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for federal and state income tax purposes, the TRUSTEES
may hold all of the Trust Estate as one common fund,
and are not required to make a physical division
thereof.
3. DIVISION AND ALLOCATION OF ASSETS. The Trust
Estate, and distributions received by this Trust from
the estate of the deceased SETTLOR (if any), shall be
allocated among the trusts described above as follows:
A. Except as provided in Subparagraph B and
Paragraph 4 [relating to simultaneous death], the
entire Trust Estate shall be allocated to TRUST “A.”
B. If the surviving SETTLOR, in his or her
capacity as beneficiary, effectively disclaims (under
Code Section 2518 or any successor provision then in
effect) all, or any specific portion, of his or her
interest in TRUST “A”, such disclaimed amount shall be
allocated to TRUST “B” to be held, administered and
distributed according to its provisions.
With respect to Trust A, all income was to be paid to or for
the benefit of the surviving settlor; the surviving settlor could
direct the trustees to distribute principal at any time and for
any reason; and the surviving settlor was granted a power, at his
or her death, to appoint any part of the principal and
undistributed income of Trust A. The latter power was to “be
made by last written instrument filed with the TRUSTEES,
effective at the surviving SETTLOR’s death and specifically
referring to this power of appointment.” Any portion of Trust A
not so appointed was to be added to Trust B.
As regards Trust B, net income was to be paid to the
surviving settlor at least annually, and the trustees were
authorized to distribute principal as they determined necessary
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Last modified: May 25, 2011