INDIVIDUAL RETIREMENT ACCOUNT TRUSTEE AGREEMENT
The following constitutes an agreement establishing an Individual Retirement
Account (under Section 408(a) of the Internal Revenue Code) between the
Depositor and the Trustee.
Form 5305 INDIVIDUAL RETIREMENT TRUST ACCOUNT
(Under Section 408(a) of the Internal Revenue Code)
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INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
Purpose of Form.
Form 5305 is a model trust account agreement that meets the requirements
of section 408(a) and has been automatically approved by the IRS. An
individual retirement account (XXX) is established after the form is fully
executed by both the individual (Grantor) and the trustee and must be completed
no later than the due date of the individual's income tax return for the tax
year. Do not file Form 5305 with the IRS. Instead, keep it for your records.
For more information on IRAs, including the required disclosure you can get
from your trustee, get Pub. 590, Individual Retirement Arrangements (IRAs).
Definitions.
Trustee. The trustee must be a bank or savings and loan association, as
defined in section 408(a) or any person who has the approval of the IRS to
act as trustee ("Trustee").
Grantor. The Grantor is the person who establishes the Trust account.
Identifying Number-The Grantor's social security number.
XXX for Nonworking Spouse.
Form 5305 may be used to establish the XXX trust for a nonworking spouse.
Contributions to an XXX trust account for a nonworking spouse must be made to
a separate XXX trust account established by the nonworking spouse.
ARTICLE I
1.01 The Trustee may accept additional cash contributions on behalf of the
Grantor for a tax year of the Grantor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in Section 402(c) (but only after December 31,1992),
403(a)(4),403(b)(8),408(d)(3), or an employer contribution to a simplified
employee pension plan as described in Section 408(k). Rollover
contributions before January 1, 1993, include rollovers described in
Section 402(a)(5), 402(a)(6), 402(a)(7),403(a)(4),403(b)(8), 408(d)(3), or
an employer contribution to a simplified employee pension plan as described
in Section 408(k).
ARTICLE II
2.01 The Grantor's interest in the balance in the trust account is
nonforfeitable.
ARTICLE III
3.01 No part of the trust funds may be invested in life insurance
contracts, nor may the assets of the trust account be commingled with
other property except in a common trust fund or common investment fund
(within the meaning of Section 408(a)(5)).
3.02 No part of the trust funds may be invested in collectibles (within the
meaning of section 408(m)) except as otherwise permitted by Section 408
(m)(3) which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.
ARTICLE IV
4.01 Notwithstanding any provision of this agreement to the contrary, the
distribution of the Grantor's interest in the trust account shall be
made in accordance with the following requirements and shall otherwise
comply with Section 408(a)(6) and Proposed Regulations Section 1.408-8,
including the incidental death benefit provisions of Proposed Regulations
Section 1.401(a)(9)-2, the provisions of which are incorporated by
reference.
4.02 Unless otherwise elected by the time of distributions are required to
begin to the Grantor under Section 4.03, or to the surviving spouse under
Section 4.03, other than in the case of a life annuity, life expectancies
shall be recalculated annually.
Such election shall be irrevocable as to the Grantor and the surviving
spouse and shall apply to all subsequent years. The life expectancy of a
nonspouse beneficiary may not be recalculated.
4.03 The Grantor's entire interest in the trust account must be, or begin
to be, distributed by the Grantor's required beginning date, (April 1
following the calendar year end in which the Depositor reaches age 70
1/2). By that date, the Grantor may elect, in a manner acceptable to the
trustee, to have the balance in the trust account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the
Grantor.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last
survivor lives of the Grantor and his or her designated
beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Grantor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor
expectancy of the Grantor and his or her designated beneficiary.
4.04 If the Grantor dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Grantor dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with
Section 4.03.
(b) If the Grantor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the
Grantor or, if the Grantor has not so elected, at the election of
the beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year containing the
fifth anniversary of the Grantor's death, or
(ii) Be distributed in equal or substantially equal payments over
the life or life expectancy of the designated beneficiary or
beneficiaries starting by December 31 of the year following
the year of the Grantor's death. If, however, the
beneficiary is the Grantor's surviving spouse, then this
distribution is not required to begin before December 31 of
the year in which the Grantor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on
the Grantor's required beginning date, even though payments may
actually have been made before that date.
(d) If the Grantor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving
spouse, no additional cash contributions or rollover contributions
may be accepted in the account.
4.05 In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual
payment for each year, divide the Grantor's entire interest in the
trust as of the close of business on December 31 of the
preceding year by the life expectancy of the Grantor (or the joint life
and last survivor expectancy of the Grantor and the Grantor's
designated beneficiary, or the life expectancy of the designated
beneficiary, whichever applies). In the case of distributions under
Section 4.03, determine the initial life expectancy (or joint life and
last survivor expectancy) using the attained ages of the Grantor and
designated beneficiary as of their birthdays in the year the Grantor
reaches age 70 1/2. In the case of a distribution in accordance with
Section 4.04(b)(ii), determine life expectancy using the attained age of
the designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence.
4.06 The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to
satisfy the minimum distribution requirements described above. This method
permits an individual to satisfy these requirements by taking from one
individual retirement account the amount required to satisfy the
requirement for another.
ARTICLE V
5.01 The Grantor agrees to provide the Trustee with information necessary
for the Trustee to prepare any reports required under Section 408(i) and
Regulations Section 1.408-5 and 1.408-6.
5.02 The Trustee agrees to submit reports to the Internal Revenue Service and
the Grantor prescribed by the Internal Revenue Service.
ARTICLE VI
6.01 Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be
controlling. Any additional articles that are not consistent with Section
408(a) and related regulations will be invalid.
ARTICLE VII
7.01 This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be
made with the consent of the persons whose signatures appear below.
ARTICLE VIII
8.01 Applicable Law: This Trust Agreement shall be governed by the laws of the
state where the Trustee resides.
8.02 Annual Accounting: The Trustee shall, at least annually, provide the
Grantor or Beneficiary (in the case of death) with an accounting
of such Grantor's account. Such accounting shall be deemed to be
accepted by the Grantor, if the Grantor or Beneficiary does not object
in writing within 60 days after the mailing of such accounting
statement.
8.03 Amendment: The Grantor irrevocably delegates to the Trustee the right
and power to amend this Trust Agreement. Except as hereafter provided,
the Trustee will give the Grantor 30 days prior written notice of any
amendment. In case of a retroactive amendment required by law, the
Trustee will provide written notice to the Grantor of the amendment
within 30 days after the amendment is made, or if later, by the time
that notice of the amendment is required to be given under regulations
or other guidence provided by the IRS. The Grantor shall be deemed
to have consented to any such amendment unless the Grantor notifies
the Trustee to the contrary within 30 days after notice to the
Grantor and requests a distribution or transfer of the balance in
the account.
8.04 Registration and Removal of Trustee:
(a) The Trustee may resign at any time by giving at least 30 days
notice to the Grantor. The Trustee may resign and appoint a
successor trustee or custodian to serve under this agreement or under
another governing instrument selected by the successor trustee or
custodian by giving the Grantor written notice at least 30 days prior
to the effective date of such resignation and appointment, which
notice shall also include a copy of such other governing instrument,
if applicable, and the related disclosure statement. The Grantor shall
then have 30 days from the date of such notice to either request a
complete distribution of the account balance or designate a different
successor trustee or custodian. If the Grantor does not request
distribution of the account or designate a different successor within
such 30 days, the Grantor shall be deemed to have consented to the
appointment of the successor trustee or custodian and the terms of
any new governing instrument, and neither the Grantor nor the
successor shall be required to excecute any written document to
complete the transfer of the account to the successor trustee or
custodian. The successor trustee or custodian may rely on any
information, including beneficiary designations, previously provided
by the Grantor.
(b) The Grantor may at any time remove the Trustee and replace the
Trustee with a successor trustee or custodian of the Grantor's choice
by giving 30 days written notice to the Trustee. In such event, the
Trustee shall then deliver the assets of the account as directed by
the Grantor. However, the Trustee may retain a portion of the assets
of the XXX as a reserve for payment of any anticipated remaining fees
and expenses, and shall pay over any remainder of this reserve to the
successor trustee or custodian upon satisfaction of such fees and
expenses.
8.05 Trustee's Fees and Expenses
(a) The Grantor agrees to pay the Trustee any and all fees specified
in the Trustee's current published fee schedule (listed below)
for establishing and maintaining this XXX, including any fees for
distributions from, transfers from, and terminations of this XXX. The
Trustee may change its fee schedule at any time by giving the Grantor 30
days prior written notice.
Trustee fee schedule:
1. Annual maintenance fee - $10.00 per account
2. Transfer to successor custodian - $10.00
3. Distributions to participants
- Premature distribution - $10.00
- Lump-sum distribution - $10.00
Extraordinary charges resulting from unusual administrative
responsibilities not contemplated by this schedule will be subject to
such additional charges as will resonably compensate the Trustee for the
services performed.
(b) All such fees, taxes, and other administrative expenses charged
to the account shall be collected either from the assets in the
account or from any contributions to or distributions from such
account if not paid by the Grantor, but the Grantor shall be
responsible for any deficiency.
(c) In the event that for any reason the Trustee is not certain as to
who is entitled to receive all or part of the Trust Funds, the Trustee
reserves the right to withhold any payment from the Trust, to request
a court ruling to determine the disposition of the Trust assets, and
to charge the Trust for any expenses incurred in obtaining such legal
determination.
8.06 Withdrawal Requests: All requests for withdrawal shall be in writing
on the form provided by the Trustee. Such written notice must also
contain the reason for the withdrawal and the method of distribution
being requested.
8.07 Age 70 1/2 Default Provisions:
(a) Unless the Trustee (or the Grantor, if the Trustee permits) elects
otherwise, life expectancies for purposes of calculating the required
minimum distribution shall not be recalculated.
(b) If the Grantor does not choose any of the distribution methods
under Section 4.03 of this Trust Agreement by April 1st following the
calendar year in which he/she reaches age 70 1/2, distribution shall
be made to the Grantor based on such Grantor's single life expectancy.
8.08 Death Benefit Default Provisions: Unless the Trustee (or the
Beneficiary, if the Trustee permits) elects otherwise, life expect-
ancies for purposes of calculating the required minimum death
distribution shall not be recalculated. If the Grantor dies before
his or her required beginning date and the beneficiary does not select
a method of distribution described in section 4.04 (b)(i) or (ii) by
December 31st following the year of death, then distributions will be
made pursuant to proposed regulation 1.401(a)(9)-1.
8.09 Responsibilities: Grantor agrees that all information and instructions
given to the Trustee by the Grantor is complete and accurate and that
the Trustee shall not be responsible for any incomplete or inaccurate
information provided by the Grantor or Grantor's beneficiary (ies).
Grantor agrees to be responsible for all tax consequences arising
from contributions to and distributions from this Trust Account
and acknowledges that no tax advice has been provided by the Trustee.
8.10 Designation of Beneficiary: Except as may be otherwise required by
State law, in the event of the Grantor's death, the balance in the
account shall be paid to the beneficiary or beneficiaries designated by
the Grantor on a beneficiary designation acceptable to and filed with
the Trustee. The Grantor may change the Grantor's beneficiary or
beneficiaries at any time by filing a new beneficiary designation with
the Trustee. If no beneficiary designation is in effect, if none of the
named beneficiaries survive the Grantor, or if the Trustee cannot locate
any of the named beneficiaries after reasonable search, any balance in
the account will be payable to the Grantor's estate.
ARTICLE IX
SELF-DIRECTED XXX PROVISIONS
9.01 Investment of Contributions: At the direction of the Grantor (or the
direction of the beneficiary upon the Grantor's death), the Trustee
shall invest all contributions to the account and earnings thereon
in investments acceptable to the Trustee, which may include marketable
securities traded on a recognized exchange or "over the counter"
(excluding any securities issued by the Trustee), covered call options,
certificates of deposit, and other investments to which the Trustee
consents, in such amounts as are specifically selected and specified
by Grantor in orders to the Trustee in such form as may be acceptable
to the Trustee, without any duty to diversify and without regard to
whether such property is authorized by the laws of any jurisdiction
as a trust investment. The Trustee shall be responsible for the
excecution of such orders and for maintaining adequate records thereof.
However, if any such orders are not received as required, or, if
received, are unclear in the opinion of the Trustee, all or a portion
of the contribution may be held uninvested without liability for loss
of income or appreciation, and without liability for interest pending
receipt of such orders or clarification, or the contribution may be
returned. The Trustee may, but need not, establish programs under
which cash deposits in excess of a minimum set by it will be periodically
and automatically invested in interest-bearing investment funds.
The Trustee shall have no duty other than to follow the written
investment directions of the Grantor, and shall be under no duty to
question said instructions and shall not be liable for any investment
losses sustained by the Grantor.
9.02 Registration: All assets of the account shall be registered in the
name of the Trustee or of a suitable nominee. The same nominee may
be used with respect to assets of other investors whether or not
held under agreements similar to this one or in any capacity whatsoever.
However, each Grantor's account shall be separate and distinct; a
separate account therefor shall be maintained by the Trustee, and the
assets thereof shall be held by the Trustee in individual or bulk
segregation either in the Trustee's vaults or in depositories approved
by the Securities and Exchange Commission under the Securities Exchange
Act of 1934.
9.03 Investment Advisor: The Grantor may appoint an Investment Advisor,
qualified under Section 3(38) of the Employee Retirement Income Security
Act of 1974, to direct the investment of his XXX. The Grantor shall
notify the Trustee in writing of any such appointment by providing
the Trustee a copy of the instruments appointing the Investment
Advisor and evidencing the Investment Advisor's acceptance of such
appointment, an acknowledgement by the Investment Advisor that it is
a fiduciary of the account, and a certificate evidencing the Investment
Advisor's current registraton under the Investment Advisor's Act of
1940. The Trustee shall comply with any investment directions furnished
to it by the Investment Advisor, unless and until it receives written
notification from the Grantor that the Investment Advisor's appointment
has been terminated. The Trustee shall have no duty other than to
follow the written investment directions of such Investment Advisor
and shall be under no duty to question said instructions, and the
Trustee shall not be liable for any investment losses sustained by
the Grantor.
9.04 No Investment Advice: The Trustee does not assume any responsibility
for rendering advice with respect to the investment and reinvestment
of Grantor's account and shall not be liable for any loss which results
from Grantor's exercise of control over his account. The Trustee and
Grantor may specifically agree in writing that the Trustee shall render
such advice, but the Grantor shall still have and exercise exclusive
responsibility for control over the investment of the assets of his
account, and the Trustee shall not have any duty to question his
investment directives.
9.05 Prohibited Transactions: Notwithstanding anything contained herein to
the contrary, the Trustee shall not lend any part of the corpus or
income of the account to; pay any compensation for personal services
rendered to the account to; make any part of its services available
on a preferential basis to; acquire for the account any property,
other than cash, from; or sell any property to, any Grantor, any
member of a Grantor's family, or a corporation controlled by any
Grantor through the ownership, directly or indirectly, of 50 percent
or more of the total combined voting power of all classes of stock
entitled to vote, or of 50 percent or more of the total value of shares
of all classes of stock of such corporation.
9.06 Unrelated Business Income Tax: If the Grantor directs investment of the
account in any investment which results in unrelated business taxable
income, it shall be the responsibiliity of the Grantor to so advise
the Trustee and to provide the Trustee with all information necessary
to prepare and file any required returns or reports for the account.
As the Trustee may deem necessary; and at the Grantor's expense, the
Trustee may request a taxpayer identificaton number for the account,
file any returns, reports, and applications for extension, and pay
any taxes or estimated taxes owed with respect to the account. The
Trustee may retain suitable accountants, attorneys, or other agents
to assist it in performing such responsibilities.
9.07 Disclosures and Voting: The Trustee shall deliver or cause to be
executed and delivered to Grantor all notices, prospectuses, financial
statements, proxies and proxy soliciting materials relating to assets
credited to the account. The Trustee shall not vote any shares of
stock or take any other action, pursuant to such documents, with
respect to such assets except upon receipt by the Trustee of adequate
written instructions from Grantor.
9.08 Miscellaneous Expenses: In addition to those expenses set out in
section 8.05 of this plan, the Grantor agrees to pay any and all
expenses incurred by the trustee in connection with the investment
of the account, including expenses of preparation and filing any
returns and reports with regard to unrelated business income,
including taxes and estimated taxes, as well as any transfer taxes
incurred in connection with the investment or reinvestment of the
assets of the account.
9.09 Nonbank Trustee Provision: If the Trustee is a nonbank trustee, the
Grantor shall substitute another trustee or custodian in place of
the Trustee upon receipt of notice from the Commissioner of the
Internal Revenue Service or his delegate that such substitution
is required because the Trustee has failed to comply with the
requirements of Income Tax Regulations Section 1.408-2(e), or is
not keeping such records, making such returns, or rendering such
statements as are required by applicable law, regulations, or other
rulings. The successor trustee or custodian shall be a bank, insured
credit union, or other person satisfactory to the Secretary of the
Treasury pursuant to Secion 408(a)(2) of the Code. Upon receipt by
the Trustee of written acceptance by its successor or such successor's
appointment, Trustee shall transfer and pay over to such successor
the assets of the account (less amounts retained pursuant to Section
8.04 of the Trust Agreement) and all records (or copies thereof) of
the Trustee pertaining thereto, provided that the successor trustee
or custodian agrees not to dispose of any such records without the
Trustee's consent.
