Invalidating an irrevocable trust

Of course, provisions may be renumbered if appropriate, language in brackets may be omitted, and blanks may be completed.

In addition, the taxpayer may add sections to the model language provided that such additions are not inconsistent with the model language. The model trust language in this section contains all provisions necessary for operation of the trust except for provisions describing the trustee's investment powers.

The Department of Labor has advised that whether a "top hat" or excess benefit plan is funded or unfunded depends upon all of the facts and circumstances.

However, it is the DOL's view that such plans will not fail to be "unfunded" for purposes of sections 4(b)(5), 201(2), 301(a)(3) and 401(a)(1) of ERISA solely because there is maintained in connection with such a plan a trust which conforms to the model trust described in Section 5 of this Revenue Procedure. A private letter ruling on a nonqualified deferred compensation arrangement using a grantor trust subject to the claims of the employer's creditors will be issued only if the trust conforms to the model language contained in Section 5 of this Revenue Procedure.

Any assets held by the Trust will be subject to the claims of Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein.


The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan(s) and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by Company.

(b) The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan(s) shall be determined by Company or such party as it shall designate under the Plan(s), and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan(s).

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This Revenue Procedure also provides guidance for requesting rulings on nonqualified deferred compensation plans that use such trusts. BACKGROUND The Internal Revenue Service receives and responds to many requests for rulings on the federal income tax consequences of trusts established in connection with unfunded deferred compensation arrangements.In addition, rulings issued on deferred compensation' arrangements using the model trust will provide that the Service expresses no opinion on the consequences under subchapter C of chapter 1 of subtitle A of the Code or under sections 1501 through 1504 on the trust's acquisition, holding, sale or disposition of stock of the grantor. The model language must be adopted verbatim, except where substitute language is expressly permitted.The request for a ruling must be accompanied by a representation that the trust conforms to the model trust language contained in this Revenue Procedure, including the order in which sections of the model trust language appear, and that the trust adopted does not contain any inconsistent language, in substituted portions or elsewhere, that conflicts with the model trust language.(b) THE TRUST HEREBY ESTABLISHED SHALL BE IRREVOCABLE.(b) THE TRUST HEREBY ESTABLISHED IS REVOCABLE BY COMPANY; IT SHALL BECOME IRREVOCABLE UPON A CHANGE OF CONTROL, AS DEFINED HEREIN.

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