is admitted to practice.
XIV.E.5.a
There is no Florida Comment nor does there appear to be
any Florida law explaining this portion of Florida Rule 4-5.5(c)(4).

II-180

XIV.E.5.b
Here is where the ACTEC Commentaries may prove to be
extremely helpful. Subject to the temporary basis threshold
requirement:
XIV.E.5.b)1 a lawyer may provide legal services in a nonadmitted jurisdiction that arise out of or are reasonably
related to the lawyer’s practice in an admitted jurisdiction.
XIV.E.5.b)1)a A variety of factors may establish that the
services performed are reasonably related to the
lawyer’s practice in the admitted jurisdiction.
XIV.E.5.b)1)b For example, a lawyer provides estate
planning services for a client in the lawyer’s
admitted jurisdiction. The client then moves to a
non-admitted jurisdiction. The lawyer may continue
to provide estate planning services for the client.
Similarly, where a client retains the lawyer to
represent the client in a fiduciary administration and
the admitted jurisdiction is the natural situs for
administration, the lawyer could provide legal
services for ancillary administrations in nonadmitted jurisdictions.
XIV.E.5.b)2 Where the lawyer has developed a recognized
expertise in federal, nationally-uniform, foreign or
international law, Comment 14 suggests that the lawyer’s
practice in non-admitted jurisdictions will be considered
reasonably related to the lawyer’s practice in the lawyer’s
admitted jurisdiction.
XIV.E.5.b)2)a For example, a lawyer with recognized
expertise in retirement planning, charitable
planning, estate and gift tax planning, or
international estate planning may be able to practice
in non-admitted jurisdictions.
XIV.E.5.b)2)b Caveat: Because the comments are not
binding, a lawyer who intends to rely on this
analysis should consider seeking an opinion of the
non-admitted jurisdiction’s bar association. In

II-181

addition, since this exception is based on recognized
expertise, a lawyer who chooses to rely on this
exception should take steps to insure that the lawyer
is recognized as an expert. These steps could
include:
XIV.E.5.b)2)b)i
obtaining certification as a
specialist in those jurisdictions offering such
programs (note that Virginia does not have
such a recognition program);
XIV.E.5.b)2)b)ii
participating actively in bar
sections related to the lawyer’s expertise;
XIV.E.5.b)2)b)iii
participating in national
associations of lawyers related to the
lawyer’s expertise;
XIV.E.5.b)2)b)iv
writing scholarly articles;
XIV.E.5.b)2)b)v
teaching; and,
XIV.E.5.b)2)b)vi
participating in seminars and
panel discussions; or,
XIV.E.5.b)2)b)vii
any other activity that
demonstrates the lawyer’s expertise.
XIV.E.6
If you are not in violation of Florida law because you have met the
requirements of Florida Rule 4-5.5, then you are not in violation of Va.
Rule 5.5.

II-182

Estate Planning
Client Asset Information
Personal and Confidential

2901 S. Lynnhaven Road, Suite 120, Virginia Beach, Virginia 23452
Telephone (757) 687-8888 * Facsimile (757) 687-8732
************
www.midgettpreti.com

FORM 1
II-183

PERSONAL INFORMATION
Name:

SSN:

Spouse's name:

SSN:

Date of Birth:

Spouse's Date of Birth:

Home Address:
City:

State:

Home Phone:
Facsimile:

Zip:

Work Phone:
Email:

U.S. Citizen? You: Yes____No____ Spouse: Yes____No____
If non-citizen, what is country of residence?__________________________________________
CHILDREN
(*Husband’s (H), Wife’s (W), Both (B) – Circle One)

1.

Name:__________________________________________________________________
Address:________________________________________________________________
Telephone:_____________________ Date of Birth___________H W B*

2.

Name:__________________________________________________________________
Address:________________________________________________________________
Telephone:_____________________ Date of Birth___________H W B*

3.

Name:__________________________________________________________________
Address:________________________________________________________________
Telephone:_____________________ Date of Birth___________H W B*

4.

Name:__________________________________________________________________
Address:________________________________________________________________
Telephone:_____________________ Date of Birth___________H W B*

5.

Name:__________________________________________________________________
Address:________________________________________________________________
Telephone:_____________________ Date of Birth___________H W B*

6.

Name:__________________________________________________________________
Address:________________________________________________________________
Telephone:_____________________ Date of Birth___________H W B______

1II-184

CASH ASSETS
(*Checking Account (CA), Savings Account (SA), Certificates of Deposit (CD), Money Market Account (MM)

+Husband (H), Wife (W), Joint Tenancy with Right of Survivorship (JTWROS).
Note: If account is in your name for benefit of a minor, please specify and give minor's name.

NAME OF INSTITUTION

TYPE* ACCT NUMBER

OWNER+

AMOUNT
$
$
$
$
$
$
$

RETIREMENT PLANS
* Individual Retirement Account (IRA), 401(k), 403(b), Pension, Profit Sharing or Keogh
** (H) Husband (W) Wife (O) Other

COMPANY

TYPE OF
PLAN*

OWNER**

PRIMARY
CONTINGENT
BENEFICIARY BENEFICIARY

Growth Rate?
Amount of Annual Contributions?
Any in payout now?Y/N

2II-185

CURRENT
VALUE

________

$

________

$

________

$

________

$

________

$

BROKERAGE ACCOUNTS
(Other than Retirement Accounts)
Please attach copies of most recent statements
Brokerage Firm:
Broker’s Name and Phone Number:
Total Account Balance from Last Statement (not including retirement plans): $
Exact name of account:
Account No:______________________________

Brokerage Firm:
Broker’s Name and Phone Number:
Total Account Balance from Last Statement (not including retirement plans): $
Exact name of account:
Account No.:_______________________________
MUTUAL FUNDS
Please list accounts held at mutual fund companies, i.e. Vanguard, Templeton, American Funds
Please attach copies of most recent statements
+ Husband (H), Wife (W) or Joint Tenancy with Right of Survivorship (JTWROS)

COMPANY

NO. OF
SHARES

OWNER(s)

STOCKS
3II-186

FAIR MARKET
VALUE

(Held in Certificate Form)
+ Husband (H), Wife (W) or Joint Tenancy with Right of Survivorship (JTWROS)
Please list all stocks in publicly owned corporations (Stock traded on an exchange or over the counter).

Note: Stock owned in family or non-publicly traded companies should be listed under
corporate business section on page 7.
COMPANY

OWNER+
OF SHARES

NUMBER
OF SHARES

FAIR MARKET
VALUE

(Please note if stock bears “TOD” designation)
BONDS
+ Husband (H), Wife (W) or Joint Tenancy with Right of Survivorship (JTWROS)
Please list all U.S. Savings Bond, corporate bonds and bonds held by you

TYPE

OWNER+

FACE VALUE
$
$
$
$
$

(Please note if bond bears “P.O.D.” designation)

4II-187

REAL ESTATE
Please list all deeds or land contract interests. (Land or Buildings owned inside a separate entity should be listed under
the partnership section on page 8).
+Husband (H), Wife (W), Joint Tenancy (JT), Joint Tenants With Right of Survivorship (JTWROS) Tenants in
Common (TC).

Please attach a copy of the Deed of Bargain and Sale for each parcel of real estate.
ADDRESS OR
DESCRIPTION

OWNER+

PURCHASE
PRICE

TAX ASSESSED
VALUE

FAIR
MARKET VALUE

Street:
City/State:
Street:
City/State:
Street:
City/State:
Street:
City/State:
Street:
City/State:
Street:
City/State:
Street:
City/State:
Street:
City/State:
Street:
City/State:
Street:
City/State:

PERSONAL EFFECTS AND OTHER ASSETS
5II-188

MORTGAGE
BALANCE

Please list furniture, automobiles, jewelry, collectibles and other personal assets of substantial value (in excess of
$10,000 each) only. Please value all other household goods in one lump sum.
*(H) Husband (W) Wife (JT) Joint

ITEM:

OWNER*:

VALUE

NOTES RECEIVABLE
Please list all debts which others owe to you, and attach copies of notes, deeds of trust, etc.
+Husband (H), Wife (W), Joint (JT)

NAME OF DEBTOR

DATE OF
NOTE

DATE NOTE
DUE

OWED
CURRENT
TO+
BALANCE OWED

ANTICIPATED INHERITANCE, GIFTS OR LAWSUIT JUDGMENTS
Please value and describe all inheritances, gifts or payment of judgments which you anticipate.

TOTAL ESTIMATED VALUE: $

6II-189

LIFE INSURANCE POLICIES AND ANNUITIES
(Please copy this page if additional space is required)
*Term, Whole Life, Universal Life, Variable Life, Group Life, Annuity
+Husband (H), Wife (W), Corporation (C) or Other (O)

Policy Number
Company

Face Amount:
Type*

Company Address
Insured+

Owner+

Primary Beneficiary
Contingent Beneficiary
Cash Value $

Policy Number
Company

Who Pays Premium+

Face Amount:
Type*

Company Address
Insured+

Owner+

Primary Beneficiary
Contingent Beneficiary
Cash Value $

Policy Number
Company

Who Pays Premium+

Face Amount:
Type*

Company Address
Insured+

Owner+

Primary Beneficiary
Contingent Beneficiary
Cash Value $

Who Pays Premium+
CORPORATE BUSINESS INTERESTS

7II-190

Please provide ownership interests in all privately owned, non-publicly traded corporations.
+Husband (H), Wife (W)

COMPANY

NO. OF PERCENTAGE
SHARES OWNERSHIP
_

OWNER+ VALUE

%

$

%

$

%

$

%

$

BUY/SELL
AGREEMENT*

* If yes, please provide a copy of this agreement.

PARTNERSHIP INTERESTS
+Husband (H), Wife (W)

PARTNERSHIP NAME

GENERAL
PARTNER

LIMITED
PARTNER

OWNER+ VALUE

%

%

$

%

%

$

%

%

$

BUY/SELL
AGREEMENT*

*If yes, either separately or as part of a written partnership agreement, please provide a copy of any partnership
agreement.

SOLE PROPRIETORSHIP BUSINESS INTERESTS
NAME OF BUSINESS

DESCRIPTION OF BUSINESS

OWNER

VALUE
$
$

8II-191

FINANCIAL SUMMARY
ASSETS

AMOUNT
HUSBAND

WIFE

JOINT

Cash Assets (Page 2)

$

$

$

Retirement Plans (Page 2)

$

$

$

Brokerage Accounts, Mutual Funds (Page 3) $

$

$

Stocks, Bonds, (Page 4)

$

$

$

Real Estate (Page 5)

$

$

$

Personal Effects (Page 6)
& Other Assets

$

$

$

Notes Receivable (Page 6)

$

$

$

Anticipated Inheritances, etc. (Page 6)

$

$

$

Insurance and Annuities (Page 7)

$

$

$

Corporations, Partnerships or
Sole Proprietorships (Page 8)

$

$

$

Other Assets
(Please describe on page 11)

$

$

$

TOTAL ASSETS

$

$

$

TOTAL FAMILY ASSETS

$

9II-192

LIABILITIES
HUSBAND

AMOUNTS
WIFE
JOINT

Notes on Residence

$

$

$

Other Notes on Real Estate

$

$

$

Automobile Loans

$

$

$

Notes Payable

$

$

$

Loans Against Life Insurance

$

$

$

Credit Cards

$

$

$

Bills Due

$

$

$

Personal Loans

$

$

$

Other

$

$

$

TOTAL LIABILITIES

$

$

$

TOTAL ASSETS (Page 9)

$

$

$

-TOTAL LIABILITIES

$

$

$

NET WORTH

$

$

$

TOTAL FAMILY NET WORTH

$

The information contained herein represents my estimate of the values of assets of my estate.
I understand that the law firm of Midgett & Preti PC will rely on the figures and values contained in
this summary in preparing their calculations of estimated estate taxes.

(Signature)

10II-193

CURRENT ESTATE PLANNING DOCUMENTS
(Y) Yes or (N) No
Please provide copies of most current documents
Husband

Wife

Comments

Wills
Revocable Trust
Irrevocable Trust
Durable Powers of Attorney
Health Care Powers of Attorney
Living Wills
Other
ADDITIONAL NOTES:

QUESTIONS/CONCERNS/ISSUES FOR DISCUSSION WITH ATTORNEY:

© 2013 Midgett & Preti PC. All rights reserved.

11II-194

ENGAGEMENT AGREEMENT
This is an agreement for the firm of MIDGETT & PRETI PC to assist you with an estate plan,
involving the use of an Estate Planning Portfolio.
The Estate Planning Portfolio includes the following items:
* Revocable Living Trusts
* Pour Over Wills
* Financial Durable Powers of Attorney
* Health Care Durable Powers of Attorney
* Assignments for Personal Property
* One (1) Deed of Transfer for Real Property located in Virginia
You agree to pay: $____________ for a joint (married) Estate Planning Portfolio.
These fees also include fees for normal consultation with our experienced estate planning
attorneys and paralegals, and funding for all tangible and intangible personal assets that you
currently own, and for which you provide us the information needed to do so.
If you need additional transfers of real property located in Virginia, deeds of transfer can be
prepared at a fee of $______________ each, inclusive of recording cost. Transfers of property
outside of Virginia can be arranged on your behalf with attorneys practicing in the state where such
property is located. The fees for such transfer shall be billed to you separately and in addition to the
amounts set forth in this Agreement.
We require a deposit of one-half of the fee prior to beginning the drafting of your documents.
This fee will be held in escrow until your documents have been drafted, at which time this portion
of our fee will be considered earned in full. The balance of the fee will be due when the documents
are completed for your execution. A finance charge of one and one-half percent (1.5%) per month
may be assessed on any fees unpaid after 30 days following the date of any bill or invoice.
After the initial consultation and our review of your completed Asset Information booklet, it
may be prudent for you to consider additional, advanced estate planning measures, such as the use of
irrevocable trusts, charitable trusts, or other tax saving devices. In those cases, we will make our
recommendations and quote an appropriate and reasonable fee for these additional services. We will
proceed to prepare these advanced documents only after obtaining your consent, in writing.

II-195

Engagement Agreement
Page 2

In accordance with this law firm's policy and the guidelines of the local Bar Associations, we
are presenting you with this engagement letter which sets forth our firm's billing practices. As an
indication of your acceptance of these terms of representation, please sign this letter where indicated.
We will provide a signed copy of this letter for your records.
For our married clients, one final matter needs to be addressed. Based on our understanding
of certain ethical considerations of the Virginia State Bar, if each of you had a separate lawyer,
whatever you told your lawyer would be considered confidential and could not be disclosed to your
spouse without consent. This is not the case if we represent both of you jointly. We are required to
disclose to the other anything that one of you told us privately if it relates to the work that we are
doing for you; a failure to do so on our part would violate the joint attorney-client relationship.
Additionally, married persons can have differing views on ownership of property, treatment
of beneficiaries, and the selection of guardians, executors, and trustees. Because you may have
potentially differing interests, we need to remind you that if each of you were separately represented,
you would receive completely independent advice from an advocate for your position. This will not
be true if we represent you jointly.
If you ask us to represent you jointly, our goal will be to work closely with both of you to
develop a coordinated plan and to encourage the resolution of any potentially differing interests in a
manner that would be in your mutual best interests. If, after consideration of these matters, you
request that we represent you jointly, please sign this letter to indicate your understanding and
acceptance of these conditions. A signed copy will be provided to you. If, on the other hand, you
decide to obtain separate counsel, we would be pleased to represent either of you, as you wish.
Thank you for allowing us to assist you in reaching your estate planning goals.
MIDGETT & PRETI PC

By:
John T. Midgett
I have read this letter in its entirety and agree to the terms of representation outlined herein.
Date:

__________________________________________

Date:

__________________________________________

II-196

When To Use A Will and When to Use a Trust
John T. Midgett
Midgett & Preti PC
Virginia Beach, Virginia
Much has been written about the advantages and disadvantages of Revocable Living Trusts over
Wills. The purpose of this program is to provide some general guidelines as to when a Trust may
(or may not) be a preferred estate planning document over a Will, and to offer some guidelines that
the author uses for drafting wills and trusts.
There are many kinds of Trusts. The Trust referred to in this program is a fully-funded Revocable
Living Trust under which the Grantor would serve as the Trustee. Having a bank serve as Trustee
can be attractive to some people, and a requirement for some family situations, but many people
prefer to have themselves (and then family members upon their death) serve as Trustee.
There are two basic steps in establishing a Revocable Living Trust: drafting (and execution) and
funding.
Because the Grantor is the Trustee, there is no lost control over property transferred into a Living
Trust and no new tax returns are required. The Grantor will continue to report the income from the
Trust property on Form 1040, as the Living Trust is a Grantor Trust as defined in IRC Sections 671
through 679. The Grantor’s home is still eligible for the exclusion on capital gains in the amount of
$250,000 ($500,000 for married couples), as well as other tax breaks available to homeowners.
A Trust has specific instructions of how to manage and distribute assets in the event of disability or
death. Thus, assets owned by the Trust avoid the need for a conservatorship (if disabled) and for
probate (upon death).
Probate is the process of winding up the affairs of one who has died and transferring the decedent's
property to the proper persons. Probate may involve having to prove a Will, notifying all potential
heirs, and resolving conflicts (and contests). Probate is generally required only when you die
owning property in your name without a surviving joint tenant or named beneficiary. Interestingly,
many people believe that if they have a Will, they will avoid probate. That simply isn't true. For a
Will to have any legal effect, it must be submitted for probate. The term “probate” literally means
“to prove a will”.
Virginia has a fairly user-friendly set of probate laws which in many cases have simplified probate,
thus reducing its cost. The executor fees are quoted on a percentage of the estate size, and the
percentage decreases as the size of the estate increases. The attorney for the estate is entitled to
receive reasonable compensation based on the amount of time spent and the difficulty of the work.
Many feel that average probate costs may run 5% of the estate, and this is generally the maximum
amount that may be charged as a commission by an Executor. But even 2% of a $500,000 estate (a
residence and other property) amounts to $10,000. These costs can be avoided (or reduced) with a
II-197

properly drafted and funded Revocable Living Trust simply because upon death an individual does
not own your property; the Trust does, and a Trustee commission can be substantially lower than an
Executor’s.
Probate can be both time consuming and frustrating to many persons who have no experience
dealing with these matters. Probate in Virginia usually takes between six (6) months and two (2)
years, depending on the complexity of the facts or situations presented. Trust administration is not
really that different from probate. The statutory requirements for notice found in Virginia Code
Section 64.2-508 used to set probate apart from trust administration, but the Uniform Trust Code,
will also require notice to trust beneficiaries. See Virginia Code Section 64.2-775.
Probate may be required to be opened in every state where an individual owns real estate.
Sometimes this real estate is abandoned by heirs because the cost of probate may exceed the value of
the property. Property owned by a Trust will generally avoid probate in all 50 states.
If a person becomes mentally incapacitated (incompetent), his or her property is essentially frozen
until the court appoints a conservator to manage their financial affairs. For instance, upon disability
a home and any investments generally cannot be sold, even if owned in joint tenancy, until a
conservator is appointed, and the court grants the conservator power and authority to sell.
Conservatorship usually involves filing fees, attorneys fees, accounting fees, bonding premiums and
court orders, all designed to protect the disabled person. While this protection may be desired in
some cases, many people feel that these are family matters and they simply don't want or need the
"protection" of the courts and the attorneys. Property owned by a Trust avoids the need for a
conservator; as the designated successor Trustee can manage the Trust’s financial affairs in the event
that the Grantor is unable to do so.
It should be noted that in Virginia, and most states, the Revocable Living Trust offers very little
creditor protection for its Grantor (trust creator), but can provide excellent creditor protection for the
Grantor's beneficiaries. A Will can also create a Trust (called a "testamentary trust") to provide the
same type of protection, such as for minor children. Property passing pursuant to either a Will or a
Trust is eligible for step-up in basis, which reduces taxable gains to an heir who sells property after
death.
Federal estate taxes can be reduced for married couples with proper drafting in either a Will or a
Revocable Living Trust. Keep in mind, however, that to obtain the tax savings features of a Will,
probate must be incurred on both deaths.
The Revocable Living Trust can avoid probate on both deaths. All too often those who attempt to
minimize estate taxes with a Will continue to hold their property in joint tenancy, thus avoiding not
only probate, but also the tax saving trusts created by the Will. Because of such devastating errors in
titling property, many attorneys feel that a funded Revocable Living Trust is more likely to achieve
the desired estate tax savings.
Probate is a matter of public record. It is a legal proceeding initiated and paid for by your family.
An inventory of your assets, the names and addresses of your heirs, and any family disputes may all

II-198

become a matter of public record. For various reasons, many people do not want their family affairs
a matter of public record.
Wills are easy to contest; a simple writing to the court can tie up assets for months or longer.
Disgruntled heirs can use the threat of a Will contest to attempt to receive more than they were left
in the Will.
A Trust is generally a private document. No notice is required to be sent to disinherited heirs; no
inventory, not even a copy of your Trust, is required to be filed with the court. Trusts are generally
viewed as being far more difficult to challenge. With the adoption of the Uniform Trust Code,
effective in July of this year, Trustees will be required to notify qualified trust beneficiaries within
60 days of accepting a trusteeship of such acceptance and to give certain personal data (such as
address), and to provide a copy of the trust, and annual reports of receipts and disbursements upon
request. Virginia Code Section 64.2-775. The Trust can waive these notice requirements
The disadvantages of a Trust involve largely business decisions. A Trust generally costs more than
a Will. The cost and quality of any legal document will vary from attorney to attorney.
Many of the reported disadvantages of a Trust are of questionable validity. No annual fees are
required if you serve as your own Trustee; similarly no control is lost. It may be time consuming to
transfer your property to a Trust, but it is still far simpler for an individual to make these transfers
than for the heirs to transfer the same property after death.
For a young person or a couple, without children, or whose situation is very simple, a Will is often
the most cost effective choice for an estate plan. But as they grow older and become more
concerned about disability, probate avoidance, estate tax minimization, and making things easier for
their families, then the Trust becomes far more desirable than the Will. It is important to understand
at least some of the advantages of Trust planning over planning with a Will before effectively
evaluating the added cost of the Trust in light of the added benefits the Trust may provide.
If it is desirable to have a court oversee the administration of estate assets, such as when there is
discord in the family, a will, even one that incorporates a testamentary trust, may be the preferred
vehicle. If needed the provisions of Virginia Code Section 64.2-1307 may be invoked to eliminate
the requirement for annual accountings for the testamentary trust.
The chart on the next page should assist you in determining which type of estate plan would be most
appropriate for your clients.

II-199

Any One of the Following Factors Could Cause You To Prefer
a Trust Over a Will:
USE A WILL

FACTORS TO CONSIDER

USE A TRUST

<---Young/Under 40---------------------------Age--------------------------------Older/Over 60--->
<---Good Health----------------Concern about Incapacity/Probate-----------Poor Health--->
<---Simple---------------------------------Family Situation----------------------------Complex--->
<---Low-----------------------------------Desire for Privacy--------------------------------High--->
<---Small------------------------------------Size of Estate-----------------Taxable or nearly so--->
<---None-------------------------------Out of State Real Estate----------------------------Any--->
<---Up-to-Date Will-----------------------Current Status--------------Simple Will or None--->
<---None Needed----------------------Desire to Protect Family---------------Strong Desire--->
<---Little or None-----------------------Likelihood of Contest-----------------Some Chance--->

II-200

LAST WILL
AND
TESTAMENT
OF
«Husbands_name_in_caps»

II-201

LAST WILL
AND
TESTAMENT
OF
«Husbands_name_in_caps»

I, «Husbands_name_in_caps», of «City», Virginia, make this will and revoke all
my earlier wills and codicils.
On the date this will is executed, I am married to «Wifes_name_in_lower_case» and
I have «Number_of_children» children, «Childrens_name», who are now living.

ARTICLE ONE
DISTRIBUTION OF ESTATE
A. Tangible Personal Property.
(1)

At my death, I direct that my Executor distribute any and all items of

tangible personal property, not otherwise specifically named in this will, to the beneficiaries
as may be set forth in any written list or statement, signed by me, and in existence at the
time of my death, as provided in §64.2-400 of the Virginia Code (1950), as amended, or its
successor. Such list or statement may be in existence at the time of execution of this will, or
it may be prepared by me thereafter and altered or amended by me in writing from time to
time. The date of preparation of such list or statement by me shall not affect the validity of
such writing or any distribution designated therein.
(2)
automobiles,

I give and bequeath my remaining household furnishings, personal effects,
and

all

other

tangible

personal

property

to

my

wife,

«Wifes_name_in_lower_case», if she survives me. If my wife shall not survive me, I give

II-202

my tangible personal property in equal shares to my children, «Childrens_name», who
survive me, and the then living descendants, per stirpes, of any children who do not survive
me, subject only to the provisions of Article Five of this will. The property passing under
this paragraph does not include assets (other than passenger automobiles) my Executor
determines were held by me primarily for business or investment purposes.

B. Personal Residences.
I give and devise all my interest in residences held in whole or in part for personal
use by me or my family, including all adjoining real property, to my wife,
«Wifes_name_in_lower_case», if she survives me. If my wife shall not survive me, this
devise shall lapse and pass as part of my residuary estate. This gift includes any interest in a
condominium or cooperative unit if it is a personal residence at my death.

C. Residuary Estate.
I

give

the

residue

of

my

real

and

personal

estate

to

my

wife,

«Wifes_name_in_lower_case», if she survives me. If my wife shall not survive me, then in
such event, I give the residue of my real and personal estate in equal shares to my children,
«Childrens_name», who survive me, and the then living descendants, per stirpes, of any
children who do not survive me, subject only to the provisions of Article Five of this will.

II-203

D. Adoption.
A person related by or through adoption shall take under my will as if related by or
through birth, except that a person adopted after reaching age twenty-one (21) and
descendants of such person shall not so take.

E. Takers in Default.
If at any time there is no living beneficiary designated to receive the assets of my
estate under the foregoing provisions of this Article, my Executor shall distribute the assets
of my estate to those persons who would be my distributees under the laws of Virginia then
in effect as if I had then died without a will, unmarried and owning the assets.

ARTICLE TWO
PAYMENT OF CHARGES
A. Debts and Funeral Expenses.
My Executor shall pay or arrange for the payment of my legally enforceable debts,
my charitable pledges, the expenses of my funeral and burial (including any headstone or
marker), and the costs of administration of my estate.

My Executor shall not seek

contribution from my wife, «Wifes_name_in_lower_case», toward the payment of our joint
debts or obligations. If my wife, «Wifes_name_in_lower_case», wishes to retain any
residence or other real property subject to a mortgage or similar indebtedness and so advises
my Executor in writing within six (6) months after my death, my Executor may elect not to
pay the indebtedness.

II-204

B. Taxes.
My Executor shall pay or arrange for the payment of all estate, inheritance, and
similar taxes payable by reason of my death as a cost of administering my estate without
apportionment. This direction to pay taxes includes taxes on assets not passing under this
will and interest on taxes. My Executor shall take advantage of any specific provisions for
payment of estate, inheritance, and similar taxes made by my wife or any other person.

ARTICLE THREE
EXECUTOR PROVISIONS
A. Executor.
I

name

«Husbands_executor_1my_life»,

«Husbands_heshe_executor»

is

unable

or

to

be

unwilling

my
to

Executor.
serve,

I

If
name

«Husbands_executor_2», to be my Executor. I direct that no surety or security be required
on the bond of my Executor or any Trustee named herein. The term, "Executor," as used
herein, shall be deemed to include the terms, "Executrix," "Co-Executors" and "Trustee."

B. Executor's Management Powers.
My Executor shall have the powers granted by law and the powers in Virginia Code
Section 64.2-105. I incorporate that section in my will by this reference. My Executor may
borrow money for any purpose that my Executor considers to be in the best interests of my
estate. My Executor may secure such borrowings with assets of my estate. My Executor
may make all tax elections and allocations my Executor considers appropriate, and any
elections or allocations made in good faith shall not be subject to challenge by any
beneficiary.

II-205

C. Certain Investments.
I may hold assets at my death that would not meet the standard in Virginia as
suitable investments to be held by my Executor. My Executor may nevertheless retain the
assets for as long as my Executor considers appropriate, even if the assets represent an overconcentration or do not meet the standard of prudence. My Executor may invest the assets
of my estate in money market funds or other mutual funds affiliated with my Executor. The
compensation of my Executor from the fund shall not reduce the compensation of my
Executor under this will.

D. Survivorship Accounts.
Any interests that I may have in any bank, savings and loan, or credit union accounts
that are titled jointly in my name and in the name of any other person or persons are hereby
declared to be the sole property of the surviving joint owner or owners, as the case may be,
and my Executor shall make no claim against them on account thereof.

ARTICLE FOUR
SURVIVORSHIP
My wife, «Wifes_name_in_lower_case», shall be deemed to have survived me if, in
the opinion of my Executor, there is no sufficient evidence that we have died otherwise than
simultaneously. I shall be deemed to have survived any other beneficiary named in this will
if we die simultaneously or if, in the opinion of my Executor, there is no evidence that such
beneficiary survived me by more than one hundred twenty (120) hours.

II-206

ARTICLE FIVE
INTERESTS VESTING IN CERTAIN BENEFICIARIES
A. Beneficiaries Under Certain Age.
Whenever any interest vests in a beneficiary under age «Age», my Executor, acting
as my Trustee, may hold the interest in trust. My Trustee may pay to or for the benefit of
such beneficiary as much of the net income or principal of the trust as my Trustee may deem
appropriate for the beneficiary's support, health, maintenance and education. When the
beneficiary reaches age «Age», my Trustee shall distribute the trust assets to the beneficiary.
If the beneficiary dies before reaching that age, my Trustee shall distribute the trust assets to
the beneficiary's estate.

B. Beneficiaries Under Impairment.
Whenever any interest vests in a beneficiary, who, in the opinion of my Executor, is
unable to manage financial affairs by reason of a physical or mental impairment, my
Executor, acting as my Trustee, may hold the interest in trust. As my Trustee, my Executor
shall have no obligation to inquire into or seek a judicial determination of (1) the ability of
any beneficiary to manage financial affairs, or (2) the existence of any physical or mental
impairment. My Trustee may pay to or for the benefit of the beneficiary as much of the net
income or principal of the trust as my Trustee may deem appropriate for the beneficiary's
support, health, maintenance and education. When the beneficiary has reached age «Age»
and, in the opinion of my Trustee, is able to manage financial affairs, my Trustee shall
distribute the trust assets to the beneficiary. If the beneficiary dies before the trust is
terminated, my Trustee shall distribute the trust assets to the beneficiary's estate.

II-207

C. Distribution to Custodian.
My Executor may also distribute any interest vesting in a beneficiary under age
twenty-one (21) to a custodian under the Virginia Uniform Transfers to Minors Act (21).
My Executor may also distribute any interest vesting in a beneficiary who is "incapacitated"
as that term is defined in Virginia Code Section 64.2-900, et seq., to a Custodial Trustee
under the Virginia Uniform Custodial Trust Act.

D. Accountings.
I hereby direct that my Trustee shall not be required to file annual accountings with
any court as otherwise required by Virginia law.

ARTICLE SIX
GUARDIANSHIP
I name my wife, «Wifes_name_in_lower_case», to be guardian of the person of my
minor children. If my wife does not serve, I name «Guardian_2», or either of them, to be
guardians of the person of minor children. I request that no security be required on the bond
of any guardian.

I have signed and sealed my will, consisting of nine (9) typewritten pages on March
27, 2013.

_____________________________________________[SEAL]
«Husbands_name_in_lower_case»

II-208

The testator signed, sealed, and declared this instrument as the testator's will in our
presence on the date shown above. At the testator's request we have signed our names as
witnesses. All of this occurred at the same time, and we and the testator were present
together throughout.

Witness

Address

Witness

Address

II-209

STATE OF VIRGINIA
CITY OF VIRGINIA BEACH

)
) ss.
)

Before me, the undersigned authority, on this day personally appeared
«Husbands_name_in_lower_case», John Doe and Jane Doe, known to me to be the testator
and witnesses, respectively, whose names are signed to the attached instrument; and, all of
these persons being by me first duly sworn, «Husbands_name_in_lower_case», the testator,
declared to me and to the witnesses in my presence that such instrument is his Last Will and
Testament and that he had willingly signed and executed it in the presence of such witnesses
as his free and voluntary act for the purposes therein expressed, and such witnesses stated
before me that the foregoing will was executed and acknowledged by the testator as his Last
Will and Testament in the presence of such witnesses who, in his presence and at his
request, and in the presence of each other did subscribe their names thereto as attesting
witnesses on the day of the date of such will, and that the testator, at the time of the
execution of such will, was over the age of eighteen (18) years and of sound and disposing
mind and memory.

Testator

Witness

Witness

Subscribed,
sworn,
and
acknowledged
before
me
by
«Husbands_name_in_lower_case», the testator; subscribed and sworn before me by John
Doe and Jane Doe, witnesses, on March 27, 2013.

Notary Public
(SEAL)
My commission expires:

II-210

LAST WILL AND TESTAMENT
OF
«Husbands_name_in_caps»

II-211

LAST WILL
AND
TESTAMENT
OF
«Husbands_name_in_caps»

I, «Husbands_name_in_caps», of «City», Virginia, make this will and revoke all
my earlier wills and codicils.
On the date this will is executed, I am married to «Wifes_name_in_lower_case» and
I have «Number_of_children» children, «Childrens_name», who are now living.

ARTICLE ONE
DISTRIBUTION OF ESTATE
A. Tangible Personal Property.
I give and bequeath my household furnishings, personal effects, automobiles, and all
other tangible personal property to my wife, «Wifes_name_in_lower_case», if she survives
me. If my wife does not survive me, I give this property to my surviving descendants, per
stirpes. The property passing under this paragraph does not include assets (other than
passenger automobiles) my Executor determines were held by me primarily for business or
investment purposes.

B. Personal Residences.
I give and devise all my right, title and interest in residences held in whole or in part
for personal use by me or my family, including all adjoining real property, to my wife,
«Wifes_name_in_lower_case», if she survives me. If my wife shall not survive me, this

II-212

devise shall lapse and pass as a part of my residuary estate. This gift includes any interest in
a condominium or cooperative unit if it is a personal residence at my death.

C. Residuary Estate.
I give the residue of my real and personal estate to the Trustee under The
«Husbands_name_in_lower_case» «Name_of_trust_doc» dated March 27, 2013, to be held
in trust under the terms of such trust in effect at my death. The trust was in existence at the
time of execution of this will.

D. Adoption.
A person related by or through adoption shall take under my will as if related by or
through birth, except that a person adopted after reaching age twenty-one (21) and
descendants of such person shall not so take.

ARTICLE TWO
PAYMENT OF CHARGES
A. Debts and Funeral Expenses.
My Executor shall pay or arrange for the payment of my legally enforceable debts,
my charitable pledges, the expenses of my funeral and burial (including any headstone or
marker), and the costs of administration of my estate.

My Executor shall not seek

contribution from my wife, «Wifes_name_in_lower_case», toward the payment of our joint
debts or obligations. If my wife, «Wifes_name_in_lower_case», wishes to retain any
residence or other real property subject to a mortgage or similar indebtedness and so advises
my Executor in writing within six (6) months after my death, my Executor may elect not to
pay the indebtedness.

II-213

B. Taxes.
My Executor shall pay or arrange for the payment of all estate, inheritance, and
similar taxes payable by reason of my death as a cost of administering my estate without
apportionment. This direction to pay taxes includes taxes on assets not passing under this
will and interest on taxes. My Executor shall take advantage of any specific provisions for
payment of estate, inheritance, and similar taxes made by my wife or any other person.

ARTICLE THREE
EXECUTOR PROVISIONS
A. Executor.
I

name

«Husbands_executor_1my_life»,

«Husbands_heshe_executor»

is

unable

or

to

be

unwilling

my
to

Executor.
serve,

I

If
name

«Husbands_executor_2», to be my Executor. I direct that no surety or security be required
on the bond of my Executor or any Trustee named herein. The term, "Executor," as used
herein, shall be deemed to include the terms, "Executrix," "Co-Executors" and "Trustee."
My Executor shall serve without compensation.

B. Executor's Management Powers.
My Executor shall have the powers granted by law and the powers in Virginia Code
Section 64.2-105. I incorporate that section in my will by this reference. My Executor may
borrow money for any purpose that my Executor considers to be in the best interests of my
estate. My Executor may secure such borrowings with assets of my estate. My Executor
may make all tax elections and allocations my Executor considers appropriate, and any
elections or allocations made in good faith shall not be subject to challenge by any
beneficiary.

II-214

C. Certain Investments.
I may hold assets at my death that would not meet the standard in Virginia as
suitable investments to be held by my Executor. My Executor may nevertheless retain the
assets for as long as my Executor considers appropriate, even if the assets represent an overconcentration or do not meet the standard of prudence. My Executor may invest the assets
of my estate in money market funds or other mutual funds affiliated with my Executor. The
compensation of my Executor from the fund shall not reduce the compensation of my
Executor under this will.

D. Survivorship Accounts.
Any interests that I may have in any bank, savings and loan, or credit union accounts
that are titled jointly in my name and in the name of any other person or persons are hereby
declared to be the sole property of the surviving joint owner or owners, as the case may be,
and my Executor shall make no claim against them on account thereof.

ARTICLE FOUR
SURVIVORSHIP
My wife, «Wifes_name_in_lower_case», shall be deemed to have survived me, if, in
the opinion of my Executor, there is no sufficient evidence that we have died otherwise than
simultaneously. I shall be deemed to have survived any other beneficiary named in this will
if, in the opinion of my Executor, there is no sufficient evidence that such beneficiary
survived me by more than one hundred twenty (120) hours.

II-215

ARTICLE FIVE
INTERESTS VESTING IN CERTAIN BENEFICIARIES
A. Beneficiaries Under Certain Age.
Whenever any interest vests in a beneficiary under age «Age», my Executor, acting
as my Trustee, may hold the interest in trust. My Trustee may pay to or for the benefit of
such beneficiary as much of the net income or principal of the trust as my Trustee may deem
appropriate for the beneficiary's support, health, maintenance and education. When the
beneficiary reaches age «Age», my Trustee shall distribute the trust assets to the beneficiary.
If the beneficiary dies before reaching that age, my Trustee shall distribute the trust assets to
the beneficiary's estate.

B. Beneficiaries Under Impairment.
Whenever any interest vests in a beneficiary, who, in the opinion of my Executor, is
unable to manage financial affairs by reason of a physical or mental impairment, my
Executor, acting as my Trustee, may hold the interest in trust. As my Trustee, my Executor
shall have no obligation to inquire into or seek a judicial determination of (1) the ability of
any beneficiary to manage financial affairs, or (2) the existence of any physical or mental
impairment. My Trustee may pay to or for the benefit of the beneficiary as much of the net
income or principal of the trust as my Trustee may deem appropriate for the beneficiary's
support, health, maintenance and education. When the beneficiary has reached age «Age»
and, in the opinion of my Trustee, is able to manage financial affairs, my Trustee shall
distribute the trust assets to the beneficiary. If the beneficiary dies before the trust is
terminated, my Trustee shall distribute the trust assets to the beneficiary's estate.

II-216

C. Distribution to Custodian.
My Executor may also distribute any interest vesting in a beneficiary under age
twenty-one (21) to a custodian under the Virginia Uniform Transfers to Minors Act
(UTMA). My Executor may also distribute any interest vesting in a beneficiary who is
"incapacitated" as that term is defined in Virginia Code Section 64.2-900, et seq., to a
Custodial Trustee under the Virginia Uniform Custodial Trust Act.

D. Accountings.
I hereby direct that my Trustee shall not be required to file annual accountings with
any court as otherwise required by Virginia law.

ARTICLE SIX
GUARDIANSHIP
I name my wife, «Wifes_name_in_lower_case», to be guardian of the person of my
minor children. If my wife does not serve, I name «Guardian_2», or either of them, to be
guardians of the person of my minor children. I request that no security be required on the
bond of any guardian.

I have signed and sealed my will, consisting of eight (8) typewritten pages, on
March 27, 2013.

[SEAL]
«Husbands_name_in_lower_case»

II-217

The testator signed, sealed, and declared this instrument as the testator's will in our
presence on the date shown above. At the testator's request we have signed our names as
witnesses. All of this occurred at the same time, and we and the testator were present
together throughout.

Witness

Address

Witness

Address

II-218

STATE OF VIRGINIA
CITY OF VIRGINIA BEACH

)
) ss.
)

Before me, the undersigned authority, on this day personally appeared
«Husbands_name_in_lower_case», John Doe and Jane Doe, known to me to be the testator
and witnesses, respectively, whose names are signed to the attached instrument; and, all of
these persons being by me first duly sworn, «Husbands_name_in_lower_case», the testator,
declared to me and to the witnesses in my presence that such instrument is his Last Will and
Testament and that he had willingly signed and executed it in the presence of such witnesses
as his free and voluntary act for the purposes therein expressed, and such witnesses stated
before me that the foregoing will was executed and acknowledged by the testator as his Last
Will and Testament in the presence of such witnesses who, in his presence and at his
request, and in the presence of each other did subscribe their names thereto as attesting
witnesses on the day of the date of such will, and that the testator, at the time of the
execution of such will, was over the age of eighteen (18) years and of sound and disposing
mind and memory.

Testator

Witness

Witness

Subscribed,
sworn,
and
acknowledged
before
me
by
«Husbands_name_in_lower_case», the testator; subscribed and sworn before me by John
Doe and Jane Doe, witnesses, on March 27, 2013.

Notary Public
(SEAL)
My commission expires:

II-219

CODICIL TO THE
LAST WILL AND TESTAMENT
OF
«Husbands_name_in_caps»

II-220

CODICIL
TO THE
LAST WILL AND TESTAMENT
OF
«Husbands_name_in_caps»

I, «Husbands_name_in_caps», of «City», Virginia, do hereby make, publish and declare
this Codicil to my Last Will and Testament dated March 11, 2013.

FIRST:

SECOND: In all other respects, except as expressly modified by this Codicil, I do hereby
ratify, reaffirm, re-publish and re-declare my said will dated January 2, 2011, and incorporate that
will herein by reference.

IN WITNESS WHEREOF, I have hereunto set my hand and seal to this Codicil to my will
on March 11, 2013.

(SEAL)
«Husbands_name_in_lower_case»

Codicil to the Last Will and Testament of «Husbands_name_in_lower_case»
Initials

Page 1

II-221

We, the undersigned, do hereby certify that «Husbands_name_in_lower_case» has signed,
sealed, published and declared the foregoing paper as and for a Codicil to his last will and testament
dated January 2, 2011, in the presence of us, two competent witnesses, who, in his presence, and at
his request, and in the presence of each other, all present together at the same time, have hereunto
subscribed our names as attesting witnesses on March 11, 2013.

Witness

Address

Witness

Address

Codicil to the Last Will and Testament of «Husbands_name_in_lower_case»
Initials

Page 2

II-222

STATE OF VIRGINIA
CITY OF VIRGINIA BEACH, to-wit:
Before me, the undersigned Notary Public, on this day personally appeared
«Husbands_name_in_lower_case», John Doe and Jane Doe, known to me to be the Testator and the
witnesses, respectively, whose names are signed to the foregoing instrument and, all of these persons
being by me first duly sworn, «Husbands_name_in_lower_case», the Testator, declared to me and to
the witnesses in my presence that said instrument is a Codicil to his last will and testament and that
he had willingly signed and executed it in the presence of said witnesses as his free and voluntary act
for the purposes therein expressed; that said witnesses stated before me that the foregoing Codicil
was executed and acknowledged by the Testator as a Codicil to his last will and testament in the
presence of said witnesses who, in his presence and at his request, and in the presence of each other,
did subscribe their names thereto as attesting witnesses on the day of the date of said Codicil, and
that the Testator, at the time of the execution of said Codicil was over the age of eighteen years and
of sound and disposing mind and memory.

«Husbands_name_in_lower_case»

Witness

Witness

Subscribed, sworn to and acknowledged before me by «Husbands_name_in_lower_case», the
Testator, and subscribed and sworn to before me by John Doe and Jane Doe, witnesses, March 11,
2013.

Notary Public
My Commission Expires:

Codicil to the Last Will and Testament of «Husbands_name_in_lower_case»
Initials

Page 3

II-223

THE
«Husbands_name_in_caps»
DECLARATION OF TRUST

2901 S. Lynnhaven Road, Suite 120
Virginia Beach, Virginia 23452
(757) 687-8888 * Fax: (757) 687-8732
www.midgettpreti.com
© Midgett & Preti PC. 2013. All rights reserved.

II-224

THE
«Husbands_name_in_caps»
DECLARATION OF TRUST

I, «Husbands_name_in_caps», of «City», Virginia, make this Declaration of Trust (hereinafter
sometimes referred to herein as “Trust,” “Revocable Trust,” “Declaration,” “Declaration of Trust”
or “Agreement”) dated March 27, 2013. The name of the trust created herein is the
«Husbands_name_in_lower_case» Declaration of Trust (“Trust”).
During my lifetime, this Declaration of Trust shall be a grantor trust as that term is defined in
Sections 671-679 of the Internal Revenue Code (“I.R.C.”) and the Treasury Regulations issued
thereunder. The tax identification number of this Declaration of Trust shall be ________________
in accordance with Treasury Regulation Section 301.6109-1(a) (2).
During my lifetime this Declaration of Trust shall be revocable and amendable by me as
provided in Article Six herein. For the purpose of transferring property to my Trust, or
identifying my trust in any beneficiary or pay-on-death designation, any description referring to
my Trust shall be effective if it reasonably identifies my Trust and indicates that the Trust
property is held in a fiduciary capacity.

ARTICLE ONE
CREATION AND DISPOSITION OF TRUST
A. Creation of Trust.
I declare that I hold as Trustee the assets listed on the attached Schedule. In the event of my
resignation as Trustee, death, or inability to manage business or financial affairs,
«Husbands_executor_1my_life», shall have the right to become my successor Trustee and shall be
vested with the same authority and duties upon written acceptance of fiduciary duties. If
«he_she_husbands_trustee» resigns or is unable to serve, then «Husbands_trustee_after_spouse»,
shall have the right to become my successor Trustee.
My successor Trustee shall have no obligation to inquire into or seek a judicial determination of
my ability to manage business or financial affairs, and may assume that I have that ability unless
and until written notice to the contrary is received from (1) my physician, (2) an order from a
court of competent jurisdiction, or (3) other reasonable method or manner of information. My
successor Trustee shall not be responsible for or required to inquire into any fiduciary actions
occurring before such Trustee's appointment. My successor Trustee or I (“my Trustee”) shall
administer all of the assets in trust under the terms of this Declaration.
The «Husbands_name_in_lower_case» Declaration of Trust

II-225

Page 1

For the purposes of determining my physical, mental or emotional inability to serve as Trustee, I
nominate and appoint my successor Trustee named herein as my personal representative for all
purposes of the Health Insurance Portability and Accountability Act of 1996, and the related
Regulations in 45 C.F.R. §§ 160-164, or any successor provisions thereto, to receive my
Protected Health Information, including, but not limited to, the results of any medical,
psychological or psychiatric examination for the purposes of determining if I lack the capacity to
continue to serve as a fiduciary under this Agreement.

B. Trust During my Lifetime.
During my lifetime, I shall have the absolute right to control the distribution of income and principal
of my Trust. In the absence of any direction from me, or if at any time, in the opinion of my
Trustee, I am unable to so direct, my Trustee may pay as much of the income or principal as my
Trustee may deem necessary to provide for my support, health and maintenance and to pay my
obligations, even to the exhaustion of all Trust property. My Trustee shall add any undistributed
income to the principal of this Trust.

C. Disposition at my Death.
The assets held at my death and other assets received by my Trustee by reason of my death shall
constitute the Family Trust. My Trustee shall administer the Family Trust as directed in Article
Two of this Declaration.

The «Husbands_name_in_lower_case» Declaration of Trust

II-226

Page 2

ARTICLE TWO
FAMILY TRUST

A. Distribution at My Death.
(1)
At my death, my Trustee shall distribute any and all items of tangible personal property, not
otherwise specifically named in this Declaration of Trust, to the beneficiaries as may be set forth in
any written list or statement, signed by me, and in existence at the time of my death. Such list or
statement may be in existence at the time of execution of this Trust, or it may be prepared by me
thereafter and altered or amended by me in writing from time to time. The date of preparation of
such list or statement by me shall not affect the validity of such writing or any distribution
designated therein.
(2)
At my death, my Trustee shall divide the remaining principal and any undistributed income
of the Family Trust (including any assets received from other sources) into equal shares, one share
for each then living child of mine and one share for each deceased child of mine having a
descendant then living. My Trustee shall distribute the share of any living child to such child,
outright and free of trust. My Trustee shall distribute the share of any deceased child of mine to the
child's then living descendants, per stirpes, subject to the provisions of Article Three herein.

B. Takers in Default.
If at any time there is no living beneficiary designated to receive the assets of any trust under the
foregoing provisions of this Article, my Trustee shall distribute the assets of such trust to those
persons who would be my distributees under the laws of Virginia then in effect as if I had then died
without a will, unmarried and owning the assets.

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ARTICLE THREE
INTERESTS VESTING IN CERTAIN BENEFICIARIES

A. Beneficiaries Under Certain Age.
Whenever any trust interest vests in a beneficiary under age «Age», my Trustee may hold the
interest in trust. My Trustee may pay to or for the benefit of such beneficiary as much of the net
income or principal of the trust as my Trustee may deem appropriate for any purpose, including the
beneficiary's support, health, maintenance, and education. When the beneficiary reaches age
«Age», my Trustee shall distribute the assets of the beneficiary’s trust to the beneficiary. If the
beneficiary dies before reaching that age, my Trustee shall distribute the assets of the beneficiary’s
trust to the beneficiary's estate.

B. Beneficiaries Under Impairment.
Whenever any trust interest vests in a beneficiary, who, in the opinion of my Trustee, is unable to
manage financial affairs by reason of a physical or mental impairment, my Trustee may hold the
interest in trust. My Trustee shall have no obligation to inquire into or seek a judicial determination
of (1) the ability of any beneficiary to manage financial affairs or (2) the existence of any physical
or mental impairment. My Trustee may pay to or for the benefit of the beneficiary as much of the
net income or principal of the trust as my Trustee may deem appropriate for the beneficiary's
support, health, maintenance, and education. When the beneficiary has reached age «Age» and, in
the opinion of my Trustee, is able to manage financial affairs, my Trustee shall distribute the assets
of the beneficiary’s trust to the beneficiary. If the beneficiary dies before the trust is terminated, my
Trustee shall distribute the assets of the beneficiary’s trust to the beneficiary's estate.

C. Distribution to Custodian.
My Trustee may also distribute any interest vesting in a beneficiary under age twenty-one (21) to a
custodian under the Virginia Uniform Transfers to Minors Act (21). My Trustee may also distribute
any interest vesting in a beneficiary who is "incapacitated," as that term is defined in Virginia Code
Section 64.2-900, et seq., 1950, to a Custodial Trustee under the Virginia Uniform Custodial Trust
Act.

D. Postponement of Vesting of Interest.
The provisions of this Article shall not postpone vesting of any interest in the beneficiary.

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ARTICLE FOUR
DEBTS, TAXES AND OTHER CHARGES

A. Payment of My Debts and Other Charges.
At my death my Trustee, in his or her sole discretion, may pay to, or upon the order of, my Executor
funds needed to pay my legally enforceable debts, my charitable pledges, my funeral and burial
expenses, costs of administration, transfer taxes, and specific bequests under my will. My Trustee
may rely upon my Executor as to the amount of the charges. The decision of my Trustee whether to
provide funds shall be final. Assets that are not included in my gross estate shall not be used for
such payments. Except as may be otherwise provided herein, the payments shall not be charged
against the share of any beneficiary.

B. Restrictions on Use of Qualified Retirement Plan Assets.
Notwithstanding any other provision hereof, my Trustee may not distribute to or for the benefit of
my estate, any charity, or any other non-individual beneficiary [as those terms may be defined in the
Internal Revenue Code (“I.R.C.”) or the Treasury Regulations issued thereunder] any benefits
payable to this Trust under any qualified retirement plan, individual retirement account, or other
retirement arrangement subject to the "minimum distribution rules" of I.R.C. Section 401(a)(9) or
comparable provisions of law. It is my intent that all such retirement benefits be distributed to or
held for only individual beneficiaries within the meaning of I.R.C. Section 401(a)(9) and applicable
Treasury Regulations. Accordingly, I direct that such retirement benefits shall not be used or
applied for payment of my debts, taxes, and other claims against my "estate." This paragraph shall
not apply to any charitable bequest which is specifically directed to be funded with retirement
benefits by other provisions of this Agreement.

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ARTICLE FIVE
FIDUCIARIES

A. Resignation of Trustee.
I reserve the right to resign as Trustee hereunder. Any successor Trustee may resign by written
notice to the adult beneficiaries and the parents or other adult persons responsible for any minor
beneficiaries. The resignation shall be effective upon either the acceptance of fiduciary duties by
the successor Trustee next named in this Declaration or the appointment of a successor Trustee
pursuant to Paragraph B of this Article.

B. Successor Trustee.
(1)
During my life, I reserve the exclusive right to appoint successor Trustees. After my
death or incapacity, if all successor Trustees named herein resign or cease to serve, a majority of
the adult beneficiaries or, if there are none, a majority of the parents or other adult persons
responsible for any minor or legally incompetent beneficiaries may appoint any competent
person or persons, licensed attorney or law firm, or any bank or trust company having trust
powers as successor Trustee. The appointment shall be effective upon written acceptance of
fiduciary duties by the successor Trustee or by accepting delivery of the trust assets and
exercising the powers or performing the duties of a Trustee. If no successor Trustee is so
appointed, a successor corporate Trustee or licensed attorney or law firm may be appointed as
provided by law upon application of the resigning Trustee or any beneficiary.
(2)
Within sixty (60) days of accepting the duties of Trustee, my Trustee shall notify the
qualified beneficiaries of the Trust of the acceptance and shall provide the Trustee’s name,
address and at least one (1) telephone number. If the Trust is irrevocable at the time a successor
Trustee shall act as fiduciary, my Trustee shall also notify the qualified beneficiaries of (a) the
existence of the Trust; (b) the identity of the grantor(s) of the Trust; (c) the right to request a
copy of the Trust; and (d) the right to an annual report as set forth in Paragraph N herein.
(3)
Each individual named herein or appointed pursuant to the provisions hereof as Trustee,
as a condition precedent to such person so serving or being appointed, shall execute a written
statement (a) authorizing and directing all of his or her health care providers to release to any
person having an interest hereunder (herein “Information Recipient”) any and all Protected
Health Information (including, but not limited to, the results of any medical examination
conducted pursuant to the remainder of this sentence) for purposes of allowing a determination
of whether the individual lacks the required capacity to continue to so serve hereunder and (b) in
a form sufficient to permit such release pursuant to 45 C.F.R. § 164.508 (or any successor
provision thereto). The term, “Information Recipient,” shall include, but not be limited to,
another Trustee acting hereunder. Any individual who revokes such authorization shall
thereupon be treated as resigning as Trustee hereunder upon the date of discovery of such
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revocation by any Information Recipient; provided that, notwithstanding the foregoing, upon
discovery of such revocation, such fiduciary shall not be treated as resigning if the requisite
authorization described above is executed by such individual within twenty (20) days after notice
of such discovery is given to such individual by any Information Recipient.
In addition, each individual so serving who (a) fails within a reasonable time to undergo a
medical examination at the written request of any person having an interest hereunder (including,
but not limited to, another Trustee acting hereunder) for the sole purpose of determining if the
individual lacks the required capacity to continue to so serve hereunder or (b) fails to cause the
results of such examination to be made available within a reasonable time to the person making
the written request, shall be treated as resigning as such fiduciary, provided that there is
reasonable basis to request that the medical examination be undertaken and provided further that
no such request may be made by a person having an interest hereunder more than once every
thirty-six (36) months. The cost of the medical examination shall be borne by the trust with
respect to which such individual is acting as Trustee. In no event shall my Trustee be required to
undertake a medical examination more frequently than annually.

C. Actions of Predecessor.
No Trustee serving under this Agreement shall be responsible for or required to inquire into any
fiduciary actions occurring before such Trustee's appointment.

D. Compensation.
Any corporate Trustee or licensed attorney or law firm serving hereunder shall receive for its
services the compensation specified in its written fee schedule in effect at the time services are
rendered, and such compensation may vary from time to time based on such schedule. My
individual Trustee shall be entitled to a reasonable compensation annually for services rendered as
Trustee. “Reasonable compensation” shall be defined as an amount not to exceed one percent (1%)
of the principal and income under administration during any calendar year. If more than one
individual Trustee shall serve, reasonable compensation shall be divided ratably among all such
individual Trustees. My Trustee shall be entitled to reimbursement, out of the trust income or
principal, with interest as appropriate, for any expenses properly incurred in the administration of
the Trust or as otherwise provided in Virginia Code Section 64.2-762.

E. Fiduciary Powers.
1.

2.

In addition to the powers granted by law, I grant my Trustee those powers set forth in
Virginia Code Sections 64.2-105 and 64.2-778, and I incorporate those Code Sections in this
Agreement by this reference.
If any asset donated to this Trust does not meet the requirements of the prudent investor
standard set forth in Virginia Code Section 64.2-781, my Trustee may nevertheless retain
the asset for so long as my Trustee, in his or her sole discretion, may deem appropriate.

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3.

My Trustee may borrow money (including borrowings from any corporate Trustee or its
affiliates) for any purpose deemed in the best interests of any trust under this Agreement and
may secure such borrowings with any assets of such trust.

4.

My Trustee may invest the trust assets in a money market or other short-term fund whether
or not my Trustee (or affiliates of any corporate Trustee) is the sponsor, advisor, manager or
custodian of, or provides services to, such fund. The compensation received by my Trustee
(or affiliates of any corporate Trustee) for services rendered to such fund shall not reduce the
compensation of my Trustee under this Agreement.

5.

I expressly grant to my Trustee the right, power, and authority to mortgage, encumber,
pledge, and create a security interest in any of the Trust Assets, whether real, personal, or
mixed, and to secure any of my indebtedness, whether jointly or individually, whether now
or hereafter incurred, and I specifically authorize and empower my Trustee to execute,
acknowledge, and deliver to the lender of such funds a deed of trust or other security
instrument, in such form as the lender may reasonably require, conveying as collateral for
such extension of credit, all of the right, title and interest possessed by this Trust in any
asset, whether real or personal, as security for an indebtedness of mine.

6.

In the event more than one Trustee shall be appointed to act, each Trustee may act
independently of the other in all matters affecting the trust assets. Any non-acting Trustee
shall not be liable for any breach of duty by such acting Trustee provided that such nonacting Trustee shall have notified, in writing, the remaining Trustees of his or her dissent at
or before the time of the action or upon notice of the action.

7.

If, for any reason, the Trustee of any trust created under this Agreement is unwilling or
unable to act with respect to any trust property or any provision of this Agreement, the
Trustee shall appoint, in writing, a corporate fiduciary or an individual to serve as an
Independent Trustee as to such property or with respect to such provision. The appointment
may be perpetual or limited as to time in the discretion of my Trustee. The Independent
Trustee appointed shall not be related or subordinate to any beneficiary of the trust within
the meaning of I.R.C. Section 672(c). The Trustee may revoke any such appointment at
will.
An Independent Trustee shall exercise all fiduciary powers granted by this Agreement
unless expressly limited elsewhere in this Agreement or by the Trustee in the instrument
appointing the Independent Trustee. An Independent Trustee may resign at any time by
delivering written notice of resignation to the Trustee. Notice of resignation shall be
effective in accordance with the terms of the written notice.

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F. Merger.
My Trustee may merge or consolidate for administrative purposes any trust under this Agreement
with any other trust made by me or any other person having the same Trustee and substantially the
same disposition provisions.

G. Termination of Small Trusts.
If, at any time after my death, the size of any trust under this Agreement is so small that, in the
opinion of my Trustee, the trust is uneconomical to administer, my Trustee may terminate the trust
and distribute the assets to the person then authorized to receive trust income, or if more than one
person is authorized to receive trust income, to the one or ones of them my Trustee may deem
appropriate and in such shares as my Trustee may deem appropriate.

H. Allocation of Assets.
Assets allocated to one trust or share may be of different character or have different income tax
bases than assets allocated to another trust or share.

I. Fiduciary Discretion.
The powers and discretion granted to my Trustee are exercisable only in a fiduciary capacity and
may not be used to enlarge or shift any beneficial interest except as an incidental consequence of the
discharge of fiduciary duties. My Trustee may make discretionary payments to the beneficiaries of
any trust in unequal shares and may, but shall not be required to, consider other resources available
to any beneficiary. My Trustee may make tax elections without regard to the relative interests of
any beneficiaries and may, but shall not be required to, make equitable adjustments among
beneficiaries. No Trustee shall be liable or responsible for the manner in which any discretion is
exercised under this Agreement unless the conduct of the Trustee amounts to fraud, willful
misconduct, bad faith or reckless indifference to the rights of any qualified beneficiary of this Trust.

J. Restrictions on Individual Trustees.
No individual serving as Trustee who is an Interested Trustee as defined herein shall have a voice in
any discretionary decision to (1) terminate a trust or (2) distribute income or principal of any trust in
order to discharge a legal obligation of the individual or for the individual's pecuniary benefit,
except as limited by the ascertainable standards enumerated herein or as allowed by I.R.C. Sections
2041 or 2514, or Treasury Regulations issued thereunder.

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K. Removal of Trustee.
After my death, the qualified beneficiary of any trust created herein solely for such qualified
beneficiary shall have the right to remove the acting Trustee and to appoint a successor Trustee of
the qualified beneficiary's particular trust or fund. The successor Trustee must be a licensed
attorney or law firm or a trust company or bank possessing trust powers and the authority to do
business in the state of the qualified beneficiary's domicile. This right of removal may be exercised
by any qualified beneficiary over the age of eighteen (18) years or by the parent or other adult
person responsible for any qualified beneficiary under the age of eighteen (18) years. This right of
removal shall be continuing and may be exercised by the qualified beneficiary or the parent or other
adult person responsible for such qualified beneficiary under eighteen (18) years of age by written
notice to the Trustee, which notice of removal shall specify the successor Trustee and certify the
successor Trustee’s willingness to serve as such. Within thirty (30) days after receiving notice, the
Trustee so removed shall deliver all assets then held to the successor Trustee, shall have full
acquittance for all assets so delivered, and shall have no further duties under this Declaration.

L. Change of Situs.
My Trustee may change the situs of this Trust (and to the extent necessary or appropriate, move the
Trust assets) to a state or country other than the one in which the Trust is then administered if my
Trustee believes the change will be in the best interests of the Trust or the beneficiaries. My Trustee
may elect that the law of such other jurisdiction shall govern the Trust to the extent necessary or
appropriate under the circumstances. My Trustee shall not be required or obligated to notify any
qualified beneficiary, or any other person, of any such proposed transfer or to provide any other
notice and information provided under Virginia Code Section 55-548.08 or any other provision
under the Virginia Uniform Trust Code, or the laws of any other state or country governing the
administration of this Trust.

M. Bond.
My Trustee shall not be required to post bond, surety, or security for its service as Trustee under this
Agreement. Every Trustee shall have the obligation of performing and exercising all of its duties in
a fiduciary manner.

N. Accountings.
My Trustee shall not be required to file accountings with any court or public official. After my
death, my Trustee shall provide an annual report to any qualified beneficiary of any trust created
herein upon receipt of a written request by such qualified beneficiary, or by an adult person
responsible for any qualified beneficiary under the age of eighteen (18) years. A qualified
beneficiary may waive the right to such report or to any other information required to be provided
by this Agreement or under applicable state law governing this Trust.
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O. Delegation of Duties.
My Trustee may employ such agents, including but not limited to, attorneys, accountants,
appraisers, brokers or real estate agents, as may be appropriate or necessary to assist my Trustee in
fulfilling his or her duties of administration of this Trust. My Trustee shall have no liability to any
beneficiary of this Trust for actions taken by such agents, provided that my Trustee, with reasonable
care, skill, and caution:

P.

(1)

Selects such agents;

(2)

Establishes the scope and terms of the delegation consistent with the purposes of this
Trust; and

(3)

Periodically reviews and monitors the agents’ performance and compliance with the
terms of such delegation.

Payments Before Notice of An Event.

Until my Trustee shall receive written notice of any birth, marriage, death, or any other event upon
which the right to payments from this Trust may depend, my Trustee shall incur no liability to
persons whose interests may have been affected by the event for disbursements made by my Trustee
in good faith.

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ARTICLE SIX
RESERVED RIGHTS

A. Additional Contributions.
I reserve for myself and any other person the absolute right to make insurance policies payable to
my Trustee and to transfer acceptable assets to my Trustee. Assets transferred to my Trustee by any
person may be withdrawn by such person at any time during his or her lifetime, and my Trustee
shall segregate the assets for accounting purposes but need not separate them physically.

B. Revocation and Amendment.
I reserve the absolute right to revoke, amend or restate this Agreement or any term or provisions
therein; or to withdraw or remove assets of this Trust, by a writing (other than my will) signed by
me and delivered to my Trustee during my lifetime. The duties or compensation of my Trustee
shall not be changed without the consent of my Trustee. If this Agreement has been revoked but at
my death any assets are payable to my Trustee, my Trustee shall distribute the assets to my estate
within a reasonable time following written notice to my Trustee of the qualification of my executor,
administrator or personal representative.

C. Action on Behalf of my Trust.
During any period that I am serving as a Trustee of my Trust, I may act or conduct business on
behalf of the Trust without the consent of any other Trustee.

D. Approval of Investment Decisions.
During my life, I shall have the absolute right to approve my Trustee’s investment decisions, and
my approval shall be binding on all other beneficiaries of this Agreement.

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ARTICLE SEVEN
GENERATION-SKIPPING TRANSFER TAX PROVISIONS

A. Separate Trusts.
To minimize the generation-skipping transfer tax, my Trustee may divide any trust into two separate
trusts, one fully exempt from generation-skipping transfer tax and the other not. My Trustee shall
allocate to the trust to be exempt from generation-skipping transfer tax the maximum fractional
share of assets that can be allocated to this trust to establish this trust with an inclusion ratio of zero.
My Trustee shall allocate to the trust to be subject to generation-skipping transfer tax the remaining
fractional share of assets to establish this trust with an inclusion ratio of one.

B. Child's General Power of Appointment Over Nonexempt Trust.
If any separate trust for a child of mine has an inclusion ratio of one and the distribution of that trust
would otherwise result in generation-skipping transfer tax, the child shall have the power, by
specific reference to this general power of appointment in the child's will, to appoint the assets
(including any undistributed income) of that trust only to the creditors of the child's estate.

C. Payment of Child's Transfer Taxes on Nonexempt Trust.
Unless a child provides otherwise by specific reference to this paragraph in a will or other writing,
my Trustee shall pay any transfer taxes attributable at the child's death to the assets (including any
undistributed income) of any trust over which the child has a general power of appointment from
the unappointed principal of that trust according to this computation: the actual taxes payable by the
child's estate, less the taxes that would be payable if the assets of that trust were excluded from the
child's gross estate. My Trustee shall pay this amount to the child's estate or directly to the taxing
authorities and may rely upon the child's personal representative for the amount due.

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ARTICLE EIGHT
MISCELLANEOUS PROVISIONS

A. Spendthrift Provisions.
To the maximum extent permitted by law, the principal and income of any trust created herein shall
not be liable for the debts of any beneficiary or subject to voluntary or involuntary assignment,
alienation or anticipation by a beneficiary, nor shall it be subject to attachment, bankruptcy
proceedings or any other legal process, or the interference or control of creditors or others. Nothing
contained in this Paragraph shall restrict in any way the exercise of any power of appointment
granted elsewhere in this Agreement.

B. Survivorship.
I shall be deemed to have survived any beneficiary named in this Trust if, in the opinion of my
Trustee, there is no sufficient evidence that such beneficiary survived me by more than one hundred
twenty (120) hours.

C. Adoption.
A person related to me by or through adoption shall take under this Declaration as if the person
were related to me by or through birth, except that a person adopted after reaching age twenty-one
(21) and descendants of such person shall not so take.

D. Disclaimer.
Any beneficiary or the legal representative of any deceased beneficiary shall have th