Survivors Option.pdf by wangnuanzg

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									                                                                                                    InterNotes®         Survivor’s Option
                                                                                                                                     Summary
This guide is strictly for informational purposes. Based on information found in the applicable prospectus, this summary provides guidelines
regarding how trustees typically respond to Survivor’s Option requests. At all times, the trustee makes the final decision on if and when the
Survivor’s Option can be exercised. Questions regarding submission of a Survivor’s Option request should be directed to the specific issuer’s
trustee. A link to complete trustee contact information can be found on InterNotes.com.

A basic guideline: For all accounts, the beneficial owner of the note must be established. This is defined as the person who has the right,
immediately prior to such person’s death, to receive the principal payment of the note.

                                                                                                       InterNotes must be held for at least six months before the Survivor’s Option may be
                                           (Check prospectus for specifics)




                                                                                HOLDING
                                             • Current InterNotes Shelf •




                                                                                                        elected. If the beneficial owner passes away prior to the six-month holding period,
   OPTION LIMITS




                                                                                PERIOD
    SURVIVOR’S




                                                                                                          the deceased’s estate must hold the notes for the remaining time period before
                                                                                                                               the Survivor’s Option may be exercised.

                                                                                                       The annual put limit for each issuer is an amount equal to the greater of $2 million,**
                                                                                ANNUAL                  or 2% of principal amount of that issuer’s InterNotes outstanding at the end of the
                                                                               PUT LIMITS                     most recent fiscal year. **PHH Corporation has an annual put limit of
                                                                                                                            $1,000,000, or 2% of principal outstanding.

                                                                               INDIVIDUAL            For each InterNotes issuer, there is a limit of $250,000 per individual deceased owner of
                                                                               PUT LIMITS                                    beneficial interest in any calendar year.

                                                                                                    Ownership of property by two or more people in which the survivors automatically gain
                                                                                  JOINT
                                                                                                  ownership of a decedent’s interest. For example: John and Jane Doe have a JTWROS account
                                                                                TENANCY
                                                                                                             and John passes away. Jane can put back the entire principal amount.

                                                                                                       A type of joint tenancy of property without right of survivorship; each tenant’s portion
                                                                                                  of ownership is distributable under will. For example: John and Jane have a Tenant in Common
                                                                               TENANCY
            SURVIVOR’S OPTION GUIDELINES




                                                                                                    account and they are not husband and wife. John passes away; therefore John’s estate can
                                                                              IN COMMON
                                                                                                            only put back John’s beneficial interest in the InterNotes. If John and Jane
                                                                                                                          were married—the full amount could be put back.

                                                                                                  A trust that may be entirely revoked or withdrawn by its grantor or by another person. Grantor
                                                                                                     can set the trust up for him/herself or for the benefit of another. If a revocable trust is set
                                                                                                    up for the grantor (himself), he is the beneficial owner and upon his death, the bonds can
                                                                              REVOCABLE                be put back. If trust is set up for the benefit of another person (i.e., his daughter), she
                                                                                  (LIVING OR       is the beneficial owner and upon her death the bonds can be put back. For example: Father
                                                                              SELF-DECLARATION)
                                                                                                    (grantor) sets up a trust for himself. Upon his death, the estate can put the bonds back as
                                                                                  TRUST              the father was the beneficial owner in this instance. However, if a father (grantor) sets up
                                                                                                      a trust for his daughter, she is the beneficial owner. In this instance, if the father passes
                                                                                                    away bonds cannot be put back as he is not the beneficial owner. However, if his daughter
                                                                                                              passes away, the bonds can be put back as she was the beneficial owner.

                                                                                                      A trust that cannot be changed or canceled once it is set up without the consent of the
                                                                                                  beneficiary. Contributions cannot be taken out of the trust by the grantor. For example: A father
                                                                              IRREVOCABLE           sets up an irrevocable trust for his son. Once set up, the father cannot change the account.
                                                                                 TRUST               Even though the father set the trust up (grantor) he is not the beneficial owner. So upon
                                                                                                       the father’s death—the bonds cannot be put back. However, if the son passed away,
                                                                                                                 the bonds could be put back because he was the beneficial owner.
                                                                                                                                                                                      CONTINUED



  For complete Survivor’s Option procedures, including trustee contact information, please visit InterNotes.com
InterNotes®                                       Survivor’s Option
                                                               Summary—Continued



                                                                        A trust that is much less restrictive than the Q-Tip format and essentially gives the surviving
                                                                        spouse the “power to appoint” the proceeds of the Marital Trust to whomever the surviving
                                                    GENERAL
                                                                         spouse deems appropriate (including spouse). For example: John sets up this trust for his
                                                   POWER OF
                                                                          wife. Trust stipulates that the wife has the right to direct the proceeds of principal upon
                                                  APPOINTMENT
                                                                             husband’s death. In this instance, she would be the beneficial owner and therefore
                                                                                         upon her death her estate could enact the Survivor’s Option.

                                                                         A trust that is used to provide for the welfare of a surviving spouse. Depending on how it is
       SURVIVOR’S OPTION GUIDELINES (CONTINUED)




                                                                        set up, the surviving spouse may be able to invade the principal of the trust. In this instance,
                                                                        the surviving spouse will likely be considered the beneficial owner and upon his/her death—
                                                                          the Survivor’s Option may be enacted. Conversely, if the trust stipulates that the wife has
                                                                        no right to the principal (only interest payments), she is not considered the beneficial owner
                                                                         and upon her death the bonds would not be eligible for the Survivor’s Option. For example:
                                                                         A husband sets up a Q-Tip trust for his wife and children. If the trust stipulates that during
                                                       Q-TIP
                                                                      the wife’s lifetime she is entitled to income (interest) from the trust and gives her broad control
                                                      TRUST
                                                                       over the principal, then the wife is the beneficial owner and upon her death the bonds may be
                                                                       put back. If, however, the husband wants the majority of his wealth transferred to his children,
                                                                      he could set the trust up so that the wife is entitled only to the income (interest) from the assets
                                                                       in the trust and not allow for her to invade the principal (as this is reserved exclusively for his
                                                                       children). In this instance the children, not the wife, are the beneficial owners. Because of this,
                                                                          upon the wife’s death, the bonds cannot be put back. If one of the children passes, since
                                                                               they are considered the beneficial owner, the Survivor’s Option can be exercised.

                                                   JOINT TRUST           These trusts are popular in community property states. Because the situation deals with a
                                                   (HUSBAND & WIFE
                                                       TRUST)                   married couple, if either party passes away, the entire note can be put back.

                                                    IRAs, 401Ks             The participant of the plan is the beneficial owner. At the death of the participant, the
                                                      AND OTHER
                                                   RETIREMENT PLANS               authorized representative of the plan can exercise the Survivor’s Option.

                                                   CUSTODIAL              Method of ownership for minors whereby an adult or trust company acts as custodian
                                                   OWNERSHIP              on the minor’s behalf. The minor is the beneficial owner of the Note. At the death of the
                                                       UNIFORM           minor, the Survivor’s Option can be exercised. For example: Mr. Smith owns InterNotes as
                                                    TRANSFERS AND
                                                       GIFTS TO           custodian for Billy Smith, Jr. under the Illinois UTMA. Upon Billy’s death, the Notes can
                                                     MINORS ACTS                                be put back by the custodian or Billy’s estate.




For complete Survivor’s Option details, please refer to the applicable InterNotes Issuer’s prospectus.




  For complete Survivor’s Option procedures, including trustee contact information, please visit InterNotes.com

								
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