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pdfForm Approved: OMB No. 3209-0007
(Revised 9/2013)
U.S. OFFICE OF GOVERNMENT ETHICS
Model Qualified Diversified Trust Provisions
[For use in the case of multiple fiduciaries]
The model qualified diversified trust agreement contained in this memorandum is made
available by the U.S. Office of Government Ethics to attorneys for their use in drafting proposed
trust agreements to be submitted for certification pursuant to section 102(f)(4) of the Ethics in
Government Act of 1978 (Pub. L.95-521, as amended) and subpart D of 5 C.F.R. Part 2634.
Under the statutory scheme, a trust agreement is not permitted to be recognized as creating an
efficacious blind trust arrangement for any purpose under Federal law unless it had been certified
by the Office prior to its execution. Proposed trust drafts submitted to the Office for
consideration must adhere to the language of the model except to the extent, as agreed to by the
U.S. Office of Government Ethics, that variations are required by the unusual circumstances of a
particular case. The fiduciaries’ certificates of independence must be executed in the exact form
indicated.
It is strongly recommended in any case in which the use of a blind trust is contemplated
that the Office be consulted as early as possible. Prospective trustees or their representatives
should schedule an appointment with the staff of the U.S. Office of Government Ethics for an
orientation to the specialized procedures and requirements which have been established by law
with respect to blind trust administration prior to the certification of the trust. As a condition of
approval by the Office, prospective trustees must exhibit a familiarity with and commitment to
the specialized nature of blind trust administration.
For further information, contact the U.S. Office of Government Ethics directly:
telephone 202-482-9300, fax 202-482-9237.
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TRUST AGREEMENT
THIS TRUST AGREEMENT is made and entered into this _______________________
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day of __________, _____, between ___________________________________________
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whose mailing address is ________________________________________________________,
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hereinafter called the Settlor; ______________________________________________
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[financial institution], whose business address is ___________________________________,
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hereinafter called the Trustee; and __________________________________________
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[financial institution], whose business address is __________________________________,
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hereinafter called the Investment Manager; such Trustee and Investment Manager hereinafter
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collectively called the Fiduciaries.
WITNESSETH
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SETTLOR has been appointed by the ______________________ to the position of
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_______________ of the __________________________ [department or agency], with respect
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to which appointment the _____________ has given its advice and consent. To avoid any
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conflict of interest, or appearance of any such conflict, which may arise from his duties and
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powers in such office and any other office to which he may subsequently be appointed to the
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extent provided for by section 102(f)(4) of the Ethics in Government Act of 1978 (Pub. L. 95-
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521, as amended) [hereinafter referred to as the "Act"], Settlor hereby creates a trust which shall
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become effective on the date this agreement bears.
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The Trustee is an eligible entity as specified in paragraph (a) of 5 C.F.R. §2634.405, that
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meets the requirements of paragraph (c) of that section. The existence of any other banking or
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client relationship between any interested party and the Trustee is disclosed in annexed
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Schedule A, and no other such relationship shall be instituted without the prior written approval
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of the Director of the U.S. Office of Government Ethics.
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The Investment Manager is an eligible person as specified in paragraph (a) of 5 C.F.R.
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§ 2634.405, who meets the requirements of paragraph (c) of such section. The existence of any
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other banking or client relationship between any interested party and the Investment Manager is
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disclosed in annexed Schedule A, and no other such relationship shall by instituted without the
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prior written approval of the Director of the U.S. Office of Government Ethics.
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Settlor, therefore, hereby delivers to the Trustee, and the Trustee hereby acknowledges
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receipt of, the property listed in annexed Schedule B, subject to the provisions of this Trust and
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the Act, and regulations promulgated thereunder, and other applicable Federal laws, Executive
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orders, and regulations.
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The primary purpose of this Trust is to confer on the Fiduciaries the sole responsibility to
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administer the trust and to manage trust assets without the participation by, or the knowledge of,
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any interested party or any representative of an interested party. This includes the duty to decide
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when and to what extent the original assets of the trust are to be sold or disposed of and in what
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investments the proceeds of sale are to be reinvested. Accordingly, the Settlor and the
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Fiduciaries agree as follows:
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FIRST:
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(1) Settlor's ceasing for any reason to serve as ______________ and in any other position to
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which he may have been subsequently appointed in the Federal Government and Settlor
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thereafter giving Trustee written notice directing that this Trust be terminated; or (2) Settlor's
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death or incompetence. The period between the date of this agreement and the termination of the
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Trust shall be called the "Trust Term".
(A) This Trust shall terminate upon the first to occur of the following –
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(B) Notwithstanding Paragraph (A) of this Article FIRST, this Trust agreement
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may in addition be terminated through revocation. However, within thirty days of dissolution of
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the trust, the interested party shall file a report of the dissolution and a list of the assets of the
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trust at the time of dissolution, categorized as to value in accordance with 5 C.F.R.
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§ 2634.301(d), with the Director of the U.S. Office of Government Ethics.
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(C) The Fiduciaries and the interested parties may amend the terms of this trust
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agreement only with the prior written approval of the Director of the U.S. Office of Government
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Ethics and upon a showing of necessity and appropriateness.
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SECOND
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control the assets of this Trust shall not consult or notify any interested party or any
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representative of an interested party.
The Fiduciaries in the exercise of their authority and discretion to manage and
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THIRD:
(A) The assets initially placed in Trust hereunder, as listed in annexed
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Schedule B, shall consist of a widely-diversified portfolio of readily marketable securities. None
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of the assets is prohibited as a holding by any interested party by the Act and regulations
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promulgated thereunder, and other applicable Federal laws, Executive orders, and regulations, or
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consist of securities of entities having substantial activities in the area of the Settlor's primary
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responsibility within the Federal government.
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(B) The portfolio shall be deemed to be widely-diversified if –
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(1) the value of the securities concentrated in any particular or limited economic
or geographic sector is no more than twenty percent of the total, and
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(2) the value of the securities of any single entity (other than the United States
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Government) is no more than five percent of the total value of such assets. For purposes of this
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paragraph (B), securities issued by the United States Government are obligations of the United
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States.
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(C) A security will be deemed readily marketable, for purposes of this Article
THIRD, if –
(1) daily price quotations for the security appear regularly in newspapers of
general circulation, and
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(2) the Trust holds the security in a quantity that does not unduly impair liquidity.
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(D) Each asset listed in annexed Schedule B is free of any restriction with respect
to its transfer or sale except as fully described in such Schedule B.
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(E) During the Trust Term, the interested parties shall not pledge, mortgage, or
otherwise encumber their interests in the property held in trust hereunder.
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FOURTH:
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diversification standards of Paragraph (B)(1) and (2) of Article THIRD of this Trust.
The Fiduciaries shall not acquire any securities or other property in excess of the
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FIFTH:
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public or to any interested party or any representative of an interested party any information as to
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the acquisition, retention, or disposition of any particular securities or other Trust property.
The Fiduciaries shall not knowingly and willfully, or negligently, disclose to the
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SIXTH:
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delegate.
(A) The income tax return of the Trust shall be prepared by the Trustee or his
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(B) During the Trust Term, the Trustee shall be responsible for the preparation
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and filing of such income (joint or separate) and other tax returns, with respect to the property
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held hereunder and the income therefrom and with respect to any other income of the Settlor, as
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shall be required by the laws of the United States of America and any State or other political
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subdivision thereof. The Settlor shall furnish to the Trustee such additional information as it
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shall, from time to time, need for the completion of such returns. The Settlor shall give to the
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Trustee powers of attorney (I.R.S. Form 2848) and any other instruments which it may need in
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order to prepare and file such returns and to represent the Settlor in connection with any audit of
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returns filed by it and to adjust, settle and pay any taxes due in respect of such returns. The
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Settlor shall deliver to the Trustee funds for the payment of any income tax obligation estimated
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to have arisen otherwise than with respect to the property held in Trust hereunder. The Trustee
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in its discretion shall be entitled to reserve an appropriate amount of Trust income for payment of
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any additional income tax obligation.
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(C) Any tax return filed pursuant to this Article SIXTH and any information
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relating thereto shall not be disclosed publicly or to any interested party or to any representative
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of an interested party.
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SEVENTH:
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any report on the holdings and sources of income of the Trust; except that the Trustee shall –
An interested party and any representative of an interested party shall not receive
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(A) Make quarterly reports of the aggregate market value of the assets
representing such interested party's interest in the Trust, and
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(B) Provide an annual report for purposes of section 102(a)(1) of the Act of the
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aggregate amount actually paid from the Trust to such interested party (or applied for his
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benefit), categorized in accordance with the provisions of such section. For purposes of this
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Article SEVENTH, only amounts actually received in respect of this Trust by such interested
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party (or applied for the interested party’s benefit) shall be deemed income derived from this
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Trust.
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A copy of each written communication under this Article SEVENTH shall be filed by the
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Trustee with the Director, U.S. Office of Government Ethics, within five days of the date of the
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communication.
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EIGHTH:
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any representative of an interested party and the Fiduciaries with respect to the Trust unless the
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communication is with the Trustee, in writing, and has the prior written approval of the Director,
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U.S. Office of Government Ethics, and unless it relates only –
There shall be no direct or indirect communication between an interested party or
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(A) To a request for a distribution of cash or other unspecified assets of the trust,
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(B) To the general financial interest and needs of the interested party (including,
but not limited to, a preference for maximizing income or long-term capital gain), or
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(C) To information, documents, and funds provided by, or needed from, the
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Settlor, to effectuate the provisions of Paragraph (B) of Article SIXTH of this Trust, with respect
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to any income tax obligation arising otherwise than with respect to the property held in Trust
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hereunder.
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A copy of each written communication under this Article EIGHTH shall be filed by the person
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initiating the communication with the Director, U.S. Office of Government Ethics, within five
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days of the date of the communication.
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NINTH:
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any action to obtain, and shall take reasonable action to avoid receiving, information with respect
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to the holdings of, and the sources of income of, the Trust, including obtaining a copy of any
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Trust or individual tax return filed by the Trustee or any information relating thereto, except for
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the reports and information specified in Article SEVENTH of this Trust.
The interested parties and any representative of an interested party shall not take
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TENTH:
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Ethics, by the May 15th after any calendar year during which the Trust was in existence properly
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executed Certificates of Compliance in the form prescribed in Appendix B to 5 C.F.R. Part 2634.
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In addition, the Fiduciaries shall maintain and make available for inspection by the U.S. Office
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of Government Ethics, as it may from time to time direct, the Trust's books of account and other
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records and copies of the Trust's tax returns for each taxable year of the Trust.
The Fiduciaries shall each file with the Director, U.S. Office of Government
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ELEVENTH:
The Fiduciaries shall not knowingly and willfully, or negligently –
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(A) Disclose any information to any interested party or any representative of an
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interested party with respect to this Trust that may not be disclosed pursuant to any provision or
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requirement of Title I of the Act (and the regulations thereunder) or this Trust;
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(B) Acquire any holding:
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(1) directly from an interested party or any representative of an interested party
without the prior written approval of the Director of the U.S. Office of Government Ethics, or
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(2) the ownership of which is prohibited by, or not in accordance with, Title I of
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the Act (and the regulation thereunder), the terms of this Trust, other applicable statutes and
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regulations,
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(C) Solicit advice from any interested party or any representative of an interested
party with respect to this Trust, which solicitation is prohibited by any provision or requirement
of Title I of the Act (and the regulations thereunder) or this Trust; or
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(D) Fail to file any document required by Title I of the Act (and the regulations
thereunder) or this Trust.
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TWELFTH:
The Settlor shall not knowingly and willfully, or negligently –
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(A) Solicit or receive any information with respect to this Trust that may not be
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disclosed pursuant to any provision or requirement of Title I of the Act (and the regulations
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thereunder) or this Trust, or
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(B) Fail to file any document required by Title I of the Act (and the regulations
thereunder).
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THIRTEENTH [Optional provision]:
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time to time reserve for the payment of such income taxes as may be due and payable by the
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Trust, and for payment of expenses and compensation as provided for in this Trust, during the
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Trust Term the Trustee shall pay to the Settlor $___________ at the beginning of each month.
Subject to such amounts as the Trustee may from
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FOURTEENTH [Optional provision]:
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and responsibilities of the Fiduciaries is recommended. Note that the Fiduciaries will not
[A provision delineating the respective powers
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be able to communicate with the Settlor for resolution of any disputes which may arise
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between them.]
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FIFTEENTH:
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by law, the Fiduciaries shall have the following powers, rights, and discretion with respect to any
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Trust property held by them:
In addition to the rights, duties, and powers conferred upon the Fiduciaries
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(A) To sell, exchange, or otherwise dispose of the property in such manner and
upon such terms as the Fiduciaries in their sole discretion shall deem appropriate;
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(B) Except as limited by specific enumeration in this Trust agreement, to invest
and reinvest the principal and any undistributed income, in property of any kind;
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(C) Except as limited by specific enumeration in this Trust agreement, to
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participate in any reorganization, consolidation, merger, or dissolution of any corporation having
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stocks, bonds or other securities that may be held at any time, to receive and hold any property
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that may be allocated or distributed to it by reason of participation in any such reorganization,
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consolidation, merger, or dissolution;
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(D) To exercise all conversion, subscription, voting, and other rights of
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whatsoever nature pertaining to any such property and to grant proxies, discretionary, or
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otherwise, with respect thereto;
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(E) To elect, appoint, and remove directors of any corporation, the stock of which
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shall constitute Trust property, and to act through their nominee as a director or officer of any
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such corporation;
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(F) Except as limited by specific enumeration in this Trust agreement, to manage,
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control, operate, convert, reconvert, invest, reinvest, sell, exchange, lease, mortgage, grant a
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security interest in, pledge, pool, or otherwise encumber and deal with the property of this Trust,
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for Trust purposes and in behalf of the Trust to the same extent and with the same powers that
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any individual would have with respect to his own property and funds;
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(G) Except as limited by specific enumeration in this Trust agreement, to borrow
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money from any person or corporation (including the Fiduciaries hereunder) and for the purpose
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of securing the payment thereof, to pledge, mortgage, or otherwise encumber any and all such
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property for Trust purposes upon such terms, covenants, and conditions as it may deem proper
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and also to extend the time of payment of any loans or encumbrances which at any time may be
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encumbrances on any such property irrespective of by whom the same were made or where the
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obligations may or should ultimately be borne on such terms, covenants, and conditions as it may
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deem proper;
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(H) To register any property belonging to the Trust in the name of their nominee,
or to hold the same unregistered, or in such form that title shall pass by delivery;
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(I) To abandon, settle, compromise, extend, renew, modify, adjust, or submit to
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arbitration in whole or in part and without the order or decree of any court any and all claims
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whether such claims shall increase or decrease the assets held under this Trust agreement;
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(J) To determine whether or to what extent receipts should be deemed income or
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principal, whether or to what extent expenditures should be charged against principal or income,
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and what other adjustments should be made between principal and income, provided that such
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adjustments shall not conflict with well-settled rules for the determination of principal and
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income adjustments, or the Uniform Principal and Income Act, if in effect in the State of
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__________________;
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(K) To determine whether or not to amortize bonds purchased at a premium;
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(L) Except to the extent otherwise expressly provided in this Trust agreement, to
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make distributions in kind or in cash or partly in each and for such purposes to fix, insofar as
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legally permissible, the value of any property;
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(M) To pay such persons employed by the Fiduciaries to assist them in the
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administration of the Trust, including investment counsel, accountants, and those engaged for
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assistance in preparation of tax returns, such sums as the Fiduciaries deem to be reasonable
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compensation for the services rendered by such persons. Such persons may rely upon and
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execute the written instructions of the Fiduciaries, and shall not be obliged to inquire into the
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propriety thereof;
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(N) No person may be employed or consulted by the Fiduciaries to assist them in
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any capacity in the administration of the Trust or the management and control of Trust assets,
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including investment counsel, investment advisers, accountants, and those engaged for assistance
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in preparation of tax returns, unless the following four conditions are met –
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(1) when an interested party or any representative of an interested party learns
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about such employment or consultation, the person must sign the Trust instrument as a party,
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subject to the prior approval of the Director of the U.S. Office of Government Ethics,
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(2) under all the facts and circumstances, the person is determined pursuant to the
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requirements for eligible entities under 5 C.F.R. § 2634.405(c) to be independent of any
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interested party with respect to the trust arrangement,
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(3) the person is instructed by the Fiduciaries to make no disclosure publicly or to
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any interested party or any representative of an interested party that might specifically identify
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current Trust assets or those assets which have been sold or disposed of from Trust holdings, and
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(4) the person is instructed by the Fiduciaries to have no direct communication
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with any interested party or any representative of an interested party, and that any indirect
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communication with an interested party or any representative of an interested party shall be made
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only through the Trustee pursuant to Article EIGHTH of this Trust;
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(O) Except as specifically limited in this Trust agreement, to do all such acts,
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take all such proceedings, and exercise all such rights and privileges, although not otherwise
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specifically mentioned in this Article FIFTEENTH, with relation to any such property, as if the
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Fiduciaries were the absolute owners thereof, and in connection therewith to make, execute, and
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deliver any instruments and to enter into any covenants or agreements binding the Trust.
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SIXTEENTH:
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Fiduciaries shall not acquire by purchase, grant, gift, exercise of option, or otherwise, without the
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prior written approval of the Director of the U.S. Office of Government Ethics, any securities,
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cash, or other property in addition to that listed in the annexed Schedule B, from any interested
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party or any representative of interested party.
Notwithstanding the provisions of Article FIFTEENTH of this Trust, the
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SEVENTEENTH:
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not taken or for any loss or depreciation of the value of any property held in the Trust whether
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due to an error of judgment or otherwise where the Fiduciaries have exercised good faith and
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ordinary diligence in the exercise of their duties such as would have been exercised by a prudent
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man.
The Fiduciaries shall not at any time be held liable for any action taken or
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EIGHTEENTH:
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any bond or other security, or to obtain the approval of any court before applying, distributing,
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selling, or otherwise dealing with property.
No Fiduciaries hereunder shall be required, in any jurisdiction, to furnish
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NINETEENTH:
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shall make no accounting to the Settlor until the date of termination of this Trust, and, at such
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time, they shall be required to make full and proper accounting and turn over to the Settlor all
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assets of the Trust then held by them the said Fiduciaries.
Except as provided in Article SEVENTH of this Trust, the Fiduciaries
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TWENTIETH:
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right, by duly acknowledged instruments delivered to the Settlor to resign as Fiduciaries in which
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event the Settlor shall designate and appoint substitute or successor Fiduciaries (subject to the
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prior written approval of the Director, U.S. Office of Government Ethics) in their place and
The Fiduciaries (and any substitutes or successors) shall have the
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stead, which shall have all of the rights, powers, discretions, and duties conferred or imposed
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hereunder upon the original Fiduciaries.
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TWENTY-FIRST:
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the appointment of substitute or successor Fiduciaries, shall require the prior written approval of
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the Director of the U.S. Office of Government Ethics, upon a showing of necessity and
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appropriateness. Any such substitute or successor Fiduciaries shall have all of the rights,
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powers, discretions, and duties conferred or imposed hereunder upon the original Fiduciaries.
Any amendment of the terms of this Trust Agreement, including
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The term "interested party" as used in this Trust means the Settlor, the Settlor’s spouse,
and any minor or dependent child.
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The validity, construction, and administration of this Trust shall be governed by the Act
(and regulations thereunder) and the laws of the State of _______________.
Dated this ________ day of _________________, _____.
Settlor
NOTARIZATION
REQUIRED
The above Trust is accepted this ________ day of ______________, _____.
Trustee
NOTARIZATION
REQUIRED
By:
(title)
Investment Manager
NOTARIZATION
REQUIRED
By:
(title)
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Privacy Act Statement
Section 102(f) of the Ethics in Government Act of 1978 as amended (the “Ethics Act”),
5 U.S.C. Appendix, § 102(f), and subpart D of 5 C.F.R. part 2634 of the regulations of the U.S.
Office of Government Ethics (OGE) require the reporting of this information for the
administration of qualified trusts under the Act. The primary use of the information on the trust
instrument prepared based in part upon this model draft document is for review by Government
officials of OGE and the agency of the Government employee for whom the trust is being
established to determine compliance with applicable Federal laws and regulations as regards
qualified trusts. Additional disclosures of the information in the trust document itself may be
made:
1) To disclose the information furnished by the reporting official, in accordance with
provisions of section 105 of the Ethics in Government Act of 1978, as amended, to any
requesting person.
2) To disclose pertinent information to the appropriate Federal, State, or local agency
responsible for investigating, prosecuting, enforcing, or implementing a statute, rule,
regulation, or order where the disclosing agency becomes aware of an indication of a
violation or potential violation of civil or criminal law or regulation.
3) To disclose information to another Federal agency, to a court, or a party in litigation
before a court or in an administrative proceeding being conducted by a Federal agency,
either when the Government is a party to a judicial or administrative proceeding or in
order to comply with a subpoena issued by a judge of a court of competent jurisdiction.
4) To disclose information to any source when necessary to obtain information relevant to a
conflict-of-interest investigation or determination.
5) By the National Archives and Records Administration or the General Services
Administration in records management inspections conducted under authority of
44 U.S.C. 2904 and 2906.
6) To disclose information to the Office of Management and Budget at any stage in the
legislative coordination and clearance process in connection private relief legislation as
set forth in OMB Circular No. A-19.
7) To disclose information to the Department of Justice, or in a proceeding before a court,
adjudicative body, or other administrative body before which OGE is authorized to
appear, when: OGE; or an employee of OGE in his or her official capacity, or any
employee of OGE in his or her individual capacity (where the Department of Justice or
OGE has agreed to represent the employee); or the United States (when OGE determines
that litigation is likely to affect OGE), is a party to litigation or has an interest in such
litigation, and the use of such records by the Department of Justice or OGE is deemed by
OGE to be relevant and necessary to the litigation provided, however, that the disclosure
is compatible with the purpose for which such records were collected.
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8) To disclose the public financial disclosure report and any accompanying documents to
reviewing officials in a new office, department or agency when an employee transfers or
is detailed from a covered position in one office, department or agency to a covered
position in another office, department or agency.
9) To disclose information to a Member of Congress or a congressional office in response to
an inquiry made on behalf of an individual who is the subject of the record.
10) To disclose the information to contractors, grantees, experts, consultants, detailees, and
other non-Government employees performing or working on a contract, service, or other
assignment for the Federal Government, when necessary to accomplish an agency
function related to this system of records.
For additional information please see OGE/GVT-1 Governmentwide Privacy System of Records.
Penalties
Knowing or willful falsification of information on the trust document prepared from this
model draft or failure to file or report information required to be reported under Title I of the
Ethics Act and 5 C.F.R. part 2634 of the OGE regulations may lead to disqualification as a
trustee or other fiduciary as well as possible disqualification of the underlying trust itself.
Knowing and willful falsification of information required under the Ethics Act and the
regulations may also subject you to criminal prosecution.
Public Burden Information and Paperwork Reduction Statement
This collection of information is estimated to take an average of one hundred hours per
response, given the estimated amount of time deemed necessary to structure an actual trust
arrangement based in part on this model draft. You can send comments regarding the burden
estimate or any other aspect of this collection of information, including suggestions for reducing
this burden, to: Program Counsel, U.S. Office of Government Ethics, Suite 500, 1201 New York
Avenue, NW., Washington, DC 20005-3917. Do not send your completed trust document to this
address; rather, see the remainder of the instructions to this model draft.
Pursuant to the Paperwork Reduction Act, as amended, an agency may not conduct or
sponsor, and no person is required to respond to, a collection of information unless it displays a
currently valid OMB control number (that number, 3209-0007, is displayed here and in the upper
left-hand corner of the first page of this OGE model qualified trust draft document).
File Type | application/pdf |
Author | aebraud |
File Modified | 2013-08-12 |
File Created | 2013-08-12 |