Federal Coverdell Education Savings Custodial Account

Coverdell Education Savings Custodial Account
Form 5305-EA (Rev. October 2016)
Form

5305-EA

(Rev. October 2016)
Department of the Treasury
Internal Revenue Service

Coverdell Education Savings Custodial Account

Do not file
with the Internal
Revenue Service

(Under section 530 of the Internal Revenue Code)

Name of depositor
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 custodian

Address or principal place of business of custodian

The depositor named above is establishing a Coverdell education savings 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 depositor assigned the custodial account

dollars ($

) in cash.

The depositor and the custodian make the following agreement:

Article I
The custodian 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 custodial account funds may be invested in life insurance contracts, nor may the assets of the custodial account be
commingled with other property except in a common trust fund or 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 depositor shall have the power to direct the custodian regarding the investment of the above-listed amount assigned to the custodial
account (including earnings thereon) in the investment choices offered by the custodian. The responsible individual, however, shall have the
power to redirect the custodian regarding the investment of such amounts, as well as the power to direct the custodian regarding the
investment of all additional contributions (including earnings thereon) to the custodial account. In the event that the responsible individual
does not direct the custodian regarding the investment of additional contributions (including earnings thereon), the initial investment direction
of the depositor also will govern all additional contributions made to the custodial account until such time as the responsible individual
otherwise directs the custodian. Unless otherwise provided in this agreement, the responsible individual also shall have the power to direct
the custodian regarding the administration, management, and distribution of the account.

Article V
The “responsible individual” named by the depositor shall be a parent or guardian of the designated beneficiary. The custodial account 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
custodial account after the designated beneficiary attains the age of majority under state law and until such time as all assets have been
distributed from the custodial account and the custodial account 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. 25204K

Form

5305-EA

(Rev. 10-2016)

Form 5305-EA (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 custodian’s procedures.

Article VII
1. The depositor agrees to provide the custodian with all information necessary to prepare any reports required by section 530(h).
2. The custodian 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 depositor and the custodian 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.

Depositor’s signature

Date

Custodian’s signature

Date

Witness’ signature

Date
(Use only if signature of the depositor or the custodian is required to be witnessed.)

General Instructions

Definitions

Section references are to the Internal Revenue
Code unless otherwise noted.

Custodian. The custodian must be a bank or
savings and loan association, as defined in
section 408(n), or any person who has the
approval of the IRS to act as custodian. Any
person who may serve as a custodian of a
traditional IRA may serve as the custodian of a
Coverdell ESA.

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-EA is a model custodial 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 depositor and the
custodian. 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 trust account, see
Form 5305-E, Coverdell Education Savings
Trust Account.
Do not file Form 5305-EA with the IRS.
Instead, the depositor must keep the completed
form in its records.

Depositor. The depositor is the person who
establishes the custodial account.
Designated beneficiary. The designated
beneficiary is the individual on whose behalf the
custodial 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, fatherin-law, mother-in-law, brother-in-law, or sister-inlaw, 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 depositor’s and designated beneficiary’s
social security numbers will serve as their
identification numbers. If the depositor is a
nonresident alien and does not have an
identification number, write “Foreign” on the

return for which is filed to report the depositor'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 depositor and custodian 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
custodian, custodian’s fees, state law
requirements, treatment of excess contributions,
and prohibited transactions with the depositor,
designated beneficiary, or responsible individual,
etc. Attach additional pages as necessary.
Optional provisions in Article V and Article VI.
Form 5305-EA may be reproduced in a manner
that provides only those optional provisions
offered by the custodian.
Form

5305-EA

(Rev. 10-2016)