Probate & Trust Law Section Conference Manual ... - Minnesota CLE

sample trust language was used where there were many grandchildren of widely varying
ages and it was important to make certain trust assets would be available for the
education of all grandchildren.
Basic Distributions. The Trustee may distribute any part or all of the net
income and principal of the trust, up to a cumulative amount of $200,000 (as
adjusted under this Article) for each grandchild of mine, to any one or more of my
grandchildren (whenever born) in equal or unequal shares as the Trustee from
time to time considers advisable for the education of such grandchildren at any
level beyond secondary school. Any undistributed net income shall be added to
the principal of the trust at least annually. Distributions for “education” may
include:
(a) tuition for a beneficiary’s education at any level beyond
secondary school at an educational institution (including, without
limitation, any university, college, junior college, trade school or
vocational school);
(b) reasonable expenses directly related to such education
(including, without limitation, expenses of room and board, costs of books
and supplies, and expenses of travel to and from such institution, but not
including costs of other travel);
(c) reimbursement to a beneficiary for amounts such
beneficiary personally paid for such beneficiary’s education expenses
described above; and
(d) payments to a beneficiary to reimburse or provide for any
income taxes the beneficiary must pay on account of trust distributions to
the beneficiary (such payments, however, shall not be considered in
applying the $200,000 limit on distributions).
Supplemental Education Distributions. If and to the extent the Trustee at
any time believes the primary purpose of the trust will not be jeopardized, the
Trustee may distribute any part or all of the net income and principal of the trust
to or for any one or more of my grandchildren as the Trustee from time to time
considers advisable to provide supplemental funds for such educational purposes
in excess of the $200,000 limit.
* * * * * * * * *
Inflation Adjustment. Notwithstanding any other provisions, the
$200,000 basic limit on distributions shall be adjusted for 2014 and each
subsequent calendar year by such sum as reflects increases in the cost of living
since January 1, 2013. For this purpose, the increase in the cost of living shall be
determined pursuant to the Consumer Price Index for Urban Consumers U.S. City
Average All Items (1982-84=100), as published by the Bureau of Labor Statistics
of the U.S. Department of Labor. If such index shall cease to be published, there
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