Common use of Xxxxxxxxxxx Options for Xxxx IRAs Clause in Contracts

Xxxxxxxxxxx Options for Xxxx IRAs. Your Designated Beneficiary is determined based on the Beneficiaries designated as of the date of your death who remains your Beneficiaries as of September 30 of the year following the year of your death. The entire amount remaining in your account will, at the election of your Designated Beneficiaries, either (1) be distributed by December 31 of the year containing the fifth anniversary of your death, or (2) be distributed over the life expectancy of your Designated Beneficiary(ies). If your spouse is your sole Designated Beneficiary, he or she must elect either option (1) or (2) by the earlier of December 31 of the year containing the fifth anniversary of your death, or December 31 of the year life expectancy payments would be required to begin. Your Designated Beneficiaries, other than a spouse who is the sole Designated Beneficiary, must elect either option (1) or (2) by December 31 of the year following the year of your death. If no election is made, distribution will be calculated in accordance with option (2). In the case of distributions under option (2), distributions must commence by December 31 of the year following the year of your death. Generally, if your spouse is the Designated Beneficiary, distributions need not commence until December 31 of the year you would have attained age 70½, if later. If a Beneficiary other than a person or qualified trust as defined in the Treasury Regulations is named, you will be treated as having no Designated Beneficiary of your Xxxx XXX for purposes of determining the distribution period. If there is no Designated Beneficiary of your Xxxx XXX, the entire Xxxx XXX must be distributed by December 31 of the year containing the fifth anniversary of your death. A spouse who is the sole Designated Beneficiary of your entire Xxxx XXX will be deemed to elect to treat your Xxxx XXX as his or her own by either (1) making contributions to your Xxxx XXX or (2) failing to timely remove a required minimum distribution from your Xxxx XXX. Regardless of whether or not the spouse is the sole Designated Beneficiary of your Xxxx XXX, a spouse Beneficiary may roll over his or her share of the assets to his or her own Xxxx XXX. If we so choose, for any reason (e.g., due to limitations of our charter or bylaws), we may require that a Beneficiary of a deceased Xxxx XXX owner take total distribution of all Xxxx XXX assets by December 31 of the year following the year of death. If your Beneficiary fails to remove a required minimum distribution after your death, an additional penalty tax of 50 percent is imposed on the amount of the required minimum distribution that should have been taken but was not. Your Beneficiary must file IRS Form 5329 along with his or her income tax return to report and remit any additional taxes to the IRS.