Trust Agreement for
Rada Research Trust
On this day of Feb 20, 2023, I, Roy F.
Rada, of Winter Park, Florida, hereby establish the Rada Research Trust. and
appoint myself as Trustee and declare that this Trust
is held and administered as follows.
This Trust is being created to provide
for the convenient administration of the assets of this Trust without the
necessity of court supervision in the event of the Trustor’s incapacity or
death.
Any person shall deal with the Trustee
without the approval of any court, the Trustor, or any beneficiary of any Trust
created by this Trust and shall assume that the Trustee has the same power and
authority to act as an individual does in the management of his or her own
affairs. No entity dealing with the
Trustee or keeping any assets of the Trust Estate shall be required to
investigate the authority of the Trustee for entering any transaction involving
assets of the Trust Estate.
To facilitate the convenient
administration of the Trust, including the registration and transfer of assets
to and from the Trust, the Trustee shall have the power to execute an Abstract
of Trust describing any Trust matter, including but not limited to a description
of the Trust terms, the administrative powers of the Trustee, and the identity
of any current Trustee. Any person presented with a copy of the Abstract plus
any other page of the Trust shall accept same as conclusive proof of the terms
and authority granted by this Trust and shall assume that no conflicting
directions or terms are contained in the pages omitted.
Registration: A Trust does not need to be registered with
the Clerk of the Court in Florida.
Furthermore, upon the Death of the Trustor the Trust continues to not be
required to be registered with the Clerk of the Court. Unless in conflict with applicable local law,
this trust shall not be required to be registered and shall be administered free
from the act of supervision of any court.
During the life of the Grantor, the
Trust may be titled Rada Research Trust.
Tax Identification: During the life of the Trustor, the Trustee
reports to the IRS through the Trustor’s Social Security Number of
310-50-0008. Upon the death of the Trustor
and the Trust becoming Irrevocable, the Trustee shall apply to the IRS for a Federal
Tax Identification Number for the Trust.
I have carefully thought about the
distributions set forth in this Trust and have taken into consideration all
individuals, including both relatives and non-relatives, that have been named
beneficiaries or who I determined not to name beneficiaries.
If any person shall, in any manner,
directly or indirectly, attempt to contest or oppose the validity of this
agreement, (including any amendment to this agreement) or commences, continues,
or prosecutes any legal proceedings to set this agreement aside, then such
person shall no longer be a beneficiary of mine. Across any Trust or other asset-holding
instrument of mine which names beneficiaries, that contestant shall forfeit his
or her share, cease to have any right or interest in the trust property, and shall,
for purposes of this agreement, be deemed to have predeceased me without living
issue.
If any provision of this Declaration of
Trust is ruled unenforceable, the remaining provisions shall stay in effect.
My wife’s name is Pauline Elizabeth
Rada. I have exactly three children:
·
Ray Max Rada born March 15, 1998,
·
Rosa Rada born January 2, 1996, and
·
Roy Anthony Rada born September 18,
1990.
My son Ray and daughter Rosa are the
children of my Wife and me. The unwed
mother of Roy against my wishes permanently left with Roy when he was a few
weeks old.
Funding: I may fund this trust during my lifetime by
transferring assets to the trustee. The assets that fund this trust shall
collectively be called the “principal”.
I or my agents may transfer assets at any time into the Trust. These assets may generate income that is
added to the Trust. These assets and
their retained, generated income together constitute the Trust Estate.
Use of Income and Principal: Upon my demand, at any time and in any amounts, the Trustee shall pay to me the income earned on
the Trust Estate and any portion, or all, of the principal of the Trust Estate.
Gifts:
If during my lifetime I want to donate assets to a charity from the
Trust and get a charitable deduction, then the Trustee shall confirm with the
charity that the receipt should be provided to my name and my personal tax id.
Upon my death or incapacity, Pauline
Rada shall serve as the trustee of this trust.
Determination of Incapacity: I shall be considered incapacitated if the
Trustee receives at least two physicians’ statements showing that I am
incapacitated and unable to manage my financial affairs.
Recovery from Incapacity. If I recover
from my incapacity, then I shall be reinstated as trustee. Verification of my
recovery shall require written certification from two physicians that I am
competent and able to deal with the trust properly and to exercise the rights
and powers reserved hereunder in my best interests.
I have been advised with respect to the
differences between revocable and irrevocable trusts and hereby declare that this
Trust is revocable. I may at any time
revoke or amend this Trust, in its entirety or in part, without notifying any
beneficiary but by a signed writing, which shall be delivered to all Trustees. This right of revocation or amendment may not
be exercised by any other person, including my attorney-in-fact or anyone else
serving as a fiduciary.
When I die, this trust shall become
irrevocable. It may not be amended or altered, except as provided by this
Trust. The Trust may be terminated only by the distributions authorized by this
Trust.
This Trust will support the legacy of
the Trustor as a researcher in artificial intelligence and contribute to
advances in science, engineering, and health care as delineated in a separate
Appendix which defines the class of possible beneficiaries. The specific beneficiaries have not yet been
identified. For instance, the Trustee
has the option to award scholarships for study or awards for certain achievements,
but no awardees have been yet identified.
After my death, to the extent that
Trustee is either requested in writing by the executor or personal
representative of my estate or required by a legal obligation of the Trust, the
Trustee shall pay its portion of the expenses as next described. I expect to have multiple trusts transferred
from Revocable to Irrevocable status on my death. Expenses that arise from elsewhere, such as
expenses associated with disposing of my body after death, I expect to be
shared among my trusts in proportion to the Trust Estate value of each
Trust. Expenses that are particular to
this Trust, such as taxes owed to the government based on transactions specific
to this Trust, shall be paid exclusively by this Trust.
The Trust may have ongoing expenses,
such as for expenses incurred by the Trustee in discharging Trustee duties.
These expenses must be paid each year before the value of the Fund for the year
is determined and before the Beneficiaries get anything.
Based on my reading of the current tax
rules, my impression is that the Trust will pay taxes on any income which it
receives but not on any interest or dividends earned that year that go to the
beneficiary that year. Since the Trust is likely to give funds to
entities or for purposes that the IRS would allow to be considered tax
deductible, such as giving money to a US state university for the university to
award scholarships, the Trustee should be attentive to such considerations.
No beneficiary of any Trust (except the
Trustor) shall have any right or power to anticipate, pledge, assign, sell,
transfer, alienate or encumber his or her interest in the Trust, in any way. No
interest in any Trust shall, in any manner, be liable for or subject to the
debts, liabilities or obligations of such beneficiary or claims of any sort
against such beneficiary.
Any beneficiary of any Trust shall have
the right to disclaim his or her interest in said Trust. Said disclaimer may be
affected in compliance with the requirements of the laws of any jurisdiction in
which any Trust may be administered. Alternatively, the Trustee may act upon
any written disclaimer of any interest, in whole or in part, in any Trust. In
the event any beneficiary is incapacitated, the Trustee may accept the
disclaimer of a legal or natural guardian of said beneficiary.
Depending on which approaches are
chosen in the choice of beneficiaries, the Trustee may either distribute only
the income of the Trust for 15 years or may also choose to dip into
principal. At the beginning of the
sixteenth year, the assets of the Trust minus necessary expenses will pass in
their entirety to the Beneficiaries as specified by the Trustee and constrained
by descriptions in the Appendix.
I want the Trust to invest in some
combination of small cap, value stock and long-term, high-quality bonds where
the combination could be anywhere from all of one and none of the other to half
of each. The Trustee may decide. Further details about these
two options follow.
One recommendation is to invest all the
assets in value, small cap, equity ETFs or index funds. The reason for this recommendation is that
value, small-cap stock have proven to have a higher rate of return than other
stock categories. Additionally, the
Grantor recommends that the value, small cap, ETF or fund have:
·
net assets exceeding $1 billion,
·
no load fee on entry or exit,
·
gross expense ratio annually less than
1%.
I suggest diversification both by
geography and industry, but this could be achieved by having one ETF that
emphasizes one area and another that emphasizes another. The small, value stock investing approach
has shown in some historical studies to provide a
geometric mean return of 1.12. However,
the return may be much lower or higher in any given year.
If one wants a return that is more
predictable from year to year but with a smaller geometric mean over the years,
then bonds might be a better choice. If
the Trust invests exclusively in a fixed-rate, fixed term
bond whose term corresponds to the longevity of the Trust, then the
beneficiaries might anticipate a constant income from the Trust each year. Long-term, high quality, fixed rate corporate
US bonds in early 2023 are paying approximately a 5% annual, nominal
return. If the Trust started with a cash
value of $2.5 m, then a 5% return would generate $125,000 per year.
During my lifetime, I shall serve as
trustee.
I expect to have multiple revocable
living trusts in effect. Expenses that
arise from elsewhere, such as expenses associated with my health care, I expect
to be shared among my various trusts in proportion to the Trust Estate value of
each Trust. Expenses that are particular
to this Trust, such as taxes owed to the government based on transactions
specific to this Trust, shall be paid exclusively by this Trust.
Given the preceding proviso of sharing
of costs among Trusts, If I am incapacitated, the trustees shall use any amount
of trust income or trust principal necessary for my proper health care,
support, maintenance, comfort and welfare. My express desire is that the Trustee apply
income liberally to maximize my remaining quality-adjusted life years. Furthermore, I strongly prefer not to be
hospitalized or otherwise institutionalized because I desire as much freedom as
possible and my experience of being institutionalized is that my freedom is
abrogated. In other words, I wish that
the Trustee use whatever expenses are reasonable to accommodate my living
freely in a home situation where I have full authority over my behavior.
Alternate Successor Trustee. If Pauline
Rada, is unable or unwilling to serve as trustee, then Ray Rada shall serve as
trustee.
Alternate Successor Trustee. In the event that my successor trustee, Ray Rada, is unable
or unwilling to serve as trustee, Rosa Rada shall serve as trustee.
Alternate Successor Trustee. In the event that my successor trustee, Rosa Rada, is unable
or unwilling to serve as trustee, Roy A Rada shall serve as trustee.
Alternate Successor Trustee. In the event that my successor trustee, Roy A Rada, is
unable or unwilling to serve as trustee, my former Ph.D. student Hayden Wimmer
shall serve as trustee.
Alternate Successor Trustee. In the event that my successor trustee, Hayden Wimmer, is
unable or unwilling to serve as trustee, my former Ph.D. student Jie Du shall
serve as trustee.
Alternate Successor Trustee. In the event that my successor trustee, Jie Due, is unable
or unwilling to serve as trustee, my former Ph.D. student Hafedh
Mili shall serve as trustee.
Alternate Successor Trustee. In the event that my successor trustee, Hafedh
Mili, is unable or unwilling to serve as trustee, my former Ph.D. student Chaomei Chen shall serve as trustee.
If Chaomei
Chen is unable or unwilling to serve as trustee, then the last acting Trustee
should distribute the assets of the Trust to a university scholarship fund
where Roy Rada studied or worked on the condition that the university shall
give the scholarship in the name of Roy F Rada to students pursuing a computer
science or information systems degree.
If none of the Trustees specifically
named by the Trustor is willing to implement the preceding, final, closing
action, then the Trustee shall appoint a successor trustee of an individual, a
bank, or a trust company.
If last acting Trustee fails to appoint
a successor Trustee, then the Court shall intervene and appoint Northern Trust as
the Trustee, unless Northern Trust is unwilling in which case the biggest
competitor to Northern Trust that is willing to accept the Trust will be
appointed.
Co-Trustees: The Trustee may request that someone join him
or her as a Co-Trustee.
Decision-Making when More Than One
Trustee: When there is more than one
Trustee at any one time, a majority decision shall control. Where no majority decision can be made, then
the first Trustee whose name appears in the Trust Agreement shall make the
final decision.
The trustee shall be entitled to
reasonable compensation consistent with the laws of the State of Florida. In
addition, the Trustee shall be reimbursed for reasonable expenses incurred by
the Trustee in the administration of this Trust.
Accounting: The Trustee shall render an annual
accounting, upon the termination of the trust, and at any other times which the
Trustee may deem necessary or advisable. The written approval of the
beneficiaries as to all matters and transactions shown in the account, shall be
final, binding and conclusive upon all such persons, and upon all persons who
may then be, or thereafter become, entitled to any income or principal of this
Trust. The written approval or assent of the persons
mentioned in this Section shall have the same force and effect in discharging
the Trustee as a decree by a court of competent jurisdiction. However, any such
written approval shall not enlarge or shift the beneficial interest of any
beneficiary.
Removal of Trustee: I may, at any time,
appoint and later remove any other trustee(s), to act with me or in my place,
by a signed writing. After my death, or if due to my incapacity I am unable to
remove the trustee, Pauline Rada shall have the power to remove a trustee.
Liability of Trustee: With respect to the exercise or non-exercise
of discretionary powers granted by this Declaration of Trust, the trustee shall
not be liable for actions taken in good faith. Such actions shall be binding on
all persons interested in the trust property.
Resignation of Trustee: Any Trustee in office
may resign at any time by signing a notice of resignation. The Trustee shall be
deliver his resignation to the person or institution who is either named in
this Trust or is appointed by the Trustee to next serve as the Trustee The resigning Trustee shall, at the request
of the remaining or successor Trustee, promptly deliver such assignments,
transfers, and other instruments as may be reasonably required for fully
vesting in such remaining or successor Trustee all rights, title and interest
in the Trust Estate.
Bond:
This Trust requires no bond for a Trustee named in the Trust.
Deciding Principal versus Income: The final decision of what’s principal and
what’s income rests with the Trustee, as the lines between principal and income
sometimes blur.
Accounts and Records. During such time
as I am not acting as Trustee, the Trustee shall keep all records and accounts
of the trusts created herein and annually or more often render to the
Beneficiary a statement showing in detail receipts, disbursements and
distributions from the Trust, and the market value of all Trust assets.
Minimum Value of Trust. If at any time
the Trustee, in its discretion, shall determine that it is not economically
feasible to continue the administration of any Trust created hereunder, the Trustee
may, but need not, terminate such Trust and distribute the Trust property
proportionately to the persons then entitled to receive the income from such
trust.
Spendthrift Provision. No beneficiary
entitled to any form of future distribution from a trust created hereunder, shall take or have any title in the Trust until
the same shall be received. Further, no disposition, charge or encumbrance by
way of anticipation by any beneficiary shall be of any validity or legal
effect, nor shall the future interest of such person be in any way liable for
any claim of a creditor, spouse, divorced spouse, or any other claimant to whom
a beneficiary may be in any way liable, nor shall it be subject to any legal
process or bankruptcy proceeding.
Disability. A fiduciary or a
beneficiary shall be deemed to be disabled if a licensed physician certifies
or, if required, a court having jurisdiction determines that due to physical or
mental conditions the person is unable to exercise judgment about or attend to
property or financial matters. The settlor desires that, if requested, any
fiduciary or successor fiduciary sign an authorization under the Health
Insurance Portability and Accountability Act permitting any fiduciary or named
successor fiduciary to receive medical information necessary to confirm his or
her ability or inability to serve as a fiduciary.
Receipt from a Beneficiary. Whenever
payments are made to a minor or to a person who is disabled as defined in this
trust, the receipt of the person, the person’s natural guardian, or the
person’s legal representative shall exonerate the trustee. The trustee need not
see to the proper application of the distribution.
Governing Law. The Trust shall be
governed and construed in all respects according to the laws of the State of Florida. In the event any Trust or asset is being
administered in another state, this Trust may be regulated by the laws of such
state if needed to avoid excessive administrative expense, or to uphold the
validity of any of the terms of this Trust.
Survival. Unless otherwise specified in
this instrument, no person shall be considered to have survived another or to
be living upon the death of another if he or she dies within 30 days after the
death of the other person. Unless otherwise specifically provided in this
Agreement, a gift fails if a beneficiary does not survive and there is no
substitute beneficiary indicated in this Agreement who satisfies the conditions
for taking. Any person who is not identified as a substitute beneficiary in
this document shall not take under the provisions of
an anti-lapse statute.
Rule Against Perpetuities. If this Trust Agreement shall violate any
applicable rule against perpetuities, accumulation or any similar rule or law,
the Trustee is hereby direct ed to terminate such trust on the date limited by
such rule of law, and thereupon the property held in the Trust affected by this
Section, shall be distributed to the persons then entitled to share the income
from the property in the proportions in which they are then entitled to share
such income.
Section Numbers and Headings have been
inserted for convenience only and such shall not be construed to affect the
interpretation of any provision of this Agreement or to limit or broaden the
terms of any provision.
The trustee shall have the
discretionary administrative power to deal with any property held in the
principal as freely as I might in the handling of my own affairs, subject to
the constraints that when this Trust becomes Irrevocable after my death that
the constraints on investing given elsewhere in this document hold. Further, I hereby grant to the trustee all the
powers conferred by the laws of any state in which the trustee may act on
behalf of the trust so long as the Trustee does not violate intentions specific
to this Trust.
Trustee Decision is Final: The exercise by the Trustee of the
discretionary powers herein granted with respect to payment, distribution or
application of principal or income is final and conclusive. No Trustee shall be required to obtain the
approval of any court for any action of such Trustee unless approval is
required by law or by a specific requirement in this Trust Agreement.
Without in any way limiting the
generality of the foregoing, the trustee is hereby granted the following
specific powers in addition to and not in substitution for powers previously
conferred:
To take possession, custody, or control
of assets transferred to the trust, to receive assets from fiduciaries or other
sources that are acceptable to the trustee, and to retain assets that trustee
may receive, including assets in which trustee is personally interested, in
accordance with the prudent investor rule of the State of Florida.
To determine whether any money or
property coming into its possession shall be treated as principal or income,
and to charge or apportion expenses, or losses to principal or income as the
trustee, in its sole discretion, may deem just and equitable.
To perform, compromise, or refuse the
performance of the grantor’s contracts that are obligations of the trust, as
the trustee may determine under the circumstances.
To abandon an asset when, in the
opinion of Trustee, it is valueless, is so encumbered, or is in a condition
that it is of no benefit to the trust.
To make, revise, or revoke any
available allocation, agreement, consent, or election affecting any tax in
conjunction with the settlor’s personal representative, if any, that is
appropriate in order to carry out the settlor’s estate
planning objectives and to reduce the overall burden of taxation, both in the
present and in the future. This authority includes the power to exclude or
include any assets from the gross estate for federal estate tax purposes, value
any assets for federal estate tax purposes, and pay taxes, assessments,
penalties, and interest and contest or sue for refunds of those payments.
To have access to Grantor’s entire
medical and medical billing record.
To insure the assets of the trust
against damage, loss, and liability and the trustee against liability as to
third persons.
To engage and pay reasonable
compensation to lawyers, accountants, consultants, or other professionals for
information and services relating to the trust.
Delegation to Successor Trustee: Any Trustee may delegate any management
function of any Trust to any other Successor Trustee (even though the Successor
Trustee is not then serving as Trustee) upon such terms as may be agreed by the
Trustees. In the event more than one Trustee is serving, Trust assets may be
held in the name of one Trustee.
Delegation to Support Staff: The Trustee may employ or retain accountants,
agents, legal counsel, investment advisers, and other experts as the Trustee
shall deem advisable. The Trustee may
rely on the advice furnished and fix the compensation of such persons.
Notwithstanding anything in this Trust
to the contrary, no single Trustee shall:
a) Have the authority to appoint income or principal of any trust formed
under this Trust Agreement to himself or herself, his or her creditors, his or
her estate, creditors of his or her estate; or to or for the benefit of any
child to whom he or she owes a legal obligation of support and for which such
appointment of income or principal would constitute a discharge of such legal
obligation of support.
b) Participate in any decisions regarding the discretionary distribution of
income or principal to himself or herself, or to or
for his or her benefit.
c) In the event any Trustee is in a position where such a decision would
have to be made, such Trustee shall not participate in such a decision and
instead any co-Trustee shall make such decision. Further, if there is no
co-Trustee, then the next named successor Trustee under this Trust Agreement
who is willing and able to participate shall so
participate in such decision.
I certify that I have read this
Declaration of Trust and that it correctly states the terms and conditions
under which the trust property is to be held, managed and disposed of by the
trustee, and I approve the Declaration of Trust.
/s/ _______________________________
NAME, Grantor and Trustee: Roy F Rada Dated: ____________________
/s/ _______________________________
NAME, First Witness: _______________________________
/s/ _______________________________
NAME, Second Witness: _______________________________
FLORIDA NOTARY ACKNOWLEDGMENT
STATE OF FLORIDA, COUNTY OF
________________________
The foregoing instrument was
acknowledged before me by means of ☐ physical presence
or ☐ online notarization, this DATE _______________ by Roy F Rada (name of
person acknowledging).
(Seal)
________________________
Signature of Notary Public
Print, Type/Stamp Name of Notary
Personally known: ________________
OR Produced Identification:
______________
Type of Identification Produced:
____________________