DESIGNATION OF BENEFICIARY UNDER IRA

By
[MFULLNAMEFIELD] [1]

Primary Beneficiary is [SPOUSEFIELD]

In the Event of a Disclaimer By [SPFULLNAMEFIELD], any Death Benefits that are otherwise not to be held in trust (upon distribution from the IRA), and that are otherwise payable to [SPHIMHERFIELD], will be payable instead to [SPOUSEDISCLAIMERNOFIELD].

This document is an attachment to any beneficiary designation form required by the terms of the IRA and is incorporated into such form. If there is no specified beneficiary designation form required by the terms of the IRA, then this document will be the beneficiary designation form.[2]

Article 1.
Identification Provisions.

1.1 Identification of Designated Participant/Designated IRA Owner.

I, [MFULLNAMEFIELD] (the “Participant” or IRA “Owner”), named “[NAMEATBIRTHFIELD]” at birth, also known as [MAKAFIELD], am the designated owner of the above referenced IRA.

My social security number is [MSSNFIELD]. I am presently a domiciliary and resident of [CORFIELD] County, [STATEFIELD]. My [STATEFIELD] domicile was established [MYDEFIELD].[3] I am a citizen of the United States.[4]

1.2 Identification of IRA Sponsor.

I believe that the sponsor of the IRA is [INSTITUTIONFIELD] (the IRA “Sponsor”).

1.3 Identification of IRA.

The IRA has been described as the [IRANAMEFIELD] and I believe it has been assigned account number [ACCTNOFIELD]. This IRA will sometimes be referred to herein simply as “the IRA,” “this IRA,” or “my IRA.” I wish to make the beneficiary designation change as set forth herein, even if the foregoing description of the IRA or account number is incorrect in any respect, so long as the IRA can reasonably be identified. Except as otherwise provided by any other beneficiary designation signed by me in the future, if the IRA is amended or restated subsequent to the signing of this beneficiary designation, I intend that this beneficiary designation will continue to apply to the restated or amended IRA.[5] [Further, except as otherwise provided by any other beneficiary designation signed by me in the future, this designation will apply to any other IRA I may now have or later establish with [INSTITUTIONFIELD], no matter what the account number.[6]]

1.4 Approximate Value.

The approximate value as of [STMTDATEFIELD] was [VALUEPRESENTFIELD]. (I may be mistaken about the approximate value of the IRA. Such mistake, if any, will have absolutely no effect on this beneficiary designation.)

1.5 Date of Birth of Designated Participant/Designated IRA Owner.

I was born on [MDOBFIELD], in [MPOBFIELD].[7]

1.6 Identification of Spouse.

I am married to [SPFULLNAMEFIELD], named “[SPNAMEATBIRTHFIELD]” at birth, and also known as [SPAKAFIELD]. All references in this Designation to “my [SPOUSEFIELD]” or to “my spouse” are to [SPFULLNAMEFIELD] alone. My [SPOUSEFIELD], [SPFULLNAMEFIELD], was born on [SPDOBFIELD][8] in [SPPOBFIELD]. My [SPOUSEFIELD]’s social security number is [SPSSNFIELD]. My [SPOUSEFIELD] is presently a domiciliary and resident of [CORFIELD] County, [STATEFIELD]. My Spouse's [STATEFIELD] domicile was established [SPYDEFIELD]. My [SPOUSEFIELD] is a citizen of the United States.[9]

1.7 Identification of Children.

I have [2] child[ren], now living.

[CHILDRENBOTHFIELD
DOBs & SSNs]

[MCHILDRENONLYFIELD
DOBs & SSNs]

I have no child now deceased leaving descendants now living.[10]

1.8 Definition of the Word “Children”/Children Born or Adopted After Signing of Instrument.

All references in this instrument to “the Participant’s children,” “my children,” “my child” or a “child of mine” include only the above children, and any child or children hereafter born to or adopted by me, and no others. This provision is to be interpreted literally and strictly.[11]

1.9 Identification of Descendants.

All references in this instrument to “the Participant’s descendants,” “my descendants,” a “descendant of mine,” or similar designation, will include only “my children” and their descendants and no others. This provision is to be interpreted literally and strictly.

1.10 Identification of Beneficiaries.

Pursuant to the provisions of the IRA permitting the designation of a Beneficiary or Beneficiaries by me, I, the undersigned Participant, hereby designate the following person or persons, individual or individuals, as the Beneficiary or Beneficiaries of the balance to my credit under the IRA, payable by reason of my death (Death Benefits).

Table of Beneficiaries

Class	Beneficiary(ies)
1. First Beneficiary	If my [SPOUSEFIELD] survives me, I leave all of my Death Benefits to [SPHIMHERFIELD], without restriction.
2. Second Beneficiary	My Descendants who survive me, by right of representation.[12]
3. Third Beneficiary	The [LASTNAMEFILED] Living Trust.
4. Fourth Beneficiary	My Probate Estate.
5. Fifth Beneficiary	N/A

Except in the case of a disclaimer, or as otherwise specifically provided in this document, the Beneficiaries identified above will be entitled to Death Benefits in ascending numerical order. That is, the person(s) identified as the First Beneficiary will be entitled to Death Benefits first, and the Second Beneficiaries will be entitled to Death Benefits only if there is no First Beneficiary surviving, existing or otherwise eligible to take. And so forth. (The lower the number the higher the Class.) Beneficiaries below the First Beneficiary level are contingent Beneficiaries.

Article 2.
rULES OF cONSTRUCTION

Except as otherwise designated or provided in this Designation, the following rules of construction will apply:[13]

2.1 Beneficiary Must Survive Me.

A Beneficiary must survive me in order to be eligible to receive Death Benefits under this designation. Further (except in the case of a disclaimer, perhaps), a Beneficiary must survive all other Beneficiaries of a higher Class in order to be eligible to receive Death Benefits. A Beneficiary’s interest will vest absolutely at my death, whether or not the Beneficiary subsequently survives the complete distribution of his Benefits under the IRA. Except as otherwise provided in the case of a disclaimer, if a trust (designated as a beneficiary) does not exist or is otherwise incapable of taking as of the date of my death, the trust will be treated for this purpose as not surviving me.

2.2 More Than One Beneficiary in Same Class.

If there is more than one Beneficiary named in the same Class (First Beneficiary Class, Second Beneficiary Class, etc.), and one or more fails to survive me, the Death Benefits to which members of that Class are entitled, unless otherwise specified, will pass to the remaining surviving members of the Class, if any (without regard to any otherwise applicable anti-lapse statute), in the same proportions in which the surviving Class members are otherwise receiving Benefits. For example, if A, B and C are each to receive a 1/3^rd interest if surviving, A and B will each be entitled to a 1/2 interest if C does not survive me. If A is to receive half, B is to receive 1/4^th , and C is to receive 1/4^th, but C does not survive me, A’s share of the whole will become 2/3^rds. This principle does not apply to a gift that is expressly made “by right of representation” or “per stirpes,” unless and except to the extent that all of the relevant descendants failed to survive as well.

2.3 Class Gifts By Right of Representation or Per Stirpes.

In the case of a gift to a Class “by right of representation” or “per stirpes,” Death Benefits will pass in accordance with the definition of those terms. For example, if a person was survived by four children, and two grandchildren who were the only surviving children of a predeceased child, a division by right of representation would provide two equal shares for each child who survived, and one share for each of the children of the predeceased child (ten shares in all). This would be true regardless of whether the surviving children had children then living, or whether the surviving grandchildren had living descendants.

2.4 Trust as Beneficiary.

The Death Benefits of which a trust is the Beneficiary will be paid, in trust, to the person who is the trustee of the trust (at the time the Death Benefits are paid), to be held, administered and distributed by the trustee, under the trust provisions contained and described in the trust instrument as it may exist on the date of my death. If a trust is the Beneficiary, then, unless otherwise clearly specified or otherwise called for by the context, a reference to a Beneficiary is a reference to the trustee, as such.

2.4(a) Copy of Trust Instrument Delivered.

A copy of [TRUSTNAMEFIELD] is delivered to the IRA Trustee contemporaneously with the delivery of this instrument. By accepting this designation, the Trustee signifies and acknowledges the receipt of the trust document.[14]

2.4(b) If Designation of Trust is Ineffective.

Except as otherwise specifically provided, if for whatever reason, a designation of [TRUSTNAMEFIELD] as Beneficiary is ineffective, such designation will be ignored (as if the trust were an individual who had predeceased me).

2.4(c) Incorporation of Trust by Reference.

The terms of the trust, which has been delivered, and any amendment delivered, are hereby incorporated into this beneficiary designation, the same as if fully set forth.

Article 3.
Disclaimer Provisions.[15]

As expressly permitted by Texas Probate Code §37A(c), I make the following provision in this instrument for the making of disclaimers by a Beneficiary.

3.1 Disclaimer Of Death Benefits Passing to a Trust Where Trust Provides For Disclaimers.

If a disclaimant disclaims an interest in any Death Benefits otherwise passing to a trust (that is to receive Benefits from this IRA), the trust (or the affected portion) will, with respect to such interest, be administered and distributed as (and if) specifically provided in the trust instrument for disclaimers.[16]

3.2 Disclaimer Of Death Benefits Passing to a Trust Where Trust Fails to Provide For Disclaimers.

If or to the extent that no provision for disclaiming an interest in the trust is contained in the trust instrument, then if a disclaimant disclaims all of his or her interest in all (or any portion) of any trust (e.g., a disclaimer of all of the disclaimant’s interest in half the trust), the trust (or the affected portion) will be administered and distributed as if the disclaimant died after having survived me[17] without having exercised any power of appointment, even if this results in the acceleration of a remainder interest or closes an otherwise open class, and even if this results in the removal of the property from the trust (which in many cases it would). If or to the extent that no provision for disclaiming an interest in the trust is contained in the trust instrument, and if any disclaimant disclaims less than all of his or her interest (e.g., a disclaimer of the right to receive a distribution for “health,” retaining the right to a distribution for “education,” or a disclaimer of a an income interest or a 5&5 power while retaining a right to discretionary distributions from corpus) in all (or any portion) of any Death Benefits otherwise passing to a trust (upon its distribution from the IRA), the trust (or the affected portion) will be administered and distributed as if the disclaimed interest had been omitted from the terms of the trust.[18]

3.3 Disclaimer By [SPOUSEFIELD] Of Death Benefits That Are Not To Be Held In Trust.

If any Death Benefits that are otherwise not to be held in trust (upon distribution from the IRA) are disclaimed by my [SPOUSEFIELD], the disclaimed Death Benefits will be payable to [SPOUSEDISCLAIMERNOFIELD].[19]

[nice1]

3.4 Disclaimer By Persons Other Than My [SPOUSEFIELD] Of Death Benefits Not To Be Held In Trust.

Except where it has been specifically provided to the contrary elsewhere in this designation, if any Death Benefits that are otherwise not to be held in trust (upon distribution from the IRA) are disclaimed by a Beneficiary other than my [SPOUSEFIELD], such Death Benefits will pass to the then living descendants of the disclaimant, by right of representation, if any, and if none, then such Death Benefits will pass as if the disclaimant predeceased me.[20]

3.5 What To Do If Trust Does Not Exist.

If, as a result of disclaimer, Death Benefits would have passed to a trust identified in this instrument but for the fact that the trust does not exist or is otherwise incapable of taking, then, in that case, the disclaimed Death Benefits will instead pass as if the disclaimant had predeceased me.

Article 4.
Spousal Rights and Interests

4.1 Death Benefits Payable to Spouse Will Be Paid Out of Spouse's Interest in Community Property First.

Notwithstanding the above or anything else herein to the contrary, to the extent that my [SPOUSEFIELD] is a Designated Beneficiary under this instrument, the Benefits to which [SPHESHEFIELD] is thereby entitled as a result of my death will be satisfied first out of any community property or other legal interest that [SPHESHEFIELD] may otherwise have in my Benefits, and second, out of property in which [SPHESHEFIELD] does not have such an interest.[21]

4.2 Predeceased Spouse Who Left Community Property Interest to Someone Other Than Me.

If my [SPOUSEFIELD] predeceases or has predeceased me, and if [SPHESHEFIELD] has left [SPHISHERFIELD] community property interest (if any) in my Benefits to someone other than me, then to the extent that such disposition was effective as a matter of law, such interest will pass as [SPHESHEFIELD] has directed, rather than in accordance with this designation. However, the IRA Trustee will be fully protected in paying or withholding payment of Benefits without regard to the preceding sentence.[22]

Article 5.
Miscellaneous Provisions

5.1 Identification of Form or Time of Payment.

Benefits payable as a result of my death will be paid in such form and manner and at such time as may be permitted by the IRA or law and as the Beneficiary elects. If there is more than one Beneficiary, then each Beneficiary may make an election with respect to that Beneficiary’s separate account.

5.2 Beneficiary Will Have Draw Down (Withdrawal) Power and Right to Transfer or Rollover IRA.

Each Beneficiary will have at all times the unrestricted power and right to direct the Trustee to transfer the Beneficiary’s interest in the IRA to any other IRA for the benefit of the Beneficiary (as beneficiary), provided only that the Trustee of the transferee IRA agrees to accept the transfer. If applicable tax law at the relevant time permits the Beneficiary to rollover the IRA, then the Beneficiary will have the unrestricted power and right to direct the Trustee to rollover the IRA to any other IRA in the name of the Beneficiary (as owner), provided only that the Trustee of the rollover IRA agrees to accept the transfer. I realize, however, that at the present time only the spouse of a participant has the right to make a rollover. Further, each Beneficiary will have at all times the unrestricted power and right to draw down and take a distribution to himself of all or any portion of the Benefits to which he or she is entitled under this designation, including the unrestricted power to accelerate any installment distributions elected.[23] (If a trust is a Beneficiary, the powers described under this paragraph will belong to the trustee of that trust.)

5.3 Death of Beneficiary.

If an individual who is a Beneficiary survives me, but dies prior to the complete distribution of his or her interest in my Benefit, the Beneficiary’s share of any remaining interest will be paid to such secondary Beneficiary or Beneficiaries as are designated by the deceased Beneficiary by written instrument delivered to the IRA Trustee.[24] If no such designation has been made, then the Beneficiary’s share of any remaining interest will be paid to the Beneficiary's personal representative to be administered as a part of the Beneficiary's general Probate Estate. Such distribution and designation will be in such form and at such time as may be permitted by the IRA or law and as the secondary Beneficiary or Beneficiary’s personal representative (as the case may be) elects.[25]

5.4 Inconsistent Provisions.

If any part of this Beneficiary Designation is inconsistent with the IRA, the IRA is hereby amended to the extent that such amendment is permitted by the Sponsor and does not cause the account to cease to be an individual retirement account within the meaning of IRC §408(a).

5.5 Acceptance of Form By Sponsor.

If the IRA Sponsor accepts this instrument without any change, the Sponsor is and will be fully indemnified and protected by the IRA Owner, the IRA Owner’s Estate and the IRA Owner’s heirs, from any liability arising by virtue of such acceptance. The Sponsor can manifest its acceptance of this Designation by allowing any further transactions in the account or by accepting any fees or charges in connection with it, without objecting in writing to this Designation. If the objection is only to part of this Designation, the remaining provisions will be effective, as set forth below.

5.6 Unenforceable Provisions.

If any provision of this Beneficiary Designation or the application of it to any person or circumstance is inoperative, illegal, void, invalid or otherwise unenforceable, the remainder of this Beneficiary Designation and the application of such provision to other persons or circumstances will not be affected thereby and will be enforced to the greatest extent permitted unless to do so would clearly be contrary to my overall intent as evidenced by the provisions of this instrument. Furthermore, in lieu of such invalid provision, there will be automatically added as a part of this Beneficiary Designation, a provision, as similar as, in terms or effect, to the unenforceable provision, as may be possible and be legal, valid, and enforceable.

5.7 Revocation of Prior Designations.

To the extent this form is effective, I revoke all previous beneficiary designations.

5.8 Revocation of This Designation.

This designation may be revoked or changed by me at any time by written notice to the IRA Trustee, and this beneficiary designation will remain in effect until such time, or until such time as I have filed another designation with the IRA Trustee bearing a subsequent signature date.

5.9 Uniform Transfers to Minors Act.

Any distribution that would be made to a minor Beneficiary may be made under the Uniform Transfers (or Gifts) to Minors Act of Texas or any other jurisdiction, and may be made in the form of a non-transferable annuity contract.

5.10 Facility of Payment.

The trustee is authorized to make distributions in any of the following ways:

· directly to the beneficiary,

· to any account in a bank or savings institution either in the name of such beneficiary, or “, in the case of a beneficiary other than the my [SPOUSEFIELD] in a form reserving title, management and custody of such account to a suitable person for the unrestricted use of such beneficiary and solely for expenditure on the beneficiary's behalf,

· in the case of a person under 21 years of age or under a disability (as the case may be), in all ways provided by laws dealing with gifts or distributions to or for minors (including but not limited to the Uniform Transfers (or Gifts) to Minors Act of Texas or of any other state) or persons under disability,

· to an agent, attorney-in-fact, or other legal representative of the beneficiary, who is in each case duly authorized to act and receive property on behalf of the beneficiary, and

· to any suitable person with whom the beneficiary resides or who has the care or control of the beneficiary, for the sole and unrestricted use of such beneficiary and for expenditure on the beneficiary's behalf. (This last bulleted provisions does not apply in the case of distributions to my [SPOUSEFIELD].)

5.11 Power of Legal Representative to Act Under IRA.

Any distribution that can be made to an individual may be made to the individual’s legal representative, including the holder of such individual’s power of attorney. Such representative will also have the power to make (on the individual’s behalf) any elections or designations that the individual is empowered to make, to the extent otherwise consistent with the scope of the representative’s legal authority.

5.12 Meaning of the Term “Survive Me.”

As used in this instrument, the term “survive me” means “survive me by 90 days or more in the case of a Beneficiary other than my [SPOUSEFIELD].”[26]

Article 6.
application of The Minimum distribution rules

6.1 Distributions Under the MRD Rules During My Life.

I was born on [MDOBFIELD]. I believe that my Required Beginning Date (RBD) will be [RBDDATEFIELD], because I will be 70½ in the immediately preceding calendar year. ~~In “the first distribution calendar year,” (i.e., in the year that I attain age 70½), I elect that distributions will commence to me over the joint life expectancy of myself and my Designated Beneficiary~~.

~~Election Regarding Recalculation~~.

~~If permitted by the IRA, life expectancies will not be recalculated for purposes of complying with the minimum distribution rules.~~

6.2 Retention of Draw Down (Withdrawal) Power and Right to Transfer During Life of IRA Owner.

During my life, my IRA will be payable to me without restriction, in such form and manner and at such time as permitted by law and as I elect. Further, unless otherwise provided below, I will have, at all times, the unrestricted power and right to withdraw or draw down and take a distribution to myself of all or any portion of my IRA, including the unrestricted power to accelerate any installment distributions elected. I retain the enforceable right to direct the Trustee to transfer (by direct rollover or otherwise) my IRA to any other IRA of which I am the owner, provided only that the Trustee of the transferee IRA agrees to accept the transfer.[27]

6.3 Beneficiary of Trust Is a Designated Beneficiary.

If and to the extent that [TRUSTNAMEFIELD] is or becomes a primary Beneficiary (by reason of a disclaimer or otherwise), it is my intent that the Beneficiary(ies) of [TRUSTNAMEFIELD] qualify as “Designated Beneficiary(ies)” for purposes of IRC §401(a)(9). The Beneficiaries should be Designated Beneficiaries because (1) the trust is a valid trust under state law, (2)(2) the Beneficiaries of the trust who are Beneficiaries with respect to the trust’s interest in the Benefit hereunder are identifiable from the trust instrument, and (3) a copy of the trust instrument has been provided to the Trustee of the IRA contemporaneously with the delivery of this beneficiary designation. The Beneficiaries of the trust who are Beneficiaries with respect to the trust’s interest in the Benefits hereunder are my [SPOUSEFIELD] and my descendants who survive me. Further, I ([MFULLNAMEFIELD]) agree that if the trust instrument is amended at any time in the future, I will, within a reasonable time, provide to the plan administrator (and to the IRA Trustee) a copy of each such amendment.[28]

6.4 MRD Rules Are Minimums And Not Limitations

If the IRA indicates that Benefits be paid out following my death and after the Required Beginning Date at least as rapidly as during my life, then, for purposes of this Beneficiary designation, I intend that such reference be construed in order to comply with the minimum required distributions described in IRC §401(a)(9), as a “minimum” and not as a limitation on my beneficiary’s right to accelerate distributions or to otherwise take them more rapidly than the MRD Rules mandate.

Article 7.
Maintenance of Separate Accounts Where there is more than one beneficiary.

If, as of the date of my death, there is more than one Beneficiary of my Death Benefits, at least one of whom is a “Designated Beneficiary” within the meaning of the minimum distribution rules, then, from that date forward, and for purposes of complying with the minimum distribution rules described in IRC §401(a)(9), a separate account will be maintained for each such Beneficiary in proportion to his or her interest, by determining, on and as of the date of my death (and again on the BDD), the Benefits that are or would be owing to such Beneficiary under this designation. From that time forward, each such account must bear its own pro rata share of gains and losses and will otherwise be separately accounted for. It is intended that such separate account will be a separate account within the meaning of applicable treasury regulations.

Article 8.
Definitions

As used in this instrument, the following terms, whether or not capitalized, will be given the following meanings, unless the context very clearly indicates otherwise.

8.1 Custodian/Trustee.

The word “Trustee” as applied to the IRA custodian will mean “custodian” if this is a custodial IRA.

8.2 Participant.

All references to the “Participant” are to [MFULLNAMEFIELD].

8.3 Estate/Probate Estate.

A distribution to the “Estate” or “Probate Estate” of a deceased individual means a distribution to the deceased individual’s personal representative, if any, to be administered and distributed as part of the individual’s general Probate Estate; or if there is no personal representative at the time of distribution, then to the persons entitled under applicable state law to succeed to the ownership of the deceased individual’s property as a result of the death of the individual.

8.4 Survive/Surviving.

Wherever it is provided in this instrument that a person must “survive” someone, or must be living at the date of a person's death, or where any other survivorship condition is explicitly expressed, it is intended that such survivorship requirement override, and be construed without regard to, any anti-lapse or similar statute that would defeat such express provision. Wherever it is provided in this instrument that a person must “survive” or must be “surviving” some other person, it means that such person must not have predeceased such other person, and must be living at the other person’s death. Other provisions of this instrument may require survival for an additional specified period. If a Beneficiary is not a human being, the Beneficiary must be eligible to take (entitled by law to receive the benefit), and if not eligible to take, (e.g., if not in existence), the person will be treated as if not surviving. A spouse of the IRA Owner will be treated as having failed to survive the Owner, if at the Owner’s death there was pending or in effect a legal or equitable action for, or decree or order of, annulment, divorce, separation, or separate maintenance (not followed by remarriage).

8.5 Gender Pronouns.

As used in this instrument, whenever the context so indicates, the masculine, feminine or neuter gender, and the singular or plural number, will considered to include the others.

8.6 Beneficiary/Beneficiaries.

The term “Beneficiary” will mean “Beneficiaries” and vice-versa, unless the context clearly indicates otherwise.

8.7 IRC.

Unless otherwise indicated, the references contained in this instrument to the “Code” or the “IRC” are to the Internal Revenue Code of 1986, as amended, and as may be from time to time hereafter amended, or any corresponding provisions of any subsequent federal tax laws. Unless clearly contrary to the manifest intent otherwise expressed in this instrument, any reference to a specific IRC section or other provision of law will be interpreted as a reference to such IRC section or other law as amended, changed or redesignated after the signing of this instrument.

8.8 Person/Individual.

The term “person” includes an individual, trust, Estate, partnership, association, company or corporation. An “individual,” on the other hand, means a person who is a human being.

8.9 Conjunctive/Disjunctive.

When the sense so indicates, use of the conjunctive (e.g., “and”) may include the disjunctive (e.g., “or”), and vice versa.

8.10 Death Benefits.

“Death Benefits” or “Benefits” generally include all of my interest in the IRA over which I have the power to designate one or more Beneficiaries to succeed to such Benefits upon my death, determined without regard to the community property laws.

8.11 By Right of Representation-Per Stirpes.

(a) The term “by right of representation,” or “per stirpes” as used in this instrument, means per stirpes, as further defined in subsection (b) below. This means that lineal descendants will represent their ancestor, that is, will stand in the same place as such ancestor would have had he or she been living. For this purpose, a living descendant excludes his or her own descendants, and a dead descendant is represented by his or her own descendants. A division “by right of representation” may sometimes be referred to as a division on a “representational basis.” The shares created in a division on a representational basis may sometimes be referred to as “representational shares.” Such a division may also be referred to as a “representational division.”

(b) Unless otherwise clearly indicated, the stirpes (i.e., the roots or stocks selected for the purpose of making the first division of the Estate on a per stirpital or representational basis) are to be those of the generation nearest the decedent whether or not of which one or more of the members survived the decedent (i.e., strict per stirpes), and for this purpose, a disclaimant will be treated as if he or she survived. This is not necessarily strict per stirpes and is sometimes referred to as “per capita with right of representation,” since, for example, the grandchildren of a decedent will take equal shares, if no children were living at the time the division is determined.

8.12 Designated Beneficiary.

The term “Designated Beneficiary” will have the same meaning as it has under IRC §401(a)(9).

8.13 Designation.

The term “Designation” or “Designation Form” means this document and includes any designation form that incorporates this document or which this document incorporates.

8.14 Including.

The term “including” means “including but not limited to.” The term “includes” means, “includes but is not limited to.” The term “include” means, “include but are not limited to.” Any “examples” given are by way of illustration and not by way of limitation, unless otherwise stated.

8.15 Surviving Spouse.

A “Surviving Spouse” is a spouse who is married to a person at such person's death and who survives such person, whether or not such spouse later remarries.

8.16 Posthumous Children.

A child in gestation who is born alive will be considered a child in being throughout the period of gestation, and will be considered to have been living throughout the period of gestation.

8.17 Required Beginning Date.

The term “Required Beginning Date” or “RBD” will have the meaning given by IRC §401(a)(9) and the regulations under it. The RBD generally refers to the April 1 following the calendar year in which I attain age 70½.

8.18 Minimum Distribution Rules.

The minimum required distribution rules (MRD rules) are the rules described in IRC §401(a)(9) and §§408(a)(6) or (b)(3), as the case may be.

Date Signed:		[MFULLNAMEFIELD], Designated IRA Owner/ Participant
		, Witness

* * * *

[1] All of the annotations are in the footnotes. Anything in brackets can be used under a global search and replace approach to customize the form.

[2] If possible, it is best to actually sign any form that the Plan or IRA provides or requires, with the words “see attached” filled in appropriately.

[3] The date domicile was established could be relevant for a number of reasons, the most important of which having to do with the Texas community property system.

[4] It is always important these days to ascertain citizenship. This clause forces the issue.

[5] This always poses an interesting issue. I do not believe that a restatement of the qualified plan or IRA voids a prior beneficiary designation, but I have heard it argued.

[6] This sentence is a variable. Some IRA sponsors won’t allow it. It is a dangerous sentence to insert, but it can also be helpful, especially where the account numbers seem to be changing frequently.

[7] This is important for quickly identifying the RBD of the IRA Owner; and, if and when the IRA Owner reaches the required beginning date (RBD), the IRA Owner’s date of birth may be a critical piece of information to use in applying the minimum required distribution (MRD) rules.

[8] The spouse’s date of birth may also be a critical piece of information to use in applying the MRD rules.

[9] It is always important these days to ascertain citizenship. This clause forces the issue.

[10] This is a question which must always be asked.

[11] In this day and age, identifying children by name is very important. This clause also makes provision for after-born children, which is something some IRA Sponsors object to.

[12] The term descendants is defined above. Being unsympathetic to orphaned grandchildren, some IRA sponsors insist that all beneficiaries be identified by name.

Also, it is so common as to be the general rule that most beneficiary designations simply list the children by name without making provision for a premature death.

[13] The following provisions clear up a number of problems, the solutions to which are often simply left to the imagination by standard pre-printed forms.

[14] This is required by the proposed as well as the re-proposed regulations. The delivery or certification must be made within nine months after death, whether death is before or after the RBD. The re-proposed regulations continue to require that delivery must also be made by the RBD if later; however, this makes sense only in one setting: where the sole beneficiary is a spouse who is more than ten years younger than the participant. In every other case, it is impossible to imagine how the failure to effect the delivery during life could make any difference, since the penalty is presumably that the participant will be treated as not having a beneficiary during life, to which the obvious response is “so what?”. Perhaps by delivering the trust during life, the nine months after death delivery rule will also be met, which would be one reason to make a lifetime delivery regardless of the effect on the lifetime MRD rules.

[15] Disclaimers, though often thought of as routine, are anything but. If there are two beneficiaries of the residuary (trust) estate and one beneficiary disclaims “Blackacre,” where does Blackacre go if the executor has a pick and choose power and decides to distribute Blackacre to the nondisclaiming beneficiary? What happens if the executor sells Blackacre and adds the proceeds to the residuary? What happens if the executor sells Blackacre to pay debts? What happens if the executor sells Blackacre and uses the proceeds to fund a pecuniary marital deduction gift? What if the executor uses Blackacre to fund a pecuniary marital deduction gift? What if the disclaimant is the beneficiary of the marital deduction gift and disclaims Blackacre, and Blackacre may or may not be used to fund the marital deduction gift? In the above examples, does it make any difference that the executor is the disclaimant, and thus can control where the disclaimed property is going to go?

[16] If I amend the designation to provide that a trust will be a beneficiary, I will not need to amend the disclaimer section as well. If the trust provides for disclaimers, then we can rely on its provisions in this regard.

[17] This can lead to a slightly different result in a trust context that if the disclaimant were treated as not having survived the trustor, especially in the case of formula gifts. Also, it is not uncommon for a gift in trust to pass to the primary beneficiary’s descendants on the primary beneficiary’s death. However, if the primary beneficiary is a friend rather than a descendant of the trustor’s, it is also common to condition the gift on survival, with a gift over in favor of the trustor’s descendants. If the disclaimed is not going to the disclaimant’s descendants, the beneficiary is unlikely to make a disclaimer.

[18] If a trust is a beneficiary, and a disclaimant disclaims the right to receive distributions for “comfort,” or disclaims the right to receive discretionary distributions from corpus, while retaining the right to receive income distributions, where does the disclaimed interest go? It is no answer to say that it passes as if the disclaimant predeceased, unless the disclaimant has disclaimed all of his or her interest in all or a portion of the trust.

[19] We are contemplating that the spouse may want to disclaim into a bypass trust. We are hopeful that by the time the disclaimer is made, we will know what the rules are, and will know whether the beneficiaries of the trust will qualify as designated beneficiaries, something no one knows for sure now. If the trust won’t qualify, maybe the spouse will not disclaim. In the meantime, we can be fairly certain that the spouse is a “designated beneficiary” and that a spousal rollover is a viable option.

[20] Where the spouse is not a beneficiary, a more conventional disclaimer pattern is probably to be preferred.

[21] If the participant is married, it is almost a certainty that a portion of the benefits will be community property. If at all possible, I suggest leaving the surviving spouse at least half of the benefit outright. This at once disposes of quite a few thorny characterization and control issues, not the least of which is whether Land v. Marshall applies. Land v. Marshall, 426 S.W.2d 841 (Tex. 1968). If Land v. Marshall were held to apply, any attempt by an IRA owner to dispose of a nonparticipant spouse’s community property interest in an IRA at death would be set aside, even in the absence of “fraud on the spouse.” However, it is worth noting that to date no court has extended the illusory trust doctrine to IRAs. Indeed, Land v. Marshall has been cited in only one case since the decision was rendered, and in that case, the doctrine was held not to apply. Westerfeld v. Huckaby, 462 S.W.2d 324 (Tex. Civ. App.— Houston [1st Dist.] 1971, affm’d, 474 S.W.2d 189 (Tex. 1972)). See Ice, “Transfers of Community Property In Qualified Plans and IRAs (Not in a Nutshell) A Guide for the Justly Confused.” Perhaps Land v. Marshall has been superseded by the Texas Trust Code.

For those readers who think it silly to specify that any benefits passing to the spouse are to be satisfied first out of the spouse’s community property, I direct your attention to Employee Savings Plan of Mobil Oil Corp. v. Geer, 535 F. Supp. 1052 (S.D. NY 1982), where the husband’s beneficiary designation left the wife half and the children the other half of the participant’s pension benefits. The wife claimed that she was entitled to three-fourths of the benefits— her one half, plus half of what was left! True, she lost; but why make a federal case out of something that is easy to draft around.

[22] If a predeceased spouse has left his or her community property interest in the survivor’s IRA to someone other than the survivor, how does the existence of this fact affect the operation of the MRD rules? Under the re-proposed regulations the answer, during life, may be “not at all,” since the existence or not of a beneficiary during lifetime is relevant only if the beneficiary is a more-than-ten-years younger-spouse.

At death, where the participant designated one beneficiary, and the spouse left his or her community interest to another, it might be a question worth pondering. Does IRC §408(g) require that we ignore reality here; so that, for example, if the spouse left his or her community property interest to a parent ‑or to charity, not a designated beneficiary‑, and the participant left the entire IRA (ostensibly) to a child, we can use 408(g) to get a longer payout by ignoring the older beneficiary of the predeceased spouse?

[23] There are commentators who have suggested, not without reason, that without such a provision the marital deduction would be jeopardized, where the beneficiary was simply “my spouse,” and no draw down power was given (or implied).

[24] Under the original proposed regulations, there was some question whether the beneficiary could design a beneficiary. This became no longer an issue under the re-proposed regs.:

Prop. Tres. Regs. §1.401(a)(9)-5, A-7(d) (prop.1/17/2001). Designations by beneficiaries. (1) If the plan provides (or allows the employee to specify) that, after the end of the calendar year following the calendar year in which the employee died, any person or persons have the discretion to change the beneficiaries of the employee, then, for purposes of determining the distribution period after the employee’s death, the employee will be treated as not having designated a beneficiary. However, such discretion will not be found to exist merely because a beneficiary may designate a subsequent beneficiary for distributions of any portion of the employee’s benefit after the beneficiary dies.

This paragraph (d) is illustrated by the following example: The facts are the same as in Example 1 in paragraph (3) of this A-7, except that, as permitted under the plan, D designates E as the beneficiary of any amount remaining after the death of D rather than C making this designation. E is still disregarded in determining C’s designated beneficiary for purposes of section 401(a)(9).

However, the final regulations dropped this provision. What are we to make of that? Nothing, I hope.

[25] It is remarkable how many IRA sponsors have beneficiary designation forms that do not address this issue. The imagination might conclude that in the absence of a provision on point, the proceeds remaining at the death of the beneficiary will (a) revert to the estate of the IRA owner (which is what would happen under trust law, if no beneficiary is designated), (b) be payable to the beneficiary’s estate, or (c) be payable to the “secondary” beneficiaries listed in the beneficiary designation.

[26] I think it is now safe to use this clause since the final regulations now provide that the beneficiary determination date (BDD) is September 30 of the year following death..

[27] What would happen if your IRA Trustee told you that it didn’t think it was in your best interest to make a withdrawal not required by the MRD rules. Most IRAs don’t expressly give the IRA owner the unilateral power to amend, revoke, or demand a distribution. Arguably, like any other trust, this is within the IRA Trustee’s discretion (?!). This argument is likely to be stronger where the beneficiary is the one asking for the distribution. If it is the IRA owner, and if the IRA is governed by trust law, then the question might be whether or not the IRA is revocable. If a trust does not address the issue, some states treat the trust as irrevocable as a matter of law. In modern times, the trend in the law, and the law in Texas, is that a trust will be presumed to be revocable unless expressly made irrevocable.

[28] This is required post-RBD, but (I believe) only if the spouse is the sole beneficiary of the IRA and then only if the spouse is more than ten years younger than the IRA owner(!).

Article 1. Identification Provisions.