Common use of Distributions of Excess Cash Clause in Contracts

Distributions of Excess Cash. If the governing instrument permits addi- tions of cash to the trust pursuant to paragraph (c)(5)(ii)(A)(1) of this sec- tion, the governing instrument must require that the trustee determine, not less frequently than quarterly, the amounts held by the trust for payment of expenses in excess of the amounts permitted by that paragraph and must require that those amounts be distrib- uted immediately thereafter to the term holder. In addition, the governing instrument must require, upon termi- nation of the term holder’s interest in the trust, any amounts held by the trust for the purposes permitted by paragraph (c)(5)(ii)(A)(1) of this section that are not used to pay trust expenses due and payable on the date of termi- nation (including expenses directly re- lated to termination) be distributed outright to the term holder within 30 days of termination.