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HomeMy WebLinkAbout12-22-05 (2) CAPB HpRL EplO CRAC KOTK ES eo . OFFICIAL USE ONLY FILE NUMBER ".1.' - ~ ~ - C P o 0 R N R 0 E E S N T NAME Marlin R. McCaleb Es . FIRM NAME (If Applicable) Law Offices-Marlin R. McCaleb TELEPHONE NUMBER COMPLETE MAILING ADDRESS 219 East Main Street P. O. Box 230 Mechanicsburg, PA 17055 R E C A P I T U L A T I o N 69 - 0 Real Estate (Schedule A) Stocks and Bonds (Schedule B) Closely Held Corporation, Partnership or Sole-Proprietorship 4. Mortgages & Notes Receivable (Schedule D) 5. Cash, Bank Deposits & Miscellaneous Personal Property (Schedule E) 6. Jointly Owned Property (Schedule F) D Separate Billing Requested 7. Inter-Vivos Transfers & Miscellaneous Non-Probate Property (7) (Schedule G or L) 8. Total Gross Assets (total lines 1-7) 9. Funeral Expenses & Administrative Costs (Schedule H) (9) 10. Debts of Decedent, Mortgage liabilities, & liens (Schedule I) (10) 11. Total Deductions (total lines 9 & 10) 12. Net Value of Estate (line 8 minus line 11) 13. Charitable and Governmental Bequests/See 9113 Trusts for which an election to tax has not been made (Schedule J) 14. Net Value Subject to Tax (line 12 minus Line 13) REV-1500 EX +(6-00) REV-1500 INHERITANCE TAX RETURN RESI DENT DECEDENT COUNTY CODE SOCIAL SECURITY NUMBER YEAR o E C E o E N T COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF REVENUE DEPT. 280601 HARRISBURG, PA 17128-0601 DECEDENT'S NAME (LAST, FIRST, AND MIDDLE INITIAL) Jarrett Robert W. DATE OF DEATH (MM-DD-YEAR) \ \ '\)'-\ NUMBER DATE OF BIRTH (MM-DD-YEAR) 189-09-8514 THIS RETURN MUST BE FILED IN DUPLICATE WITH THE (1) (2) (3) None None None REGISTER OF WILLS soaALSECU~TYNUMBER E. 6. Decedent Died Testate 2. Supplemental Return X 4a. Future Interest Compromise (date of death after 12-12-82) X 7. Decedent Maintained a Living Trust 3. date of death . Remainder Return prior to 12-13-82) 5. Federal Estate Tax Return Required 8. Total Number of Safe Deposit Boxes 11. Election to tax under Sec. 9113(A) (Attach Sch 0) 1 OFFICIAL USE ONLY \.~.:.+. (8) 201,399.88 (11) 5.761.40 (12) 195,638.48 (13) (14) 195,638.48 (15) (16) (17) (18) (19) 0.00 6,563.45 0.00 0.00 6,563.45 (Attach copy of Will) (Attach copy of Trust) D 9. Litigation Proceeds Received D 10. Spousal Poverty Credit (date of death between 12-31-91 and 1-1-95) D (4) (5) None 998.20 (6) None 200,401.68 5,761.40 None C o M P T U A T X A T I o N SEE INSTRUCTIONS ON REVERSE SIDE FOR APPLICABLE RATES 15. Amount of line 14 taxable at the spousal tax rate, or transfers under Sec. 9116(a)( 1.2) 16. Amount of Line 14 taxable at lineal rate 17. Amount of Line 14 taxable at sibling rate 18. Amount of Line 14 taxable at collateral rate 19. Tax Due 20. X 49,784.12 145,854.36 x X X X .0 0 .0 45 .12 .15 Copyright (c) 2000 form software only The Lackner Group, Inc. Form REV-1500 EX (Rev. 6-00) A t. 206 CITY Lema e STATE PA ZIP 17043 Tax Payments and Credits: 1. Tax Due (Page 1 Line 19) 2. Credits/Payments A. Spousal Poverty Credit B. Prior Payments C. Discount (1 ) 6,563.45 0.00 Total Credits ( A + B + C) (2) 0.00 3. Interest/Penalty if applicable D. Interest E. Penalty Total Interest/Penalty ( D + E) (3) 4. If Line 2 is greater than Line 1 + Line 3, enter the difference. This is the OVERPAYMENT. Check box on Page 1 Line 20 to request a refund (4) 5. If Line 1 + Line 3 is greater than Line 2, enter the difference. This is the TAX DUE. (5) A. Enter the interest on the tax due. (SA) B. Enter the total of Line 5 + SA. This is the BALANCE DUE. (5B) Make Check Payable to: REGISTER OF WILLS, AGENT ;;';;;;;;:;!;:;;:~;~~~~~';!~~~;~k:~!;:~~~!!~:8:t!~ci~~:~~:;:~U~;~~~~I~~i:i~$li~tl!~;:!~~;i~!li!!;~ij!;:!I~:;;~~:~:~~~'~:a~;~I~ig:!~[8b'R~!:::!:!!:!;!; 1. Did decedent make a transfer and: Yes No a. retain the use or income of the property transferred; . . . . . . . . . . . . . ~~ ~ b. retain the right to designate who shall use the property transferred or its income; . c. retain a reversionary interest; or. . . . . . . . . . . . . . . . . . . . . . . . . . d. receive the promise for life of either payments, benefits or care? . . . . . . . . . 2. If death occurred after December 12, 1982, did decedent transfer property within one year of death without receiving adequate consideration? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Did decedent own an "in trust for" or payable upon death bank account or security at his or her death? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Did decedent own an Individual Retirement Account, annuity, or other non-probate property which contains a beneficiary designation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [K] D IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS YES, YOU MUST COMPLETE SCHEDULE G AND FILE IT AS PART OF THE RETURN. 0.00 0.00 6,563.45 0.00 6,563.45 D D IT] IT] Under penalties of perjury, I declare that I have examined this return, Including accompanying schedules and statements, and to the best of my knowledge and belief, it Is true, correct and complete. Declaration of pre parer other than the personal representative Is based on all Information of which preparer has any knowledge. SIGNATURE OF PERSON RESPONSIBLE FOR FILING RETURN ~n~Hnn11~~UnWni -'-;.:';'",:::::!:;::: :::::::ij1j~~j[;iij; ;i~:}H:i;;}i ::i:i:;;';: i=i: :;i,li:: i:;: :r~\?:~:::j;i: ::::::;~:::: ::!:n:~;: i:i::!:;!:; i:!:;::! :.::,:.:.,:.:.: Joyce E. Jarrett, Trustee 20 North 12th Street ----------------------------------------------------- Lema e, PA 17043 Law Offices-Marlin R. McCaleb 219 East Main Street -- M~~hani~-;b~r-i: - 1'A -- rioss- -- -- -- -- -- -- - -- - - - -- l:l ~;t2 - 05'- i nj;:::,.",.",.',i:i ::::;. :.;.. ::~:;:::: ;:!1::~i~>!;!.~.',;,.,.",.i,.~. i,.!,i,.~.;!:.::: .:::!.;.::;:;:;.:::: ~Hj!ii!~~j~!~,:~.j,~,..~,..~,',.~!"i,.j,.!,.~,.l,.~,.j,.~,.j,.j,,~,.j,.~,.j,..!,,~,..~,.~,.~,.l,.~,.!,.~,.~,.~,,'H nnH!n~jin:; :.::',.;i,,:i,.: .". .'.:": ::~::: :;:: '::.: ;~;~:~:;::; ::;:;: nnh@Hn Hjjj:~ !;; i;J;;! Hin:!!:::::: :HnHH~niHmnHH~:nn;; iHHn~nn~njH HHjU]jjj !jHld ml~~lf jjjjj~~~ ::::;!:!;;:::;;:;;:::::::::::::::.: DATE /~/.1-Vaj DATE ' For dates of death on or after July 1, 1994 and before January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is 3% [72 P.S. 9116 (a) (1.1) (i)]. For dates of death on or after January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is 0% [72 P.S. 9116 (a) (1.1) (ii)). The statute does not exempt a transfer to a surviving spouse from tax, and the statutory requirements for disclosure of assets and filing a tax return are still applicable even if the surviving spouse is the only beneficiary. For dates of death on or after July 1, 2000: The tax rate imposed on the net value of transfers from a deceased child twenty-one years of age or younger at death to or for the use of a natural parent, an adoptive parent, or a stepparent of the child is 0% [72 P.S. 9116 (a) (1.2)]. The tax rate imposed on the net value of transfers to or for the use of the decedent's lineal beneficiaries is 4.5%, except as noted in 72 P.S. 9116(1.2) [72 P.S. 9116(a)(1)j. The tax rate imposed on the net value of transfers to or for the use of the decedent's siblings is 12% [72 P.S. 9116(aX 1.3)). A sibling is defined, under Section 9102, as an individual who has at least one parent in common with the decedent, whether by blood or adoption. Copyright (c) 2000 form software only The Lackner Group, Inc. Form REV-1500 EX (Rev. 6-00) ? Pour Over Will -- of Robert W. Jarrett 1) I, Robert W. Jarrett, residing at 9850 Garfield Ave. #11, Huntington Beach, CA 92646-2405 which I hereby declare to be my place of domicile, being of sound mind and memory and disposing disposition, do make, publish and declare this to be my Last Will and Testament, thus revoking any and all previous Wills and their codicils which I have made previously. 2) I am married to Joyce E. Jarrett. 3) I am the father of children whose names are: Diana G. Cuffe 12-06-45 162-36-8023 271 N. Titmus Drive, Mastic, NY 11950; Linda J. Hoffer 09-21-47 202-36-5535 915 Indiana Ave., Lemoyne, PA 17043; All references herein to my children shall include any child or children born to or adopted by me after - the making of this Will. 4) I give the entire residue of my estate to the trustee then in office under that trust designated as THE JARRETT FAMILY TRUST, dated October 3, 1992, of which I am a Trustor. I direct that the residue of my estate shall be added to, administered, and distributed as part of that trust, according to the terms of the trust and any amendment made to it before my death. To the extent permitted by law, it is not my intent to create a separate trust by this will or to subject the trust or the property added to it by the will to the jurisdiction of the probate court. 5) I direct that inheritance, death and estate taxes, including interest and penalties thereon, becoming due by reason of my death, with respect to property other than property held in trust or property taxed to my estate as a generation-skipping transfer, be paid preferably out of my residuary estate passing under this Will to the extent thereof, but may be paid out of the trust receiving distribution of my residuary estate passing under this Will if the Trustee deems it appropriate. Any such taxes, and interest and penalties thereon, attributable to trust property or property taxed as a generation-skipping transfer shall be paid out of the respective property so taxed by the person or persons having custody of such property or by the person or persons receiving distribution of such property. The determination of the amount of tax due by my residuary estate shall be made as if trust property were a pro rata share of my estate and as if no property classified as a generation-skipping transfer were taxed to my estate. 6) I hereby nominate, constitute and appoint my wife as the Executor (Executrix) of this will. In the event she is unable or unwilling to so serve in this capacity, then I nominate, constitute and appoint Diana Cuffe & Linda Hoffer as First Alternate Executor. Pour-Over Will Page 1 Initials ~~ I ",-". The Executor shall have full power and authority to carry out the provisions of the Will. including the power to manage and operate during the probate of my estate. any property and any business belonging to my estate. 7) No bond shall be required of any Executor. 8) If the disposition in Paragraph 4. above. is inoperative or is invalid for any reason. or if the trust referred to in Paragraph 4. above, fails or is revoked, I incorporate herein by reference the terms of that trust, as executed on this date, without giving effect to any amendments made subsequently. and I bequeath and devise the residue of my estate to the trustee named in the trust as trustee. to be held. administered. and distributed as provided in this instrument. The abovtHlescribed Declaration of Trust was executed by me for the purpose of creating a revocable inter vivos trust. All property distributed to said trust under the terms of this will shall be held. administered and distributed according to the terms of said Declaration of Trust. including any amendments thereto in effect at my death. Said trust was created during my lifetime and shall not be construed to be a testamentary trust. 9) I hereby nominate. constitute and appoint my wife as the Guardian of my Person. In the event that she is unable or unwilling to so serve in this capacity. then I hereby nominate. constitute and appoint Diana Cuffe & Linda Hoffer as my Alternate Guardian. In the event that my Alternate Guardian is unable or unwilling to so serve in this capacity, then the I nominate. constitute and appoint Linda J. Hoffer as Second Alternate Guardian. '-. 10) No bond shall be required of any Guardian. 11) In the event. any provision of this Last Will and Testament is held to be invalid by a Court of competent jurisdiction, then such finding shall invalidate only that provision leaving the balance of this Last Will and Testament enforce. ~~- IN ~S WHEREOF, I have signed this my ;ast Wil'lan~ Testament this ()e-! ,1972, in the City of ~ (~ . State of cA- . day of ri~9f~~ Robert W. Jarrett() -... Pour-Over Will Page 2 Initials ~ t Declaration of Witnesses --- This instrument was, on the date hereof, signed and published by Robert W. Jarrett, was the Will of Robert W. Jarrett. The Testator thereupon signed this Will in our presence and in the presence of each of us, and we, at the same time, at his request, in his presence and in the presence of each other, have hereunto signed our names and addresses as attesting witnesses. We declare u executed on' .. /// enalty of perju . ~at the foregoing is tJjue and correct and that this declaration was ,e.., , 19'\11 , at C\(^~,,~ t~ ,CA. Witness Signature W.itnps ~ame (printed) , ~j r VI PJ ~) /f 1/"'( rfi"S I P""- Address l.. A Witness Signature - State of CA County of Orange A / I',,?R9ber, VII Jarrett and, ---~-~__.IJ!~_f...___________ and ~ () b l,v N tj -e , the Testator, and the witnesses, respectively, whose names are signed to the attached and forgoing instrument, being first duly sworn, do hereby declare to the undersigned officer that we voluntarily signed the instrument as the Testator's Last Will and Testament and that each of the witnesses, in the presence of each other, signed the Will as a witness and that to the best of the knowledge of each witness the Testator was at the time eighteen or more years of age, of sound mind and under no constraint or undue influence. . Witness Name (printed) In i <.E;icty) Address Vf'~ 0, ell- .. ,--. Pour-Over will Page 3 Initials ~ . . ,. . Declaration of Trust " DECLARATION OF THE JARRETT FAMILY TRUST This Declaration of Trust made October 3, 1992 TRUSTORS Robert W. Jarrett 9850 Garfield Ave. #11 Huntington Beach, CA 92646-2405 Joyce E. Jarrett 9850 Garfield Ave. #11 Huntington Beach, CA 92646-2405 TRUSTEES Robert W. Jarrett 9850 Garfield Ave. #11 Huntington Beach, CA 92646 Joyce E. Jarrett 9850 Garfield Ave. #11 Huntington Beach, CA 92646 SUCCESSOR TRUSTEE(S) Diana G. Cuffe 271 N. Titmus Dr. Mastic, NY 11950 Linda J. Hoffer 915 Indiana Ave. Lemoyne, P A 17043 Declaration of Trust Page 1 Initials ~ ~,C~ ,. Part One Creation and Intention of Trust and Identification of Parties 1.1 Trust Property. Concurrently with the execution of this Trust, Trustor has conveyed and delivered to Trustee the property described in a Schedule of Trust Assets, and Trustee hereby aclmow ledges receipt of that property and agrees to hold and dispose of that property and all additions thereto and income therefrom IN TRUST upon the tenns and conditions hereinafter set forth. Additional property from time to time may be transferred to Trustee with. Trustee's consent by Trustor or by any other person, estate or trust. Any such additional property shall become a part of the Trust estate and shall be held, managed, invested and disposed of on the same tenns and conditions as hereinafter provided. 1.2 Identification of Beneficiaries. The beneficiaries of this Trust, in order of priority, are: a. Robert W. Jarrett and Joyce E. Jarrett, the Trustors, (hereinafter referred to as Trustor Lifetime Beneficiaries); b. Beneficiaries other than the Trustors, (hereinafter referred to as Primary Beneficiary), as follows: Diana G. Cuffe 271 N. Titmus Drive Mastic, NY 11950 Linda J. Hoffer 915 Indiana Ave. Lemoyne, P A 17043 Per Stirpes Per Stirpes And any child or children of Trustor born or legally adopted after the effective date of this Trust. 1.3 Designation of Successor Trustee. If the surviving Trustee dies or otherwise ceases to function as Trustee,. the following shall serve as Co-Successor Trustees: Diana G. Cuffe 271 N. Titmus Dr. Mastic, NY 11950 Linda J. Hoffer 915 Indiana Ave. Lemoyne, P A 17043 1.4 Acts of Trustees. During the lifetime of both Trustors, if there are two Trustees, then the act of either of the Trustees shall constitute the act of the Trust. On the death or incapacity of one or both Trustors, if there are two Trustees, both must consent and act to bind the Trust. If there are three or more Trustees, then the act of a majority of the Trustees shall constitute the act of the Trust. Unanimous approval of Trustees shall be necessary only when expressly provided for elsewhere in this Trust. Declaration of Trust Page 2 Initials ,R<,t ~'{J2; I Other provisions of this Trust notwithstanding, both Trustors expressly pennit either Trustor to sign all documents transferring or otherwise dealing with separate property of that Trustor which has been transferred to the Trust. For the convenience of any person dealing with the Trust, Trustors or others transferring property into the Trust may designate the Trust as owner, with the words following as the sole and sepr;lrate property of _ (designating the name of the Trustor). 1.5 Desi~nation of Advisers. Until notified in writing to the contrary, the following professionals shall have the responsibility for advising Trustees in the professional area hereinafter designated: 1.5.a Le~al Adviser. NONE. 1.5.b Accountin~ Adviser. The latest accountant whose services have been engaged by Trustor for maintenance of all books of account, preparation of tax reports and returns, and all other accounting matters. At the time of executing this Trust, Trustor's accountant is NONE. 1.5.c Insurance Adviser. The latest insurance agent through whom Trustor has purchased life insurance. At the time of executing this Trust, Trustor's insurance adviser is NONE. 1.5.d Investment Adviser. The latest stockbroker or other investment adviser from whom Trustor has purchased stocks, bonds or other investments. At the time of executing this Trust, Trustor's investment adviser is NONE. Trustee is not mandatorily required to follow the advice of these advisers. 1.6 T~st Objectives. Trustors intend, by establishing this Trust to provide: 1.6.a A receptacle during the lifetime of Trustor in which to deposit assets for management by Trustee. 1.6.b A receptacle for estate planning in the event of the death of Trustor. 1.6.c A trust arrangement within the Trust to provide for the maximum marital deduction in the event of the death of one of the Trustors and for Separate Trusts to benefit the surviving Trustor. 1.7 Statement of Wishes. Trustor provides Trustee with this precatory Statement of Wishes to guide Trustee and Trustor reserves the right from time to time for Trustor to give additional written Statements of Wishes to be used as non-mandatory suggestions and guidelines for Trustee: 1.7. a Beneficiary Not W orkine. With respect to distributions to any beneficiary of this Trust, Trustor desires that Trustee not make distributions to a beneficiary when there is reason to believe the beneficiary is not working or is unproductive solely because of the benefits available from this Trust. 1.7.b Suspension of Benefits. Trustor does not wish this Trust to provide benefits to a beneficiary who is living riotously or irresponsibly. Benefits of this Trust shall be suspended until such time as the beneficiary changes direction and pursues a responsible lifestyle, either through employment or continued education. 1.7.c Assistance to Beneficiary. At Trustee's discretion, small amounts may be advanced to assist and encourage a beneficiary to establish a business enterprise, to enter into an entrepreneurial endeavor or to purchase a residence. Declaration of Trust Page 3 Initials R.1J~ ~;i.~ ? 1.7. d Individual Trustee. Trustor desires the Trust be run by individual Trustees and not a cOIporate Trustee for as long as possible. 1.8 Minimum Limitation on Separate Trusts' Size. Irrespective of the other provisions of this Trust, if at any time after the death of Trustor the Trust estate or any Separate Trust created hereunder be of the aggregate principal fair market value of $50,000 or less, such Trust may be terminated in the sole discretion of Trustee and distributed to the beneficiaries in accordance with the provisions of the Trust or Separate Trust in proportion to their interest; or, if such interests are indefinite, then to the beneficiaries of that Trust m such equitable proportions as Trustee shall determine. 1.9 Trust Name. This Trust shall, for convenience, be known as the TIIE JARREIT FAMILY TRUST, and it shall be sufficient that it be referred to as such in any deed, assignment, bequest or devise. 1.10 Place of Constructive Notice of Trust. The parties to this Trust designate the County Recorder of Orange County, CA, as the location where title companies and others may check to ascertain if this Trust has been modified in any material respect. A signed Abstract of certain terms of this Trust shall be filed or recorded with that public office as notice of the existence of this Trust, its Trustor, Trustee, beneficiaries, Trustee powers and other relevant provisions. All parties dealing with this Trust may rely on the Abstract, Amended Abstract and other documents fIled or recorded with that public office in ascertaining the status of this Trust and may assume, if there are no recordings to the contrary, that no material modifications have been made to the, Trust since the last recording. 1.11 Interpretation. Inasmuch as the continued welfare of Trustor is of primary and paramount concern, Trustee is directed to liberally construe all provisions of this Trust in favor of the Trustor, and if there is any doubt or conflict of interest, the rights and interests of the Trustor shall be dealt with by Trustee as primary and paramount to the rights and interests of all other beneficiaries. 1.12 Incorporation of Last Will and Testament. This trust incoIporates by reference the Last Will and Testaments of Trustors, which provides if a Revocable Living Trust, of which he and she is a Trustor, is in existence at the time of his or her death, all the residue of his or her estate and property, wherever situated, including lapsed legacies and devises, but expressly excluding any property over which he or she may have a power of appointment, is devised to the then Trustee under that trust agreement. It is intended by the Trustors of this trust that this is the trust into which the Last Will and Testament pours over as provided for in that Will. 1.13 Protection Aeainst Dissipation of Trust. Under no circumstances shall any beneficiary of this trust who is addicted to alcohol, drugs, or other chemical dependencies receive any distributions from this trust in principal or interest directly from Trustee. If Trustee suspects that any beneficiary has any addiction to gambling, alcohol, drugs or other chemical dependency, Trustee shall require that periodic tests, no more frequently than monthly, of the beneficiary to insure that the beneficiary is not taking these substances. Trustee shall, upon discovering that these substances are being taken, require periodic checks of the beneficiary for. a period of one year before any distributions are made to that beneficiary. Trustee may require at the time the principal distributions are due to any beneficiary that the beneficiary take a test at an accredited laboratory selected by Trustee as a prerequisite for receiving a principal distribution. Upon discovery of any addiction or dependency, the Trustee may make payments to hospitals, doctors, or other persons or organizations treating or assisting the beneficiary to recover from the addiction or dependency. Declaration of Trost Page 4 Initials }Qt~ ~t~. j , The purpose of this provision is to dissuade any beneficiary of this trust from gambling or using harmful substances which are addictive, to assist the beneficiary in recovery from any such addiction or dependency, and to prevent the trust funds, as much as possible, from ever being used to support an addIction or dependency that is harmful to the beneficiary. . Trustor shall notify beneficiaries of these provisions forthwith and shall offer any encouragement or assistance the beneficiaries request to avoid losing any benefits from this trust in the future. . . . Declaration of Trost Page 5 Initials ~-a- . ~[,~ i ( Part Two Dispositive Provisions Trustor Lifetime Trust 2.1 Distribution of Income and Principal. While both Trustors are living, Trustee shall distribute the net income and principal of the community property in this Trust as both Trustors may direct Trustee from time to time by a written instrument signed by both Trustors and delivered to Trustee. If one Trustor becomes incapacitated, the competent Trustor shall have the right to distribute the net income and principal of one-half of the community property as the competent Trustor may direct. Any income not disposed of by Trustee under this paragraph by the end of each fiscal year of the Trust shall be added to principal. It is very probable, from time to time, that separate property or property held with others as tenants in common, tenants by the entirety or community property will be J?laced in this Trust. The Trustee is instructed to correctly identify the property as it is placed m the Trust and to maintain the character of the property as either community or separate as long as it remains in the Trust. Under no circumstances shall Trustee commingle any community property with separate property. Trustee shall keep books of account, so that the commumty and separate property can be clearly identifiable upon inspection of the Trust at any time. While both Trustors are living, should there be separate property of either Trustor in the Trust, then the Trustor owning that separate property may direct Trustee, in writing signed by that Trustor and delivered to Trustee, as to the distribution of principal and income from that separate property. Either Trustor may, at any time, direct Trustee m writing to transfer that Trustor's separate property out of the ownership of the Trust into the ownership of that Trustor in his own name. 2.2 Incapacity of Trustor. If, in the opinion of Trustee, either Trustor becomes incapacitated through illness, age or other cause, the Trustee may, in Trustee's discretion, while Trustee believes such incapacity continues, apply all or any part of the net income or principal of this Trust for the benefit of either Trustor in such amounts and in such manner as Trustee may determine without regard to the other means of Trustors. Any distributions to either Trustor shall be made fIrst from that Trustor's separate property, and then from that Trustor's half of the community property. 2.3 Need of Funds bv Trustor or Beneficiaries. If, at any time, in the sole discretion of Trustee, Trustor or child of Trustor, should for any reason be in need of funds for his or her proper care, maintenance, support or education, Trustee may pay to or apply for the benefit of anyone or more of these persons any amount from the principal as Trustee may, from time to time, deem necessary or advisable. Distribution of Assets on Death of Trustors 2.4 Death of Trustors. After the death of a Trustor, the trust shall be administered and distributed as follows: Declaration of Trost Page 6 Initial9~ ' ~,s~ ; r 2.4.a Treatment of Lifetime Trust on Death of Trustor and Payment of Death Expenses of First Deceased Trustor. On the death of a Trustor, this Trustor Lifetime Trust shall continue until all property is distributed to the other sub-Trusts established by this Trust. Transfers from this Trustor Lifetime Trust shall be made as soon as practicable and convenient after the death of a Trustor and after all accounting, legal and administrative taxes and decisions have been comeleted. From the time of the death of a Trustor until tennination when all assets have been distributed, this Trustor Lifetime Trust shall operate as an Irrevocable Trust. On the death of a Trustor (and before distribution to any sub-Trust), Trustee shall pay the expenses of the last illness, funeral and burial of the deceased Trustor, together with any inheritance, estate or other death taxes that may, by reason of his death, be due upon or in connection with the entire Trust estate or any portion thereof and any taxes that may be due on any property outside the Trust estate, unless Trustee shall determine, m Trustee's discretion, that other provisions have been made for the payment of such expenses and taxes. All such expenses and taxes which may be paid by Trustee shall be charged against and paid from the Trust share which is included in the deceased Trustor's taxable estate. 2.4. b Special Distribution on Death of Trustor Husband. There shall be made by the Trustee from the Trust share included in the estate of the Trustor Husband the following distributions on the death of Trustor Husband: NONE If any of the above-named beneficiaries with "per stiJ::pes" designated after his/her name, predeceases this Special Distribution without issue, then this Special Distribution shall lapse and the sum that deceased beneficiary would have received shall be distributed along with other Trust property in accordance with the remaining provisions of this Trust Agreement. If any of the above-named beneficiaries who is not designated as "per capita" predeceases this Special Distribution with issue under the a~e of 18, then the share allotted to such minor beneficiary shall be distributed to a Trust established by Trustor for such minor beneficiary or, if none, to the legal guardian of such minor beneficiary upon the Trustee receiving bona fide evidence of Letters of Guardianship issued by a court of law. Payment or conveyance of Special Distributions shall be made when, in Trustee's discretion, such Special Distribution will not work a fmancial hardship on the administr~tor of the Trust. In addition to the above Special Distributions, in the event that any residence and/or personal property described in the Last Will and Testament of surviving Trustor have been transferred to the Trust, then it is Trustor's intent, and the Trustee is instructed, to distribute the residence and/or personal property as set forth in the Will or in any Codicils to that Will. 2.4. c Special Distribution on Death of Trustor Wife. There shall be made by the Trustee from the Trust share included in the estate of the Trustor Wife the following distributions on the death of Trustor Wife: NONE If any of the above-named beneficiaries with "per stUpes" designated after his/her name, predeceases this Special Distribution without issue, then this Special Distribution shall lapse and the sum that deceased beneficiary would have received shall be distributed along with other Trust property in accordance with the remaining provisions of this Trust Agreement. Declaration of Trust Page 7 InitialS* ~,t~ t I If any of the above-named beneficiaries who is not designated as "per capita" predeceases this Special Distribution with issue under the age of 18, then the share allotted to such minor beneficiary shall be distributed to a Trust established by Trustor for such minor beneficiary or, if none, to the legal guardian of such minor beneficiary upon the Trustee receiving bona fide evidence of Letters of Guardianship issued by a court of law. Payment or conveyance of Special Distributions shall be made when, in Trustee's discretion, such Special Distribution will not work a fmancial hardship on the administrator of the Trust. In addition to the above Special Distributions, in the event that any residence and/or personal property described in the Last Will and Testament of surviving Trustor have been transferred to the Trust, then it is Trustor's intent, and the Trustee is instructed, to distribute the residence and/or personal property as set forth in the Will or in any Codicils to that Will. Primary Beneficiary Trust 2.5 Administration of Primary Beneficiary Trust. The Primary Beneficiary Trust shall be administered and distributed as follows: 2.5.a Division of Trust. Upon the death of the surviving Spouse, Trustee shall divide the property distributed into this sub-Trust in accordance with paragraph 2.4.n (primary BeneficI~ Trust) of this Trust Agreement the amounts provided for in sub-paragraphs (1), et seq., to this paragraph 2.5.a and then divide the remaining Trust estate into as many equal shares as may be necessary to apportion one share for each child then living, and one share for the then living descendants collectively of each deceased child. Trustee shall obtain a separate tax identification number for each Trust share and, except as provided elsewhere in this Trust instrument, treat each Trust share as a separate tax entity in accordance with proper accounting rules and procedures. 2.5.b Interim Distributions of Income and Principal. If a child is under the age of 21 years, then Trustee shall pay to at apply for the benefit of such child so much of the net income and ~rincipal of this Trust as Trustee, in Trustee's discretion, shall deem necessary or advisable, conSidering the best interest of the child, for the child's health, maintenance, support and education. Trustee shall make no distributions to any child which would have the effect of discharging any person's legal obligation to support such child, or for the support or maintenance of any person dependent on child. Any net mcome of this Trust which is not distributed to a child shall be added to the principal of that child's Trust at the end of each year. After a child attains the age of 21 years, Trustee shall pay to or apply for the benefit of such child the entire net income earned from the assets of their Trust and so much of the principal of this Trust as Trustee, in Trustee's discretion, shall deem necessary or available. Diana G. Cuffe 271 N. Titmus Drive Mastic, NY 11950 50% Linda J. Hoffer 915 Indiana Ave. Lemoyne, P A 17043 50% 2.5.d Distribution on Death of Child. Each share apportioned in accordance with paragraph 2.5.a (Division of Trust) to the living descendants of a deceased child shall be held or distributed in accordance with paragraph 2.6 (Administration of Secondary Beneficiary Trust) of Declaration of Trust "g.8 "".. ~~ .t 5" . , this Trust Agreement. If, after the allocation of Trust shares in accordance with paragraph 2.5.a (Division of Trust), there occurs the death of any child, Trustee shall distribute that child's Trust share, as then constituted, to the appointees under any special power of appointment made by that deceased child in accordance with paragraph 2.5.f (Special Power of Appointment to Child). To the extent the deceased child does not effectively exercise his Power of Appointment, then that child's Trust shall be distributed to his then living descendants in accordance with the provisions of paragraph 2.6 (Administration of Secondary Beneficiary Trust). If the deceased child has no livmg descendants, then that child's Trust share shall be distributed to that child's then living descendants by right of representation; except that the share distributable to any beneficiary, in default of appointment, may, in Trustee's absolute discretion, be added to in whole or in part and commingled with another Trust which primarily benefits that beneficiary and held as if it had been an original part of that other Trust. If any share becomes distributable to any person under the age of 21 years, his share shall vest in him, but distribution shall be postponed until after he attains the age of 21 years. During such time as any beneficiary is under the age of 21 years, Trustee may pay to or for the benefit of such benefiCIary so much of the income and principal of the retained share as Trustee may deem necessary or advisable for his proper care, maintenance, support and education. Trustee shall add to the principal any undistributed income. 2.5.e Authoritv to Pay Death and Tax Expenses of Child. Upon the death of a child provided for in paragraph 2.5.a (Division of Trust), Trustee shall pay from the share of such child his expenses of last illness, funeral and burial together with any inheritance, estate or other death taxes that may by reason of such death be due upon or in connection with the share of such child. 2.5.f Special Power of Appointment to Child. Each child shall have a Special Power to Appoint by Will the whole or any part of the principal of the Trust established on his account to or among that child's living descendants, in such amounts or proportions and in such lawful interests and estates, whether absolute or in trust, as the child may direct. No child shall have any power to ap.?oint any part of the principal either directly or indirectly in such a way as to benefit himself, his estate, his creditors or the creditors of his estate. Further, he shall have no power to appoint any policies of insurance or the proceeds of any policies of insurance on his life which such Trust may own. Any Power conferred on any child shall be exercisable by such child by a specific reference to the Power in ~e Will of such child. At any time after 90 days fonowing the death of a child, Trustee, in the absence of actual notice of the existence of a Will exercising this Special Power of Appointment (which notice is, in the opinion of Trustee, worthy of belief), shall be entitled to treat this Special Power of Appointment as not exercised; provided, however, that this provision shall not affect any right which an appointee (should there be an appointee, regardless of the lack of knowledge of such fact on the part of Trustee), or a beneficiary in default of appointment may have against any distributee with respect to property distributed to such distributee. Any such Power shall be releasable in whole or in part by such child. In addition to other methods of release recognized by law, such Power may be released by written instrument delivered to Trustee expressly declaring the intention of that child to release his Power in whole or in designated part. This Special Power of Appointment shall not be exercised while the Trustor is still living. A Will exercising this Special Power of Appointment is effective on death. Declaration of Trust Page 9 Initials~. ~-~~ . I 2.5.g Disclaimer by Child. Any child may disclaim, in whole or in part, any property that is to become or has become the vested interest of such child, before such property is distributed to the child. Such disclaimer shall be in writing under any method recognized at law. The property subject to the disclaimer shall then be held or distributed in accordance with paragraph 2.8 (Distribution on Death of Child). A written signed copy of the disclaimer shall be mailed or delivered to the Trustee. Secondary Beneficiary Trust 2.6 Administration of Secondary Beneficiary Trust. Upon the death of surviving Spouse and u'pon the disclaimer or death of a child, the portion that such child would have received but for his death or disclaimer and which is not distributed by such child's exercise of a Special Power of Appointment shall be held, administered and distributed by Trustee as follows: 2.6.a Division of Trust. The share that such child would have received but for death or disclaimer shall be divided by Trustee into as many equal shares as may be necessary to apportion one share for each then living descendant of such child hereinafter secondary beneficiary, and one share for the then living descendants collectively of each deceased secondary beneficiary to be distributed by right of representation. 2.6.b Trust for Descendants of Deceased Secondary Beneficiary at Time of Division. Each share apportioned to the living descendants of a deceased secondary beneficiary shall forthwith be distributed by right of representation; provided, however, if any share becomes distributable to any person under the age of 21, his share shall vest in him, but distribution shall be postponed until after he attains the age of 21 years. During such time as any descendant is under 11 years of age, Trustee shall pay to or for the benefit of the descendant so much of the income and principal of the retained share as Trustee may deem necessary or advisable for his proper care, maintenance, support and education. Trustee shall add to the principal any undistributed income. If a descendant of a deceased secondary beneficiary dies before the age of 21, that descendant's share shall be paid to his estate. 2.6.c Interim Distributions of Income and Principal. Each share apportioned to a secondary beneficiary shall be held as a Separate Trust for such secondary beneficiary, during which time Trustee shalll?ay to or apply for the benefit of such secondary beneficiary so. much of'the net income and pnncipal of such share as Trustee, in Trustee's discretion, shall deem necessary or advisable, considering the best interest of the secondary beneficiary, for the secondary beneficiary's care, maintenance, support and education. Trustee shall make no distributions to any secondary beneficiary which would have the effect of discharging any person's legal obligation to support such secondary beneficiary, or for the support or maintenance of any person de'pendent on secondary beneficiarx. Any net income of the Trust for the secondary beneficIary in any year which is not distributed shall be added to the principal of that Trust at the end of each year. After the secondary beneficiary attains the age of 21, Trustee shall pay to or apply for the benefit of such secondary beneficiary the entire net income earned from the assets of that beneficiary's Trust. After the secondary beneficiary attains the age of21 years, Trustee shall pay to or apply for the benefit of the secondary beneficiary the entire net income earned from the assets of this Trust, and so much of the principal of this Trust as Trustee, in Trustee's discretion, shall deem necessary or advisable, considering the best interests of the secondary beneficiary for the secondary beneficiary's health, maintenance, support and education. 2.6. e Distribution on Death of Secondary Beneficiary. If a secondary beneficiary dies after the allocation of Trust shares in accordance with paragral?h 2.6.a (Division of Trust) Trustee shall distribute his Trust share, as then constituted, to or III trust for the benefit of such person among Trustor's descendants and their spouses, upon such conditions and estates, with Declaration of Trust "'gelD r..;ti.. ~ t ;r , t such powers, in such manner, and at such time(s) as the secondary beneficiary appoints and directs by Will specifically referring to this Special Power of Appointment. To the extent a deceased secondary beneficiary does not effectively exercise his Special Power of Appointment, his share shall be distributed outright to his living descendants by right of representation or, if there are none, then to Trustor's then living descendants by right of representation; except that the share distributable to any beneficiary, in default of appointment, may, in Trustee's absolute discretion, be added to in whole or in part and commingled with another Trust which primarily benefits that beneficiary and held as if it had been an original part of that other Trust. If any share becomes distributable to any person under the age of 21 years, his share shall vest in him, but distribution shall be postponed until after he attains the age of 21 years. During such time as any beneficiary is under the age of 21 years, Trustee may pay to or for the benefit of such beneficiary so much of the income and principal of the retained share as Trustee may deem necessary or advisable for his proper care, maintenance, sUPI?ort and education. Trustee shall add to the principal any undistributed income. If such beneficIary dies before the age of 21, that beneficiary's share shall be paid to his estate. 2.6.f Separate Trusts for Tax Purposes. If property becomes administered under this Trust section for the benefit of a secondary beneficiary, then the share set aside for each secondary beneficiary shall be treated and administered as a separate tax-paying Trust, ifpossible under the revenue laws at the time the Trust is administered. 2.6.g Disclaimer bv Secondary Beneficiary. Any secondary beneficiary may disclaim, in whole or in part, any property that is to or has become the vested interest of such secondary beneficiary, before such property is distributed to the secondary beneficiary. Such disclaimer shall be in writing under any method recognized at law. The property subject to the disclaimer shall then be held or distributed in accordance with paragraph 2.14.e (Distribution on Death of Secondary Beneficiary). A written signed copy of the disclaimer shall be mailed or delivered to the Trustee. Contingent Distribution 2.7 Contim!'ent Distribution. If all descendants of Trustors predecease the termination of this Trust, so that no beneficiary remains to take under the foregoing provisions, then, upon the death of the last surviving beneficiary, the Trost shall terminate and be distributed as follows: . 2.7.a The separate property of Trustor Wife shall be distributed to the heirs at law of Trustor Wife in accordance with the laws of succession of the State of CA as they exist at the time of executing the last amendment to this Trust. 2.7.b The separate property of Trustor Husband shall be distributed to the heirs at law of Trustor Husband in accordance with the laws of succession of the State of CA as they exist at the time of executing the last amendment to this Trust. 2.7.c The community property of Trustors shall be divided into two equal portions, one portion to be distributed to the helTs at law of Trustor Husband in accordance with the laws of succession of the State of CA as they exist at the time of executing the last amendment to this Trust, and the other one-half to be distributed to the heirs at law of Trustor Wife in accordance with the laws of succession of the State of CA as they exist at the time of executing the last amendment to this Trust. 2.7. d If there are no qualifying heirs at law of one Trustor, then the portion set aside for that Trustor's qualifying heirs at law shall be distributed to the qualifying heirs at law of the other Trustor. . . . Declaration of Trost Pog.11 lID'". ~ ~.~ ':1' I I Part Three Power to Amend or Revoke 3.1 Power in Trustors Durin~ Lifetimes of Both Trustors. Subject to paragraph 3.3 (Irrevocability on Death of First Trustor Spouse), Trustors reserve the right at any time or times to amend or revoke this Trust Agreement and the Trusts hereunder, in whole or in part, by an instrument in writing, signed by both Trustors and delivered in Trustors' lifetimes to Trustee; provided, however, that if there are Husband and Wife Trustors, no such alteration, amendment or revocation shall affect the character of any property held by the Trust, and the interest of the Husband and Wife in the various Trust assets, whether community, separate or otherwise, shall retain its character as such. Nothing herein shall be construed as a transfer of separate properties from Husband to Wife or from Wife to Husband, and in the event of any revocation or amendment, all property shall be reconveyed to the respective owners. If this Trust Agreement is revoked in its entirety, the revocation shall take effect u.{>on the delivery of the required writing to Trustee. On the revocation of this Trust Agreement ill its entirety, Trustee shall deliver to Trustors, or as Trustors may direct in the instrument of revocation, all the Trust estate. 3.2 Correlation of Trustors' Last Wills and This Trust Aereement. Trustors' Wills may provide for additions to the Trust estate hereunder and should be examined when making any amendment to or revocation of this Trust Agreement. 3.3 Irrevocability on Death of First Trustor Spouse. From and after the death of the fIrst Trustor to die, this Trust Agreement shall become irrevocable and may not be amended or revoked by any person. 3.4 Special Provision for Small Trust. In the event that, on the death of one of the Trustors, there are no living children and the value of the property in the Trust is less than $50,000, then the Trust shall continue to be revocable by the surviving spouse until such time that the surviving spouse dies, at which time the Trust shall become irrevocable. . . . Declaration of Trust p,.. 12 1nW,1. ~.t ~, . I Part Four Trustee's Powers 4.1 Tax Returns. Trustee shall have the power to fIle estate, gift and income tax returns on behalf of a deceased person having any interest in this Trust. 4.2 Trustee Powers. In the investment, administration and distribution of the Trust estate and the several shares thereof, the Trustee (subject only to the duty to apply the proceeds and avails of the Trust estate to the purposes herein specified) may perlorm every act in the management of the Trust property which individuals may perlorm in the management of like property owned by them free of trust. Trustee may exercise every power with respect to each item of property in the Trust estate, real or personal, which individual owners of like property may exercise, including, by way of illustration but not by way of limitation, the following powers: 4.2.a To Acquire Stock Riehts. To acquire stock and securities of Trustee by the exercise of rights issued in connection with the stock of Trustee comprising a portion of the Trust estate; to vote in person or by general or limited proxy with respect to any shares of stock or securities held by Trustee; to consent, directly or through a committee or other agent to the reorganization, consolidation, merger, dissolution or liquidation of any corporation in which the Trust estate may have any interest; to consent to the sale, lease, pledge or mortgage of any property by or to any such corporation; and to make any payments and take any steps which Trustee deems necessary or proper to enable Trustee to obtain the benefIt of such transaction. 4.2.b To Add Net Income to Principal. To add to principal that portion of the net income of this Trust in excess of net income distributed to beneficiaries and reinvest such amounts at the end of the taxable year of this Trust. 4.2.c To Appoint Ancillary Trustee. To appoint an individual or another corporation as Trustee if the Trustee is unable to act with respect to real and tangible personal property not located in the state of the Trust's situs. The appointed Trustee (1) shall have all the powers of the appointing Trustee, to be exercised, however, only with the approval of the appointing Trustee, (2) shall not, unless required by law, make periodic judicial accounting, but shall furnish the appointing Trustee with seIDl-annual statements, and (3) may delegate any or all Trust powers. The appointing Trustee is to require any Trustee so appointed to remit to the appointing Trustee the income and net proceeds of any sale of any property. The appointing Trustee may remove any Trustee appointed pursuant to this paragraph at any time and to appoint another, including the appointing Trustee. 4.2.d To Apportion Principal and Income. To determine what is principal and what is income and to allocate receipts and expenses between them as Trustee shall ill good faith determine to be in accordance with the law; provided, however, that notwithstanding any such laws, all dividends payable in shares of a corporation other than the declaring corporation and all capital gains distributions of any Trust investment shall be apportioned to the principal. 4.2.e To Borrow. To borrow money for any pUIJ?ose connected with the protection, preservation or improvement of the Trust estate whenever ill Trustee's judgment this action is deemed advisable, and as security for same to mortgage or pledge any real estate or personal pro~erty forming a part of the Trust estate upon such terms and conditions as Trustee deems adVIsable. Money may be borrowed from the banking department of a corporate Trustee. Declaration of Trust "'ge 13 1ni<W'~,t.'is' 4.2.f To Buy on Mar2"in. To buy, sell and hypothecate securities on margin; to buy, sell and write put and call options; and to transact all types of securities transactions with a brokerage fIrm that are allowed under SEe regulations. 4.2.g. To Commence or Defend Liti2"ation. . To commence or defend such litigation with respect to the Trust or any property of the Trust as Trustee deems advisable, at the expense of the Trust; and to comprormse, abandon, or otherwise adjust any claims or litigation against or in favor of the Trust. 4.2.h To Deal Between. To sell or purchase assets from any trust or estate in which the beneficiary of the Trust established by Trustor may be interested, including sales by the Trust hereby established to any other of the Trusts hereby established; to deal in every way and without limitation or restriction with the Personal Representative, Trustee or other representative of any trust or estate in which any beneficiary hereunder has any existing or future interest, even though Trustee is acting in such other capacity, without liabYity for loss or depreciation resulting from such transactions; and to purchase from, sell to, or otherwise deal with any 'coIporation, partnership or association with which any Trust may be affiliated, or in which any Trost may in any other way be interested, as freel~ as Trustee might or could deal with an independent third party without any greater responsibility, all rules or provisions of law to the contrary being hereby expressly waived. 4.2.i To Deleeate Powers. To delegate powers, discretionary or otherwise, for any pU1J>ose to one or more nominees or proxies with or without power of substitution; and to make aSSIgnments to and deposits with committees, Trustees, agents, depositories and other representa- tives. 4.2.j To Desienate Si2"nator on Bank Accounts. To have the power to designate, as signator or joint signator on any Trust bank account, any person Trustee desires to designate. This person shall act as agent for Trustee and may sign on the bank account, deposit funds in the bank account or otherwise deal w~th the bank account. 4.2.k To Determine Value. To determine the market value of any investment of the Trust estate for any pUIpose on the basis of such quotations or information as Trustee may deem pertinent and reliable without any limitation whatsoever. 4.2.1 To Develop. To develop, improve, lease, partition, abandon, subdivide, d~cate as parks, streets and alleys, and grant easements and nghts-of-way with respect to any real property or improvements thereon; and to improve, construct, repair, alter, reconstruct, or demolish any such improvements. 4.2.m To Dissolve Corporations. To enter into an agreement to dissolve a cOIporation in which stock is owned by the Trust, when, in Trustee's opinion, such action is in the best interest of the Trust estate. 4.2.n To Employ A2"ents. To employ agents, experts and advisors, even if they are employed by Trustee or any beneficiary of the Trust estate; and to make reasonable and proper payments to such agents, experts or advisors for services rendered. 4.2.0 To Establish Reserves. To set aside from rents, profits or other income received, reserves for taxes, assessments, insurance premiums, mortgage payments, debt l?ayments, repairs, improvements, depreciation, obsolescence and general maintenance of buildings and other property, and for the equalization of payments to or for beneficiaries entitled to receive income, as Trustee deems advisable. Declaration of Trust P... 14 InW'" K?i~. . Jt,~~ 4.2.p To Exploit Oil. Gas and Other :Mineral Interests. To drill, mine and otherwise operate for the development of oil, gas and other mineral interests; to enter into contracts relating to the installation and operation of absorption and repressuring plants; to enter into unitization or pooling agreements for any purpose including primary or secondary recovery; to place and maintain pipelines and telephone and telegraph lines; to execute oil, gas and mineral leases, division and transfer orders, grants and other instruments; and to perform such other acts as Trustee deems appropriate, using such methods as are commonly employed by owners of such interests in the community in which the interests are located. 4.2.q To Guarantee Debts. To sign guarantees ofloans and co-sign or endorse any type of loan document and thus obligate the Trust estate for and on behalf of any individual, partnership, corporation, Trust, or other type of participating interest with which the Trust is involved ill some type of business relationship; and to guarantee an indebtedness, co-sign or endorse an indebtedness for and on behalf of one of the named beneficiaries of the Trust as Trustee deems advisable. This power supplements the power of Trustee to borrow. 4.2.r To Have Ri~hts. To have all the rights, powers and privileges of an owner, including the power to give proxies, pay assessments, abandon stock; to expend any sums deemed by Trustee to be necessary for the protection of the Trust estate; to participate in voting trusts, pooling agreements, foreclosures, reorganizations, consolidations, mergers and liquidations; and to participate in and deposit securities with any creditors, bondholders, stockholders or other protective committees. 4.2. s To Hold Partnership Interests. To act as a general partner or as a limited partner in any general or limited partnership in the same manner that an individual could act ill such capacity . 4.2.t To Hold Property. To hold, without liability for loss or depreciation resulting from such retention, any original property, real or personal, received by Trustee from Trustor, including stock and securities of Trustee, for such time as Trustee shall deem advisable. Even though such property may not be of the character prescribed by law or by the terms of this Trust Agreement for investment by the Trust and represents a large percentage or all of the Trust estate, such original property may be held as a permanent investment. 4.2.u To Invest. To invest the Trust estate, both principal and income, in any property or undivided interests therein, wherever located, without being limited by any statute or .rule of law concerning investments of Trustees; to hold on deposit or to deposit any funds in banks, including Trustee bank, in any form of account whether or not interest-bearing; to cause any of the investments which may be delivered to or acquired by Trustee to be registered in Trustee's name or in the name of a nominee; and to retain any investment received in exchange in any reorganization or recapitalization. 4.2.v To Make Distribution. To make any distribution or division of the Trust estate in cash or in kind, or both; to allot different kinds or disproportionate shares of property or undivided interests in property among the beneficiaries; and to continue to exercise any powers and discretions herein given for a reasonable period after the termination of the Trust, but only for so long as no rule of law relating to perpetuities would be violated. 4.2.w To Make Loans. To make loans to any person, including any beneficiary, at a reasonable interest rate and with adequate security. 4.2.x To Operate Business. To operate and manage, at the sole risk of the Trust estate and not at the risk of Trustee, any business received in trust, as long as Trustee deems advisable; to incorporate any unincorporated business received hereunder; and to accept beneficial employment with or from any business in which the Trust estate may be interested, whether by Declaration of Trust Page 15 Initials~' ~ ~It. . way of stock ownership or otherwise, even though the interests of the Trust estate in the business shall constitute a majority interest therein or the complete ownership thereof, and to receive appropriate compensation from such business for such employment. 4.2.y To Pay Costs. To pay all costs, charges and expenses of the Trust estate and pay or compromise all taxes pertaining to the administration of the Trust estate which may be assessed against it or against Trustee on account of the Trust estate or the income thereof, together with a reasonable compensation to Trustee for Trustee's services hereunder, including services in the matter of whole or partial distribution of the Trust estate. 4.2.z To Purchase Insurance. To insure the Trust estate against such risks and for such amounts and upon such terms as Trustee deems necessary; to purchase ]?olicies of insurance on the life of any beneficiary of this Trust, or on the life of any other person ill whom this Trust may have an insurable interest; to continue in effect or to terminate any life insurance policy which may be owned or held by this Trust; to pay (from income or principal) any premiums or other charges; and to exercise any and all rights or incidents of ownership in connection therewith. 4.2.aa To Purchase Special Properties. To purchase or otherwise acquire, and to retain, whether originally a part of the Trust estate or subsequently acquired, any and all stocks, bonds, notes or other securities, including interests in investment trusts and common trust funds or any variety of real or personal property, as Trustee may deem advisable, whether or not such investments be of the character permissible for investments by fiduciaries, or be unsecured, unproductive, underproductive, overproductive, or of a wasting nature. Investments need not be diversified and shall be made or retained with a view to a possible increase in value. Trustee may at any time render liquid the Trust estate, in whole or in part, and hold cash or readily marketable securities with little or no yield for such period as Trustee may deem advisable. 4.2.bb To Receive Additional Assets. To receive additions to any Trusts established under this Trust Agreement from any source, and to administer such additions according to the terms of this Trust Agreement. 4.2.cc To Sell and Lease. To sell, lease, pledge, mortgage, transfer, exchange, convert or otherwise dispose of, or grant options with respect to, any and all property at any time forming a J?art of the Trust estate, in such manner, at such time or times, for such purposes and for such pnces and upon such terms, credits and conditions as Trustee deems advisable. Any lease may be made for such period of time and upon such terms and conditions as Trustee may deem proper and may extend beyond the period fixed by statute for leases made by fiduciaries and beyond the duration of the Trust without the approval of any court. 4.2.dd To Settle. To complete, extend, modify or renew any loan, note, bond, mortgage, contract or any other obligation under which the Trust estate may be a party or obligated or which may be a lien or charge against any property of the Trust estate, even though the Trust estate may not be liable thereon, in such manner as Trustee deems advisable; to pay, compromise, compound, adjust, submit to arbitration, sell or release any claim or demand of the Trust estate against others or of others against the Trust estate as Trustee deems advisable, and to make any payments in connection therewith which Trustee deems advisable. 4.2.ee To Transfer Situs. To transfer the situs of the Trust estate to some other location. 4.3 Discretionary Power to Purchase Property from Estate of Trustor. Trustee is authorized to purchase securities and other property, real or personal, belonging to the estate of Trustor, and to retain such purchased property as an investment of the Trust. Declaration of Trost _16 fuitioJ./ttt"o,t~, 4.4 Discretionary Power to Make Loans to Estate of Trustor. Trustee is authorized to make loans from the Trust estate to the Trustor's executors, administrators or personal representa- tives, provided such loans are made with adequate security and at a reasonable interest rate. 4.5 "s" Corporation Stock. Upon the death of a Trustor whose ItSIt Corporation stock is included in the Trust estate, Trustee shall have the power to immediately distribute, in Trustee's sole discretion, all Itslt Corporation stock directly to the current Trust beneficiaries, if this is necessary to avoid tax problems for the parties. If for any reason, either through a deliberate or an inadvertent action by any party, this Trust becomes a shareholder of an It S It corporation, then immediately on that event, the Trustee shall pay all income attributable to the beneficiaries of this Trust under It S" corporation regulations, directly to the beneficiary until such time as the "Sit corporation terminates its Its" cOlporation status and becomes a regular It C" corporation in good standing. During the period when this Trust is a shareholder of ItS" corporation stock, Trustee shall take all actions to meet the requirements mandated for a Trust to qualify as an "S It corporation shareholder. Trustee shall meet regularly with the then serving certified public accountant and attorney for the corporation to make certain Trustee has taken all necessary steps to ensure the Trust qualifies and thereby avoid an inadvertent tennination of the "s" corporation status. If qualification for It S It corporation stock ownership requires the addition of any terms or removal of any terms of the Trust, the Trustee shall upon notice of this requirement exercise his Trustee rights and duties under the Trust to add or remove provisions in order to ensure that the Trust has the requisite terms to qualify for It S" corporation stock ownership. 4.6 Authority. No person dealing with Trustee shall be obliged to inquire as to Trustee's powers or to see to the application of any money or property delivered to Trustee. Trustee shall not be required to obtain authority or approval of any court in the exercise of any power conferred hereunder. Trustee shall not be required to make any current reports or accounting to any court nor to furnish a bond for the proper performance of Trustee's duties hereunder. Trustee may execute and deliver any and all mstruments in writing which Trustee deems advisable to carry out any of the foregoing powers. No party to any such instrument in writing signed by Trustee shall be obliged to inquire into its validity, or be bound to see to the application by Trustee of any money or other property paid or delivered to Trustee pursuant to the terms of any such instrument. . 4.7 Additional Powers Given by Law. The powers enumerated in this Part Four shall be construed as being in addition to any other authority given or conferred upon Trustee by law. 4.8 Continuation of Powers. After tennination of any Trust created herein until the same is f'mally distributed, Trustee shall have the authority to exercise all powers and authority including any discretionary powers. 4.9 Distribution to Beneficiary's Trust. If any beneficiary of this Trust has created a Trust for the management of his property, or if any minor or incompetent beneficiary has had a Trust created for his protection, care, support or general welfare, then Trustee may, in his discretion, make the designated distributions under this Trust to that beneficiary by transferring to the Trustee of that beneficiary's Trust the share of that beneficiary, instead of distributing the share to the beneficiary directly. Should a beneficiary ask in writing that a share be distributed to a Trust by disclaimer, Special Power of Appointment, or otherwise, then such request shall be controlling on Trustee. 4.10 Mer~er of Trusts. If at any time Trustee is holding any Trust under this Trust Agreement for the primary benefit of any person or persons for whose primary benefit Trustee is holding any Declaration of Trust Page 17 Initials/~!tt \-' i ~t6' , , other Trust, upon substantially the same terns, created by Trustor or any member of Trustor's family under this or any other Trust Agreement, Trustee may, in Trustee's discretion, consolidate, commingle and hold them as a single Trust. Trustee shall allot to each Separate Trust an undivided interest in the mingled funds that shall always be equal to that Separate Trust's proportionate contribution (as adjusted from time to time by payments, accumulations of income or additions to principal) to the mingled funds. 4.11 Power to Transfer Assets to Another Trust. For purposes of facilitating administration, reducing the cost of managing this Trust, greater protection of the assets or for other reasons which Trustee, in his opinion, feels are in the best mterest of the beneficiaries, the Trustee may, in his absolute discretion, transfer all or some of the property of the Trust or sub-Trust to another valid Trust which provides substantially the same benefits for the same beneficiaries, rather than distributing directly to a beneficiary. 4.12 Authority To Make Tax Elections and Allocations. Trustee is authorized to make tax elections and allocations under any statute or rule of law as the Trustee deems prudent to minimize or eliminate taxes with respect to the estate of the Trustor and any other beneficiary under this Trust Agreement (following the death of the Trustor) and no adjustments shall be made with respect to the interests of the beneficiaries to compensate for the effect of the Trustee's tax elections and allocations. . 4.13 Treasurv Bonds to Pay Estate Tax. During the lifetime of Trustor, Trustee is authorized to purchase and retain, for the Trust estate, United States of America Treasury Bonds which may be redeemed at par in pa~ment of the Federal Estate Tax. which may be imposed upon Trustor's estate. Trustee is authonzed to borrow funds for the purpose of purchasing such bonds, and is authorized to secure any such borrowing by pledge of the bonds so purchased, by pledge of any other Trust property, or by any other security arrangement which Trustee determines advisable. The discretion granted in this paragraph should be freely exercised when information is received that Trustor is seriously ill, or that there may be a substantial and progressive deterioration in Trustor's state of health. In determining the amount of bonds to purchase, consideration should be given to Trustor's view that it is better to overestimate the amount of such bonds that may ultimately be required than to purchase an inadequate amount of bonds. . If, upon the death of Trustor, the Trust estate contains any such treasury bonds, Trustee shall submit for redemption so many of such bonds as may be required to pay in full the federal estate tax imposed by reason of Trustor's death, including additional assessments, penalties and interest, without regard to the apparent .adequacy of the assets comprising Trustor's probate estate. 4.14 Pour-Back. Trustee shall have the express power at any time to pour back assets to the probate estate of Trustor if necessary or advantageous. 4.15 Continuation of Gift Pro&rams. Trustee shall have the power and duty to continue gifting programs which Trustor may have begun, or to initiate gifting programs to issue of Trustor should Trustees, in their sole discretion, deem these gifts advantageous to the family of Trustor. All gifts shall be pre-approved by the attorney and accountant for the Trust to insure that all tax laws are complied with. . . . Declaration of Trust Pog. 18 wow~. t '6' . I Part Five General Provisions 5.1 Income Payment Dates. Income payments which Trustee is required to make hereunder to a beneficiary of the Trust shall be made in convenient installments not less frequently than quarterly. 5.2 Spendthrift Provision. The interest of a beneficiary in the income or principal of the Trust hereunder shall be free from the control or interference of any creditor of the beneficiary or of the spouse of the beneficiary and shall not be subject to attachment, execution or other process of law or susceptible to anticipation, alienation or assignment, whether voluntarily or mvoluntarily encumbered, except in those cases where Trustee, in Trustee's sole discretion, approves the credit extended and the assignment of the beneficiary's interest hereunder as collateral therefor. In exercising such discretion, Trustee shall ascertain whether or not it would be in the best interest of the beneficiary that credit be accepted and collateral given. This provision includes obligations to pay alimony or support by any beneficiary or spouse of a married beneficiary. Nothing contained in this paragraph shall be construed as restricting in any way the exercise of any powers or discretions granted hereunder. 5.3 Cost of Livine Increases. Should the retail cost of living index change, as evidenced by the Consumer Price Index (CPI), as published by the Bureau of Labor Statistics of the United States Department of Labor, then any amounts set forth in this Trust as fixed amounts shall be increased or decreased, on an annual basis, by Trustee in the same proportion as the changes in the CPI for the 12-month period following the first month of payment or last CPI adjustment, whichever is applicable. This paragraph shall not apply to any sum which sets limitations in amounts for tax pUlposes or over which Trustee has discretionary power. If at the time required for the determination of the cost of living adjustment, the CPI is no longer published or issued, Trustee may use such other index as is then generally recognized and accepted for similar determinations of purchasing power fluctuations. 5.4 Inter:pretation. Trustee shall have full power to construe any provision in this Trust where Trustor's intent is uncertain or ambiguous. However, should there be any serious question in the interpretation of an~ provision of this Trust, then a written interpretation shall be obtained by Trustee from three dismterested attorneys specializing in estate planning in the county where this Trust is administered, and the interpretation rendered by a majority of them shall be binding upon the parties having an interest in this Trust. 5.5 Arbitration of Disputes. Any dispute arising in connection with this Trust, including disputes between Trustee and any beneficiary or among Co-Trustees, shall be settled by the negotiation, mediation and arbitration provisions of that certain LawForms Integrity Agreement (Unifonn Agreement Establishing Procedures for Settling Disputes) entered into by the parties prior to, concurrently with or subsequent to the execution of this Trust. In the event that the parties have not entered into a LawForms Integrity Agreement (Unifonn Agreement Establishing Procedures for Settling Disputes), then disputes in connection with this Trust shall be settled by arbitration in accordance with the rules of the American Arbitration Association. Any decision rendered either in accordance with the LawFonns Integrity Agreement (Unifonn Agreement Establishing Procedures for Settling Disputes) or the rules of the American Arbitration Association shall be binding upon the parties as if the decision had been rendered by a court having proper jurisdiction. Declaration of Trust 1'0..19 rn;"".~~.t ~ In any dispute arising out of this Trust, the losing party shall pay to the prevailing party reasonable costs and expenses incurred in connection with any suit or arbitration as determined by the court or arbitrator, including attorneys' fees, court costs and the value of time lost by the prevailing party or any agent or employee of the prevailing party in participating in any litigation or arbitration ill connection herewIth. This provision shall be binding upon Trustee and any beneficiary who seeks to enforce rights or privileges under this Trust. This provision shall not be interpreted to allow an assessment of attorneys' fees against a disinterested Trustee who acted in good faith. It shall, however, be interpreted to permit the assessment of attorneys' fees against the share of any Trustee who is also a beneficiary, or the share of any beneficiary. The purpose of this clause is to discourage persons with frivolous disputes by putting them on notice that the losing party shall bear these expenses. 5.6 Governin~ Law. Each Trust hereunder is a(n) CA Trust and its validity is to be determined, interpreted and construed according to CA law. The administration of the Trust and investments shall be governed by the law of the situs where the Trust may be administered. 5.7 Certified Copies of This Trust. To the same effect as if it were the original, anyone may rely upon a copy certified by a notary public to be a true copy of this Trust Agreement..or an Abstract of this Trust Agreement (and of the writings, if any, endorsed thereon or attached thereto). Anyone may rely upon any statement of fact certified by anyone who appears from the original document or a certified copy thereof to be a Trustee hereunder. 5.8 Notices of Event. Until Trustee shall receive written notice of any birth, marriage, death or other event, or the existence of any document upon which the right to payments from the Trust estate may depend, Trustee shall incur no liability for disbursements made in good faith to persons whose interests may have been affected by that event. 5.9 Rule A2:ainst Pe11>etuities. Notwithstanding other provisions of this Trust, no Trust created hereby shall continue for more than 21 years after the death of the last survivor of the Trustor and beneficiaries and such descendants of Trustor and beneficiaries as are in being at the date this Trust becomes irrevocable. If at the expiration of this period any property is still held in Trust hereunder, such property shall immediately be distributed to those persons as are then entitled to receive income therefrom, in the same proportion which the income such persons are receiving shall bear to the entire income of the Trust. 5.10 Creation of New Trusts. Trustee shall have the power to create a new Trust for any beneficiary with terms and conditions which carry out the intent and purposes of this Trust and which protect the well-being of that beneficiary. This provision shall be liberally construed, and the exercise of this power shall be left to the absolute discretion of Trustee. The attorney advising Trustee shall be responsible for reviewing the new Trust Agreement into which distributions from this Trust shall pour over or for drafting the new Trust Agreement with the necessary provisions. This clause is a recognition that the uncertainties of the future for each beneficiary cannot be predicted in advance and that, therefore, wide flexibility must be given to Trustee to meet a myriad of future situations. 5.11 Establishment of Incapacity. In establishing the incapacity of a Trustor or beneficiary of this Trust Agreement, affidavits of three independent licensed Doctors of Medicine shall be sufficient to establish such incapacity or inability to act or ability to continue to act hereunder, and Trustee, any Successor Trustee and third parties shall be protected in relying upon such statements without any further act or notice. Declaration of Trust Page 20 Initials ~ \\ ~t~ , I 5.12 Generation-Skippine Taxes and Exemptions. If a Trust created by this Trust Agreement would be partially exempt from generation-skipping tax by reason of a generation-skipping tax exemption allocated to it, then before the allocation, the Trustee, in his discretion, may divide the Trust into two separate, identical Trusts of equal or unequal value, to enable the Trustee or Personal Representative making the allocation to allQcate the generation-skipping tax exemption solely to one Trust which will be entirely exempt from the generation-skipping tax. In addition, if a Trust created by this Trust Agreement is entirely exempt from generation-skipping tax and adding property to the Trust would partially subject it to generation-skipping tax, the addition shall not be made and the property instead shall be held as a Separate Trust identical to the exempt Trust. In both cases, the two Trusts shall have identical terms and conditions, but the Trustee shall not make discretionary distributions from the income or principal of the exempt Trust to any non-skip beneficiaries so long as any readily marketable assets remain in the non-exempt Trust. If the Trustee considers that any distribution from a Trust created by this Trust Agreement, other than pursuant to a power to withdraw or appoint, is a taxable distribution subject to a generation- ski{>ping tax payable by the distributee, the Trustee shall augment the distribution by an amount which the Trustee estimates to be sufficient to pay the tax and shall charge the same against the Trust to which the tax relates. If the Trustee considers that any termination of an interest in the Trust estate is a taxable termination subject to a generation-skipping tax, the Trustee shall pay the tax from the Trust estate to which the tax relates, without adjustment of the relative interests of the beneficiaries. If any Trust set up within this Trust is subject to a generation-skipping tax, then that portion of the Trust that would be subject to generation-skipping taxes will vest in the lifetime beneficiary at age 65 or at his sooner death, so as not to subject any of the assets of this Trust to a generation-skipping tax. 5.13 Determination of Best Interests. The best interest of a beneficiary shall be liberally construed by Trustee and shall contemplate not only distributions necessary for the support of such beneficiary (if such distributions shall be in the best interests of such benefiCIary as determined by Trustee), but also distributions for the beneficiary's comfort and convenience. As illustrations and not in limitation to the purposes for which distributions may be made under such standard (which is not intended to be an ascenainable or inflexiblestandard), Trustee may make distributions to permit the beneficiary to travel for education or pleasure, to permit the beneficiary to purchase or furnish a personal residence, or to permit the beneficiary to purchase, initiate or invest in a business which Trustee personally deems to be sound or promising, even though such business might be the type of investment in which, because of its risk, Trustee would not or could not invest the Trust estate. In making any such discretionary distribution, Trustee shall consider both the general fmancial resources and requirements of such beneficiary and the ability of the beneficiary to deal with and manage the money or property involved and shall exercise the discretionary powers herein conferred primarily to benefit the beneficiary rather than the remaindermen. This provision is intended solely as a precatory guide to Trustee and shall in no way be construed to alter, limit or enlarge the discretions and powers conferred on Trustee by any other provision hereof nor to require Trustee to make any distribution to any beneficiary, though there is an overriding standard of reasonableness, so that Trustee cannot allow a beneficiary, for example, to be left destitute. . . . Declaration of Trost ",.21 Im<WI.t!1%.t%-' Part Six Definitions 6.1 Beneficiary. Unless otherwise expressly identified herein, wherever reference is made herein to a beneficiary, such reference shall be deemed to mean a person to whom the Trustee of a Separate Trust is then directed or authorized to distribute net income or principal or both from the Trust estate of such Trust, and wherever the facts and context require such construction, the term beneficiary shall be deemed to mean the plural form thereof. 6.1.a Child. Child is a person who will receive the income or principal distribution only on the death or disqualification of a Lifetime Beneficiary. 6.1. b Secondary Beneficiary. Secondary Beneficiary is a person who will receive income or principal only on the death or disqualification of a Child. 6.1.c Adult Income Beneficiary. Adult Income Beneficiary is a beneficiary who is 18 years of age or over, is not incapacitated, and to whom Trustee is then directed or authorized to pay income. 6.2 By Right of Representation. The term by right of representation denotes that method of dividing an estate by which an equal share is given to all those persons of a class who are related in the same degree to the decedent. For instanc~, where the deceased has a son with one son (who is a grandson to the deceased) and a daughter with three daughters (who are the granddaughters to the deceased) and the will provides that the deceased's descendants shall share by right of representation and both children predecease the decedent, then each grandchild shall receive an equal one-fourth share of the estate. 6.3 Child. Children and Issue. References in this Trust to child or children mean lawful blood descendants in the first degree of the parent designated, and references to issue mean lawful blood descendants in the Trrst, second or any other degree of the ancestor designated, provided always, however, that: 6.3.a Adopted Children. An adopted child and such adopted child's lawful blood descendants shall be considered in this Trust Agreement as lawful blood descendants. of the adopting parent or parents and of anyone who is by blood or adoption an ancestor of the adopting parent or of either of the adopting parents, and shall not be considered descendants of the adopted child's natural parents, except where a child is adopted by a spouse of one of his natural parents, such child shall be considered a descendant of such natural parent as well as a descendant of the adopting parent. 6.3.b Child in Gestation. A child in gestation who is later born alive shall be regarded in this Trust Agreement as a child in being during the period of gestation in determining whether any person has died without leaving surviving issue, and in determining, on the termination of any Trust hereunder, whether such child is entitled to share in the disposition of the then remaining principal and undistributed income of such Trust, but for other purposes, such child's rights shall accrue from the date of birth. 6.4 Community Property. All property acquired by either Husband or Wife during the marriage, except that which is acquired by gift or devise, is the community property of the Husband and Wife. In non-community property states, community property is intended to mean property where the Husband and Wife Jointly acquired it with joint funds or joint credit or in a Declaration of Trust Page 22 Initials M . V l/ ~,C'O way that if it were acquired in a community property state it would be deemed community property. 6.5 Descendants. Except where distribution is directed to the descendants per stirpes of a person, the term descendants includes descendants of every degree, whenever born, whether or not a parent or more remote ancestor of such descendant is living. Where distribution is directed to any person's descendants per stirpes who are living at a designated point of time, the stirpes shall begin with the children of such person, whether or not any child of that person is then living. 6.6 Education. The term education shall include all forms of education, including but not limited to public or private schools, primary or secondary, college, advanced college or post- college, professional, commercial, technical, business, language or artistic studies. 6.7 Trustor. In this Trust, the term Trustor shall refer to the person(s) designated above in the block titled Trustor. 6.7.a Trustor Husband. Should the term Trustor Husband be used in this Trust or in any amendments hereto, the term Trustor Husband shall refer to Trustor's present husband; or if Trustor is not married at the time of execution of this Trust, Trustor Husband shall refer to the man Trustor shall marry after the effective date of this Trust. 6.7.b Trustor Wife. Should the term Trustor Wife be used in this Trust or in any amendments hereto, the term Trustor Wife shall refer to Trustor's present wife; or if Trustor is not married at the time of execution of this trust, Trustor Wife shall refer to the woman Trustor shall marry after the effective date of this Trust. 6.8 Gross Estate and Taxable Estate. The terms gross estate and taxable estate refer to the amounts described by these terms in the Internal Revenue Code. 6.9 Heirs-at-Law. The term heirs-at-law means those persons other than creditors who would receive the personal propeI!}' of the person designated under the laws of the state named in the place designated in the headmg of this Trust, as if said person had died intestate, unmarried and domiciled in that state on the date stipulated for distribution. 6.10 Per Capita. The termIer capita denotes that method of dividing an estate by which an equal share is given to each 0 a number of persons, all of whom stand in equal degree to the decedent. The term literally means l:Jy the head. For instance, where the deceased has a son with one son (who is a grandson to the deceased) and a daughter with three daughters (who are granddaughters to the deceased) and the will provides that the deceased's children shall share per. capita and both children predecease the decedent, then the grandchildren receive nothing and the estate passes under the residuary clauses of the Trust or will. 6.11 Per Stirpes. The term per stirpes denotes that method of dividing an estate where a class or group of distributees take the share to which a deceased would have been entitled, taking thus by their right of representing such ancestor, and not as so many individuals. The term literally means by the branch. For instance, where the deceased has a son with one son (who is a grandson to the deceased) and a daughter with three daughters (who are granddaughters to the deceased) and the will provides that the deceased's children shall share equally per stirpes and both children predecease the decedent, then the grandson shall receive one-half of the estate (the share his father would have received) and the three granddaughters shall share the other one-half (one-sixth each) which their mother would have received. 6.12 Person. The term person includes an individual, a corporation, an organization or other legal entity. Declaration of Trust st. Page 23 Initials . \\.". .. cr: Ollie) 6.13 Personal Representative. Personal Representative includes executor, administrator, successor personal representative, special administrator and persons who perform substantially the same functions under the law governing their status. 6.14 Reference to Gender. Reference hereunder to the masculine gender shall be deemed to include the feminine and neuter genders, unless otherwise stated or unless the circumstances eliminate such inclusion. 6.15 Renunciation. Any person who is a beneficiary or who otherwise has an interest in any Separate Trust may at any time renounce the whole, or from time to time, any part of an interest in such Trust, either as to income or principal or both, by an instrument in writing delivered to Trustee, and thereafter such Trust or the part of such Trust which shall have been renounced shall be administered and distributed as if such person had died on the date of delivery of the written instrument, and as if such person had not exercised any testamentary power of appointment granted to that person; provided, however, that such renunciation shall not, unless it specifically so provides, affect the right of such person to receive subsequent distributions of principal or income from the Trust estate of any Separate Trust upon the death of any other person, upon the renunciation by any other person of any interest in any Separate Trust or pursuant to the exercise of any power of appointment by any other person. 6.16 Separate Property. All property, real and personal, of each spouse, owned by such spouse before marriage, and that acquired afterward by gift or devise, and also the increase, rents, issues and profits thereof, and where the Trustors have agreed (in writing in any form) that the property be separate, is the separate property of such spouse. 6.17 Survivin2: Spouse. Where the tenn Surviving Spouse is used in this Trust, the term shall refer to a surviving Trustor Wife or a surviving Trustor Husband. 6.18 Trust Estate. The term Trust estate shall include all pro~erty received initially by Trustee with respect to any Separate Trust, all additions thereto receIved by Trustee from any other source, all investments and reinvestments of such property or such additions thereto, and all accrued and undistributed income of such Trust. 6.19 Trustee. References in this Trust to Trustee shall be deemed to include not only the original Trustee or Co-Trustees but also any additional or Successor Trustee or Co-Trustee. 6.20 Will. Will includes Last Will and Testament and any Codicils thereto. . . . Declaration of Trost ""g. 24 Ini""~ ~:t ~ Part Seven Trustee's Rights and Duties 7.1 Trustee's Ri2hts. Trustee shall be entitled: 7.1. a To Act Without Bond. To act at any time and in any jurisdiction without bond or other security to ensure the faithful performance of Trustee's fiduciary duties. If a bond is required by law, no surety on such a bond is required. 7.1.b To Rely on Documents. To rely on any document or other paper if believed by Trustee to be genuine and to be signed and delivered by or on behalf of the proper person, finn or corporation, without incurring liability for any action or inaction based thereon. 7.l.c To Use Best .Tud~ent. To use Trustee's best judgment in exercising the powers, discretions and rights conferred by this Trust or in performing the duties imposed upon Trustee by law. 7.1.d To Reimburse. To reimburse Trustee from the Trust estate for all reasonable expenses incurred in the administration thereof. 7.l.e To Be Indemnified. To not be required to comply with any instructions of the Trustor defend any action, which in Trustee's judgment may subject Trustee to liability or expense, unless indemnified in a manner and amount satisfactory to Trustee. 7.l.f To Petition Court for Accountin~. To petition at any time any appropriate court to have Trust accounting judicially settled. 7.1.g To Keep Property in Certain Place. To keep any of the Trust property at any place or places within the United States or abroad or with a depository or custodian at such place or places. 7.2 Jurisdiction of Probate Court. Except for disputes to be settled by arbitration under provisions of this Trust or interpreted under provisions of this Trust, the Trustee or any beneficiaries or interested parties may seek the assistance of the probate court to have Trust provisions clarified and judicially settled. 7.3 Adequate Records. Trustee shall be the custodian of the property constituting the Trust estate and shall be responsible for the maintenance of adequate records evidencing the Trust income and expenses, and for the preparation and filing of all required accounting, reports and tax returns. The records pertaining to any Trust herein created shall be open at all reasonable times to inspection by any beneficiary of any Trust, or by the representatives of any beneficiary. Any beneficiary shall have the right to demand an annual accounting of the administration of the Trust. 7.4 Separate and Combined. Trustee may combine for investment purposes all or any part ?f the fun~s held in all or any of the Trust estates, o! may hold the.funds of all such Trust est;ate m a combmed Trust fund. Trustee shall be responSible for the mamtenance of records showmg the receipts and disbursements, the funds held for the benefit of each Separate Trust estate, and showing the allocable portion of any such combined Trust fund belonging to each such Separate Trust. Declaration of Trust P.,. 25 fui6o~ ~t'ls 7.5 Compensation to Trustee. The compensation of the Trustee shall be a reasonable amount as is customary for Trustees of corporate fiduciaries in the county and state where the Trust is administered. 7.6 Keep Informed. The Trustee shall use its best efforts to keep informed of called bonds, subscri.ption rights, reorganizations and other matters of similar nature which may affect the securities on deposit, and upon receipt of any notice in connection therewith, Trustee shall forward same to beneficiaries. Proxies, circulars, fmancial statements and similar material are not to be forwarded unless, in the judgment of Trustee, the matter is of unusual importance and should be brought to the attention of beneficiaries. . . . Declaration of Trust Po..26 Jnitiili ~ 'o,t 'E Part Eight Rendition of Accounts 8.1 Durin~ Lifetime of Trustor. During the lifetime of Trustor, Trustee shall render an accounting of income and principal to Trustor whenever requested to do so by Trustor or any income beneficiary. The written approval of this account by Trustor shall, as to all matters and transactions covered by the account, be binding upon all who are then or who may thereafter become entitled to the income or principal. Failure to disapprove an account within 10 days of the mailing of the account shall be deemed an approval. 8.2 Mandatory Distribution of Income. After the death of Trustor (or of both Husband and Wife Trustors, if there are Husband and Wife Trustors), with respect to each Separate Trust under which the income is required to be distributed, Trustee shall render an annual accounting of income and principal to the person(s) to whom the income of the Trust is required to be distributed, or to the guardian(s) of such person(s). The written approval of such ;person(s) or guardian( s) shall as to all matters and transactions covered by that account, be binding upon all who then are or who may thereafter become entitled to the income or principal, provided, however, that nothing contained in this paragraph shall be deemed to give such person(s) or guardian(s), acting in conjunction with Trustee, the power to amend or revoke such Trust. 8.3 Discretionary Distribution of Income. After the death of Trustor (or both Husband and Wife Trustors, if there are Husband and Wife Trustors), with respect to any Separate Trust under which the income may be distributed or accumulated in the discretion of the Disinterested Co- Trustee, Trustee shall render an annual accounting of income and principal to the oldest person to whom such income could be distributed, or to the guardian of such person(s). The written approval of such person(s) or guardian(s) shall as to all matters and transactions covered by that account be binding upon all who are then or who may thereafter become entitled to the income or principal, provided, however, that nothing contained in this paragraph shall be deemed to give such person(s) or guardian(s), acting in conjunction with Trustee, the power to amend or revoke such Trust. 8.4 Distributions. All distributions of income or principal shall be made to the respective beneficiaries in person or may at their direction be deposited in any bank to the credit of such beneficiary in any account carried in the beneficiary's name or jointly with another or 'others. Distributions to a minor or an incompetent beneficiary may nevertheless be made by Trustee for the benefit of such beneficiary in such of the following ways as in Trustee's opinion will be most desirable: 8.4.a directly to such beneficiary; 8.4.b to such beneficiary's legal representative; 8.4.c to some near relative or friend of such beneficiary; or 8.4.d by Trustee making such payments directly for the benefit of such beneficiary. . . . Declaration of Trust P... 27 Jruti.. ~"8 t);' Part Nine Resignation and Removal of Trustee and Appointment of Successor Trustee 9.1 Resimation of Trustee; Trustee may resign by giving 30 days written notice to Trustor during Trustor's lifetime, or after Trustor's death, to each of the adult income beneficiaries. 9.2 Removal of Trustee. Trustee may be removed at any time by a majority of the adult income beneficiaries who are members of the Trustor's bloodline and the legally appointed guardians of the other beneficiaries who are members of the Trustor's bloodline who are then currently entitled to benefits under this Trust, by written notice to Trustee. Until the accounts of Trustee are settled and Trustee discharged, Trustee shall continue to have all the powers and discretions granted to Trustee hereunder or conferred by law, except as limited by provisions of this Trust Agreement. 9.3 Appointment of Successor Trustee. Except as may be otherwise provided in Part One, in case of resignation or removal of Trustee, a majority of the adult income beneficiaries who are members of the Trustor's bloodline and the legally appointed guardians of the other beneficiaries who are members of the Trustor's bloodline, and who are then currently entitled to benefits under this Trust, may, by instrument signed and acknowledged, ap~oint a Successor Trustee. If a Successor Trustee is not appointed within 30 days after the giving of notice of resignation or removal, Trustee may apply to a court of competent jurisdiction for the appointment of a successor. Trustee shall be entitled to reimbursement from the Trust estate for all expenses incurred in connection with the settlement of Trustee's accounts and the transfer and delivery of the Trust estate to Successor Trustee. If Trustee is removed, Trustee shall be entitled to full compensation as if the Trust had terminated while Trustee was still acting. If Trustee resigns, Trustee shall be entitled to retain the compensations theretofore taken and to take any compensations then accrued but unpaid. If the Trustee is missing for more than 30 days as attested to by three credible persons, a Successor Trustee shall be appointed as described above. 9.4 Successor to Business of COl:porate Trustee. Any successor to the business of a Corporate Trustee, whether by reorganization or otherwise, shall succeed as Trustee with the like powers as though originally named as Trustee. 9.5 Powers of Successor Trustee. Successor Trustee, upon executing an acknowledgment of acceptance as Trustee and upon the settlement of the accounts and discharge of the prior Trustee, shall be vested, without further act on the part of anyone, with all the estate, title, rights, powers, duties, obligations, privileges, immunities and discretions granted to the predecessor Trustee. The prior Trustee shall, however, execute and deliver such assignments or other instruments as shall be deemed advisable. 9.6 Incanacity of Trustee. If Trustee becomes unable to discharge his duties as Trustee of this Trust by reason of accident, physical or mental illness, progressive or intermittent physical or mental deterioration or other similar cause, as certified by three independent licensed physicians affinning that each has examined Trustee and that each has concluded, based upon such examination, that Trustee is unable to discharge his duties as Trustee, then, in that event Trustee shall thereupon cease to be Trustee in the same manner as if he had resigned on the dat~ that the third certificate from the independent physician is signed. The Affidavit of Succession signed by Successor Trustee shall be recorded with the County Recorder as provided in Part One Declaration of Trust P...28 rruti.]. tl1?st,~ of this Trust. Successor Trustee shall deliver a true copy of that Affidavit of Succession, with the physician's certificates attached, to the Trustee and all adult beneficiaries forthwith after recordation of the original. The independent physicians shall be selected one by the spouse or oldest child of Trustee, and the other two by the president of the Medical Association in the county where Trustee resides. Should the spouse or child not be available, then one independent physician shall be selected by one of the income beneficiaries. If none of these persons is available, then all shall be selected by the other Trustees and the president of the Medical Association of the county in which Trustee resides. The standard that shall be used in determining incapacity for purposes of succession is the same as that defmed for the appointment of a conservator under the present laws of the state in which Trustee resides. 9.7 Notice of Incapacity. To give proof of the incapacity of the incompetent Trustee in order for the Successor Trustee to act on behalf of the Trust, the Successor Trustee must mail, by certified mail, return receipt requested, or by direct delivery, a copy of the Affidavit of Succession to the incompetent Trustee. The purpose of this provision is to permit the Successor Trustee to act on behalf of the incompetent Trustee without the necessity of the Successor Trustee filing court proceedings. 9.8 Acts of Prior Trustees. An additional or Successor Trustee shall not be liable for any action taken by Trustee prior to the time such additional or Successor Trustee becomes a Trustee. 9.9 Restriction on Liability of Successor Trustee. No Successor Trustee shall be liable for the acts or defaults of any predecessor Trustee, nor for any loss or expense from anything done or neglected to be done by any predecessor Trustee, but such Successor Trustee shall be liable only for his own willful wrongdoing or gross negligence with respect to property received by him as Trustee. Any Successor Trustee who shall be then acting as Trustee pursuant to a notlce of vacancy shall not be guilty of any wrongdoing merely because he is acting as Successor Trustee if it shall later be discovered that another has been designated as Successor Trustee pursuant to any provisions herein. 9.10 Criminal Charees. Convictions or Bankruptcv of Trustee. Should any individual Trustee be convicted of a felony or fIle bankruptcy, said Trustee shall be deemed nnmediately terminated as Trustee as of that date. Should a Trustee be subjected to a charge of committing a felony or to the filing of an involuntary bankruptcy, then all his powers as a Trustee shall be suspended until the determination of the proceedings. . . . Declaration of Trust Pog.29 InhW. ~ t'6 Part Ten Co-Trustees - Effect Upon Operation 10.1 Operation of Trust. If there is more than one Trustee, the following provisions shall be controlling and take precedence over any other provisions relating to Trustee: 10.1. a Deimition. The use of the term Trustee or Co- Trustee shall be used interchangeably throughout this Trust Agreement and shall mean, for all purposes, the duly authorized Trustees under this Trust. 10.1.b Corporate Trustees Unable to Act. If any corporate Trustee at any time resigns, is unable or refuses to act, another corporation, authorized under the laws of the United States or of any state to administer trusts, may be appointed as Trustee by an instrument signed by all the beneficiaries and delivered to it. 10.1.c Power of Attorney. Any Co-Trustee may give another Co-Trustee of this Trust a general or limited power of attorney to act for him as Trustee under this Trust. The use of such a Power of Attorney shall not relieve either Trustee of his liability for breach of any fiduciary duties. 10.I.d Desire for Concurrine: Decision. It is Trustor's desire that all Trustees concur on all decisions made with regard to the Trust. If the Co-Trustees fail to concur or either has discomfort with any decision, they shall involve a Third Co-Trustee. With the advice and counsel of a Third Co-Trustee or other experts that they may bring in as mediators, Trustor desires that the Trustees reach a concurrence on fmal decIsions. The provisions of the Integrity Agreement may be used to facilitate a harmonious process. 10.2 Acts of Co-Trustees. If there are two or more Co-Trustees, one Co-Trustee shall not be responsible for the acts or omissions of another Co-Trustee or for allowing another Co-Trustee to have custody or control of the funds, securities or property. Each Trustee shall be responsible for his own bad-faith acts or omissions. 10.3 Conflicts of Interest. Trustees shall disclose to the other Trustees any conflict of interest they may have with respect to any matter. The other Trustees shall seek legal counsel and if the Trustees after seeking legal counsel decide there is a conflict of interest, then the Trustee with the conflict shall not vote on that matter. Whenever a Trustee disqualifies himself or is disqualified by the other Trustees for a vote, a written memorandum of this decision to disqualify and the reasons for it shall be written and placed in the fIles of the Trust. 10.4 One Trustee Authority to Sifn Insurance Applications and Tax Documents. If any insurance is purchased by the Trustees of this Trust, anyone of them may sign life, property and casualty or other insurance applications and paperwork necessary to purchase and process the :policies. The reason for this special authority to anyone of the Trustees is that sometimes speed IS necessary in obtaining insurance coverage and damages may be caused to the Trust by the unnecessary delays of fmding a Trustee. Any Trustee may sign tax applications, returns and other tax and governmental forms and paperwork that may be required from time to time. . . . Declaration of Trost "'go ,. rru,,,.g,tt"c;[ ~' Part Eleven Insurance Provisions 11.1 Insurance as Trust Res. Insurance policies may be the subject property of this Trust and the Trust may be designated as beneficiary and/or owner of certain policies of insurance on the life of Trustor or any beneficiary, listed in Schedule A or another schedule of assets for the Trust attached hereto. Such policies and the proceeds therefrom, together with any other property which is added to this Trust, and the investments and reinvestments thereof, shall be managed, controlled and disposed of for the uses and purposes and upon the terms and conditions as provided herein. 11.2 Ri~hts of Trustee to Deal with Insurance Policies. Trustee shall have full power and authority to have and possess the rights of an owner with respect to any life insurance policy held in the trust estate, including, without limiting the genera1i!;' of the foregoing, the right to receive or apply dividends or distributative shares of surplus, disability benefits, surrender values or proceeds of matured endowments; to obtain and receive from the issuing insurance company such advances or loans on account of any such policy as may be available; to sell, assign or pledge the policy; to surrender the policy; and to exercise any option or privilege granted in the policy, mcluding, the right to select, m Trustee's discretion, settlement options with respect to any life insurance policy payable to the Trustee of the Trust created hereunder. 11.3 Duties of Trustee with Respect to Insurance. Trustee shall use Trustee's best efforts to collect the proceeds of any policies of insurance which are made payable to Trustee hereunder when any of such policies shall, to the knowledge of Trustee, have matured, but shall not be required to take legal proceedings until indemnified to Trustee's satisfaction against all expenses and liabilities to which Trustee might be subjected. Any release given by Trustee to any insurance company shall fully and completely discharge the insurance company for any payment so made and shall be binding upon every beneficiary under this Trust Agreement. 11.4 Desi~ation of Trust as Beneficiary of Disability and Salary Continuation Policies. It is contemplated that from time to time this Trust may be designated as the benefic~ of disability or salary continuation policies which provide for income to the named insured while the named insured is incapacitated or disabled as dermed in the policies. The reason for designating the Trust as the beneficiary of these policies is to allow a receptacle for the administration of these funds, should the disabled beneficiary be unable to manage the funds because of incapacity or disability . 11.5 Notice to Insurance Company. No insurance company shall be required to inquire into or take notice of any of the provisions of this Trust Agreement or to see to the application or disposition of the proceeds of such policies. . . . Declaration of Trust Page 31 Initials/9.t~. A ~ U ~tU( Part Twelve Execution and Certification 12.1 Effective Date. This Trust Agreement has been executed by the parties intending that it be effective on the effective date set forth on the caption page. The parties recognize that they effectuated a meeting of the minds among themselves on that effective date and intended that this Trust Agreement take effect on that date even though, because of the exigencies of the modem world, the mechanics of drafting, the convenience of the parties, and the economy of travel, it may have been necessary to actually sign the document at a later time. 12.2 Effective Place of Execution. The parties intend that the place of execution be that county and state that is set forth in the caption of this Trust Agreement. The effective place of execution is the place that the parties intend this Trust Agreement to have been executed, incoIporating all laws, for pUIposes of conflicts of laws, which apply to that effective place of execution. The parties recognize that, due to the exigencies of the modem world, the mechanics of drafting, the convenience of the parties, and the economy of travel, this Trust Agreement may be executed by one or all the parties at some other geographic location and possibly at multiple places. However, in spite of this, they intend that it be deemed executed at the effective place of execution. 12.3 InterIineations and Initials. The parties recognize that because of the exigencies of the modern world, the mechanics of drafting, the convenience of the parties, and the economy of costs, they may have in their own handwriting made minor changes in this Trust Agreement. These minor changes have been initialed by all the parties, if any changes have been made, before and after the change on all originals to prevent any extension or alteration of that change by any of the parties or others. Unless otherwise indicated by the placement of a date beside the change, these changes were intended by the parties to have occurred as of the effective date of this Trust Agreement. Any interlineated changes made by the parties after the effective date of this Trust Agreement shall be initialed by all parties, dated and have the date itself initialed before and after by all parties to this Trust Agreement. 12.4 Execution. All parties named in the caption as parties shall sign below and at least one of the parties shall initial all pages of all original copies of this Trust Agreement. Furthermore, all documents such as schedules, exhibits and like documents which are expressly incoIporated herein shall be initialed by the parties and either exchanged or attached to the originals which are given to any party named on the caption page of this Trust Agreement. It is the intent of the parties that all pages be initialed on all onginals that are exchanged in order that no substituted pages or misunderstanding shall ever become possible to create problems in satisfying the mtended objectives of this Trust Agreement. 12.5 Acknowled~ent. The Notary Publics who have acknowledged the signatures of the various parties as designated in the acknowledgments hereof certify that this Trust Agreement was acknowledged by the signing party before the notary on the date of the notarization. If the Trust Agreement was subscribed by any of the parties m a representative capacity, then the notary ascertained that the signing party signed for the principal named and in the capacity in which that party indicated he signed. . . . Declaration of Trost Page 32 Initials M-(J (~ ~.\.J I C IN WITNESS WHEREOF, the parties execute this Trust intending that it be effective on the Effective Date and at the Effective Place of Execution. !..r- /11"\ ..-+Ir-r A~J.I1~lVYf'jjr Robert W. Jarr -- (Trustor) ~9~ ert W. Jarrett (Trustee) ~~~ C, ~/uP J~e . Jarrett (Trustor) ~",- C, ~~ yce E. Jarrett (Trustee) ~d ~~ signed' the presence of us who, at the request and in the presence of Trustor / ~;;- sence 0 each other, have signed the same as witnesses thereto. \L/ /1 YlA". ! ' / ------c ~ d.%//I/1fiuSa#-' rvS t>"h. LfVdC/I ~Ignature 0 WItne ' Address of WItness ~/0/~f c:/ ~ \.- Signature 0 WItness / Zfs;307rL-f'G?'j,;- ~U/&z. A ress Itness W 'J!~-;t; Ignature of WItness n.5CJ~au-.~.36 .tk~ --:&t) ~ v Address 0 Witness Yuc.J-b State of CA ) ) ss. ACKNOWLEDGMENT OF TRUSTOR County of Orange ) On this date, /0 '':;s ... 92 , before me, the undersigned Notary Public, personally appeared Robert W. Jarrett and Joyce E. Jarrett, who acknowledged themselves to be the persons named herein and that they executed the within instrument for the purposes contained therein. IN WITNESS WHEREOF, I hereunto set my hand ~ Notary Public 1-20 -f"~ Notary Expiration Date Declaration of Trust Page 33 Initia1sV2t.{.~. State of CA ) ) ss. ACKNOWLEDGMENT OF TRUSTEE County of Orange ) On this date, 0tl7. ~ SI 19'[ 2- , this instrument was acknowledged before me by Robert W. Jarrett and'Joyce E. Jarrett, who acknowledged themselves to be the acting Trustees of THE JARRETT FAMILY TRUST, dated October 3, 1992, and that they, being authorized to so do, executed the within instrument for the purposes therein contained by signing for that Trust as such Trustee. 7-20. 1't, Notary Expiration Date , before me, a No Pu~lic, personally , ~ {l,le ti. wI, . , , own to me or satis acto y proven to be s mstrument and acknowledged that they executed State of CA County of Orange IN WITNESS WHEREOF, I hereunto set my hand an 7 -2o-7~ Notary Expiration Date '--..A..~---~~"""'.A.. U~h'. ~ ROBIN G~ NOE' .1 " . . Comm. _9761 It. . AllY PUBuc . CALlFORNIAG'l .c: ORANGE COUNTY 0 I My Comm. Expires July 20 1l196..l. .- ....... --- -., ~- --- -- -- ----~ -~ ~..:. ::"-l Declaration of Trust Pog.34 Ici"" 1Q.,~ FIRST AMENDMENT TO THE JARRETT FAMILY TRUST Pursuant to the powers reserved to me as Grantor in that certain Declaration of Trust dated October 3, 1992, wherein I am named as initial Trustee and beneficiary, I hereby amend THE JARRETT FAMILY TRUST dated October 3, 1992. A copy ofthis duly executed First Amendment, together with any subsequent amendments, may be relied upon by any party as though such restatement and amendments taken together were the originally executed Declaration of Trust. This Amendment to Declaration is made , to change the residential address to the County of Cumberland, for Trustor(s) and Trustee(s) as follows: TRUSTOR(S) Robert W. Jarrett 20 N 12th St. Lemoyne, Pennsylvania 17043 Joyce E. Jarrett 20 N 12th St. Lemoyne, Pennsylvania 17043 TRUSTEE(S) Robert W. Jarrett 20 N 12th St. Lemoyne, Pennsylvania 17043 Joyce E. . Jarrett 20 N 12th St. Lemoyne, Pennsylvania 17043 1. Section 5.7 is hereby deleted in its entirety and replaced with the following: 5.7 Governing Law. Each Trust hereunder is a Pennsylvania Trust and its validity is to be determined, interpreted and construed according to Pennsylvania law. The administration of the Trust and investments shall be governed by the law of the situs where the Trust may be administered. I certify that I have read the foregoing First Amendment to THE JARRETT FAMILY TRUST, and that it correctly states the modifications to be made to the Trust Agreement of Robert W. Jarrett and Joyce E. Jarrett, dated October 3, 1992. . ' . ... . Executed this ~ day of Se.pkrl\.b-er, 2002, in the City of Lemoyne, County of Cumberland, State of Pennsylvania. .~+~ I . Robert W. Jarrett ~ ~~ J (' 'l.., /\ ~e1 ." Joyce E. Jarrett STATEOFPENNSYLVAmA ) ) ss. COUNTY OF CUMBERLAND ) On q I \ 7S j 0 ~ before me, ~ '0,,", '(\Q \-\0.\')'"\ i \ -\o~ Notary Public in and for said County and State, personally appeared Robert W. Jarrett and Joyce E. Jarrett personally known to me (or proved to me on the basis of satisfactory evidence), to be the persons whose names are subscribed to the same in their authorized capacity, and that their signatures on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal NotarIal Seal Sabrina. HamiItoo, NotaJy Public L..owar Paxton ro,o,p., Daup'lin ColJ'lty My Cormission Expires J~ 15, 2006 Member, Pennsytvania Association Of ~ .. SECOND AMENDMENT TO THE JARRETT FAMILY TRUST Pursuant to the powers reserved to us as Trustors and as initial Trustees in and under a certain Declaration of Trust dated October 3, 1992, lmown as THE JARRETT FAMILY TRUST, as amended by a FIRST AMENDMENT TO THE JARRETT FAMILY TRUST, dated September 18, 2002, we hereby modify and amend said Declaration of Trust, as amended, as follows: 1. Section 1.3 of said Declaration of Trust, as amended, is hereby revoked and deleted in its entirety and is hereby replaced with the following: 1.3 Designation of Successor Trustee. If the surviving Trustee dies or otherwise ceases to function as Trustee, the following shall serve as Successor Trustee: Linda J. Hoffer 21 Westwind Drive Lemoyne, Pennsylvania 17043 ( 2. In all other respects, we hereby ratify and confirm the said Declaration of Trust, as amended. Signed and executed this )./ day of.A1L/JL(~ , 2003, in the Borough of Lemoyne, Cumberland County, Pennsylvania. MJJ? ~ Rob' W. Jarrett ..' . II I ~W~( 0 tr L-~ rl~~ / oyce E. ~ett COMMONWEALTH OF PENNSYLVANIA) : SS. COUNTY OF CUMBERLAND) On this, the ~ \ day of \\\Q\\~ , 2003, before me, a Notary Public in and for the state and county aforesaid, the undersigned ROBERT W. JARRETT and JOYCE E. JARRETT, known to me (or satisfactorily proven) to be the person(s) described in the foregoing instrument, and aClmowledged that they executed the same for the purposes therein contained. REV -1508 FX + (1-97) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Robert W. Jarrett SCHEDULE E CASH, BANK DEPOSITS, & MISC. PERSONAL PROPERTY FILE NUMBER SS1ft 189-09-8514 03/25/2005 Include the proceeds of litigation imd the date the proceeds were received by the estate. All property jointly-owned with the right of survivorship must be disclosed on Schedule F. ITEM NUMBER 1 DESCRIPTION Neptune Society, Costa Mesa, CA, - pre-need cremation and burial contract dated 11/23/1990. VALUE AT DATE OF DEATH 998.20 TOTAL (Also enter on line 5, Recapitulation) $ 998.20 (If more space is needed, insert additional sheets of the same size) Copyright (c) 1996 form software only CPSystems, Inc. Form REV-150S EX (Rev. 1-97) REV-1510 EX + (1,-97) SCHEDULE G INTER-VIVOS TRANSFERS & MISC. NON-PROBATE PROPERTY COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Robert W. Jarrett SSff 189-09-8514 FILE NUMBER This schedule must be completed and filed if the answer to any of questions 1 through 4 on page 2 is yes. 03/25/2005 ITEM NUMBER 1 DESCRIPTION OF PROPERTY RELAW8~M~I~ t~1>~~~5~M~r-rJ?~~1nt~EJF t~~ffSFER. ATTACH ACOPYOF THE DEED FOR REAL ESTATE. USA11ianz Contract ifDA216021, - flexible-premium deferred variable annuity owned by Decedent, payable upon his death to the Robert W. Jarrett Family Trust UTD 10/3/92 (Item No. ~ of this Schedule G). 2 The Jarrett Family Trust, - dated 10/03/1992, by and between Robert W. Jarrett and Joyce E. Jarrett, his wife, as Trustors/Settlors, and Robert W. Jarrett and Joyce E. Jarrett, his wife, as Trustees/Lifetime Beneficiaries, authorizing distributions of principal and/or income to Joyce E. Jarrett during her lifetime and distributions of principal to her children for their "proper care, maintenance, support or education", and upon her death, remainder to her children, as amended by First Amendment dated 09/18/2002 and a Second Amendment dated 03/21/2003 (copies attached). See Inventory attached hereto as Schedule G-l. DATE OF DEATH VALUE OF ASSET 6,290.10 % OF DECO'S INTEREST TAXABLE VALUE EXCLUSION (IF APPLICABLE) 6,290.10 194,111.58 194,111. 58 TOTAL (Also enter on line 7, Recapitulation) $ (If more space is needed, insert additional sheets of the same size) Copyright (c) 1996 form software only CPSystems, Inc. 200,401. 68 Form REV-1510 EX (Rev. 1-97) USAllianz Service Center 300 Berwyn Park PO Box 3031 Berwyn, P/l. 19312-0031 .-.,--- r',' , USAllianz~ c.:' " - _..,.:.,;;;A-'. April 11, 2005 ROBERT W JARRETT FAM TR UTD 10/3/92 etO JOYCE E JARRETT 20 N 12TH ST APT 206 LEMOYNE PA 17043 TODD M BOLEN XCU CAPITAL CORP iNC 2200 E GRAND AVE EL SEGUNDO CA 90245 RE: Contract # DA216D21 - ROBERT W JARRETT Dear Mrs. Jarrett \IV e recently received notification of the death of your husband. Robert W. Jarrett, who owned a flexible. premium deferred variable annuity. Please accept our sincere condolences on your loss. We would like to do whatever we can to assist you. According to our records, the named beneficiary of the annuity Is the Robert W. Jarrett Family Trust UTD 10/3/92. This variable annuity may be invested in optIons subject to market fluctuation. Please provide the fOllowing Information that will assist us in processing the claim request as quickly as possible. · Original certified coPy of the death certificate of the Contract Owner named above. · The enclosed Annuity Claim form completed entirely and signed by the successor trustee, in Part I and Part V. · The original contract. jf available. · The pages of the trust agreement that contain: the name and cate of the trust, the names of the trustee, successor trustee and the slgnattJre page. A declaration or verification of trust may be acceptable in place of the specific pages listed, provided it includes the information needed for verification. The successor trustee must sign the claim form. The trust's Tax Identification Number (TIN) should be provided as the tax identification number of the beneficiary on the form. · The enclosed affidavit completed and signed by the appropriate successor trustee. · The enclosed Trustee Representation Form for IR.O. Beneficiaries completed and signed by the successor trustee. We are trying to locate the successor trustee. If you have any information regarding a current address or phone number, please contact us, US;;fiiQnz '1iJri~bltp rJ;OOUdS !r.~ ~sutd bf AlliMzlie tJ\Slll'nnc~- Cr.!np..1ny oi 'iorrh A!r:t'r~J, cm.:! in /.Jtv.' Yor~ t:y AIJ'MiZ L 11: lnsur~nce (ompU1Y of New Yerl and distributed b'1 the;, affi~alp USliller.;o [n...~b!' S:-I\~(($, i Le": 5701 G.jlfl~rl HijJ; Driv!:', i,,1hnr;'r:po!i'), f./.N 5~"': 16. :2n {(1rl-:r.l ~~~.5.:j:?'. M~nb~r ~sn. Pl~~~p. ser<f art correspondenCE 1f'1h~ USAtr~l; ~'~f\.i(~ (~.t(-; 3(;(J a.~i~""ln PI1t'k. PO BO); jlJ31, B~rv.l\If~, p~, 'rS3U{1031. Allian!: Group USAllianz Service Center USAlljanz~ PO Box 30} 1 Ber""Yr}, FA 19312-0031 As of the close of business on March 31,2005. the lump sum pa)ment amount available is $6,290.10. Since the contract is not valued until claim proofs are received in our office, this value is subject to change. Please be aware that the funds remain invested in the allocations eiected by the tr~stee and could be subject to market fluctuations. The investment options may be reallocated by written request signed by t:1e successor trustee. Please contact the registered representative of this contract or me for further information on reallol;;ation. The benefic:ary has two options available to receive the oroceeds. Please be aware that the owner had reached the required beginning date for Minimum Distribution Payments and this may affect the met,"'lod in which you can receive the benefit. Please consult a tax advisor. The enclosed death benefit information , . SCHEDULE G-1 INVENTORY OF THE JARRETT FAMILY TRUST Dated October 3, 1992, as Amended (As of March 25, 2005) 1. Mellon Investor Services Acct. Key JARRETFAMTR-1-0100 327.3426 shs., PerkinElmer, Inc. (PK1)@ $21.9825: 2 . Computershare Acct. #4959-41-4800 411.0181 shs., Aqua America, Inc. (WTR)@ $23.91: 3 . Sovereign Bank, Acct. #2331024286 Pro bal. as of D.O.D.: $17,953.40; Int. Accrued to D.O.D.: $13.63: 4. Discover Bank, Acct. #3000398182 Pro bal. as of D.O.D. : $5,766.69 5. Citizens Bank, Acct. #6201167416 Pro bal. as of D.O.D. : $5,226.13 6. Citizens Bank, Acct. #6201167424 Pro bal. as of D.O.D. : $148,128.48 Total: $ 7,195.81 9,827.44 17,967.03 5,766.69 5,226.13 148,128.48 $194,111.58 Mellon Investor Services p.O. }3ox 3333 South'Hack~nsack, NJ 07606 August 11, 2005 IICompany Namel!PERKINELMER I Account Key IIJARREF AMTR--l- I 10100 'IControl Numberl12005 08080005210 Telephone 11877-711-4098 Number II ~ Mel;lon I I I I JOYCE E JARRETT TR UA OCT 03 92 THE JARRETT FAMILY TRUST A TIN MARLIN R MCCATEB FRANKEBERGERPLACE 219 EAST MAIN STREET PO BOX 230 MECHANICSBURG PA 17055 RE: ESTATE OF ROBERT W Jp......1UlliTT Dear Sir or Madam: Thank you for your inquiry requesting information for this account. Please be advised that March 25,2005, was a non business day, hence we are unable to provide you with the closing price for the same. However, we are able to provide you with the closing price for the dates referenced below: The closing price as on March 24, 2005, was $22.0900 per share. The closing price as on March 28,2005, was $21.9200 per share. We hope that this information has been helpful. If you have additional questions, please call our Customer Service Center at the number listed above. Sincerely, Mellon Investor Services Shareholder: · jm'CE.E JARRETT TR UA OCT 0392 THE JARRETT FAMILY TRUST 20 NORTH 12TH ST APT 206 LEMOYNE PA 17043 fAI Our Control Number: 200508080005210 YEAR TO DATE ACCOUNT SUMMARY There are no certificates for this account CERTIFICATE HISTORY ( From :2004 To: 2005) PLAN TYPE: IR001 BOOK ENTRY HISTORY ( From :2004 To: 2005 ) PAYMENT HiSTORY (From :2004 To: 2005) There are no Payment History to be processed. Note:. For Security reasons, we are replacing the first five digits of your Social Security number with "-.-"(asteriskS) on correspondence that we send to you. to,mputershare . formerly EquiServe tJ../r~ September 2, 2005 MARLON MCCALEB 219 EAST MAIN STREET PO BOX 230 MECHANICSBURG P A 17055 AQUA AMERICA INC ROBERT W JARRETT & JOYCE E JARRETT TR UA 10/03/92 JARRETT FAMILY TRUST ACCOUNT NUMBER: 4959-41-4800 Dear Mr. McCaleb: Thank you for your inquiry regarding the share balance of the above referenced account. We appreciate the opportunity to be of service to you. On March 25,2005, account number 41-4800 held 411.0181 shares. On that date, the closing price was $23.72 per share. Aqua America pays a quarterly divided of $0.13 per share in the months of March, June, September and. December. Should you have any questions, please call us toll free at 1-800-736-3001. Our telephone representatives are available Monday through Friday between the hours of 9 a.m. to 6 p.m. Eastern Time. For certain routine information, you may call us 24 hours a day, 7 days a week and access our teleservicing system. If you have Internet access, you may also obtain additional information on products and services by visiting our web site at www.computershare.com/equiserve. You may also write to us at Computershare, P.O. Box 43010, Providence, RI 02940-3010. Sincerely, ~ Lauren Flipp Shareholder Services Representative Reference Number: 01690971 Tia<<': C5-0019 Rev 6105 . . I ,. Court Ordered Processing /MA1 MB3 02-10 P.O. Box 841005 Boston, MA 02284 August 17,2005 Law Office Marlin R. McCaleb P.O. Box 230 Mechanicsburg, P A 17055 RE: Estate of Robert W. Jarrett Date of Death: 3/25/05 Dear Mr. McCaleb: Per your request, enclosed please find the account information as of the date of death for the above-named decedent. For your information, accrued interest is not included in the date of death balance. Please feel free to contact me if I can be of any further assistance. Very truly yours, . . ~fJ'~4~~ Laurie DiGiandomenico OAG Team Leader (617) 533-1789 Enclosures . # ~ . . , Sovereign Bank ESTATE OF SOCIAL SECURITY #: DATE OF DEATH: Robert W. Jarrett 189-09-8514 March 25, 2005 Account #: 2331024286 Type: Checking Open date: 9/4/2002 In the name of: The Jarrett Family Trust, Robert W. Jarrett Trustee, Joyce E. Jarrett Trustee Date of Death Balance: $17,953.40 Int.(YTD) from 1/1/2005 to 3/13/2005 $84.64 Accrued interest to date of death: $13.63 Other Info: Account #: 233-31 Type: Safe Deposit Box Open date: In the name of: Robert W. Jarrett Date of Death Balance: Int.(YTD) from to Accrued interest to date of death: Other Info: Location: 1300 Camp Hill Mall, Camp Hill, PA 17011 9/4/2002 Page 1 of 1 . ~ . DISC VER~ October 11,2005 Marlin R McCaleb PO Box 230 Mechanicsburg, P A 17055 RE: Robert W Jarrett Dear Sir/Madam: BANK Thank you for your recent inquiry. The following is the information you requested concerning the above referenced estate: · Account Number: · Account Status: · Account Title: · Account Type: · Date of Death Balance: · 2004 Interest Paid: · 2005 Interest Paid to Date of Death: · 2005 Interest Paid after Date of Death: · Current Balance: · Current Rate of Interest: · Open Date: · Maturity Date: · Close Date: · Close Balance: · Safe Deposit Box: 3000398182 Active The Dec of the Jarrett Fam Trust Dtd 10/3/92 Robert W / Joyce E Jarrett Trustees Money Market $5,766.69 $48.76 $28.32 $81.40 $5,848.09 3.34% 03/06/87 N/A N/A N/A No · Note: Interest is accrued daily and paid monthly. Due to interest being paid monthly, interest reporting for income tax purposes is based on interest paid. If you have additional questions or need additional information, please contact us by calling 1-800-347-7000 (TDD 1-800-347-7454). Account Managers are available to personally assist you Monday through Friday, 9:00 a.m. to 6:00 p.m., Eastern Time. ' Sincerely, Deposit Products Customer Support ,.'7.1:!;<(7::';, :FDil fEllWlOO'05ll."'SlJW..O:COt<<ltAD::lN PO Box 7112, Dover DE 19903-9955 ~.~ Citizens Bank~ 525 William Penn Place Suite 153-2618 Pittsburgh, PA 15219 . ~ . August 27, 2005 MARLJN R McCALEB Esq 219 E MAJN ST PO BOX 230 MECHANICSBURG P A 17055 Estate of ROBERT W JARRETT Date of Death: March 25, 2005 SSN: 189-09-8514 Dear SirlMadam: In accordance with your request, the attached information sheet has been provided in the above decedent's name as of his date of death. The decedent had 2 active accounts at the time of his death and he had no Safe Deposit Box. For II.. or LC accounts, contact our Loan Department at 1-800-708-6680. For all other inquiries, please call1-888-999-6884 ~ Philip Lynch Operations Services . '" . . . . a Citizens Bank- Account Number Account Title 6201167416 JARRETT FAMILY LIVING TRS JOYCE E JARRETT TTEE ROBERT W JARRETT TTEB 2/24/2003 Checking $5,226.13 $.00 $5,226.13 $3.73 Date Opened Account Type Principal Balance as of DaD Interest from Last Posting to DaD Account Balance as of DaD YTD Interest to DaD . #' . . . . a Citizens Bank" Account Number Account Title 6201167424 JARRETT FAMll.. Y LIVING TRS JOYCE E JARRETT TTEE ROBERT W JARRETT TTEE 2/24/2003 Checking $148,128.48 $.00 $148,128.48 $720.51 Date Opened Account Type Principal Balance as of DOD Interest from Last Posting to DOD Account Balance as of DOD YTD Interest to DOD REV-1511,EX :.(1-~7) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE H FUNERAL EXPENSES & ADMINISTRATIVE COSTS ESTATE OF Robert W. Jarrett FILE NUMBER SS1f 189-09-8514 03/25/2005 Debts of decedent must be reported on Schedule I. ITEM NUMBER A. DESCRIPTION AMOUNT 1 FUNERAL EXPENSES: Neptune Society, Costa Mesa, CA, - funeral services (cremation and interment). 998.20 B. ADMINISTRATIVE COSTS: 1. Personal Representative's Commissions Name of Personal Representative(s) Social Security Number(s) / EIN Number of Personal Representative(s) Street Address City State Zip Year(s) Commission Paid: 2. 3. Attorney's Fees Law Offices-Marlin R. McCaleb Family Exemption: (If decedent's address is not the same as claimant's, attach explanation) Claimant Joyce E. Jarrett Street Address 20 North 12th Street City Lemoyne State PA Zip 17043 Relationship of Claimant to Decedent Spouse 3,750.00 998.20 4. Probate Fees 5. Accountant's Fees 6. Tax Return Preparer's Fees 7. 1 Other Administrative Costs Register of Wills, - filing Pennsylvania Inheritance Tax Return. 15.00 TOTAL (Also enter on line 9, Recapitulation) $ 5,761.40 (If more space is needed, insert additional sheets of the same size) Copyright (c) 1996 form software only CPSystems, Inc. Form REV-1511 EX (Rev. 1-97) REV -1513 EX t (9-00) I fJ/ . . \ COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Robert W. Jarrett SS# 189-09-8514 SCHEDULE J BENEFICIAR IES FILE NUMBER RELATIONSHIP TO DECEDENT AMOUNT OR SHARE NUMBER NAME AND ADDRESS OF PERSON(S) RECEIVING PROPERTY Do Not List Trustee(s) OF ESTATE I. TAXABLE DISTRIBUTIONS [include outright spousal distributions, and transfers under Sec. 9116(a)(1.2)] 1 Joyce E. Jarrett Spouse 49,784.12 20 North 12th Street Lemoyne, PA 17043 2 Linda J. Hoffer Daughter 72,927.18 21 Westwind Drive Lemoyne, PA 17043 3 Diana G. Cuffe Daughter 72,927.18 271 North Titmus Drive Mastic, NY 11950 ENTER DOLLAR AMTS. FOR DISTRIBUTIONS SHOWN ABOVE ON LN. 15 THRU 18, AS APPROPRIATE, ON REV 1500 COVER SHEET II. NON- TAXABLE DISTRIBUTIONS: A. SPOUSAL DISTRIBUTIONS UNDER SEC. 9113 FOR WHICH AN ELECTION TO TAX IS NOT BEING MADE B. CHARITABLE AND GOVERNMENTAL DISTRIBUTIONS TOTAL OF PART II - ENTER TOTAL NON-TAXABLE DISTRIBUTIONS ON LINE 13 OF REV 1500 COVER SHEET $ 0.00 03/25/2005 (If more space is needed, insert additional sheets of the same size) Copyright (e) 2000 form software only The Lackner Group, Inc. Form REV-1513 EX (Rev. 9-00) REV-1514 EX +(9-00) 011 . SCHEDULE K LIFE ESTATE, ANNUITY & TERM CERTAIN Check Box 4 on Rev-1500 Cover Sheet ESTATE OF FILE NUMBER Robert W. Jarrett SS# 189-09-8514 03/25/2005 This schedule is to be used for all single life, joint or successive life estate and term certain calculations. For dates of death prior to 5-1-89, actuarial factors for single life calculations can be obtained from the Department of Revenue, Specialty Tax Unit. Actuarial factors can be found in IRS Publication 1457, Actuarial Values, Alpha Volume for dates of death on or after 5-1-89. Indicate the type of instrument which created the future interest below and attach a copy to the tax return. COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT Copy III o Will [K] Intervivos Deed of Trust o Other DATE OF BIRTH Jo ce E. Jarrett 09/04/22 83 Term of Years Term of Years 1. Value of fund from which life estate is payable 2. Actuarial factor per appropriate table Interest table rate - 0 3 1/2% 0 6% 3. Value of life estate (Line 1 multiplied by Line 2) $ 195,638.48 0.25447 010% [] Variable Rate 4.6 % $ 49,784.12 DATE OF BIRTH Term of Years 1. Value of fund from which annuity is payable 2. Check appropriate block below and enter corresponding (number) Frequency of payout - 0 Weekly (52) 0 Bi-weekly (26) o Quarterly (4) 0 Semi-annually (2) 0 Annually (1) 3. Amount of payout per period 4. Aggregate annual payment, Line 2 multiplied by Line 3 5. Annuity Factor (see instructions) Interest table rate - 031/2% 06% 010% 0 Variable Rate 6. Adjustment Factor (see instructions) 7. Value of annuity - If using 3 1/2%, 6%, 10%, orif variable rate and period payout is at end of period, calculation is: Line 4 x Line 5 x Line 6 If using variable rate and period payout is at beginning of period, calculation is: (Line 4 x Line 5 x Line 6) + Line 3 0.00 o Monthly (12) D Other ( ) o 0.00 0.00 0.0 % 0.0000 0.0000 0.00 0.00 NOTE: The values of the funds which create the above future interests must be reported as part of the estate assets on Schedules A through G of this tax return. The resulting life or annuity interest(s) should be reported at the appropriate tax rate on Lines 13,15, 16, 17 and 18. (If more space is needed, insert additional sheets of the same size) Copyright (c) 2000 form software only The Lackner Group,lnc. Form REV-1514 EX (Rev. 9-00) "' II- 'lI . I . Part I Section 1274.--Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property (Also Sections 42, 280G, 382,412,467,468,482,483,642,807,846, 1288,7520, 7872.) Rev. Rul. 2005-13 This revenue ruling provides various prescribed rates for federal income tax purposes for March 2005 (the current month). Table 1 contains the short-term, mid- term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid- term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long- term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(2) for buildings placed in service during the current month. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520. , . . .' I , . t .. \ , ) 3 REV. RUL. 2005-13 TABLE 3 Rates Under Section 382 for March 2005 Adjusted federal long-term rate for the current month Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal long-term rates for the current month and the prior two months.) REV. RUL. 2005-13 TABLE 4 Appropriate Percentages Under Section 42(b)(2) for March 2005 Appropriate percentage for the 70% present value low-income housing credit Appropriate percentage for the 30% present value low-income housing credit REV. RUL. 2005-13 TABLE 5 Rate Under Section 7520 for March 2005 Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest 4.09% 4.27% 7.97% 3.42% 4.60% REV-1647 EX + (9-00) . . ... I ~ COMMONWEAL TH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE M FUTURE INTEREST COMPROMISE (Check Box 4a on Rev-1500 Cover Sheet) ESTATE OF FILE NUMBER Robert W. Jarrett SS# 189-09-8514 03/25/2005 This schedule is appropriate only for estates of decedents dying after December 12, 1982. This schedule is to be used for all future interests where the rate of tax which will be applicable when the future interest vests in possession and enjoyment cannot be established with certainty. Indicate below the type of instrument which created the future interest and attach a copy to the tax return. nWiII rxl Trust n Other J. Beneficiaries NAME OF AGE TO BENEFICIARY RELATIONSHIP DATE OF BIRTH NEAREST BIRTHDAY 1. Joyce E. Jarrett Spouse 09/04/1922 83 2. Linda J. Hoffer Daughter 09/21/1947 58 3. Diana G. Cuffe Daughter 12/06/1945 59 4. 5. II. For decedents dying on or after July 1, 1994, if a surviving spouse exercised or intends to exercise a right of withdrawal within 9 months of the decedent's death, check the appropriate block and attach a copy of the document in which the surviving spouse exercises such withdrawal right. [Xl Limited ri~ht of withdrawal n Unlimited right of withdrawal III. Explanation of Compromise Offer: Taxpayer offers the valuation as set forth in Schedule K for the reasons set forth in the Affidavit of Joyce E. Jarrett attached hereto and made a part hereof. IV. Summary of Compromise Offer: 1. Amount of Future Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 145,854.36 2. Value of Line 1 exempt from tax as amount passing to charities, etc. (also include as part of total shown on Line 13 of Cover Sheet) . . . . . .$ 0.00 3. Value of Line 1 passing to spouse at appropriate tax rate Check One 06%, 03%, 00% . . . . . . . .$ 0.00 (also include as part of total shown on Line 15 of Cover Sheet) 4. Value of Line 1 taxable at lineal rate Check One 06%, [K] 4.5% . . . . . . . . .....$ 145,854.36 (also include as part of total shown on Line 16 of Cover Sheet) 5. Value of Line 1 taxable at sibling rate (12%) (also include as part of total shown on Line 17 of Cover Sheet) . . . . . .$ 0.00 6. Value of Line 1 taxable at collateral rate (15%) (also include as part of total shown on Line 18 of Cover Sheet) . . . . . .$ 0.00 7. Total Value of Future Interest (sum of Lines 2 thru 6 must equal Line 1) . . . . . . . . . . . . . . $ 145,854.36 (If more space is needed, insert additional sheets of the same size) Copyright (c) 2000 form software oniy The Lackner Group. Inc. Form REV-1647 EX (Rev. 9-00) f . 'I " , II AFFIDAVIT JOYCE E. JARRETT, being duly sworn according to law, deposes and says: That I am the surviving spouse of Robert W. Jarrett, the Decedent herein, who died on March 25, 2005; and That I am the Surviving Trustor/Settlor, as well as the Surviving Trustee and Lifetime Beneficiary, of the Jarrett Family Trust dated October 3, 1992, as amended; and That the Decedent and I were the parents of two children: Linda J. Hoffer (born September 21, 1944), of Lemoyne, PA, and Diana G. Cuffe (born December 6, 1948), of Mastic, NY; and That my daughter, Linda J. Hoffer and her husband own and operate B & C Fasteners, Inc., which distributes and sells commercial, industrial and construction fasteners, with a family income in excess of $500,000.00 per annum; and that they have four adult children, all of whom are emancipated and have their own homes; and That my daughter, Diana G. Cuffe and her husband are retired, with a family income in excess of $80,000.00 per annum; and that they have two adult children, both of whom are emancipated and have their own homes; and That I live and reside at The Essex House, a retirement community in Lemoyne, PA; and That my normal monthly income and expenses are set forth on a statement attached to this Affidavit and made a part hereof, marked Exhibit "A"; and '" r .~ y< , It> That my sources of income are my monthly Social Security, my monthly Civil Service widow's annuity from my husband's Civil Service retirement, and interest income from the various Trust bank accounts; and That I rely upon distributions from the Trust to make up for the income shortfall and to pay my expenses and meet my needs; and That in view of my income and expenses, it is likely that during my lifetime all distributions that I make from the Trust will be to meet my needs and pay my expenses; and That in view of my daughters' abilities to adequately provide for their own needs, it is unlikely that during my lifetime I will be making any distributions from the Trust to them, or either of them, for their "proper care, maintenance, support or education"; and That the foregoing is true and correct to the best of my knowledge, information and belief. ~b- {~~ oyce E. rrett Sworn to and subscribed before me th~ ~^~f day of December, 200'l': ~ . ~/) Lt!; aA-L ;(- ~ 74ZJ. Notary Public . . ~ ' I ' . . . Notarial Seal Martin R McCaleb, Notary Public Mechanicsburg Bora, Cumbertand County My Commission Expires Dec. 14,2006 Member, Penllsyivania Association Of Notaries /:;.:~)./,.: :; *,:- .:10 -). ~", .,t.... .""';, . .""..... . -; ~... . ..... -2- / ; ~ '. , -, . ,-... , .., . .., I' . . Monthly Income: U S Treasury (Annuity) Social Security Interest from banks Total Income Monthly Expenses: Rent Telephone credit cards Misc. Expenses Total Expenses Net Loss $1,651.00 $803.00 $250.00 $2,704.00 $2,675.00 $22.00 $100.00 $200.00 $2,997.00 -$293.00 Joyce E. Jarrett Income Expense 11/01/05 Exhibit "A"