XXXX INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT AND
CUSTODIAL ACCOUNT AGREEMENT
(LOGO)
FIRST OMAHA
FAMILY OF FUNDSR
First National Bank of Omaha - Adviser
XXXX INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
GENERAL
Your Xxxx Individual Retirement Account ("Xxxx XXX") is a custodial account for
the benefit of you or your beneficiaries. The Custodian of the Xxxx XXX is named
on the Xxxx XXX Application.
The following information is being provided to you in accordance with the
requirements of the Internal Revenue Code. Please read it, together with the
Xxxx Individual Retirement Custodial Account Agreement and the prospectus or
other offering documents for the investments which you have chosen for
investment of your Xxxx XXX contributions. Because the rules with respect to
Xxxx IRAs are very complex, and because misunderstanding or disregarding the
rules may have serious tax implications, you should consult your own tax adviser
if you have questions about the information contained in this Disclosure
Statement. Further information can also be obtained from any district office of
the Internal Revenue Service.
WHAT IS AN IRA?
An IRA is a trust or custodial account created or organized in the United States
for the exclusive benefit of an individual and his or her beneficiaries. Under
an IRA, you defer federal income taxes on the earnings on the amount you invest
and in the case of deductible contributions to an IRA, on the amount you invest
(up to certain limits). State income tax treatment of IRAs varies.
WHAT TYPES OF IRAS ARE AVAILABLE THROUGH
FIRST OMAHA FUNDS?
A REGULAR IRA Account may be established for investment of tax-deductible or
non-deductible contributions made by an employed or self-employed individual.
You may also transfer funds to a Regular IRA Account from an existing IRA with
another custodian or roll over distributions from an employee-sponsored
qualified plan.
A SPOUSAL IRA Account is used for investment of tax-deductible or non-deductible
contributions made by a Regular IRA account holder on behalf of a spouse whose
taxable compensation is less than the other spouse's.
A ROLLOVER IRA Account is used for deferring tax on an eligible rollover
distribution from another individual retirement account, individual retirement
annuity, or an employer-sponsored qualified retirement plan.
A XXXX XXX is an IRA to which, beginning in 1998, non-deductible contributions
are made. If distributions from the Xxxx XXX are "qualified distributions," the
distributions, even of earnings in the account, which have never been taxed, are
not includible in the recipient's income.
A SEP-IRA is a simplified employee pension by which an employer makes
contributions to a SEP-IRA on behalf of an employee. If these payments are
structured correctly, the payments are excluded from the employee's gross
income.
A SIMPLE IRA is an IRA created pursuant to a Savings Incentive Match Plan for
Employees of Small Employers, also called a SIMPLE Plan. Your employer must
establish the SIMPLE Plan and your SIMPLE IRA may only receive contributions
made by your employer on your behalf under the terms of the employer's SIMPLE
Plan and transfers or rollovers from other SIMPLE IRAs. No other contributions
can be accepted.
An EDUCATION IRA is an IRA established, beginning in 1998, for a child and to
which non-deductible contributions of up to $500 annually may be contributed
until the child reaches age 18. Earnings in the Education IRA accumulate free of
tax. Distributions from the Education IRA during the year are tax-free unless
they exceed the child's qualified higher education expenses during the year.
WHO IS ELIGIBLE TO SET UP A XXXX
INDIVIDUAL RETIREMENT ACCOUNT?
All employed people may contribute to a Xxxx XXX, whereas people over age 701/2
may not contribute to a Regular IRA.
Additionally, your spouse may establish a separate Xxxx XXX even if he or she is
not employed. Your spouse can contribute to a spousal Xxxx XXX for tax years
beginning after 1997 if all of the
following conditions are met:
A. You must be married at the end of the tax year;
B. You must file a joint return for the tax year;
C. You must have taxable compensation for the year; and
D. Your spouse's taxable compensation for the year is less than yours.
AM I ELIGIBLE TO MAKE TAX-DEDUCTIBLE
CONTRIBUTIONS TO A XXXX XXX?
While you may be eligible to make tax-deductible contributions to a Regular IRA,
all contributions to a Xxxx XXX are not deductible.
WHAT IS THE MAXIMUM CONTRIBUTION
I CAN MAKE TO A XXXX XXX?
After 1997, you may make an annual non-deductible contribution to a Xxxx XXX in
an amount which is the excess of:
A. The lesser of $2,000, or 100% of your annual compensation, or
B. The total amount of contributions for the tax year to all other IRAs other
than Xxxx IRAs which you maintain.
This maximum amount is limited further if your adjusted gross income ("AGI")
exceeds the "applicable dollar amount." If you are subject to these additional
limits, the allowable contribution to your Xxxx XXX is calculated by reducing
the maximum contribution otherwise allowable by the same ratio as the amount of
the excess of your adjusted gross income for the tax year over the "applicable
dollar amount," bears to $15,000, or $10,000 if you file a joint return. The
"applicable dollar amount" is $150,000 for a taxpayer filing a joint return and
$95,000 for any other taxpayer other than a married taxpayer filing separately.
The applicable dollar amount for a taxpayer filing separately is zero. This
means that the contribution that you can make to a Xxxx XXX is phased out if
your AGI is between $95,000 and $110,000 or, if you file jointly, if your joint
AGI is between $150,000 and $160,000. Keep in mind that the total amount of
contributions to all of your IRAs for a tax year cannot exceed $2,000. An
individual who cannot or does not make deductible contributions to a Regular
IRA, or non-deductible contributions to a Xxxx XXX, can make non-deductible
contributions to a Regular IRA.
In applying the reductions to the permitted limit as a result of the AGI
limitations described above, no reduction in the maximum contribution below $200
is required until the permitted contribution is zero. Additionally, any
reduction in the maximum contribution which is not a multiple of $10 must be
rounded to the next lowest $10.
For example, assume that your AGI for the year is $157,555 and you are married,
filing jointly. You would calculate your Xxxx XXX contribution limit this way:
1. The amount by which your AGI exceeds the lower limit of the reduced
contribution deductible range:
($157,555 - $150,000) = $7,555
2. Divide this by $10,000: $7,555 = 0.7555
$10,000
3. Multiply this by $2,000
(or your compensation for the year, if less):
0.7555 x $2,000 = $1,511
4. Round this down to the nearest $10 = $1,510
5. Subtract this from your $2,000 limit:
($2,000 - $1,510) = $490
6. If the answer in Step 5 was less than $200, your contribution limit is the
greater of this amount or $200.
Remember, your Xxxx XXX contribution limit of $2,000 is reduced by any
contributions for the same year to a Regular IRA. If you fall in the reduced
contribution range, the reduction formula applies to the Xxxx XXX contribution
limit left after subtracting your contribution for the year to a Regular IRA.
AGI is your gross income minus those deductions which are available to all
taxpayers even if they don't itemize. Instructions to calculate your AGI are
provided with your income tax Form 1040 or 1040A. There are two additional rules
when calculating AGI for purposes of Xxxx XXX contribution limits. First, if you
are making a deductible contribution for the year to a Regular IRA, your AGI is
reduced by the amount of the deduction. Second, if you are converting a Regular
IRA to a Xxxx XXX in a year (see below), the amount includible in your income as
a result of the conversion is not considered AGI when computing your Xxxx XXX
contribution limit for the year. (Note: a xxxx xxxxxxx in Congress might affect
the first rule _ consult your tax adviser or the IRS for the latest
developments.)
DO MARRIED COUPLES WITH TWO INCOMES
CONTRIBUTE TO ONE OR TWO XXXX IRAS?
Each individual must establish a separate Xxxx XXX account. The application must
be completed and signed by each individual.
HOW ARE CONTRIBUTIONS MADE TO A XXXX XXX
BY A SPOUSE?
A separate Xxxx XXX account must be established in the name of the spouse in
order to take advantage of the additional contribution, and each account will
have its own number.
WHEN ARE CONTRIBUTIONS DUE?
Your regular contribution to a Xxxx XXX for any year must be made no later than
the date required for filing your federal income tax return for that year,
without regard to any extensions. This date is generally April 15.
CAN I MOVE MONEY FROM AN EXISTING IRA
INTO MY FIRST OMAHA FUNDS XXXX XXX?
If you have made contributions to another IRA, you may be able to roll over all
or part of the assets of that account into your First Omaha Funds Xxxx XXX. You
cannot make such a rollover in any taxable year if your adjusted gross income,
or if filing jointly, the combined adjusted gross income of you and your spouse,
for the taxable year exceeds $100,000. Additionally, if during the taxable year
you are a married individual who is filing a separate return, you may not make a
rollover contribution to a Xxxx XXX.
If you are eligible to make a rollover contribution to your Xxxx XXX, you may do
so by contributing all or part of a distribution which you have received from
another IRA into your Xxxx XXX. You must complete the transaction within 60 days
after receiving the distribution to avoid penalty taxes. You may roll over the
assets of an IRA into your Xxxx XXX only once each year. A rollover contribution
which meets these requirements does not count against the limit on the annual
contribution to your Xxxx XXX. You may not make a rollover contribution to a
Xxxx XXX from a plan qualified under Section 401(a) or an annuity or custodial
account meeting the requirements of Section 403(b) of the Internal Revenue Code.
Only contributions from other IRAs may be rolled into a Xxxx XXX.
You may designate your Xxxx XXX as a "Xxxx Conversion IRA" on the Application
that you complete. A "Xxxx Conversion IRA" is a Xxxx XXX that accepts only "IRA
Conversion Contributions" made during your same tax year. "IRA Conversion
Contributions" are amounts rolled over, transferred or converted from any IRA
that is not a Xxxx XXX to a Xxxx XXX. To simplify the identification of funds
distributed from Xxxx IRAs, you are encouraged to maintain IRA Conversion
Contributions for each tax year in a separate Xxxx XXX.
Special rules apply to SIMPLE IRAs. You may only roll over or transfer amounts
from a SIMPLE IRA to your Xxxx XXX after the expiration of a two-year period
beginning on the date you first participated in your employer's SIMPLE plan. If
you attempt to roll over amounts held in a SIMPLE IRA to an IRA that is not a
SIMPLE IRA before that time expires, you will not receive the favorable tax
treatment accorded rollovers.
CAN I MOVE MONEY FROM ANOTHER
RETIREMENT PLAN INTO A XXXX XXX?
Only amounts held in a Regular IRA or another Xxxx XXX may be rolled into your
Xxxx XXX. Amounts which were previously distributed from another retirement plan
or Section 403(b) contract or custodial account and then were rolled into a
rollover IRA may be rolled into your Xxxx XXX.
IF I ROLL OVER A DISTRIBUTION FROM MY EXISTING IRA INTO MY FIRST OMAHA FUNDS
XXXX XXX, AM I TAXED ON THE DISTRIBUTION?
If you make a qualified rollover contribution of the distribution from your
existing IRA to your Xxxx XXX, the amount that would have been included in your
income as a result of the distribution from your existing IRA had it not been
rolled over will be included in your gross income in the year in which the
rollover occurs. However, you will not be subject to the 10% additional tax on
early distributions under Section 72(t). Additionally, if you roll over a
distribution from your existing IRA into a Xxxx XXX before January 1, 1999, the
amount that would be required to be included in your gross income will be
included ratably over the taxable four year period beginning with the taxable
year in which the payment or distribution is made. Keep in mind that you may
only make a rollover into a Xxxx XXX if your adjusted gross income, or the
adjusted gross income of you and your spouse if filing jointly, does not exceed
$100,000. Additionally, you may not make a rollover into a Xxxx XXX if you are a
married individual filing a separate return.
Example: You have an existing IRA, all attributable to deductible contributions,
with an existing account balance of $40,000. The adjusted gross income of you
and your spouse does not exceed $100,000 and you are not a married individual
filing a separate return. On September 1, 1998 you receive a distribution in
cash from your existing IRA and within 60 days thereafter contribute the $40,000
distribution to your new Xxxx XXX. You must include $10,000 in your taxable
income in each of the 1998, 1999, 2000 and 2001 taxable years.
Example: Assume the same facts as in the prior example, except that you received
your distribution in 1999 and make the contribution to your Xxxx XXX in 1999.
You must include the entire $40,000 distribution from your existing IRA in your
taxable income for 1999.
MAY I CONVERT MY EXISTING FIRST OMAHA FUNDS REGULAR IRA TO A XXXX XXX?
If you would be eligible to roll over a Regular IRA into a Xxxx XXX during a
taxable year, you may convert your existing Regular IRA into a Xxxx XXX in
accordance with procedures specified by the Internal Revenue Service. Thus, for
example, your adjusted gross income must be less than $100,000 in the taxable
year in order to be eligible to make the conversion. Your First Omaha Funds
Regular IRA can be converted to a Xxxx XXX by contacting the First Omaha Funds
at P.O. Box 419022, Kansas City, MO 00000-0000 or by calling 0-000-000-0000 for
the appropriate forms.
ARE THERE ANY FEES CHARGED AS A RESULT OF A ROLLOVER OR TRANSFER TO A FIRST
OMAHA FUNDS XXXX XXX?
There are no rollover or transfer fees charged for your First Omaha Funds Xxxx
XXX. You may transfer money as often as you wish. You may make a rollover once
every 12 months. The rules concerning rollovers and transfers are complicated
and you should consult a tax adviser to make sure your rollover is accomplished
properly.
WHERE ARE THE CONTRIBUTIONS INVESTED?
Contributions to a Xxxx XXX must be placed in a special custodial or trust
account and held by a bank trustee or custodian (or other person who has been
approved by the Secretary of the Treasury). The purpose of this rule is to
segregate these savings from other assets and to use them for retirement
purposes only.
Under the First Omaha Funds Xxxx XXX, your contributions and the earnings on
your Xxxx XXX account will be invested in shares of a self-designated First
Omaha Funds IRA-authorized investment fund. The prospectus or other offering
documents explain the investment objectives of each such fund. Since the
performance of each such fund or partnership is subject to market changes,
growth in value of your account cannot be projected or guaranteed.
WHAT ARE THE FEES FOR A FIRST OMAHA FUNDS
XXXX XXX?
Currently no separate custodial fees are charged to you or your account. The
Custodian reserves the right to charge an annual maintenance fee and other fees
and expenses for Xxxx XXX accounts, and if it imposes these charges in the
future it will notify you. If you close your First Omaha Funds Xxxx XXX account
during the year, any such fees will be deducted from the proceeds before
redemption or transfer. The Custodian reserves the right to amend its custodial
and other fees from time to time and the fees will be determined in accordance
with the published fee schedule of the Custodian as then in effect.
The fees may be deducted on your federal tax return if you itemize your
deductions and pay the fees directly during the same calendar year for which you
are claiming the deduction. If you desire to deduct the fees on your return, you
should pay the fee with a separate check to the Custodian.
Of course, shares of the fund in which your account is invested will be affected
by management fees and other expenses of the fund or partnership. These matters
are discussed in the prospectus or other offering documents which you received
prior to, or with, this packet.
WHEN CAN I TAKE MONEY OUT OF MY XXXX XXX?
The rules concerning distributions from a Xxxx XXX differ substantially from
those applicable to a Regular IRA. Whereas virtually all distributions, other
than qualified rollover distributions from a Regular IRA to another Regular IRA,
result in taxable income to the recipient of the distribution, if you receive a
"qualified distribution" from a Xxxx XXX, you will not be subject to tax on the
distribution. A qualified distribution is a distribution occurring on or after
the date you attain age 59-1/2, your death or your disability (within the
meaning of Section 72(m)(7) of the Internal Revenue Code), or a distribution
which is a "qualified first-time home buyer distribution."
Even a distribution which would otherwise be a qualified distribution will not
be a qualified distribution, and thus may be subject to tax, if the distribution
is made within the five-year period beginning with the year in which you or your
spouse made the contribution to your Xxxx XXX, or, if you made a rollover from a
Regular IRA to a Xxxx XXX, within the five-taxable-year period beginning with
the taxable year in which the rollover contribution was made. Any such
distribution will be taxable to the extent that earnings on the contributions
are withdrawn.
A "qualified first-time home buyer distribution" is a distribution meeting the
requirements of Section 72(t)(8) of the Internal Revenue Code, and is generally
a distribution to the account owner to the extent that the distribution is used
within 120 days of receipt of the distribution to pay "qualified acquisition
costs" with respect to the principal residence of a first-time home buyer who is
either the account owner, his or her spouse, or his or her child, grandchild or
ancestor of the account owner or the account owner's spouse. There is a maximum
lifetime dollar limitation on qualified first-time home buyer distributions of
$10,000. Qualified acquisition costs include the costs of acquiring,
constructing or reconstructing the principal residence, and any usual or
reasonable settlement, financing, or other closing costs. With limited
exceptions, an individual is a "first-time home buyer" if the individual (and if
married, the individual's spouse) had no present ownership interest in a
principal residence during the two-year period which ends on the acquisition of
the principal residence. A principal residence is generally a residence which
has been occupied by the taxpayer as a principal residence for at least two out
of the previous five years.
Finally, any distribution is not taxed to the extent that the distribution, plus
all previous distributions from the Xxxx XXX, do not exceed the total amount you
contributed to the Xxxx XXX. Note that, for purposes of determining what portion
of any distribution is includible in income, all of your Xxxx XXX accounts are
considered as one single account. Amounts withdrawn from any one Xxxx XXX
account are deemed to be withdrawn from contributions first. Since all your Xxxx
IRAs are considered to be one account for this purpose, withdrawals from Xxxx
XXX accounts are not considered to be from earnings or interest until an amount
equal to all contributions made to all of an individual's Xxxx XXX accounts is
withdrawn.
Note that the tax treatment of a distribution from a Xxxx XXX is different than
that applicable to a distribution of non-deductible contributions from a Regular
IRA, in that any such distribution from a Regular IRA is treated as a
distribution of a portion of the non-deductible contributions and a portion of
the earnings in the account. This results in tax on the earnings portion of the
distribution.
WHEN MUST I BEGIN TO TAKE MONEY OUT OF MY
XXXX XXX?
You are not required to receive a distribution from a Xxxx XXX during your
lifetime. This is very different from a Regular IRA, where you are required to
begin receiving distributions by April 1 following the year in which you reach
age 70-1/2.
WHAT ABOUT DISTRIBUTIONS AFTER MY DEATH?
Distributions of your Xxxx XXX funds must be completed within five years after
the end of the year in which your death occurs unless certain conditions are
met. If you have designated a beneficiary and distributions begin within one
year after the end of the year in which your death occurs, distributions may be
made over a period not exceeding the beneficiary's life or life expectancy. If
you have designated your spouse as your beneficiary, the date on which
distribution to your spouse must begin may be as late as December 31 of the year
in which you would have reached age 70-1/2. If your spouse dies before
distributions are required to begin to the spouse, then similar conditions to
those described above apply to a beneficiary designated by your surviving spouse
to take the spouse's interest in your Xxxx XXX upon the spouse's death.
The distributions described above are required by the Internal Revenue Code. If
the distributions actually made during the year are smaller than those that are
required, an excise tax penalty will be assessed equal to 50% of the difference
between the amount that should have been distributed and the amount that was
actually distributed. This penalty can be waived by the Internal Revenue Service
if the shortfall resulted from a reasonable error and steps are taken to correct
it.
HOW DO I BEGIN RECEIVING DISTRIBUTIONS?
Contact First Omaha Funds at P.O. Box 419022, Kansas City, MO 00000-0000 or by
calling 0-000-000-0000 for a distribution request form.
WHAT ARE THE RESTRICTIONS ON MY XXXX XXX?
In addition to various penalty taxes, your Xxxx XXX account is subject to the
following restrictions:
A. No part of your Xxxx XXX assets may be invested in life insurance contracts
or commingled with other property except in a common trust or investment
fund.
B. Your interest in the account is nonforfeitable. It is also segregated from
other assets to ensure that it is used for retirement purposes only.
C. Transactions between yourself (or your beneficiary) and the assets held in
the account are not allowed. The specific prohibited transactions are
described in the Internal Revenue Code and include selling or exchanging
property with the account or borrowing from the account. Should a
transaction of this type occur, your entire account will be treated as
having been distributed to you. If this occurs within the five-taxable-year
period beginning with the year in which a contribution or rollover is made,
all or a portion of the account earnings will then be included in your
income for that year and, if you are not yet age 59-1/2, can be subject to
the 10% penalty tax on early distribution.
D. You may not pledge or use any portion of your Xxxx XXX as security for a
loan. If you do, that portion will be treated as having been distributed to
you, and all or a portion of the account earnings may be included in your
income for that year. You may also incur a 10% penalty tax on premature
distributions if you are under age 59-1/2.
E. No part of the Xxxx XXX funds may be invested in collectibles, as defined in
Section 408(m) (e.g., art works, rugs, antiques, metals, gems, stamps,
alcoholic beverages, certain other tangible personal property and coins,
other than coins issued under the laws of any state which are acquired by
the Xxxx XXX after November 10, 1988, and certain gold and silver coins
minted by the U.S. Treasury beginning October 1, 1986 and certain types of
bullion after 1997).
WHAT PENALTY TAXES MAY APPLY TO MY XXXX XXX?
You may incur penalty taxes in connection with your account under the following
circumstances:
A. Excess Contributions. If your total IRA and Xxxx XXX contributions exceed
the maximum for the year, the excess will be subject to a 6% penalty tax
unless the excess (along with any earnings) is withdrawn from your account
by the due date (including extensions) for that year's federal income tax
return. You may not claim the withdrawn portion as a deduction for that
year. If you fail to withdraw the excess contribution by the due date of
your return, you will incur an additional 6% penalty tax for each year that
it remains an excess. To avoid this recurring penalty tax for later years,
you must either withdraw the excess from the account or absorb it by
reducing your future deductible contributions by an amount corresponding to
the excess. You may also have to file an amended tax return to correct the
deduction or reduce your IRA deduction for that year. Withdrawal of the
excess after the due date of your return and before you reach age 591/2 will
result in a 10% penalty tax on a
premature withdrawal.
B. Premature Distributions. If you receive distributions of amounts in excess
of your contributions from your Xxxx XXX before you reach age 59-1/2, and
you are not disabled, you will be subject to a 10% penalty tax in addition
to the ordinary income taxes you must pay on the distribution. The 10%
penalty tax may also apply to any portion or all of the earnings in your
account which is treated as having been distributed to you because you
engaged in a prohibited transaction or pledged your account as security for
a loan. Proper rollovers into another Xxxx XXX and proper withdrawal of
excess contributions are not considered premature distributions.
C. Excess Accumulations. After you die, a 50% penalty tax will be imposed on
any amount which is required to be distributed to your beneficiary under the
minimum IRS distribution rules but which your beneficiary fails to withdraw.
If you have more than one Xxxx XXX account, the withdrawal must be based
upon the aggregate balance.
WHAT FORMS DO I HAVE TO FILE
WITH THE IRS FOR MY XXXX XXX?
You should consult with your tax adviser for detailed information concerning
reporting requirements as they apply to your Xxxx XXX. You may also obtain a
copy of IRS Publication 590, "Individual Retirement Arrangements," and other
information about IRAs from your local district Internal Revenue Service office.
You must file Form 5329 as part of your federal income tax return for any year
in which you incur a penalty tax due to excess contributions, premature
distributions, or excess accumulations, and calculate the penalty tax due. There
are penalties for failing to file, or late filing of, Form 5329 for any year it
is required. A rollover contribution must also be reported on Form 1040.
CAN I REVOKE MY ACCOUNT?
You will be permitted to revoke your Xxxx XXX within seven (7) days after the
date on which you are given this Xxxx XXX Disclosure Statement. If you have not
received this Disclosure Statement at least seven (7) calendar days before your
Xxxx XXX has been established, you have the right to revoke your Xxxx XXX during
the seven (7) calendar days after your Xxxx XXX was established. To revoke your
Xxxx XXX under this seven-day provision, you must request the revocation by
giving written notice to First Omaha Funds. If mailed, your revocation notice
will be deemed mailed on the date of the postmark (or, if sent by certified or
registered mail, the date of certification or registration) if it is deposited
in the mail in the United States in an envelope or other appropriate wrapper,
first-class postage prepaid, properly addressed. Upon such revocation, you will
be entitled to a return of the entire amount of the consideration paid to the
Xxxx XXX, without adjustment for sales commissions, administrative expenses or
fluctuation in the market value of the Xxxx XXX.
WHAT ARE GIFT TAX CONSEQUENCES OF
XXXX XXX CONTRIBUTIONS AND DISTRIBUTIONS?
For federal gift tax purposes, irrevocable beneficiary designations will not be
treated as gifts. Again, you should consult your tax adviser to determine the
tax consequences of an irrevocable
beneficiary designation under the state gift tax laws.
HAS THE INTERNAL REVENUE SERVICE APPROVED THE FORM OF THE FIRST OMAHA FUNDS XXXX
XXX CUSTODIAL ACCOUNT AGREEMENT?
While many of the provisions of the First Omaha Funds Xxxx XXX Custodial Account
Agreement are taken verbatim from a form provided by the Internal Revenue
Service, the Internal Revenue Service has not approved the form of the
agreement.
XXXX INDIVIDUAL RETIREMENT ACCOUNT
CUSTODIAL ACCOUNT AGREEMENT
FORM 5305-RA (REV. JANUARY 1998)
The individual whose name appears on the Xxxx XXX Application to which this
Agreement applies (hereinafter called "Depositor") is establishing a Xxxx
Individual Retirement Account ("Xxxx XXX") (under Section 408A of the Internal
Revenue Code) to provide for his or her retirement and for the support of his or
her beneficiaries after death.
The Custodian named on the Xxxx XXX Application (herein-after called
"Custodian") has agreed to serve as Custodian of the Depositor's Xxxx Individual
Retirement Account established hereunder.
The Depositor has deposited with the Custodian the amount indicated as the
initial contribution on the Xxxx XXX Application. Such amount and any additions
thereto and earnings thereon held by the Custodian pursuant to this Agreement
may be hereafter referred to as the "custodial account," "account" or "custodial
funds."
The Depositor and the Custodian make the following agreement:
ARTICLE I
1.1 If this Xxxx XXX is not designated as a Xxxx Conversion IRA, then, except
in the case of a rollover contribution described in Section 408A(e), the
Custodian will accept only cash contributions and only up to a maximum
amount of $2,000 for any tax year of the Depositor.
1.2 If this Xxxx XXX is designated as a Xxxx Conversion IRA, no contributions
other than IRA Conversion Contributions made during the same tax year
will be accepted.
ARTICLE II
2.1 The $2,000 limit described in Article I is gradually reduced to $0
between certain levels of adjusted gross income(AGI). For a single
Depositor, the $2,000 annual contribution is phased out between AGI of
$95,000 and $110,000; for a married Xxxxxxxxx who files jointly, between
AGI of $150,000 and $160,000; and for a married Xxxxxxxxx who files
separately, between $0 and $10,000. In the case of a conversion, the
Custodian will not accept IRA Conversion Contributions in a tax year if
the Depositor's AGI for that tax year exceeds $100,000 or if the
Depositor is married and files a separate return. Adjusted gross income
is defined in Section 408A(c)(3) and does not include IRA Conversion
Contributions.
ARTICLE III
3.1 The Depositor's interest in the balance in the Custodial account is
nonforfeitable.
ARTICLE IV
4.1 No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with
other property except in a common trust fund or common investment fund
(within the meaning of Section 408(a)(5)).
4.2 No part of the custodial 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, silver and
platinum coins, coins issued under the laws of any state, and certain
bullion.
ARTICLE V
5.1 If the Depositor dies before his or her entire interest is distributed to
him or her and the Depositor's surviving spouse is not the sole
beneficiary, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of the
beneficiary or beneficiaries, either:
(a) Be distributed by December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(b) Be distributed over the life expectancy of the designated beneficiary
starting no later than December 31 of the year following the year of
the Depositor's death.
If distributions do not begin by the date described in (b),
distribution method (a) will apply.
5.2 In the case of distribution method 5.1(b) above, to determine the minimum
annual payment of each year, divide the Depositor's entire interest in
the custodial account as of the close of business on December 31 of the
preceding year by the life expectancy of the designated beneficiary using
the attained age of the designated beneficiary as of the beneficiary's
birthday in the year distributions are required to commence and subtract
1 for each subsequent year.
5.3 If the Depositor's spouse is the sole beneficiary on the Depositor's date
of death, such spouse will then be treated
as the Depositor.
ARTICLE VI
6.1 The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under Sections 408(i)
and 408A(d)(3)(E), Regulations Sections 1.408-5 and 1.408-6, and under
guidance published by the Internal Revenue Service.
6.2 The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor prescribed by the Internal Revenue Service.
ARTICLE VII
7.1 Not withstanding any other articles which may be added or incorporated,
the provisions of Articles I through IV and this sentence will be
controlling. Any additional articles that are not consistent with Section
408A, the related regulations, and other published guidance will be
invalid.
ARTICLE VIII
8.1 This agreement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published
guidance. Other amendments may be made with the consent of the Depositor
and Custodian.
ARTICLE IX
THE PROVISIONS OF THIS ARTICLE SHALL APPLY TO ANY AND ALL
CUSTODIAL ACCOUNTS ESTABLISHED PURSUANT TO THIS AGREEMENT.
9.1 INVESTMENT POWER OF CUSTODIAN
The Custodian shall invest and reinvest all contributions to
the custodial account, plus any earnings in any or all of
the following.
(a) Investment shares of the Mutual Funds (regulated investment companies)
which the Custodian has designated as appropriate for investments in
the custodial account.
(b) All dividends and capital gain distributions received on the shares
of any Mutual Fund held in the Depositor's account shall be reinvested
in shares of the same Mutual Fund which paid the distribution, and
credited to the custodial account.
9.2 FEES, EXPENSES, TAXES AND PENALTIES
(a) The Depositor agrees to pay to the Custodian fees for services
performed under this agreement in an amount specified from time to
time by the Custodian, Such fees may include, but are not limited to a
fee to establish the custodial account and the annual maintenance fee.
The Custodian shall have the right to change any such fees at any time
without prior written notice to the Depositor. As soon as practicable
after any change in fees, the Custodian shall make available to the
Depositor a new fee schedule. All fees may be billed to the Depositor
or deducted from the custodial account, at the discretion of the
Custodian. The Custodian shall also be entitled to reimbursement for
all reasonable and necessary costs, expenses and disbursement incurred
by it in the performance of services. Such reimbursement shall be made
from the account if not paid directly by the Depositor.
(b) The Depositor shall be responsible for the payment of any income,
transfer and other taxes of any kind that may be levied or assessed
upon the custodial account, and all other administrative expenses
reasonably incurred by the Custodian in the performance of its duties,
including any fees for legal services provided to the Custodian. To
the extent the Depositor fails to pay such taxes and expenses
directly, the Custodian may, in its discretion, deduct them from the
custodial account.
(c) The Custodian shall not be responsible for excise or penalty taxes or
interest imposed by the IRS by virtue of any premature distributions,
over-contributions or excess accumulations with respect to the
Depositor's account, or for the failure to commence distributions, nor
shall the Custodian be responsible for providing any tax or legal
advice with respect to the account. The Custodian shall have no
obligations to return any amounts withheld for federal income tax
purposes from any distribution as to which the Depositor (or
beneficiary, as applicable) has failed to provide a withholding
election notice prior thereto.
(d) Sales charges, if any, attributable to the acquisition of shares of a
Mutual Fund as stated in its then current prospectus may be charged to
the Depositor's account.
9.3 RESPONSIBILITIES OF CUSTODIAN
(a) The Custodian shall maintain the custodial account, distinct from all
other custodial accounts, for the exclusive benefit of the Depositor
and the Depositor's beneficiaries and shall be responsible for
performing only such services as are described in this Agreement.
(b) All contributions by the Depositor to the custodial account shall be
invested according to Article 8.1 hereof at the sole direction of the
Depositor, and the Custodian shall not be responsible or liable for
any investment decisions or recommendations with respect to the
investment, reinvestment, or sale of assets in the custodial account.
With regard to the Mutual Funds listed on the Application and any
other Mutual Fund, the Depositor understands that the Custodian does
not endorse the Mutual Funds as suitable investments for the
Depositor. In addition, the Custodian will not provide investment
advice to the Depositor. The Depositor assumes all responsibility for
the choice of his or her investments in the custodial account. The
Custodian shall not be responsible for reviewing any assets held in
the custodial account and shall not be responsible for questioning any
investment decision of the Depositor. The Custodian shall not be
liable for any loss resulting from any action taken by the Custodian
at the direction of the Depositor or any loss resulting from any
failure to act because of the absence of directions from the
Depositor.
(c) The Custodian shall not be responsible for inquiring into the nature
or amount of any contribution made by the Depositor, nor into the
amount or timing of any distribution requested by the Depositor, or
whether such contributions or distributions comply with the Code. The
Depositor shall have full responsibility for any tax or investment
consequences of all contributions to and distributions from the
custodial account.
(d) If the Custodian receives any investment instructions from the
Depositor which, in the opinion of the Custodian, are not in good
order or are unclear, or if the Custodian receives monies from the
Depositor which would exceed the amount that the Depositor may
contribute to the custodial account, the Custodian may hold all or a
portion of the monies uninvested pending receipt of written (or in any
other manner permitted by the Custodian) instructions or
clarification. During any such delay the Custodian will not be liable
for any loss of income or appreciation, loss of interest, or for any
other loss. The Custodian may also return all or a portion of the
monies to the Depositor. Again, in such situations, the Custodian will
not be liable for any loss.
(e) The Custodian will designate contributions (other than rollover
contributions) as being made for any particular year as requested by
the Depositor. If the Depositor does not designate a year for any
contribution, the Custodian will designate the year the contribution
was actually received.
(f) The Custodian will accept transfers of a cash amount to the custodial
account from another custodian or trustee of an Individual Retirement
Account, Qualified Retirement Plan or Individual Retirement Annuity
upon the Depositor's written direction. The Custodian will also
transfer a cash amount in the custodial account upon the written
request of the Depositor to another custodian or trustee of an
Individual Retirement Account or Annuity. For such transfer, the
Custodian may require a written acceptance of the successor custodian.
The Depositor warrants that all transfers to and from the custodial
account will be made in accordance with the rules and regulations of
the Internal Revenue Service.
(g) The Custodian is authorized to hire an agent to perform certain of its
duties hereunder, which agent may be the transfer agent for the Mutual
Fund shares authorized to be held hereunder.
(h) The Depositor agrees to indemnify and hold harmless, and to defend the
Custodian against any and all claims arising from and liabilities
incurred by reason of any action taken by the Custodian in good faith
pursuant to this Agreement.
9.4 JUDICIAL SETTLEMENT OF ACCOUNTS
The Custodian may bring an action before a court of appropriate
jurisdiction at any time to resolve any dispute or ambiguity in its
accounts. If a dispute or ambiguity exists regarding who is entitled to
receive funds from the custodial accounts, the Custodian may withhold
such funds until the dispute or ambiguity is resolved through settlement
by the parties or determination by a court of appropriate jurisdiction.
The court's resolution shall be final and binding on all parties
involved. All expenses incurred by the Custodian, including, without
limitation, all legal and accounting fees, shall be paid for from the
custodial account, if not otherwise paid by the Depositor.
9.5 NOTICE
(a) All notices or requests to the Custodian to make distributions from
the custodial account must conform to the requirements of the Internal
Revenue Code, the redemption requirements of the applicable fund
prospectus and the requirements of the Custodian and its duly
appointed agent, if any. The Custodian will make distributions from
the custodial account only after receiving a written request from the
Depositor (or any other party entitled to receive the assets of the
custodial account) in the form required by the Custodian. The
Depositor (or any other party entitled to receive the assets of the
custodial account) must provide to the Custodian any applications,
certificates, tax waivers, signature guarantees and any other
documents (including proof of any legal representative's authority)
that the Custodian requires. The Custodian will not be liable for
complying with a distribution request that appears to be genuine, nor
will the Custodian be liable for refusing to comply with a
distribution request which the Custodian is not satisfied is genuine
or in proper form. This includes any losses which may occur while the
Custodian waits for the distribution request to be in the proper form.
The Depositor (or any other party entitled to receive the assets of
the custodial account) also agrees to fully indemnify the Custodian
for any losses which may result from the Custodian's failure to act
upon an improperly made distribution request.
(b) Except as otherwise permitted by the Custodian, all instructions to
the Custodian under this Agreement must be in writing. The Depositor
may authorize an agent to act on behalf of the Custodian, provided
that such appointment and authorization is provided in writing to the
Custodian in the form required by the Custodian. Any instructions by
an authorized agent of the Depositor will be binding upon the
Depositor. Any authorization given by the Depositor will remain in
effect until the Custodian receives written notice of the Depositor's
revocation of the authorization, or the death of the Depositor,
whichever occurs first.
(c) Any notice, report, payment, distribution or other material required
to be delivered by the Custodian under this Agreement, shall be deemed
delivered and effective three days after the date mailed by the
Custodian to the Depositor at the Depositor's last address of record
as provided by the Depositor to the Custodian, and the Custodian shall
not be obligated to ascertain the actual address or whereabouts of
the Depositor.
(d) Any notice or instructions required to be delivered by the Depositor
to the Custodian under this Agreement shall be deemed delivered when
actually received by
the Custodian.
(e) Any notice required to be given to the Custodian under this Agreement
shall be given to the Mutual Fund Group, the name of which appears on
the front of the Agree ment, and any notice required or permitted to
be given to the Depositor under this Agreement shall be given to the
Depositor at the address filed with the Custodian from time to time.
Notices may be delivered in person or may be sent by United States
mail, first class with postage prepaid and properly addressed.
9.6 REPORTS, RECORDS AND ACCOUNTING
The Custodian shall maintain such records as may be reasonably necessary
for the proper administration of the account. The Custodian shall render
a report to each Depositor (or his or her beneficiaries), on the status
of his or her account or accounts at least annually. The report shall
show contributions (deposits) received, withdrawals made, dividend
credits, other credits and/or charges, and the balance at the end of the
report period. The report shall also furnish the Depositor such other
information as the Custodian may possess and as may be necessary for the
Depositor to comply with the reporting requirements of the Internal
Revenue Code and any applicable regulations. The Custodian shall have no
duty to furnish information about the account to any person except as
expressly provided herein or as required by law. Any accounting, when
approved by the Depositor, will be binding and conclusive as to the
Depositor, and the Custodian will thereby be released and discharged from
any liability or accountability to the Depositor with respect to matters
set forth therein. The Depositor or beneficiary shall advise the
Custodian within 60 days following receipt of the Custodian's report of
any corrections to his or her account. If the Depositor or beneficiary
fails to advise the Custodian of any corrections within the 60-day
period, the Depositor or beneficiary shall be deemed to have approved the
Custodian's report. The Custodian shall have the right to have its
account settled by a court of competent jurisdiction.
9.7 RECORDS RETENTION
The Custodian shall retain its records relating to the account as long as
necessary for the proper administration thereof and at least for any
period required by the Employee Retirement Income Security Act of 1974 or
other applicable law.
9.8 RESIGNATION OR REMOVAL OF CUSTODIAN
(a) The Custodian may resign as the Custodian hereunder without the
consent of the Depositor, by providing notice of such resignation 30
days prior to the effective date of the resignation. In the event of a
resignation by the Custodian, the Depositor must appoint a successor
Custodian or Trustee. Upon receipt by the Custodian of a written
acceptance of such appointment by the successor Custodian or Trustee,
the Custodian shall transfer and pay over to such successor the assets
of the custodial account. If after 30 days from notice of resignation,
the Custodian has not received written acceptance of such appointment
by the successor Custodian or Trustee, the Custodian shall pay or
otherwise transfer to the Depositor the assets remaining in the
custodial account. The Custodian is authorized, however, to reserve
such funds as it deems advisable for payment of any liabilities
constituting a charge against the assets of the custodial account or
against the Custodian, with any balance of such reserve remaining
after payment of all such items to be paid over to the successor
Custodian.
(b) Upon the appointment and qualification of a successor Custodian or
Trustee, the successor Custodian or Trustee shall assume all rights,
powers, and privileges, liabilities and duties of the Custodian. Upon
acceptance of appointment by the successor Custodian or Trustee, the
Custodian shall assign, transfer and deliver to the successor all
funds held in the custodial account. The Custodian is authorized,
however, to reserve such funds as it deems advisable for payment of
any liabilities constituting a charge against the assets of the
custodial account or against the Custodian, with any balance of such
reserve remaining after the payment of all such items to be paid over
to the successor Custodian or Trustee.
9.9 DESIGNATION OF BENEFICIARY
(a) The Depositor has the right to designate a beneficiary(ies) of his or
her account in writing on a form provided by the Custodian or in a
format approved by the Custodian. The purpose of this designation is
to identify the recipient(s) of the custodial account upon the
Depositor's death.
(b) The Depositor has the right to change this designation of beneficiary
at any time by writing to the Custodian. A beneficiary designation
when received by the Custodian shall relate back and be effective as
of the date it was signed by the Depositor, but without prejudice to
or liability of the Custodian, Mutual Fund or its agents, for any
payout made prior to receipt by them. If the beneficiary does not
survive the Depositor or if the Custodian cannot locate the
beneficiary after reasonable search, any balance in the account will
be paid to the Depositor's estate.
9.10 PAYMENT IN THE EVENT OF DISABILITY
A Depositor who becomes disabled as defined by IRC Section 72(m)(7) shall
be entitled to a distribution of his or her custodial account. The
Custodian may require what evidence it deems appropriate before
distributing on account of such disability. This determination by the
Custodian shall not constitute any warranty or assurance by the Custodian
that the distribution to the Depositor is free from the penalty on
premature distributions described in IRC Section 72(t).
9.11 EXCLUSIVE BENEFIT
The custodial account is established for the exclusive benefit of the
Depositor and his or her beneficiary(ies).
9.12 AMENDMENT
(a) The Custodian is authorized from time to time to amend this Agreement,
in whole or in part. The Custodian shall furnish copies of any such
amendments to the Depositor within 30 days of the date the amendments
are effective.
(b) This Agreement may not be amended in any manner that will cause or
permit any part of the assets of the custodial account to be divested
from any person having any interest in the custodial account unless
such amendment is necessary to satisfy the conditions of any law,
governmental regulation or ruling or to meet the requirements of the
Internal Revenue Code or any amendment thereof, in which case the
Custodian is expressly authorized to make amendments that are
necessary for such purposes. Such amendments may be made retroactively
to the later of the effective date of this Agreement or the
effective date of any future legal requirements.
9.13 CONTINUANCE OF THE CUSTODIAL RELATIONSHIP
The relationship created by this Agreement shall continue in effect until
a full distribution of the custodial account has been made and all
accounts of the Custodian have been settled.
9.14 CUSTODIAN'S LIMITED LIABILITY
The Custodian shall not be liable for any action taken or omitted at the
direction of the Depositor or beneficiary, or with his or her consent and
approval, or for any action taken or omitted in accordance with the terms
and conditions of this Agreement, or applicable governmental regulations
or law, or for any other action taken or omitted by it in good faith for
any mistake in judgment, or for any loss suffered by the custodial
account except those which are a result of its own gross negligence or
willful misconduct.
9.15 GENERAL PROVISIONS
(a) A "Xxxx Conversion IRA" is a Xxxx XXX that accepts only "IRA
Conversion Contributions" made during your same tax year. "IRA
Conversion Contributions" are amounts rolled over, transferred or
converted from any IRA that is not a Xxxx XXX to a Xxxx XXX. To
simplify the identification of funds distributed from Xxxx IRAs, you
are encouraged to maintain IRA Conversion Contributions for each tax
year in a separate Xxxx XXX.
(b) Anything contained in this Agreement to the contrary not withstanding,
neither the Depositor nor any beneficiary of the Depositor shall be
entitled to use the custodial account or any portion thereof, as
security for a loan, nor shall the Custodian or any other person or
institution engage in any prohibited transaction, within the meaning
of Section 4975 of the Code, with respect to any custodial account.
(c) Except to the extent otherwise required by law or this Agreement, none
of the amounts held in a custodial account shall be subject to the
claims of any creditor of the Depositor, or any beneficiary of the
Depositor, nor shall the Depositor or any beneficiary have the right
to anticipate, sell or pledge, option, encumber or assign any of the
benefits, payments or proceeds to which he or she may be entitled
under this Agreement.
(d) If any question arises as to the meaning of any provision of this
Agreement, the Custodian shall be authorized to construe or interpret
any such provision, and the Custodian's construction and
interpretation shall be binding upon the Depositor and any beneficiary
of the Depositor.
(e) Throughout this Agreement, the singular form includes the plural where
applicable.
(f) Any provision of this Agreement which would disqualify the custodial
account as a Xxxx Individual Retirement Account shall be disregarded
to the extent necessary to make the custodial account qualify as an
Individual Retirement Account under the Code.
(g) The headings and articles of this Agreement are for convenience of
reference only, and shall have no substantive effect on provisions of
this Agreement.
(h) This Agreement and the custodial account created hereby shall be
governed by the laws of the State in which the Custodian maintains its
principal place of business. All contributions to the custodial
account shall be deemed to take place in said State.
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(LOGO)
FIRST OMAHA
FAMILY OF FUNDSR
First National Bank of Omaha - Adviser
P.O. Box 419022
Kansas City, MO 64141-6022
0-000-000-0000
RIRADSCA-198
