I hereby appoint American Estate & Trust to act as the Custodian of my account (“Custodian”) and Accuplan Benefits Services (or its designated assignee) to act as the Third-Party Administrator of my account (“TPA”). This Application and Custodial Agreement (“Agreement”) comprise my total agreement, and govern all aspects of my relationship, with Custodian and TPA. I acknowledge and agree that TPA is independent of Custodian and is not empowered or authorized to obligate or bind Custodian. Additionally, nothing in this Agreement shall be construed to render TPA an employee, partner, agent of, or joint venturer with, Custodian. Custodian shall not be responsible or liable under any circumstances for any representations or statements made by TPA.
1. Definitions. When used in this Agreement, the following capitalized terms shall have the meanings as set forth below. Additionally, all terms used in this Agreement that are not accordingly defined shall have the meanings as set forth elsewhere in this Agreement.
1.1 "Applicant" means the person making and executing this Agreement and, in the case of an employee-based plan, also the business entity that will be the sponsor of the plan.
1.2 "Associated Parties" means and includes (jointly and severally), with respect of a person or entity, its principals, owners, members, shareholders, partners, directors, officers, managers, employees, agents, associates, representatives, advisors, consultants, attorneys, accountants, contractors and subcontractors, and each of them.
1.3 "American Estate & Trust", solely for purposes of any legal duties and obligations of Custodian, means only American Estate & Trust, LC; and solely for purposes of any rights, benefits and other non-obligations of Custodian, means (jointly and severally) American Estate & Trust, LC and its controlled and controlling, direct and indirect, affiliates, parents, subsidiaries, divisions, and all Associated Parties acting through, under, or in concert with any of the foregoing, and each of their former, present, and future Associated Parties, in each case in their personal, corporate, authorized, representative or other capacities, and the predecessors, successors, assigns, personal representatives and heirs of any of the foregoing.
1.4 "Accuplan Benefits Services", solely for purposes of any legal duties and obligations of TPA, means only Financial & Retirement Resources, LLC; and solely for purposes of any rights, benefits and other non-obligations of TPA, means (jointly and severally) Financial & Retirement Resources, LLC and its controlled and controlling, direct and indirect, affiliates, parents, subsidiaries, divisions, and all Associated Parties acting through, under, or in concert with any of the foregoing, and each of their former, present, and future Associated Parties, in each case in their personal, corporate, authorized, representative or other capacities, and the predecessors, successors, assigns, personal representatives and heirs of any of the foregoing.
1.5 "Planner" means any salesperson(s) who assisted Applicant with this Agreement and with any general (non-legal/tax) information requested regarding the features or uses of a self-directed IRA.
1.6 "IRA" means any type of individual retirement account described in the Internal Revenue Code and related regulations, including a Traditional IRA, Roth IRA, SEP IRA and SIMPLE IRA.
1.7 "Dispute" means any dispute, claim or controversy concerning or related to the IRA being created (or its intended, pending, current or past investments) or the terms of this Agreement or the rights, obligations or duties created thereby or hereby.
2. Backup Withholding. The Internal Revenue Service requires Applicant’s consent to the following certification regarding backup withholding. Under penalties of perjury, by signing this Agreement, Applicant hereby declares and certifies:
(A) that Applicant has provided Custodian with Applicant’s correct Social Security or Tax I.D. Number; and
(B) that Applicant is not subject to backup withholding because:
1) Applicant is exempt from backup withholding; or
2) Applicant has not been notified by the Internal Revenue Service (IRS) that Applicant is subject to backup withholding as a result of a failure to report all interest or dividends; or
3) the IRS has notified Applicant that Applicant is no longer subject to backup withholding.
Note: If Applicant has been notified by the IRS that Applicant is currently subject to backup withholding because of under reporting interest or dividends on your tax return, then Applicant is required to cross through statement (B) above and initial next to it (or if completing this Agreement electronically, to notify Custodian of such in writing).
3. Independence of Planner. Applicant acknowledges and agrees that the Planner may be independent of Custodian and/or TPA and, if so, is not empowered or authorized to obligate or bind Custodian or TPA. Additionally, nothing in this Agreement shall be construed to render Planner an employee, partner, agent of, or joint venturer with, Custodian or TPA. Custodian and TPA shall not be responsible or liable under any circumstances for any representations or statements made by Planner, unless Planner can be proven, by clear and convincing evidence, to be a W-2 employee of, and acting in the scope of duty for, Custodian or TPA.
4. Accuracy and Completeness. Applicant is responsible for the accuracy, completeness and genuineness of all data and information provided in this Agreement. Applicant hereby authorizes Custodian and TPA to conclusively rely on all such data and information, and Custodian and TPA shall be under no duty or obligation to authenticate the source, or verify the accuracy, completeness or genuineness of any such data or information other than as specifically required by law. Other than the data and information provided in this Agreement, Applicant considers no other data or information relevant or significant in or for the IRA. Applicant hereby acknowledges and understands that if there are any errors or omissions in the data or information provided to Custodian or TPA, then inaccurate, incomplete, and unreliable results will result.
5. Assignment. Applicant may not assign or transfer, by operation of law or otherwise, any of its rights under this Agreement to any third party without Custodian’s prior written consent. Any attempted assignment or transfer in violation of the foregoing shall be void. Custodian and TPA shall have the right to assign or transfer this Agreement to any third party without notice to or consent by Applicant. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.
6. Third Party Beneficiaries. There are no other third-party beneficiaries of this Agreement.
7. Final Agreement; Modification. This Agreement constitutes the final, complete and entire agreement between the Parties concerning the subject matter of this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, written or oral, between the Parties with respect thereto. Any modification, rescission or amendment of this Agreement shall not be effective except by a separate written instrument signed by Applicant and an authorized officer of Custodian.
8. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but when taken together shall constitute one and the same agreement. Facsimile, scanned and photocopy signatures and/or initials, including those delivered electronically in .pdf format, shall be binding and effective and shall have the same force and effect as original signatures and/or initials.
9. Electronic Record and/or Electronic Signature. All Parties to this Agreement agree that this Agreement as well as any signature and/or initials by a Party may be in electronic form. Signatures and/or initials made through DocuSign or similar technologies shall be deemed of acceptable form for manifesting such Party’s affirmative assent.
11. Plain Language. This Agreement shall be interpreted and construed in accordance with its plain language and no presumption or burden of proof shall be implied or employed against any person, including Custodian or TPA, as the drafter hereof.
12. Headings. Headings are for convenience of reference only and have no legal effect.
13. Severability. If any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed and enforced as if such invalid, illegal or unenforceable provisions) had never been contained herein, provided that such invalid, illegal or unenforceable provisions) shall first be curtailed, limited or eliminated to the extent necessary to remove such invalidity, illegality or unenforceability with respect to the applicable law as it shall then be applied.
14. Waiver. Any delay in exercising or promise not to enforce any right under this Agreement shall not constitute a waiver and is unenforceable unless evidenced in a separate writing signed by the Party expressly making said waiver or promise.
15. Notices. All notices, requests and other communications hereunder shall be made in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed email or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or email or five (5) days after deposit in the mail. Notices will be sent to a Party at its address set forth above or such other address as that Party may specify in writing pursuant to this Section.
16. Fraudulent Transfers. Applicant states and declares that the IRA will not be used to hinder, delay or defraud any existing creditors or governmental agencies that have a legal claim or interest in Applicant’s assets, or to hinder, delay or defraud creditors or governmental agencies that Applicant could reasonably expect to have a current or future claim. Applicant further states and declares that it intends to repay all existing creditors and otherwise retains the means to discharge all its debts as they come due.
17. Unknown and/or Conflicting Matters. Applicant expressly acknowledges and agrees that all of the facts and circumstances relating to the IRA may not be known or that the proper significance may not have been ascribed thereto by Applicant, but notwithstanding, Applicant desires to enter into this Agreement and further expressly agrees to protect, indemnify, defend and hold harmless Custodian and TPA, as provided herein, with full knowledge that there may be such unknown matters that might have materially affected the decision to enter into this Agreement. Applicant shall comply with all other agreements, instruments, entities, instruction, etc. related to the IRA. Applicant represents and warrants that this Agreement does not conflict with any other agreement to which Applicant is bound and obligated.
18. Developing Law. Applicant expressly acknowledges and agrees that federal, state and local laws and regulations with respect to retirement plans may change from time to time and thereby affect this Agreement and/or the validity or effectiveness of the IRA or its investments. Custodian and TPA, in their sole discretion, may send out notices of changes regarding the IRA. Such updates may incur an additional charge. Applicant agrees to notify Custodian or TPA of any address change so that notices may be timely received and also agrees that failure to comply with any legal requirements may result in disqualification of the IRA with serious legal and/or tax consequences. Applicant has sole responsibility for ensuring compliance with all laws, regulations and guidelines including any updates. Custodian and TPA are never obligated to provide any notices of updates but may choose to do so strictly as a courtesy to customers. Custodian and TPA have not, and will not, provide advice, representations, guarantees or warranties with respect to the applicability of laws, regulations or guidelines to Applicant’s particular situation.
19. Disclaimer. Custodian and TPA shall not be responsible or liable under any circumstances for any claims, costs, losses or damages of any kind or nature whatsoever, whether foreseeable or not, arising from, related to, or as a result of any act or omission to act by any party other than Custodian or TPA, and further shall not be responsible or liable in the event of any delays or irregularities in closing, settlement or transfer of funds or property to/from the IRA.
20. Warranty. EXCEPT AS EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT, THE PRODUCTS AND SERVICES PROVIDED IN CONNECTION WITH THIS AGREEMENT, AND ANY INTELLECTUAL PROPERTY RELATING TO ANY OF THE FOREGOING, ARE PROVIDED ON AN “AS IS” BASIS. CUSTODIAN AND TPA MAKE NO WARRANTY OF ANY KIND IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT, AND CUSTODIAN AND TPA HEREBY EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NONINFRINGEMENT. SOME JURISDICTIONS LIMIT OR DO NOT ALLOW THE DISCLAIMER OF IMPLIED OR OTHER WARRANTIES SO THE ABOVE DISCLAIMERS MAY NOT APPLY TO YOU.
21. Indemnity and Hold Harmless. Applicant expressly agrees to protect, indemnify, defend, and hold harmless Custodian and TPA from and against any and all claims, costs, losses and damages, taxes, interest, and penalties or any other obligations (including without limitation, reasonable attorneys’ fees, court costs, and other litigation and dispute resolution costs), of every kind and nature whatsoever, sustained or incurred by Applicant or by Custodian or TPA in any way, arising from, related to or as a result of the IRA funding and/or operation; or this Agreement; or any act or omission to act by any party other than Custodian and TPA, whether in whole or in part, and in any way whatsoever.
22. Consequential or Incidental Damages. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER CUSTODIAN NOR TPA (OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, AFFILIATES, AGENTS, SUCCESSORS OR ASSIGNS) SHALL BE LIABLE TO ANY PARTY FOR ANY INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, THOSE RESULTING FROM LOST PROFITS OR BUSINESS INTERRUPTION) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE USE, INABILITY TO USE, OR THE RESULTS OF USE OF THE PRODUCTS AND SERVICES PROVIDED IN CONNECTION WITH THIS AGREEMENT, WHETHER BASED ON WARRANTY, CONTRACT, TORT OR ANY OTHER LEGAL THEORY AND WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER CUSTODIAN NOR TPA (OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, AFFILIATES, AGENTS, SUCCESSORS OR ASSIGNS) SHALL BE LIABLE FOR ANY DIRECT DAMAGES IN EXCESS OF THE AMOUNT PAID BY APPLICANT TO CUSTODIAN OR TPA FOR THE PRODUCTS AND SERVICES PROVIDED IN CONNECTION WITH THIS AGREEMENT. SOME JURISDICTIONS DO NOT ALLOW THE LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES SO THE ABOVE LIMITATION OF LIABIITY MAY NOT APPLY TO YOU.
23. Third-Party Litigation and/or Dispute Resolution Expenses. Though uncommon, an IRA or its investments may become subject to a legal claim against the IRA, an IRA investment and/or its owner, which may require the involvement of Custodian and/or TPA. Applicant understands and agrees that Custodian and TPA are not required to use their own resources: (1) to satisfy any of the debts and/or claims against Applicant’s IRA or its investments; or (2) to pay for the defense of any such claims. If Custodian and/or TPA is named as a party to a third-party claim relating to Applicant’s account or investments, Applicant hereby authorizes Custodian and/or TPA, respectively, to: (a) have sole discretion in choosing their own attorneys and other professionals to assist with litigation or other dispute resolution processes; and (b) deduct from Applicant’s account any amount necessary to pay such costs and expenses related to the litigation or dispute resolution processes, including, but not limited to, all attorneys’ fees and costs incurred by Custodian and/or TPA, respectively, in the defense of such claim. If there is insufficient Uninvested Cash in Applicant’s account, Applicant will promptly reimburse Custodian and/or TPA, respectively, any remaining costs and expenses in such defense of the claim. If Applicant fails to provide such reimbursement, then Custodian and/or TPA is authorized to freeze and liquidate Applicant’s investments (in any or all of Applicant’s accounts held by Custodian) and/or initiate legal action so as to obtain full reimbursement for any such costs and expenses. Applicant also agrees to hold Custodian and TPA harmless for any default, surrender charges, investment losses, opportunity costs, and any other losses or penalties due to any liquidation of Applicant’s account assets in execution of this provision. For purposes of this paragraph, the terms Custodian and TPA include American Estate & Trust, LC and Accuplan Benefits Services, respectively, as well as their employees, agents, licensees, franchises, affiliates, joint ventures, assigns and/or business partners.
24. Dispute Resolution. If any Dispute arises, Applicant agrees that such Dispute shall first be negotiated in good faith with Custodian or TPA, as applicable, to come to a resolution. If no resolution is reached within thirty (30) days of both parties receiving notice of the Dispute, Applicant agrees to then try in good faith to settle the Dispute by non-binding mediation administered by the American Arbitration Association under its Commercial Mediation Procedures (unless a procedure is otherwise provided herein) before resorting to arbitration, litigation or any other dispute resolution procedure. Such mediation shall occur in Las Vegas, Nevada with respect to any Dispute with Custodian and in Salt Lake County, Utah with respect to any Dispute with TPA or, if permission is provided by Custodian or TPA, via telephone. If not settled by mediation within another thirty (30) days, then Applicant agrees that such Dispute shall be resolved by final, binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules (unless a rule is otherwise provided herein), including the Optional Rules for Emergency Measures of Protection, and judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction consistent with this Agreement. Arbitration shall occur in Las Vegas, Nevada with respect to any Dispute with Custodian and in Salt Lake County, Utah with respect to any Dispute with TPA. Applicant hereby consents to such exclusive jurisdiction and waives objections to venue. If Applicant institutes legal action against Custodian or TPA in any State or federal court (bypassing this section’s mediation/arbitration dispute resolution requirements), Applicant understands and agrees that such action constitutes an intentional breach of this Agreement; Applicant waives all rights to any damages; and Applicant hereby agrees to reimburse immediately all expenses incurred by Custodian or TPA (including reasonable attorneys’ fees, court costs and reasonable wages for involved employees) incurred in the defense of such action.
24.1 In any action or arbitration instituted to resolve a Dispute, the prevailing party shall be entitled to reasonable attorneys’ fees and costs (but the costs of mediation shall be borne as provided under the applicable Commercial Mediation Procedures). If Applicant institutes any such action or arbitration and subsequently abandons it prior to final resolution (with abandonment defined as any 6 consecutive months of inactivity), then each defendant shall be deemed a prevailing party entitled to its reasonable attorneys’ fees and costs from the Applicant.
24.2 In no event shall the demand for mediation or arbitration be made after the date the institution of legal or equitable proceedings based upon such claim, dispute or other matter would be barred by the applicable statute of limitations.
24.3 IF APPLICANT FAILS OR REFUSES TO NEGOTIATE, MEDIATE OR ARBITRATE IN GOOD FAITH ANY DISPUTE OR FAILS OR REFUSES TO PROVIDE PRIOR NOTICE TO CUSTODIAN OR TPA, AS APPLICABLE, REGARDING ANY DISPUTE, APPLICANT HEREBY AGREES THAT CUSTODIAN OR TPA WILL BE ENTITLED TO ALL REASONABLE ATTORNEYS’ FEES AND COSTS FOR RESPONDING TO ANY LITIGATION OR OTHER DISPUTE RESOLUTION PROCEEDING WHICH APPLICANT INITIATES PRIOR TO ENGAGING IN SUCH GOOD FAITH NEGOTIATION, MEDIATION OR ARBITRATION. MOREOVER, APPLICANT UNDERSTANDS AND AGREES THAT NO INDIVIDUAL EMPLOYEE, OFFICER, MANAGER, DIRECTOR, OR OTHER INDIVIDUAL HAS ANY PROFESSIONAL OR FIDUCIARY DUTY TO APPLICANT OR HAS MADE ANY MATERIAL REPRESENTATIONS TO INDUCE APPLICANT INTO APPLYING FOR THE IRA. APPLICANT FURTHER HEREBY AGREES TO REIMBURSE IMMEDIATELY ANY SUCH INDIVIDUAL (WHO IS NAMED AS A DEFENDANT IN ANY LEGAL PROCEEDING INITIATED OR JOINED BY APPLICANT) FOR ALL LEGAL EXPENSES AND COSTS ASSOCIATED WITH DEFENSE OF ANY SUCH LEGAL ACTION.
25. No Endorsement Of Other Professional Advisors. APPLICANT FURTHER ACKNOWLEDGES, AGREES AND UNDERSTANDS: i) CUSTODIAN AND TPA DO NOT SELL, ENDORSE, OR RECOMMEND AND HAS NOT SOLD, ENDORSED OR RECOMMENDED ANY INSURANCE, ANNUITIES, SECURITIES, MUTUAL FUNDS OR ANY OTHER INVESTMENT OR FINANCIAL PLANNING PRODUCTS OR SERVICES; AND ii) CUSTODIAN AND TPA DO NOT ENDORSE, RECOMMEND, OR APPROVE ANY INSURANCE COMPANIES, BROKER-DEALERS OR ANY OTHER FINANCIAL INSTITUTION. CUSTODIAN AND TPA DO NOT ENDORSE, RECOMMEND, CONTROL OR REGULATE ANY PLANNERS, ADVISORS, SECURITIES REPRESENTATIVES, INSURANCE AGENTS, ATTORNEYS, CPAS OR OTHER PROVIDERS OF PROFESSIONAL, LEGAL, ACCOUNTING, OR FINANCIAL PRODUCTS OR SERVICES. SUCH PERSONS MUST ACT AND DO ACT INDEPENDENTLY IN EXERCISING THEIR OWN PROFESSIONAL JUDGMENT ON BEHALF OF THE APPLICANT.
26. Termination of Account. Applicant agrees that upon Applicant’s request to terminate his or her IRA, a termination fee shall be incurred and deducted from the IRA. If there are not sufficient funds in the IRA to pay such fee, Applicant agrees to pay the fee personally prior to termination. Applicant further agrees to be bound by all terms and conditions of the most current IRA Agreement in effect just prior to termination of the IRA. It shall be Applicant’s responsibility to request and review any changes made to the Agreement while the IRA is held by Custodian. Applicant agrees that Custodian may terminate any account for which fees have accrued and remain unpaid for more than three (3) months. Custodian also may terminate any account, and/or roll over or distribute in-kind any account investments which Custodian, at its sole discretion, deems to be infeasible or prohibited to hold. The IRS Form 1099-R issued from any account termination shall reflect the last known value of the account assets.
27. Self-Directed Investments. Applicant understands and agrees that Custodian and TPA do not endorse, promote, validate or vet any IRA investment choice made by Applicant. Moreover, in accepting any particular investment, Custodian is not providing a legal, tax, fiduciary or other professional opinion that such investment is permissible under any and all federal and State laws. Applicant agrees not to rely on custodial acceptance of any investment to indicate or suggest legal permissibility. It is entirely Applicant’s responsibility to ensure that all laws and regulations will be complied with in making and maintaining any investment. Applicant must determine, alone or with the assistance of an independent advisor, if his or her investment is permissible and appropriate. Custodian and TPA do not provide investment, legal, tax or other professional advice of any kind. Applicant agrees that Custodian is not acting as a fiduciary with respect to Applicant’s self-directed IRA investments.
28. Prohibited Transactions. Applicant understands that: (a) both ERISA and IRS rules prohibit certain transactions between a retirement plan, including an IRA, and specified "disqualified persons"; (b) as the owner of a self-directed IRA, Applicant is a disqualified person; (c) certain relatives and entities in which Applicant (or such relatives) have a significant ownership interest, are likewise disqualified persons; (d) the purpose of the rules is to prevent self-dealing and to minimize conflicts of interest that could adversely affect the IRA; (e) ERISA §§ 406-408 and Internal Revenue Code § 4975 detail these rules; (f) other regulations and notices issued by the DOL and IRS further refine and explain the rules; and (g) since Applicant’s plan account is self-directed, it may be possible for Applicant to direct his or her IRA to purchase nontraditional assets with IRA funds and that some of these transactions could violate the rules. Examples include: using IRA funds to purchase a property that Applicant (or certain related parties) already own; having the IRA purchase an investment property and then renting it to Applicant’s child (even at fair market rent); using personal funds to make a down payment or earnest money deposit or using other means to hold an investment intended for the IRA; using personal funds to pay any expenses properly associated with acquisition, maintenance, repair or disposition of an IRA investment; receiving compensation from an entity in which the IRA has a significant ownership; allowing Applicant or a relative to provide sweat equity labor or other services to a business significantly owned by the IRA; personally guaranteeing a loan made by the IRA; etc.. Applicant hereby agrees that Custodian has sole discretion to disallow any intended or pending transaction if Custodian believes the transaction may be prohibited or if Custodian finds the transaction unfeasible for any reason. Applicant further agrees that Custodian may terminate and distribute Applicant’s account if Custodian, in its sole discretion, determines that Applicant’s IRA may have been involved in a prohibited transaction. Applicant understands and agrees that it is very important to examine the relevant rules before investing or otherwise interacting with IRA assets. Applicant understands and agrees that Custodian and/or TPA may provide some general guidance in this area but that does not substitute for legal or tax advice. Applicant agrees that he or she must consult his or her own independent advisor when deciding how to invest IRA assets.
29. Audits. Applicant understands and agrees that Applicant must consult with his or her own tax and/or legal counsel to make the final decision regarding whether a self-directed IRA and its related investments will satisfy all state and federal regulations and whether it is suitable and appropriate for Applicant’s own particular needs. Applicant affirms that either Applicant has consulted with his or her own tax and/or legal counsel or that Applicant intentionally declined to use such counsel on the firm belief that Applicant can make decisions without such assistance or counsel. Applicant further understands and agrees that there are no promises or guarantees that either Applicant or the IRA will never be audited by the IRS, DOL or any other governmental agency. Applicant also understands and agrees that there are no promises or guarantees that either Applicant or the IRA will never lose an audit or never be successfully sued. Applicant agrees that nothing in this Agreement or in anything else provided to Applicant by Custodian, TPA or Planner is a promise or guarantee of specific results or is a legal, tax or other professional opinion.
30. Annual Asset Valuations. Applicant understands that IRA investments may include assets that are hard to value. While Custodian is required to report the fair market value of all IRA assets on IRS Form 5498 each year, Applicant understands and hereby agrees to provide such valuations, solely at the expense of Applicant or Applicant’s IRA, to Custodian in sufficient time for Custodian to report the values as required by law. If Applicant is unwilling or unable to timely provide fair market value for any asset, Applicant agrees that Custodian may use the last known value or any value provided by a third party (such as K-1 values issued from managers of private placements, hedge funds, etc.) for the required valuation. If the value provided by Applicant or any third party (or the last known value used by Custodian due to an unprovided value) is not the actual fair market value of any asset, Applicant agrees to hold Custodian harmless for such discrepancy. Applicant shall have sole responsibility to determine fair market value for hard-to-value assets and to validate any value provided by a third party (such as K-1 values, property appraisals, etc.). Custodian shall issue periodic account statements to Applicant listing all known IRA assets and their respective values. If Applicant believes a value listed on Custodian’s account statement is inaccurate, Applicant must contact Custodian in writing within 30 days of the statement date to explain the discrepancy and what the value should be. If Applicant fails to contact Custodian within that time period, Applicant agrees that the value provided on the statement fairly represents the fair market value of the asset.
31. Lowered Asset Valuations. Whenever Applicant needs to make Required Minimum Distributions (RMDs) or requests a transfer; rollover; distribution or conversion of IRA assets; or any other action that leads to Custodian issuing an IRS Form 1099-R, Applicant agrees that Custodian shall not calculate RMDs or issue the Form 1099-R using a lower valuation than what is listed at the last known value unless Applicant can provide sufficient documentation to independently validate a lower valuation. In cases of reported loss due to the insolvency of an entity, sufficient documentation means a notarized statement from the bankruptcy trustee assigned to the liquidation of the entity showing the value of the IRA’s interest in the entity that would be expected following liquidation. In cases of reported loss due to a Ponzi scheme, embezzlement or other criminal activity, sufficient documentation means a notarized statement from the court handling the criminal case showing the value of the IRA’s interest in the investment that would be expected following conclusion of the case. In cases of reported loss in value of real property, sufficient documentation means a notarized appraisal report from an independent, licensed MAI real estate appraiser. In any other situation, Custodian shall determine what qualifies as sufficient documentation. In no case shall Custodian be required to accept Applicant’s personal statement or opinion of asset valuation, or an appraisal from any non-independent or unqualified appraiser, as sufficient documentation for a lowered valuation.
32. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Nevada (with respect to any Dispute with Custodian) and Utah (with respect to any Dispute with TPA), without giving effect to any state’s choice of law rules. Under no circumstances shall this Agreement be governed or construed in accordance with the laws of any State other than Nevada or Utah. Jurisdiction and venue for any dispute, claim or controversy arising from, related to, or as a result of the IRA or this Agreement, in whole or in part, shall be solely in Las Vegas, Nevada (with respect to any Dispute with Custodian) and Salt Lake County, Utah (with respect to any Dispute with TPA). Applicant hereby consents to such jurisdiction and waives objections to venue therein.
33. Legal and Tax Advice. Applicant declares that he or she, with or without assistance from Applicant’s independent advisors, will assume sole responsibility for all legal and tax consequences arising from Applicant’s account transactions, including all contributions, investments, and distributions and that Applicant has sole responsibility for ensuring his or her actions will comply with all laws, regulations and guidelines. Applicant declares that he or she is authorized to establish this account and to make investment decisions therein. Applicant also declares that Custodian and TPA have not, and will not, provide legal or tax advice, representations, guarantees or warranties with respect to the applicability of laws, regulations or guidelines to Applicant’s particular situation. Although Custodian’s or TPA’s employees, associates or independent representatives may discuss generically the rules pertaining to an IRA and certain publications and materials may be provided on some topics, such is provided for general informational, illustrative and educational purposes only. If professional assistance of any kind is required, Applicant is advised to seek the services of a competent professional. It is the sole responsibility of Applicant to use independent counsel: (a) to verify any representations, claims, sales materials, and discussions made or provided by Custodian or TPA; and (b) to determine for Applicant the IRA’s legality, appropriateness for Applicant’s needs, accuracy, effectiveness, required and optional updates, proper ongoing operation, legality and appropriateness of any IRA investment options, and termination. If professional assistance is required, Applicant is advised to seek the services of a competent professional.
34. Third-Party Professional Services. Applicant acknowledges and agrees that Custodian and TPA are not responsible for any legal, accounting, financial, tax, investment, actuarial or any other such professional services and/or advice rendered to Applicant by any persons other than Custodian or TPA, and that Custodian and TPA do not provide and have not provided legal, accounting, financial, tax, investment, actuarial or other professional advice or opinions on any specific facts or circumstances of Applicant.
35. UBIT and UDFI. Applicant understands that if IRA funds are invested in certain assets, there could be special tax consequences. UBIT (Unrelated Business Income Tax) applies to IRA investments in active businesses. For example, if an IRA is invested in a limited partnership that incurs taxable active income for its partners, then the allocation of income that passes through to the IRA would be subject to UBIT (which is taxed at trust tax rates – currently less favorable than corporate rates). There are exemptions from UBIT for certain passive investments such as dividends, royalties, interest, and real property rent. Thus, if an IRA invested in a C-corporation that issued dividends to its stockholders, the IRA would not have to pay UBIT on those dividends (because the corporation is already paying its taxes at the entity level). Applicant also understands that the IRA is expected to invest in long-term passive investments for Applicant’s retirement and cannot run a business itself, so there could be problems if the IRA is too active in its activities (such as flipping houses). Active enterprises need to be run in an entity outside the IRA. UDFI (Unrelated Debt-Financed Income) applies to passive investments that utilize debt financing. For example, if an IRA purchases tax lien certificates and borrows 50% of the purchase price, then approximately half of the IRA’s first year’s revenues would be subject to UDFI taxation. As the debt is paid down, the UDFI fraction is reduced. Qualified plans (but not IRAs) may be exempt from UDFI if the debt is used to purchase real property. Applicant understands that it is important to examine potential UBIT and UDFI consequences when engaging in self-directed IRA investments. Applicant understands and declares that neither Custodian nor TPA can or will provide tax advice for Applicant’s particular situation and that Applicant will consult a competent, independent advisor if these issues may apply to his or her investment choices.
36. Transfers and Rollovers. Applicant understands that there may be limitations on transfers and rollovers permitted into or out of a Traditional IRA or Roth IRA. Applicant should review the information on the IRS website (http://www.irs.gov/pub/irs-tege/rollover_chart.pdf) to determine whether any intended rollovers are permitted prior to implementing the IRA. Applicant further understands and agrees that any rollover from a prior custodian and/or plan administrator may take several weeks to process and those funds will not be available to the IRA until all appropriate documentation has been properly completed, submitted, verified and processed.
37. Pre-Acceptance Liability for Transfers and Rollovers. When Applicant is transferring or rolling over assets from a prior custodian or plan administrator/trustee, Applicant agrees that neither Custodian nor TPA shall be liable in any manner for actions or omissions by the prior custodian or plan administrator/trustee and that responsibility for custodial or administration duties shall not apply to Custodian or TPA until after Custodian has received and accepted the full transfer or rollover. Custodian and TPA have no responsibility or duty to inquire into or take action related to acts or omissions by the prior custodian or plan administrator/trustee.
38. Applicant Representation. Applicant hereby expressly represents and warrants that Applicant has read and understood this Agreement and that Applicant has been given a full and fair opportunity to review this instrument with independent professional advisors of his or her own choosing. Applicant has reviewed and expressly approves all statements, answers and information (the “data”) which Applicant (or an agent under Applicant’s direction) has given in this instrument and all other data given in writing, by telephone or electronic means. Applicant further hereby represents and warrants that all such data is true, correct and complete, and Applicant freely and voluntarily, without duress or undue influence, makes and executes this Agreement on the terms and provisions provided herein. Applicant agrees to all the Terms and Conditions, pricing, and all other statements, warranties and representations in this Agreement.