.16 Permitted Conditions for Trust Agreements.

A. In General. A trust agreement established to meet the requirements of Regulation .14 of this chapter may include the provisions allowed under this regulation.

B. Resignation and Removal of Trustee.

(1) Subject to §B(2) of this regulation, a trust agreement may provide that the:

(a) Trustee may resign by delivering to the beneficiary and grantor written notice of resignation, effective not less than 90 days after receipt by the beneficiary and grantor; and

(b) Grantor may remove the trustee by delivering to the trustee and beneficiary written notice of removal, effective not less than 90 days after receipt by the trustee and beneficiary.

(2) A resignation or removal under this section may not become effective until:

(a) A successor trustee has been appointed and approved by the beneficiary and the grantor; and

(b) All assets in the trust have been transferred to the new trustee.

C. Shares of Stock—Voting Rights and Dividends.

(1) A trust agreement may give the grantor the full and unqualified right to:

(a) Vote any shares of stock in the trust account; and

(b) Receive from time to time payments of any dividends or interest on any shares of stock or obligations included in the trust account.

(2) Any interest or dividends shall be:

(a) Forwarded promptly on receipt to the grantor; or

(b) Deposited in a separate account established in the grantor's name.

D. Investment and Substitution.

(1) Subject to §D(2) of this regulation, a trust agreement may authorize the trustee to invest, and accept substitutions of, any funds in the account.

(2) The trustee may not make an investment or substitution without prior approval of the beneficiary unless the trust agreement:

(a) Specifies categories of investments acceptable to the beneficiary; and

(b) Authorizes the trustee to invest funds and to accept substitutions that the trustee determines are at least equal in current fair market value to the assets withdrawn, and that are consistent with the restrictions in Regulation .15 of this chapter.

E. Transfer of Assets.

(1) A trust agreement may provide that the beneficiary may at any time designate a party to which all or part of the trust assets shall be transferred.

(2) Transfer may be conditioned on the trustee receiving other specified assets before or simultaneously with the transfer.

F. Delivery of Assets to Grantor on Termination of Account. A trust agreement may provide that, on termination of the trust account, all assets not previously withdrawn by the beneficiary shall, with written approval of the beneficiary, be delivered to the grantor.