Fill - Free fillable Coverdell Education Savings Trust Account Oct-2016 Form-5305-E PDF form

Form 5305-E

(Rev. October 2016)

Department of the Treasury

Internal Revenue Service

Coverdell Education Savings Trust Account

(Under section 530 of the Internal Revenue Code)

Do not file

with the Internal

Revenue Service

Name of grantor

Check if amendment . . .

▶

Name of designated beneficiary

Address of designated beneficiary Date of birth of designated beneficiary

Name of responsible individual (generally the parent or guardian of the designated beneficiary)

Address of responsible individual

Name of trustee Address or principal place of business of trustee

The grantor named above is establishing a Coverdell education savings trust account under section 530 for the benefit of the designated

beneficiary exclusively to pay for the qualified elementary, secondary, and higher education expenses, within the meaning of section 530(b)(2),

of such designated beneficiary.

The grantor has assigned the trust

dollars ($

) in cash.

The grantor and the trustee make the following agreement:

Article I

The trustee may accept additional cash contributions provided the designated beneficiary has not attained the age of 18 as of the date such

contributions are made. Contributions by an individual contributor may be made for the tax year of the designated beneficiary by the due date

of the beneficiary’s tax return for that year (excluding extensions). Total contributions that are not rollover contributions described in section

530(d)(5) are limited to $2,000 for the tax year. In the case of an individual contributor, the $2,000 limitation for any year is phased out between

modified adjusted gross income (AGI) of $95,000 and $110,000. For married individuals filing jointly, the phase-out occurs between modified

AGI of $190,000 and $220,000. Modified AGI is defined in section 530(c)(2).

Article II

No part of the trust account funds may be invested in life insurance contracts, nor may the assets of the trust account be commingled with

other property except in a common trust fund or a common investment fund (within the meaning of section 530(b)(1)(D)).

Article III

1. Any balance to the credit of the designated beneficiary on the date on which he or she attains age 30 shall be distributed to him or her

within 30 days of such date.

2. Any balance to the credit of the designated beneficiary shall be distributed within 30 days of his or her death unless the designated

death beneficiary is a family member of the designated beneficiary and is under the age of 30 on the date of death. In such case, that family

member shall become the designated beneficiary as of the date of death.

Article IV

The grantor shall have the power to direct the trustee regarding the investment of the above-listed amount assigned to the trust (including

earnings thereon) in the investment choices offered by the trustee. The responsible individual, however, shall have the power to redirect the

trustee regarding the investment of such amounts, as well as the power to direct the trustee regarding the investment of all additional

contributions (including earnings thereon) to the trust. In the event that the responsible individual does not direct the trustee regarding the

investment of additional contributions (including earnings thereon), the initial investment direction of the grantor also will govern all additional

contributions made to the trust account until such time as the responsible individual otherwise directs the trustee. Unless otherwise provided

in this agreement, the responsible individual also shall have the power to direct the trustee regarding the administration, management, and

distribution of the account.

Article V

The “responsible individual” named by the grantor shall be a parent or guardian of the designated beneficiary. The trust shall have only one

responsible individual at any time. If the responsible individual becomes incapacitated or dies while the designated beneficiary is a minor

under state law, the successor responsible individual shall be the person named to succeed in that capacity by the preceding responsible

individual in a witnessed writing or, if no successor is so named, the successor responsible individual shall be the designated beneficiary’s

other parent or successor guardian. Unless otherwise directed by checking the option below, at the time that the designated beneficiary

attains the age of majority under state law, the designated beneficiary becomes the responsible individual. If a family member under the age

of majority under state law becomes the designated beneficiary by reason of being a named death beneficiary, the responsible individual shall

be such designated beneficiary’s parent or guardian.

Option (This provision is effective only if checked): The responsible individual shall continue to serve as the responsible individual for the

trust after the designated beneficiary attains the age of majority under state law and until such time as all assets have been distributed from

the trust and the trust terminates. If the responsible individual becomes incapacitated or dies after the designated beneficiary reaches the age

of majority under state law, the responsible individual shall be the designated beneficiary.

Cat. No. 25205V

Form

5305-E (Rev. 10-2016)

Form 5305-E (Rev. 10-2016)

Page 2

Article VI

The responsible individual may or may not change the beneficiary designated under this agreement to another member of the

designated beneficiary’s family described in section 529(e)(2) in accordance with the trustee’s procedures.

Article VII

1. The grantor agrees to provide the trustee with all information necessary to prepare any reports required by section 530(h).

2. The trustee agrees to submit to the Internal Revenue Service (IRS) and responsible individual the reports prescribed by the IRS.

Article VIII

Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through III will be controlling. Any

additional articles inconsistent with section 530 and the related regulations will be invalid.

Article IX

This agreement will be amended as necessary to comply with the provisions of the Code and the related regulations. Other amendments

may be made with the consent of the grantor and trustee whose signatures appear below.

Article X

Article X may be used for any additional provisions. If no other provisions will be added, draw a line through this space. If provisions are

added, they must comply with applicable requirements of state law and the Internal Revenue Code.

Grantor’s signature Date

Trustee’s signature Date

Witness’ signature Date

(Use only if signature of the grantor or the trustee is required to be witnessed.)

General Instructions

Section references are to the Internal

Revenue Code unless otherwise noted.

What's New

Military death gratuity. Families of soldiers

who receive military death benefits may

contribute, subject to certain limitations, up to

100 percent of such benefits into an

educational savings account. Publication 970,

Tax Benefits for Education, explains the rules

for rolling over the military death gratuity and

lists eligible family members.

Purpose of Form

Form 5305-E is a model trust account

agreement that meets the requirements of

section 530(b)(1) and has been pre-approved

by the IRS. A Coverdell education savings

account (ESA) is established after the form is

fully executed by both the grantor and the

trustee. This account must be created in the

United States for the exclusive purpose of

paying the qualified elementary, secondary,

and higher education expenses of the

designated beneficiary.

If the model account is a custodial account,

see Form 5305-EA, Coverdell Education

Savings Custodial Account.

Do not file Form 5305-E with the IRS.

Instead, the grantor must keep the completed

form in its records.

Definitions

Trustee. The trustee 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 trustee. Any

person who may serve as a trustee of a

traditional IRA may serve as the trustee of a

Coverdell ESA.

Grantor. The grantor is the person who

establishes the trust account.

Designated beneficiary. The designated

beneficiary is the individual on whose behalf

the trust account has been established.

Family member. Family members of the

designated beneficiary include his or her

spouse, child, grandchild, sibling, parent,

niece or nephew, son-in-law, daughter-in-law,

father-in-law, mother-in-law, brother-in-law,

or sister-in-law, and the spouse of any such

individual. A first cousin, but not his or her

spouse, is also a “family member.”

Responsible individual. The responsible

individual, generally, is a parent or guardian of

the designated beneficiary. However, under

certain circumstances, the responsible

individual may be the designated beneficiary.

Identification Numbers

The grantor and designated beneficiary’s

social security numbers will serve as their

identification numbers. If the grantor is a

nonresident alien and does not have an

identification number, write “Foreign” on the

return for which is filed to report the grantor's

information. The designated beneficiary’s

social security number is the identification

number of his or her Coverdell ESA. If the

designated

beneficiary is a nonresident alien, the

designated beneficiary’s individual taxpayer

identification number is the identification

number of his or her Coverdell ESA. An

employer identification number (EIN) is

required only for a Coverdell ESA for which a

return is filed to report unrelated business

income. An EIN is required for a common fund

created for Coverdell ESAs.

Specific Instructions

Note: The age limitation restricting

contributions, distributions, rollover

contributions, and change of beneficiary are

waived for a designated beneficiary with

special needs.

Article X. Article X and any that follow may

incorporate additional provisions that are

agreed to by the grantor and trustee to

complete the agreement. They may include,

for example, provisions relating to: definitions,

investment powers, voting rights, exculpatory

provisions, amendment and termination,

removal of the trustee, trustee’s fees, state

law requirements, treatment of excess

contributions, and prohibited transactions

with the grantor, designated beneficiary, or

responsible individual, etc. Attach additional

pages as necessary.

Optional provisions in Article V and Article

VI. Form 5305-E may be reproduced in a

manner that provides only those optional

provisions offered by the trustee.

Form 5305-E (Rev. 10-2016)

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Coverdell Education Savings Trust Account Oct-2016 Form-5305-E

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