Preview
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
EXHIBIT B
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
TaxlD
THE ELMER A. KESTLER AND FRANCES R. KESTLER
IRREVOCABLETRUST
July 8, 2012
LAW OFFICES
NANCY BURNER & ASSOCIATES, P.C.
46 ROUTE 25A, SUITE 4
SETAUKET, NEW YORK 11733
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
The ELMER A. KESTLER and FRANCES R.
KESTLER Irrevocable Trust
. Table of Contents
Article One Establishing the Trust................................................1-1
Section 1.01 Identifying Our Trust..............................................................1-1
Section 1.02 Reliance by Third Parties .......................................................1-1
Section 1.03 An Irrevocable Trust...............................................................1-2
Section 1.04 Transfers to the Trust..............................................................1-2
Section 1.05 Statement of Our Intent ..........................................................1-2
Section 1.06 Grantor Trust Provisions ........................................................1-3
Article Two Our Beneficiaries........................................................2-1
Article Three Trustee Succession Provisions ................................3-1
Section 3.01 Resignation of a Trustee.........................................................3-1
Section 3.02 Trustee Succession .................................................................3-1
Section 3.03 Notice of Removal and Appointment.....................................3-2
Section 3.04 Appointment of a Co-Trustee.................................................3-2
Section 3.05 Corporate Fiduciaries .............................................................3-3
Section 3.06 Incapacity of a Trustee ...........................................................3-3
Section 3.07 Appointment of Independent Special Trustee ........................3-3
Section 3.08 Rights and Obligations of Successor Trustees .......................3-3
Article Four Administration while Either of Us is Living ..............4-1
Section 4.01 Contributions Held in a Single Trust......................................4-1
Section 4.02 Administration Upon the Death of the Survivor of Us...........4-2
Article Five Administration of Remaining Trust Property...........5-1
Section 5.01 Division of Remaining Trust Property ...................................5-1
Section 5.02 Administration of the Separate Trusts....................................5-1
Section 5.03 General Power of Appointment Over Property Subject
to Taxable Generation-Skipping Transfers.............................5-2
.
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THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST
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NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEW YoRK 11733 | (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
Article Six Remote Contingent Distribution ...............................6-1
Article Seven Distributions to Underage and Incapacitated
Beneficia les...............................................................7-1
Section 7.01 Special Needs Trust................................................................7-1
Section 7.02 Underage and Incapacitated Beneficiaries .............................7-4
Section 7.03 Methods of Distribution..........................................................7-4
Section 7.04 Retention in Trust...................................................................7-5
Section 7.05 Application of Article.............................................................7-6
Article Eight Trust Administration..................................................8-1
Section 8.01 Distributions to Beneficiaries.................................................8-1
Section 8.02 Trust Decanting; Power to Appoint in Further Trust .............8-1
Section.8.03 Beneficiary's Status ................................................................8-2
Section 8.04 No Court Proceedings.............................................................8-2
Section 8.05 No Bond..................................................................................8-2
Section 8.06 Exoneration of Our Trustee....................................................8-2
Section 8.07 Trustee Compensation............................................................8-2
Section 8.08 Employment of Professionals.................................................8-3
Section 8.09 Exercise of Testamentary Power of Appointment.................,8-3
Section 8.10 Determination of Principal and Income..................................8-3
Section 8.11 Trust Accounting....................................................................8-4
Section 8.12 Action of Trustees and Delegation of Trustee Authority .......8-4
Section 8.13 Trustee May Disclaim or Release Any Power........................8-5
Section 8.14 Trustee May Execute a Power of Attorney ............................8-5
Section 8.15 Additions to Separate Trusts...................................................8-5
Section 8.16 Authority to Merge or Sever Trusts........................................8-5
Section 8.17 Authority to Terminate Trusts................................................8-6
Section 8.18 Merger of Corporate Fiduciary...............................................8-·6
Section 8.19 Funeral and Other Expenses of Beneficiary...........................8-6
Section 8.20 Generation-Skipping Transfer Tax Provisions.......................8-7
Section 8.21 Independent Trustee May Confer Testamentary Power
of Appointment.......................................................................8-8
Article Nine Our Trustee's Powers ................................................9-1
Section 9.01 Introduction to Trustee's Powers............................................9-1
Section 9.02 Execution of Documents by Our Trustee ...............................9-1
Section 9.03 Investment Powers in General................................................9-1
Section 9.04 Banking Powers......................................................................9-2
Section 9.05 Business Powers .....................................................................9-2
Section 9.06 Contract Powers......................................................................9-2
Section 9.07 Common Investments.............................................................9-3
Section 9.08 Environmental Powers............................................................9-3
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THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST
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NANCYBURNER& ASSOCIATEs, P.C. , 46 RoUTE 25A, SUITE4, SETAUKET,NEW YORK 11733 [ (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
Section 9.09 Farming and Ranching Operations.........................................9-4
Section 9.10 Insurance Powers....................................................................9-5
Section 9.11 Loans and Borrowing Powers.................................................9-5
Section 9.12 Nominee Powers.....................................................................9-6
Section 9.13 Oil, Gas and Mineral Interests................................................9-6
Section 9.14 Payment of Property Taxes and Expenses..............................9-6
Section 9.15 Purchase of Assets from and Loans to a Deceased
Grantor's Probate Estate.........................................................9-7
Section 9.16 Real Estate Powers .................................................................9-7
Section 9.17 Residences and Tangible Personal Property...........................9-7
Section 9.18 Retention and Abandonment of Trust Property......................9-8
Section 9.19 Securities, Brokerage and Margin Powers .............................9-8
Section 9.20 Settlement Powers ..................................................................9-9
Section 9.21 Limitation on Our Tmstee's Powers ......................................9-9
Article Ten General Provisions...................................................10-1
Section 10.01 Maximum Term for Trusts...................................................10-1
Section 10.02 Spendthrift Provision............................................................10-1
Section 10.03 Contest Provision..................................................................10-1
Section 10.04 Changing the Governing Law and Situs of
Administration......................................................................10-1
Section 10.05 Definitions............................................................................10-2
Section 10.06 General Provisions and Rules of Construction.....................10-7
THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST
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NANCYBURNER& AssoCIATES, P.C. , 46 ROUTE25A, SUITE4, SETAUKET.NEW YORK 11733 | (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
The ELMER A. KESTLER and FRANCES R. KESTLER
Irrevocable Trust
Article One
Establishing the Trust
The date of this Irrevocable Trust Agreement is 2012. The parties to the agreement are
July 8,
ELMER A. KESTLER and FRANCES R. KESTLER (the and GERALD A.
"Grantors")
KESTLER (our "Trustee").
We intend that this agreement create a valid trust under the laws of New York and under the laws
of any state in which any trust created under this agreement is administered. The terms of this
trust agreement prevail over any provision of New York except those provisions that are
law,
mandatory and may not be waived.
Neither of us may serve as Trustee of any trust created under this agreement at time.
any
Section 1.01 Identifying Our Trust
Our trust may be referred to as "GERALD A. KESTLER, Trustee of the ELMER A. KESTLER
2012."
and FRANCES R. KESTLER Irrevocable Trust dated July 8,
For the purpose of transferring property to our trust, or identifying our trust in any beneficiary or
pay-on-death designation, any description referring to our trust will be effective ifit reasonably
identifies our trust. Any description that contains the date of our trust, the name of at least one
initial or successor Trustee and an indication that our Trustee is holding the trust property in a
fiduciary capacity will be sufficient to reasonably identify our trust.
Section 1.02 Reliance by Third Parties
From time to time, third parties may require documentation to verify the existence of this
agreement, or particular provisions of it,such as the name or names of our Trustee or the powers
held by our Trustee. To protect the confidentiality of this agreement, our Trustee may use an
affidavit or a certification of trust that identifies our Trustee and sets forth the authority of our
Trustee to transact business on behalf of our trust in lieu of providing a copy of this agreement.
The affidavit or certification may include pertinent pages from this agreement, such as title or
signature pages.
A third party may rely upon an affidavit or certification of trust that is signed by our Trustee with
respect to the representations contained in the affidavit or certification of trust. A third party
relying upon an affidavit or certification of trust shall be exonerated from any liability for actions
the third party takes or fails to take in reliance upon the representations contained in the affidavit
or certification of trust.
A third party dealing with our Trustee shall not be required to inquire into the terms of this
agreement or the authority of our Trustee, or to see to the application of funds or other property
THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST
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NANCYBURNER& ASSOCIATES,P.C. , 46 RoUTE 25A, SUITE4, SETAUKET,NEW YORK 11733| (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
received by our Trustee. The receipt from our Trustee for or
any money property paid,
transferred or delivered to our Trustee will be a sufficient discharge to the person or persons
paying, transferrin! or delivering the money or property from all liability in connection with its
application. A written statement by our Trustee is conclusive evidence of our Trustee's
authority. Third parties are not liable for any loss resulting from their reliance on a written
statement by our Trustee asserting our Trustee's authority or seeking to effectuate a transfer of
property to or from the trust.
Section 1.03 An Irrevocable Trust
This Trust is irrevocable, and neither of us can alter, amend, revoke, or terminate itin way.
any
Section 1.04 Transfers to the Trust
We transfer to our Trustee the property listed in Schedule A, attached to this agreement, to be
held on the terms and conditions set forth in this instrument. We retain no right, title or interest
in the income or principal of this trust or any other incident of ownership in any trustproperty.
By execution of this agreement, our Trustee accepts and agrees to hold the trust property
described on Schedule A. All property transferred to our trust after the date of this agreement
must be acceptable to our Trustee. Our Trustee may refuse to accept any.property. Our Trustee
shall hold, administer and dispose of all trust property accepted by our Trustee for the benefit of
our beneficiaries in accordance with the terms of thisagreement.
Section 1.05 Statement of Our Intent
We are creating this trust with the intent that assets transferred to the trust be held for the benefit
of our trust beneficiaries on the terms and conditions set forth in this agreement. In order to
maximire the benefit to our trust beneficiaries, we give our Trustee broad discretion with respect
to the management, distribution and investment of assets in our trust. Our specific objectives in
creating this trust include, but are not limited to, having:
Any giftmade to the trust be treated as a completed gift for federal estate and gift
tax purposes;
The assets of the trust estate be excluded for federal estate tax purposes from our
gross estates and the gross estates of our trust beneficiaries except to the extent
that the grant or exercise of a power of appointment is treated as a general power
of appointment; and
The assets in this trust not be subject to the claims of our creditors and any
beneficiary's creditors.
All provisions of this agreement are to be construed to accomplish these objectives. Any .
beneficiary has the right at any time to release, renounce or disclaim any right, power or interest
that might be construed or deemed to defeat these objectives.
THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST
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NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEW YORK 11733 | (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
Section t.06 Grantor Trust Provisions
We intend that we be taxed äs owners of this trust for federal income tax purposes for those
periods during which either of us or other person holds one or more of
any the powers described
in Sections 671-678 of the Internal Revenue Code. All provisions of this trust will be construed
to carry out this intent. provision of this trust that
Notwithstanding any may seem to be to the
contrary, the following provisions apply in the administration of the trust.
(a) Power of Substitution
During our lifetime, each of us reserves the independent right to reacquire any
trust property by substituting other of equivalent value.
property We, however,
may not reacquire any property that would cause either or both of us to have an
incident of ownership, as defmed in Section 2042 of the Internal Revenue Code,
with respect to any insurance policy on either or both of our lives held as part of
the trust property. Furthermore, we may not exercise this power with respect to
any stock treated as voting stock under Section of the Internal Revenue
2036(b)
Code.
Our Trustee has a fiduciary obligation to ensure our com15liance with the terms of
this. power by satisfying itself that the pi·operties acquired and substituted by
either of us are in fact of equivalent value.
Neither of us may exercise this power in any manner that shifts benefits among
the beneficiaries. In consideration of this limitation, during any time we hold this
power of substitution·
No provision in this agreemerit is to be construed in any manner
that limits our Trustee's power to reinvest trust corpus for the
benefit of the beneficiaries, and
Our Trustee has a fiduciary duty to act impartially toward alltrust
beneficiaries.
It isour intention that the provisions of this subsection comply in all respects with
Revenue Ruling 2008-22, and that this subsection must be interpreted to ensure
compliance with that ruling.
Either of us may at any time, by written notice to our Trustee, release and
relinquish this right. After the death of one of us, the survivor may release and
relinquish this right If one of us is incapacitated, the other may release and
relinquish this right on behalf of both of us.
(b) Non-fiduciary Capacity
Except as otherwise specifically provided to the contrary in this Section, the
powers described in this Section are exercisable solely in a non-fiduciary capacity
without approval or consent of any person acting in a fiduciary capacity. No one
may impose a claim for breach of fiduciary duty upon any other party to this trust
THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST
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NANCY BURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEW YORK 11733 | (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
as a result of the exercise or non-exercise of the powers granted under this
Section.
THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRDST
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NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEW YORK 11733 I (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
Article Two
Our Beneficiaries
We have four children. They are:
FRANCIS A. KESTLER, born on May 29,
GERALD A. KESTLER, born on January 29,
MARGARET M. KESTLER, born on July 23, and
KATHERINE A. KESTLER, born on December 17,
children"
All references in this agreement to "our are references to these children.
descendants"
References in this agreement to "our refer to our children and their descendants.
beneficiaries"
The "lifetime of our trust are our children.
THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST
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NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE 25A, SUlTE4, SETAUKET,NEw YORK 11733 | (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
.
Article Three
Trustee Succession Provisions
Section 3.01 Resignation of a Trustee
A Trustee may resign by giving written notice to either of us. If we are both incapacitated or
deceased, a resigning Trustee shall give written notice to the Income Beneficiaries of the trust
and to any other then-serving Trustee. .
Upon the resignation of a Trustee, the resigning Trustee may, concurrent with the written notice
described above, appoint the resigning Trustee's successor as Trustee in the manner set forth in
Section 3.03. If the resigning Trustee fails to make the appointment, the other provisions of this
Article regarding Trustee succession upon incapacity or death (as the case may be) shall govern,
and the next named successor or successors to the resigning Trustee will serve in the order listed.
Likewise, if no named successors to the resigning Trustees are available to serve and the
resigning Trustee fails to designate a successor, the other provisions of this Article regarding the
filling of a vacant Trustee office shall govern.
Section 3.02 Trustee Succession
This Section governs the removal and replacement of the Trustees.
(a) Appointment of Successor Trustees
If GERALD A. KESTLER ceases to serve we name the following, in the order
named, to serve as successor Trustee:
MARGARET M. KESTLER; and then
FRANCIS A. KESTLER.
(b) Trustees of the Separate Trusts
Upon the
Beneficiary
or herself
creation
as
of
a
a
of the
separate
Co-Trustee
separate
trust,
of
upon
his
trusts
or
as provided
attaining
her
the age
in
of
Article
25,
separate.trusugge
Five, the
may_appoint
with
Prim
the
elf
i
\
servmg TrdãTëE"WäzifTuli
T iiëfi
iary is serving as Co-Trustee of ˆis õFlier
Šru'liClHErêllikst be at least one other Trustee serving with the beneficiary.
Notwithstanding the foregoing provisions, however, the Primary Beneficiary of
any trust administered as a Special Needs Trust under this agreement may not
appoint himself or herself at any time as a Co-Trustee of his or her separate trust.
(c) Removal by Beneficiaries
The Prùnary Beneficiary may remove a Trustee with or without cause.
A Trustee may be removed under tbis subsection only if, on or before the
effective date of removal, the person or persons having the right of removal
appoint an individual or a corporate fiduciary that simultaneously commences
THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST
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NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEWYORK 11733 | (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
service as Trustee. The Trustee so appointed not be related or
may subordinate to
the person or persons the right of removal within the
having meaning of Section
672(c) of the Internal Revenue Code.
The right to remove a Trustee under this subsection is not intended to grant to the
person holding that right any of the powers of that Trustee.
If a beneficiary is a minor or is the parent or Legal
incapacitated, Representative
of the beneficiary, other than either of act on behalf of the beneficiary.
us, may
(d) Default of Designation
If the office of Trustee of a trust created under this agreement is vacant and no
designated Trustee is able and willing to act, the Primary Beneficiary may
appoint an individual or corporate fiduciary to serve as successor Trustee. In the
case of a minor or incapacitated the parent or Legal Representative of
beneficiary,
such beneficiary, other than one of us, may act on behalf of such beneficiary.
Any beneficiary or the beneficiary's Legal Representative petition a court of
may
competent jurisdiction to appoint a successor Trustee to fill any vacancy
remaining unfilled after a period of 30 days. By the appointment, the
making
court does not thereby acquire any jurisdiction over the trust,except to the extent
necessary for making the appointment.
Neither of us may serve as Trustee of any trust created under this agreement at
any time.
In the event of a Trustee vacancy due to resignation, however, the foregoing
provisions apply only if the resigning Trustee fails to appoint a successor Trustee
in the manner more fully set forth in Section 3.01.
Section 3.03 Notice of Removal and Appointment
Notice of removal must be inwriting and delivered to the Trustee being removed, along with any
other then-serving Trustees. The notice of removal will be effective in accordance with its
provisions.
Notice of appointment must also be in writing and delivered to the successor Trustee and any
other then-serving Trustees. The appointment will become effective at the time of acceptance by
the successor Trustee. A copy of the notice should be attached to this agreement.
Section 3.04 Appointment of a Co-Trustee
Any individual Trustee may appoint an individual or a corporate fiduciary as a Co-Trustee. That
Co-Trustee will serve as as the Trustee who appointed the Co-Trustee if the Co-
only long (or,
Trustee was named by more than one Trustee acting together, by the last to serve of those
Trustees) serves, and the Co-Trustee will not become a successor Trustee upon the death, .
resignation, or incapacity of the Trustee who appointed the Co-Trustee, unless so appointed
under the terms of this agreement. Although the Co-Trustee may exercise allthe powers of the
appointing Trustee, the combined powers of the Co-Trustee and the appointing Trustee cannot
THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST
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NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A SUITE 4, sETAUKET,NEW YoRK 11733 | (631) 941-3434
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023
exceed the powers of the appointing Trustee alone. The Trustee a Co-Trustee
appointing may
revoke the appointment at any time with or without cause.
Section 3!05 Corporate Fiduciaries
Any corporate fiduciary serving under this agreement as a Trustee must be a bank, trust
cornpany, or public charity that is qualified to act as a fiduciary under applicable federal and
state law and that is not related or subordinate to any beneficiary within the meaning of Section
672(c) of the Internal Revenue Code.
Section 3.06 Incapacity of a Trustee
If any individual Trustee becomes incapacitated, it will not be for the incapacitated
necessary
Trustee to resign as Trustee. A written declaration of incapacity by the Co-Trustee, if any, or, if
none, by theparty designated to succeed the incapacitated Trustee will terminate the trusteeship.
The provisions of Section 10.05(h) of this agreement govern the determination of a Trustee's
incapacity by a physician and the Trustee's obligations to submit to examination and provide
necessary releases.
Section3.07 Appointment of Independent Special Trustee
Iffor any reason the Trustee of any trust created under this instrument is unwilling or unable to
act with respect to any trust property or any provision of this instrument, our Trustee shall
appoint, in writing, a corporate fiduciary or an individual to serve as an Independent Special
Trustee with respect to this property or provision. The appointed Independent Special Trustee
must not be related or subordinate to any trust beneficiary within the meaning of Internal
Revenue Code Section 672(c).
An Independent Special Trustee shall exercise allfiduciary powers granted by this trust unless
limited elsewhere in this instrument or by the Trustee in the instrument appointing the
expressly
Independent Special Trustee. An Independent Special Trustee may resign at any time by
delivering written notice to the Trustee. Notice of resignation will be effective in accordance
with the terms of the notice.
Section 3.08 Rights and Obligations of Successor Trustees
Each successor Trustee serving under this agreement, whether corporate or individual, will have
all of the title, rights, powers and privileges granted to the initial Trustee named under this
agreement. In addition, each successor Trustee is subject to all of the restrictions imposed upon,
as well as all obligation
Preview
FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 EXHIBIT B FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 TaxlD THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLETRUST July 8, 2012 LAW OFFICES NANCY BURNER & ASSOCIATES, P.C. 46 ROUTE 25A, SUITE 4 SETAUKET, NEW YORK 11733 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 The ELMER A. KESTLER and FRANCES R. KESTLER Irrevocable Trust . Table of Contents Article One Establishing the Trust................................................1-1 Section 1.01 Identifying Our Trust..............................................................1-1 Section 1.02 Reliance by Third Parties .......................................................1-1 Section 1.03 An Irrevocable Trust...............................................................1-2 Section 1.04 Transfers to the Trust..............................................................1-2 Section 1.05 Statement of Our Intent ..........................................................1-2 Section 1.06 Grantor Trust Provisions ........................................................1-3 Article Two Our Beneficiaries........................................................2-1 Article Three Trustee Succession Provisions ................................3-1 Section 3.01 Resignation of a Trustee.........................................................3-1 Section 3.02 Trustee Succession .................................................................3-1 Section 3.03 Notice of Removal and Appointment.....................................3-2 Section 3.04 Appointment of a Co-Trustee.................................................3-2 Section 3.05 Corporate Fiduciaries .............................................................3-3 Section 3.06 Incapacity of a Trustee ...........................................................3-3 Section 3.07 Appointment of Independent Special Trustee ........................3-3 Section 3.08 Rights and Obligations of Successor Trustees .......................3-3 Article Four Administration while Either of Us is Living ..............4-1 Section 4.01 Contributions Held in a Single Trust......................................4-1 Section 4.02 Administration Upon the Death of the Survivor of Us...........4-2 Article Five Administration of Remaining Trust Property...........5-1 Section 5.01 Division of Remaining Trust Property ...................................5-1 Section 5.02 Administration of the Separate Trusts....................................5-1 Section 5.03 General Power of Appointment Over Property Subject to Taxable Generation-Skipping Transfers.............................5-2 . . THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST . 1 NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEW YoRK 11733 | (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 Article Six Remote Contingent Distribution ...............................6-1 Article Seven Distributions to Underage and Incapacitated Beneficia les...............................................................7-1 Section 7.01 Special Needs Trust................................................................7-1 Section 7.02 Underage and Incapacitated Beneficiaries .............................7-4 Section 7.03 Methods of Distribution..........................................................7-4 Section 7.04 Retention in Trust...................................................................7-5 Section 7.05 Application of Article.............................................................7-6 Article Eight Trust Administration..................................................8-1 Section 8.01 Distributions to Beneficiaries.................................................8-1 Section 8.02 Trust Decanting; Power to Appoint in Further Trust .............8-1 Section.8.03 Beneficiary's Status ................................................................8-2 Section 8.04 No Court Proceedings.............................................................8-2 Section 8.05 No Bond..................................................................................8-2 Section 8.06 Exoneration of Our Trustee....................................................8-2 Section 8.07 Trustee Compensation............................................................8-2 Section 8.08 Employment of Professionals.................................................8-3 Section 8.09 Exercise of Testamentary Power of Appointment.................,8-3 Section 8.10 Determination of Principal and Income..................................8-3 Section 8.11 Trust Accounting....................................................................8-4 Section 8.12 Action of Trustees and Delegation of Trustee Authority .......8-4 Section 8.13 Trustee May Disclaim or Release Any Power........................8-5 Section 8.14 Trustee May Execute a Power of Attorney ............................8-5 Section 8.15 Additions to Separate Trusts...................................................8-5 Section 8.16 Authority to Merge or Sever Trusts........................................8-5 Section 8.17 Authority to Terminate Trusts................................................8-6 Section 8.18 Merger of Corporate Fiduciary...............................................8-·6 Section 8.19 Funeral and Other Expenses of Beneficiary...........................8-6 Section 8.20 Generation-Skipping Transfer Tax Provisions.......................8-7 Section 8.21 Independent Trustee May Confer Testamentary Power of Appointment.......................................................................8-8 Article Nine Our Trustee's Powers ................................................9-1 Section 9.01 Introduction to Trustee's Powers............................................9-1 Section 9.02 Execution of Documents by Our Trustee ...............................9-1 Section 9.03 Investment Powers in General................................................9-1 Section 9.04 Banking Powers......................................................................9-2 Section 9.05 Business Powers .....................................................................9-2 Section 9.06 Contract Powers......................................................................9-2 Section 9.07 Common Investments.............................................................9-3 Section 9.08 Environmental Powers............................................................9-3 . THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST .. n NANCYBURNER& ASSOCIATEs, P.C. , 46 RoUTE 25A, SUITE4, SETAUKET,NEW YORK 11733 [ (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 Section 9.09 Farming and Ranching Operations.........................................9-4 Section 9.10 Insurance Powers....................................................................9-5 Section 9.11 Loans and Borrowing Powers.................................................9-5 Section 9.12 Nominee Powers.....................................................................9-6 Section 9.13 Oil, Gas and Mineral Interests................................................9-6 Section 9.14 Payment of Property Taxes and Expenses..............................9-6 Section 9.15 Purchase of Assets from and Loans to a Deceased Grantor's Probate Estate.........................................................9-7 Section 9.16 Real Estate Powers .................................................................9-7 Section 9.17 Residences and Tangible Personal Property...........................9-7 Section 9.18 Retention and Abandonment of Trust Property......................9-8 Section 9.19 Securities, Brokerage and Margin Powers .............................9-8 Section 9.20 Settlement Powers ..................................................................9-9 Section 9.21 Limitation on Our Tmstee's Powers ......................................9-9 Article Ten General Provisions...................................................10-1 Section 10.01 Maximum Term for Trusts...................................................10-1 Section 10.02 Spendthrift Provision............................................................10-1 Section 10.03 Contest Provision..................................................................10-1 Section 10.04 Changing the Governing Law and Situs of Administration......................................................................10-1 Section 10.05 Definitions............................................................................10-2 Section 10.06 General Provisions and Rules of Construction.....................10-7 THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST ... NANCYBURNER& AssoCIATES, P.C. , 46 ROUTE25A, SUITE4, SETAUKET.NEW YORK 11733 | (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 The ELMER A. KESTLER and FRANCES R. KESTLER Irrevocable Trust Article One Establishing the Trust The date of this Irrevocable Trust Agreement is 2012. The parties to the agreement are July 8, ELMER A. KESTLER and FRANCES R. KESTLER (the and GERALD A. "Grantors") KESTLER (our "Trustee"). We intend that this agreement create a valid trust under the laws of New York and under the laws of any state in which any trust created under this agreement is administered. The terms of this trust agreement prevail over any provision of New York except those provisions that are law, mandatory and may not be waived. Neither of us may serve as Trustee of any trust created under this agreement at time. any Section 1.01 Identifying Our Trust Our trust may be referred to as "GERALD A. KESTLER, Trustee of the ELMER A. KESTLER 2012." and FRANCES R. KESTLER Irrevocable Trust dated July 8, For the purpose of transferring property to our trust, or identifying our trust in any beneficiary or pay-on-death designation, any description referring to our trust will be effective ifit reasonably identifies our trust. Any description that contains the date of our trust, the name of at least one initial or successor Trustee and an indication that our Trustee is holding the trust property in a fiduciary capacity will be sufficient to reasonably identify our trust. Section 1.02 Reliance by Third Parties From time to time, third parties may require documentation to verify the existence of this agreement, or particular provisions of it,such as the name or names of our Trustee or the powers held by our Trustee. To protect the confidentiality of this agreement, our Trustee may use an affidavit or a certification of trust that identifies our Trustee and sets forth the authority of our Trustee to transact business on behalf of our trust in lieu of providing a copy of this agreement. The affidavit or certification may include pertinent pages from this agreement, such as title or signature pages. A third party may rely upon an affidavit or certification of trust that is signed by our Trustee with respect to the representations contained in the affidavit or certification of trust. A third party relying upon an affidavit or certification of trust shall be exonerated from any liability for actions the third party takes or fails to take in reliance upon the representations contained in the affidavit or certification of trust. A third party dealing with our Trustee shall not be required to inquire into the terms of this agreement or the authority of our Trustee, or to see to the application of funds or other property THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST 1-1 NANCYBURNER& ASSOCIATES,P.C. , 46 RoUTE 25A, SUITE4, SETAUKET,NEW YORK 11733| (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 received by our Trustee. The receipt from our Trustee for or any money property paid, transferred or delivered to our Trustee will be a sufficient discharge to the person or persons paying, transferrin! or delivering the money or property from all liability in connection with its application. A written statement by our Trustee is conclusive evidence of our Trustee's authority. Third parties are not liable for any loss resulting from their reliance on a written statement by our Trustee asserting our Trustee's authority or seeking to effectuate a transfer of property to or from the trust. Section 1.03 An Irrevocable Trust This Trust is irrevocable, and neither of us can alter, amend, revoke, or terminate itin way. any Section 1.04 Transfers to the Trust We transfer to our Trustee the property listed in Schedule A, attached to this agreement, to be held on the terms and conditions set forth in this instrument. We retain no right, title or interest in the income or principal of this trust or any other incident of ownership in any trustproperty. By execution of this agreement, our Trustee accepts and agrees to hold the trust property described on Schedule A. All property transferred to our trust after the date of this agreement must be acceptable to our Trustee. Our Trustee may refuse to accept any.property. Our Trustee shall hold, administer and dispose of all trust property accepted by our Trustee for the benefit of our beneficiaries in accordance with the terms of thisagreement. Section 1.05 Statement of Our Intent We are creating this trust with the intent that assets transferred to the trust be held for the benefit of our trust beneficiaries on the terms and conditions set forth in this agreement. In order to maximire the benefit to our trust beneficiaries, we give our Trustee broad discretion with respect to the management, distribution and investment of assets in our trust. Our specific objectives in creating this trust include, but are not limited to, having: Any giftmade to the trust be treated as a completed gift for federal estate and gift tax purposes; The assets of the trust estate be excluded for federal estate tax purposes from our gross estates and the gross estates of our trust beneficiaries except to the extent that the grant or exercise of a power of appointment is treated as a general power of appointment; and The assets in this trust not be subject to the claims of our creditors and any beneficiary's creditors. All provisions of this agreement are to be construed to accomplish these objectives. Any . beneficiary has the right at any time to release, renounce or disclaim any right, power or interest that might be construed or deemed to defeat these objectives. THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST 1-2 NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEW YORK 11733 | (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 Section t.06 Grantor Trust Provisions We intend that we be taxed äs owners of this trust for federal income tax purposes for those periods during which either of us or other person holds one or more of any the powers described in Sections 671-678 of the Internal Revenue Code. All provisions of this trust will be construed to carry out this intent. provision of this trust that Notwithstanding any may seem to be to the contrary, the following provisions apply in the administration of the trust. (a) Power of Substitution During our lifetime, each of us reserves the independent right to reacquire any trust property by substituting other of equivalent value. property We, however, may not reacquire any property that would cause either or both of us to have an incident of ownership, as defmed in Section 2042 of the Internal Revenue Code, with respect to any insurance policy on either or both of our lives held as part of the trust property. Furthermore, we may not exercise this power with respect to any stock treated as voting stock under Section of the Internal Revenue 2036(b) Code. Our Trustee has a fiduciary obligation to ensure our com15liance with the terms of this. power by satisfying itself that the pi·operties acquired and substituted by either of us are in fact of equivalent value. Neither of us may exercise this power in any manner that shifts benefits among the beneficiaries. In consideration of this limitation, during any time we hold this power of substitution· No provision in this agreemerit is to be construed in any manner that limits our Trustee's power to reinvest trust corpus for the benefit of the beneficiaries, and Our Trustee has a fiduciary duty to act impartially toward alltrust beneficiaries. It isour intention that the provisions of this subsection comply in all respects with Revenue Ruling 2008-22, and that this subsection must be interpreted to ensure compliance with that ruling. Either of us may at any time, by written notice to our Trustee, release and relinquish this right. After the death of one of us, the survivor may release and relinquish this right If one of us is incapacitated, the other may release and relinquish this right on behalf of both of us. (b) Non-fiduciary Capacity Except as otherwise specifically provided to the contrary in this Section, the powers described in this Section are exercisable solely in a non-fiduciary capacity without approval or consent of any person acting in a fiduciary capacity. No one may impose a claim for breach of fiduciary duty upon any other party to this trust THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST 1-3 NANCY BURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEW YORK 11733 | (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 as a result of the exercise or non-exercise of the powers granted under this Section. THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRDST 1-4 NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEW YORK 11733 I (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 Article Two Our Beneficiaries We have four children. They are: FRANCIS A. KESTLER, born on May 29, GERALD A. KESTLER, born on January 29, MARGARET M. KESTLER, born on July 23, and KATHERINE A. KESTLER, born on December 17, children" All references in this agreement to "our are references to these children. descendants" References in this agreement to "our refer to our children and their descendants. beneficiaries" The "lifetime of our trust are our children. THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST 2-1 NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE 25A, SUlTE4, SETAUKET,NEw YORK 11733 | (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 . Article Three Trustee Succession Provisions Section 3.01 Resignation of a Trustee A Trustee may resign by giving written notice to either of us. If we are both incapacitated or deceased, a resigning Trustee shall give written notice to the Income Beneficiaries of the trust and to any other then-serving Trustee. . Upon the resignation of a Trustee, the resigning Trustee may, concurrent with the written notice described above, appoint the resigning Trustee's successor as Trustee in the manner set forth in Section 3.03. If the resigning Trustee fails to make the appointment, the other provisions of this Article regarding Trustee succession upon incapacity or death (as the case may be) shall govern, and the next named successor or successors to the resigning Trustee will serve in the order listed. Likewise, if no named successors to the resigning Trustees are available to serve and the resigning Trustee fails to designate a successor, the other provisions of this Article regarding the filling of a vacant Trustee office shall govern. Section 3.02 Trustee Succession This Section governs the removal and replacement of the Trustees. (a) Appointment of Successor Trustees If GERALD A. KESTLER ceases to serve we name the following, in the order named, to serve as successor Trustee: MARGARET M. KESTLER; and then FRANCIS A. KESTLER. (b) Trustees of the Separate Trusts Upon the Beneficiary or herself creation as of a a of the separate Co-Trustee separate trust, of upon his trusts or as provided attaining her the age in of Article 25, separate.trusugge Five, the may_appoint with Prim the elf i \ servmg TrdãTëE"WäzifTuli T iiëfi iary is serving as Co-Trustee of ˆis õFlier Šru'liClHErêllikst be at least one other Trustee serving with the beneficiary. Notwithstanding the foregoing provisions, however, the Primary Beneficiary of any trust administered as a Special Needs Trust under this agreement may not appoint himself or herself at any time as a Co-Trustee of his or her separate trust. (c) Removal by Beneficiaries The Prùnary Beneficiary may remove a Trustee with or without cause. A Trustee may be removed under tbis subsection only if, on or before the effective date of removal, the person or persons having the right of removal appoint an individual or a corporate fiduciary that simultaneously commences THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST 3-1 NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A, SUITE4, SETAUKET,NEWYORK 11733 | (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 service as Trustee. The Trustee so appointed not be related or may subordinate to the person or persons the right of removal within the having meaning of Section 672(c) of the Internal Revenue Code. The right to remove a Trustee under this subsection is not intended to grant to the person holding that right any of the powers of that Trustee. If a beneficiary is a minor or is the parent or Legal incapacitated, Representative of the beneficiary, other than either of act on behalf of the beneficiary. us, may (d) Default of Designation If the office of Trustee of a trust created under this agreement is vacant and no designated Trustee is able and willing to act, the Primary Beneficiary may appoint an individual or corporate fiduciary to serve as successor Trustee. In the case of a minor or incapacitated the parent or Legal Representative of beneficiary, such beneficiary, other than one of us, may act on behalf of such beneficiary. Any beneficiary or the beneficiary's Legal Representative petition a court of may competent jurisdiction to appoint a successor Trustee to fill any vacancy remaining unfilled after a period of 30 days. By the appointment, the making court does not thereby acquire any jurisdiction over the trust,except to the extent necessary for making the appointment. Neither of us may serve as Trustee of any trust created under this agreement at any time. In the event of a Trustee vacancy due to resignation, however, the foregoing provisions apply only if the resigning Trustee fails to appoint a successor Trustee in the manner more fully set forth in Section 3.01. Section 3.03 Notice of Removal and Appointment Notice of removal must be inwriting and delivered to the Trustee being removed, along with any other then-serving Trustees. The notice of removal will be effective in accordance with its provisions. Notice of appointment must also be in writing and delivered to the successor Trustee and any other then-serving Trustees. The appointment will become effective at the time of acceptance by the successor Trustee. A copy of the notice should be attached to this agreement. Section 3.04 Appointment of a Co-Trustee Any individual Trustee may appoint an individual or a corporate fiduciary as a Co-Trustee. That Co-Trustee will serve as as the Trustee who appointed the Co-Trustee if the Co- only long (or, Trustee was named by more than one Trustee acting together, by the last to serve of those Trustees) serves, and the Co-Trustee will not become a successor Trustee upon the death, . resignation, or incapacity of the Trustee who appointed the Co-Trustee, unless so appointed under the terms of this agreement. Although the Co-Trustee may exercise allthe powers of the appointing Trustee, the combined powers of the Co-Trustee and the appointing Trustee cannot THE ELMER A. KESTLER AND FRANCES R. KESTLER IRREVOCABLE TRUST 3-2 NANCYBURNER& ASSOCIATES,P.C. , 46 ROUTE25A SUITE 4, sETAUKET,NEW YoRK 11733 | (631) 941-3434 FILED: SUFFOLK COUNTY CLERK 01/25/2023 02:51 PM INDEX NO. 602020/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/25/2023 exceed the powers of the appointing Trustee alone. The Trustee a Co-Trustee appointing may revoke the appointment at any time with or without cause. Section 3!05 Corporate Fiduciaries Any corporate fiduciary serving under this agreement as a Trustee must be a bank, trust cornpany, or public charity that is qualified to act as a fiduciary under applicable federal and state law and that is not related or subordinate to any beneficiary within the meaning of Section 672(c) of the Internal Revenue Code. Section 3.06 Incapacity of a Trustee If any individual Trustee becomes incapacitated, it will not be for the incapacitated necessary Trustee to resign as Trustee. A written declaration of incapacity by the Co-Trustee, if any, or, if none, by theparty designated to succeed the incapacitated Trustee will terminate the trusteeship. The provisions of Section 10.05(h) of this agreement govern the determination of a Trustee's incapacity by a physician and the Trustee's obligations to submit to examination and provide necessary releases. Section3.07 Appointment of Independent Special Trustee Iffor any reason the Trustee of any trust created under this instrument is unwilling or unable to act with respect to any trust property or any provision of this instrument, our Trustee shall appoint, in writing, a corporate fiduciary or an individual to serve as an Independent Special Trustee with respect to this property or provision. The appointed Independent Special Trustee must not be related or subordinate to any trust beneficiary within the meaning of Internal Revenue Code Section 672(c). An Independent Special Trustee shall exercise allfiduciary powers granted by this trust unless limited elsewhere in this instrument or by the Trustee in the instrument appointing the expressly Independent Special Trustee. An Independent Special Trustee may resign at any time by delivering written notice to the Trustee. Notice of resignation will be effective in accordance with the terms of the notice. Section 3.08 Rights and Obligations of Successor Trustees Each successor Trustee serving under this agreement, whether corporate or individual, will have all of the title, rights, powers and privileges granted to the initial Trustee named under this agreement. In addition, each successor Trustee is subject to all of the restrictions imposed upon, as well as all obligation