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

Code Section 2503(b) and further reduced by gifts by any Contributor directly to or
for the benefit of a Descendant of a Grandchild of mine or to any other trust for the
benefit of a Descendant of a Grandchild of mine qualifying for the federal gift tax
annual exclusion under Code Section 2503(b) on a date during any calendar year
prior to the Contribution to this Trust.
(5) Contribution Defined. For purposes of this paragraph 1.1, the term "Contribution"
means a non-testamentary transfer (direct or indirect, actual or imputed to the
transferor) to the Trustee of any property to be held as part of the Trust Estate,
which would be treated under Chapter 12 of the Code as a taxable gift of the
Grantor (before taking into account the exclusion allowed by Code section 2503(b)),
and also includes any premiums on policies of life insurance owned by the trust
paid directly to any insurance company rather than first being transferred to the
Trustees. "Grantor" is defined in paragraph [grantor definition paragraph]. In the
case of any premium which is paid directly to an insurance company, the date of the
contribution to the trust shall be deemed to be the date on which the premium
payment is transmitted to the insurance company issuing the policy. The amount of
any Contribution is its federal gift tax value, as finally determined for federal gift
tax purposes. Contributions made by a Grantor's attorney-in-fact pursuant to a
power of attorney shall be considered as made by the Grantor.
(6) Contributor Defined. For purposes of this paragraph 1.1, the term "Contributor"
means the person treated as having made the gift to the trust for federal gift tax
purposes. If the Grantor is unmarried at the time of such contribution, the Grantor
shall be the Contributor. If the Grantor is married at the time of the Contribution
and informs the Trustee that the Grantor shall be treated as the Contributor of onehalf
(½) of such contribution, and the spouse of the Grantor shall be treated as the
Contributor of one-half (½) of such contribution (a “Split Gift”), then the Grantor
and the Grantor’s spouse shall be treated by the Trustee as the Contributor of half
of the value of assets transferred by the Transferor, except with respect to Powers
of Withdrawal granted to a Grantor’s spouse that may not be split between spouses
under Code Section 2513(a)(1). The Trustee may rely upon any election by the
Grantor to treat all future transfers as “Split Gifts” until notified differently by the
Transferor or the Transferor’s agent. With respect to premiums paid on insurance
owned by the trust or other indirect contribution by an entity or another person on
behalf of me or some other person, such as by an employer, the Grantor shall be
deemed to be the person on whose behalf the premiums or other Contributions are
made and the Contributor shall be determined with respect to such Contribution as
provided in the foregoing provisions of this paragraph.
(7) Term Of Power To Withdraw; Lapse. Each Power Holder shall have from the date
of Contribution until thirty (30) days after the receipt of actual or written notice of
such Contribution as described above to exercise the power by a written instrument
delivered to the Trustees. If upon the termination of such thirty (30) day period the
Power Holder has not exercised such power to withdraw, such power shall lapse,
provided, however, if the cumulative lapse of such powers with respect to any
calendar year would otherwise exceed the greater of (a) Five Thousand Dollars
($5,000) or (b) Five Percent (5%) of the aggregate value of the assets of the Trust
3