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Exhibit 14(a)
CUSTODIAL ACCOUNT AGREEMENT
(Under Section 408(a) of the Internal Revenue Code - Form 5305-A (Revised
October 1992))
The Depositor (Contributor), whose name appears in the accompanying
Application, is establishing a Parkstone Individual Retirement Account (XXX)
(under section 408(a) of the Internal Revenue Code of 1986, as amended October
1992 (the "Code")) to provide for his or her retirement and for the support of
his or her beneficiaries after death. The Custodian, The Union Bank of
California, has given the Depositor the disclosure statement required under
section 1.408-6 of the Income Tax Regulations.
The Depositor and the Custodian make the following agreement:
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in sections 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 sections 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
The Depositor's interest in the balance in the Custodial Account is
nonforfeitable.
ARTICLE III
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)).
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 and silver coins and
coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the Custodial Account shall be
made in accordance with the following requirements and shall otherwise
comply with section 408(a)(6) and Proposed Regulations section
1.401(a)(9)-2, the provisions of which are incorporated by reference.
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2. Unless otherwise elected by the time distributions are required to begin to
the Depositor under paragraph 4.3, or to the surviving spouse under
paragraph 4.4, other than in the case of a life annuity, life expectancies
shall be recalculated annually. Such election shall be irrevocable as to
the Depositor and the surviving spouse and shall apply to all subsequent
years. The life expectancy of a nonspouse beneficiary may not be
recalculated.
3. The Depositor's entire interest in the custodial account must be, or begin
to be, distributed by the Depositor's required beginning date, (April 1
following the calendar year in which the Depositor reaches age 70 1/2). By
that date, the Depositor may elect, in a manner acceptable to the Custodian,
to have the balance in the custodial 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 Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly or annual payments over the joint and last survivor lives of
the Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor'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 Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire investment is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with
paragraph 4.3.
(b) If the Depositor dies before distribution of his or her interest has
begun, 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
(i) Be distributed by December 31 of the year containing the fifth
anniversary of the Depositor'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
Depositor's death. If,
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however, the beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of the year in
which the Depositor 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
Depositor's required beginning date, even though payments may actually
have been made before that date.
(d) If the Depositor 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.
5. 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 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 Depositor (or the joint life and last survivor expectancy
of the Depositor and the Depositor's designated beneficiary, or the life
expectancy of the designated beneficiary, whichever applies). In the case
of distributions under paragraph 4.3, determine the initial life expectancy
(or joint life and last survivor expectancy) using the attained ages of the
Depositor and designated beneficiary as of their birthdays in the year the
Depositor reaches age 70 1/2. In the case of a distribution in accordance
with paragraph 4.4.(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.
6. 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.
7. Withholding (Purpose of Form W-4P). The XXX Owner must elect whether or not
to have money withheld for federal income tax purposes and on what basis.
You can make this election on this substitute Form W-4P or you could attach
an actual Form W-4P. Unless elected otherwise, XXX distributions will have
federal income tax withheld at a flat rate of 10%. You may use this form to
elect to have no income tax withheld (except for payments to U.S. citizens
delivered outside the U.S. or its possessions), to have 10% withheld, or to
have 10% plus an additional dollar or percentage amount withheld. Check the
box reflecting your choice. Generally, your election will apply to any
later distributions from the same XXX. You may, however, revoke your
previous exemption from withholding. Simply complete a new W-4P with your
Custodian/Trustee. Copies of Form W-4P will not be sent to the IRS by the
payer.
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Statement of Income Tax Withheld from Your XXX. By January 31 of next year,
you will receive a statement from your payer showing the total amount of your
XXX payments and the total income tax withheld during the year.
Exemption from Income Tax Withholding. The election to be exempt from income
tax withholding does not apply to any periodic payment or nonperiodic
distribution that is delivered outside the U.S. or its possessions to a U.S.
citizen or resident alien. Other recipients who have these payments
delivered outside the U.S. or its possessions can elect exemption only if an
individual certifies to the payer that the individual is not: (1) a U.S.
citizen or resident alien, or (2) an individual to whom Section 877 of the
Internal Revenue Code applies (concerning expatriation to avoid tax). The
certification can be made in a statement to the payer under penalties of
perjury.
For more information, please see Publication 505, Tax Withholding and
Estimated Tax, available from most IRS offices.
CAUTION: REMEMBER THAT THERE ARE PENALTIES FOR NOT PAYING ENOUGH TAX DURING
THE YEAR, EITHER THROUGH WITHHOLDING OR ESTIMATED TAX PAYMENTS. NEW
RETIREES, ESPECIALLY, SHOULD SEE IRS PUBLICATION 505. IT EXPLAINS THE
ESTIMATED TAX REQUIREMENTS AND PENALTIES IN DETAIL. YOU MAY BE ABLE TO AVOID
QUARTERLY ESTIMATED TAX PAYMENTS BY HAVING ENOUGH TAX WITHHELD FROM YOUR XXX
USING FORM W-4P.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information necessary for
the Custodian to prepare any reports required under section 408(i) and
Regulations sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service and
the Depositor prescribed by the Internal Revenue Service
ARTICLE VI
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 the
related regulations will be invalid.
ARTICLE VII
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 Depositor and Custodian.
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ARTICLE VIII
The provisions of this Article shall apply to any and all Custodial Accounts
established pursuant to this Agreement.
1. Investment Powers 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
for which BISYS Fund Services is ("Distributor").
(b) Any other investments approved by the Custodian for investment in the
Custodial Account.
All dividends and capital gains distributions received on the shares of any
Mutual Fund held in the Depositor's account shall (unless received in
additional shares of the fund) be reinvested in shares of the same Mutual
Fund which paid the distribution, and credited to the Custodial Account.
2. Fees, Expenses, Taxes and Penalties
(a) Depositor agrees to pay to the Custodian fees for services performed
under this Agreement in any 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 such fees at any time without
prior written notice to Depositor. As soon as practicable after any
change in fees, Custodian shall make available to Depositor a new fee
schedule. All fees may be billed to 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 fees and reimbursement shall be paid from the Account if
not paid directly by the Depositor and shall constitute a lien upon the
Account until paid, and shall be paid from the Account unless paid by
the Depositor.
(b) 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 Custodian in the performance of its duties, including any
fees for legal services provided to the Custodian. To the extent
Depositor fails to pay such taxes and expenses directly, Custodian may,
in its discretion, deduct them from the Custodial Account.
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(c) The Custodian and Distributor 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 Depositor's failure to commence
distributions at age 70 1/2, nor shall the Custodian and Distributor 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.
3. Responsibilities of Custodian
(a) The Custodian shall maintain the Custodial Account, distinct from all
other Custodial Accounts, for the exclusive benefit of Depositor and
Depositor's beneficiaries and shall be responsible for performing only
such services as are described in the Agreement.
(b) All contributions by Depositor to the Custodial Account shall be
invested according to Article 8.1 hereof at the sole direction of
Depositor, and 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 neither the Custodian nor the Distributor
endorses the Mutual Funds as suitable investments for the Depositor. In
addition, neither the Custodian nor the Distributor will provide
investment advice to the Depositor. The Depositor assumes all
responsibility for the choice of his/her investments in the Custodial
Account. 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. Custodian shall
not be liable for any loss resulting from any action taken by Custodian
at the direction of Depositor or any loss resulting from any failure to
act because of the absence of directions from Depositor.
(c) The Custodian shall not be responsible for inquiring into the nature or
amount of any contribution made by Depositor, nor into the amount or
timing of any distribution requested by Depositor, or whether such
contributions or distributions comply with the Code. Depositor shall
have full responsibility for any tax or investment consequences of all
contributions to and distribution from the Custodial Account.
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(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 Distributor) 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 made.
(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, qualified retirement plan or individual retirement 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) Depositor agrees to indemnify and hold harmless, and to defend Custodian
against any and all claims arising from and liabilities incurred by
reason of any action taken by Custodian in good faith pursuant to this
Agreement.
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
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from the Custodial Account and the Custodian shall have a lien on the
Custodial Account until the expenses are paid.
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 representatives' 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 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 or the Depositor 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
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.
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(e) Any notice required to be given to Custodian under this Agreement shall
be given to the Mutual Fund Group, the name of which appears on the
front of the Agreement, and any notice required or permitted to be given
to 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.
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/her Beneficiaries), on the status of his/
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 for 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/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.
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.
8. Resignation or Removal of Custodian
(a) Custodian may resign as Custodian hereunder without the consent of
Depositor, by providing notice of such resignation 30 days prior to the
effective date of the resignation. In the event of a resignation by
Custodian the Distributor must either appoint a successor custodian to
serve under this agreement or notify the Depositor that he/she must
appoint a successor custodian. Upon receipt by Custodian of a written
acceptance of such appointment by the successor custodian, Custodian
shall transfer and pay over to such successor the assets for the
Custodial Account. If after 30 days from notice of resignation,
Custodian has not received written acceptance of such appointment by
successor custodian,
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Custodian shall pay or otherwise transfer to the Depositor the assets
remaining in the Custodial Account. 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 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 in which such removal relates. 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 the successor custodian or trustee.
9. Designation of Beneficiary
(a) The Depositor has the right to designate a beneficiary(ies) of his/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 your beneficiary does not survive you
or if the Custodian can not locate your beneficiary after reasonable
search, any balance in the account will be paid to your estate.
10. Payment in the Event of Disability
A Depositor who becomes disabled under IRC Section 72(m) shall be entitled to
a distribution of his/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 distribution described in IRC Section
72(t).
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11. Exclusive Benefit
The Custodial Account is established for the exclusive benefit of the
Depositor and his or her Beneficiary(ies).
12. Amendment
(a) 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 requirement so the
Internal Revenue Code or any amendment thereof, in which case 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.
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.
14. Special Minimum Distribution Provisions
(a) Article IV permits the Depositor and/or spouse beneficiary to
irrevocably elect whether or not life expectancy(ies) will be
recalculated. Notwithstanding paragraph 4.2, if a timely election is
not made, distribution shall be made with life expectancy(ies) not being
recalculated.
(b) Failure by the Depositor to choose any methods of distribution described
in paragraph 4.3.(a) through 4.3.(e) by April 1 following the calendar
year in which he/she reaches age 70 1/2, will cause a total distribution
to be made to the Depositor by check or to non-XXX Mutual Fund accounts
established on behalf of the Depositor, at the discretion of the
Custodian.
(c) If any beneficiary fails to elect a distribution option on a timely
basis, distributions shall commence pursuant to paragraph 4.4.(b)(ii).
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(d) A surviving spouse beneficiary who fails to timely elect recalculation
or no recalculation of life expectancies shall not have his/her life
expectancy recalculated.
(e) The provisions of paragraph 4.4.(d) above shall not apply if the
Depositor's death occurred prior to 1984.
(f) A surviving spouse beneficiary shall be permitted to make the election
specified under paragraph 4.4.(b)(i) or 4.4.(b)(ii) no later than the
earlier of December 31 or the fifth year after the year of death or the
year in which the Depositor would have attained age 70 1/2.
(g) A nonspouse beneficiary shall be permitted to make the election
specified under paragraph 4.4.(b)(i) or 4.4.(b)(ii) no later than
December 31 of the year following the year of death.
15. Simplified Employee Pension Plan
(a) The Custodial Account may accept contribution made through a Simplified
Employee Pension Plan (SEP) under Section 408(k).
(b) The provisions of Section 408(k) and the surrounding regulations for
proper maintenance of a SEP are the responsibility of the Depositor's
employer. The Custodian shall have no liability with respect to the
operation of the SEP.
(c) The Depositor's employer must retain on file an IRS Form 5305-SEP, IRS
Form 5305A-SEP, or another IRS approved SEP document, and must provide a
copy of the SEP document to each employer. The Custodian shall have no
responsibility to provide or to maintain the SEP documentation.
(d) The Custodian may require written documentation from the Depositor that
the SEP has been properly established before accepting a SEP
contribution to the Custodial Account.
16. 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/her consent and
approval, or for any action taken or omitted in accordance with the terms and
conditions of any time deposit or savings account agreement, 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 judgement, or for any loss
suffered by the Custodial Account except those which are a result of its own
gross negligence or willful misconduct.
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17. General Provisions
(a) Anything contained in this Agreement to the contrary notwithstanding,
neither Depositor nor any beneficiary of 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.
(b) 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 or Depositor, or any beneficiary of Depositor,
nor shall 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.
(c) 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 Custodian's construction and interpretation
shall be binding upon Depositor and any beneficiary of Depositor.
(d) Throughout this Agreement, the singular form includes the plural where
applicable.
(e) Any provision of this Agreement which would disqualify the Custodial
Account as an Individual Retirement Account shall be disregarded to the
extent necessary to make the Custodial Account qualify as an Individual
Retirement Account under the Code.
(f) The headings and articles of this Agreement are for convenience of
reference only, and shall have no substantive effect on provisions of
this Agreement.
(g) 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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14
OFFICIAL IRS GENERAL INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
Form 5305-A is a model custodial 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 (Depositor) and the Custodian and must be
completed no later than the due date of the individual's income tax return for
the tax year (without regard to extensions). This account must be created in
the United States for the exclusive benefit of the Depositor or his or her
beneficiaries .
Individuals may rely on regulations for the Tax Reform Act of 1986 to the
extent specified in those regulations .
Do not file Form 5305-A with the IRS. Instead, keep it for your records.
For more information on IRAs, including the required disclosure you can get
from your Custodian, obtain IRS Publication 590, Individual Retirement
Arrangements (IRAs), from any office of the IRS or by calling 0-000-XXX-XXXX.
DEFINITIONS
Custodian - The Custodian must be a bank or savings and loan association, as
defined in section 408(n), or any person who has the approval of the IRS to act
as Custodian.
Depositor - The Depositor is the person who establishes the Custodial Account.
IDENTIFYING NUMBER
The Depositor's Social Security number will serve as the identification number
of his or her XXX for the Internal Revenue Service. An employer identification
number is required only for an XXX for which a return is filed to report
unrelated business taxable income. An employer identification number is
required for a common fund created for IRAs.
XXX FOR NON-WORKING SPOUSE
Form 5305-A may be used to establish the XXX Custodial Account for a
non-working spouse.
Contributions to an XXX custodial account for a non-working spouse must be made
to a separate XXX Custodial Account established by the non-working spouse.
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SPECIFIC INSTRUCTIONS
ARTICLE IV - Distributions made under this article may be made in a lump sum,
periodic payment or a combination of both. The distribution option should be
reviewed in the year the Depositor reaches age 70 1/2 to ensure that the
requirements of section 408(a)(6) have been met.
ARTICLE VIII - Article VIII and any that follow it may incorporate additional
provisions that are agreed to by the Depositor and Custodian to complete the
agreement. They may include, for example, definitions, investment powers,
voting rights, exculpatory provisions, amendment and termination, removal of
the Custodian, Custodian's fees, state law requirements, beginning date of
distributions, accepting only cash, treatment of excess contributions,
prohibited transactions with the Depositor, etc. Use additional pages if
necessary and attach them to this form.
Note: Form 5305-A may be reproduced and reduced in size for adoption to
passbook purposes.
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