Distribution necessary to satisfy need Clause Samples

The "Distribution necessary to satisfy need" clause defines the conditions under which distributions are made from a trust or estate to beneficiaries based on their demonstrated needs. Typically, this clause empowers the trustee to assess and determine what constitutes a beneficiary's need, such as for health, education, maintenance, or support, and to make distributions accordingly. Its core function is to ensure that trust assets are used to address genuine requirements of beneficiaries, preventing arbitrary or excessive distributions and providing a safeguard against misuse of trust funds.
Distribution necessary to satisfy need. A distribution is necessary to satisfy an immediate and heavy financial need of the Participant only if: (i) The amount of the distribution does not exceed the amount necessary to satisfy the Participant’s immediate and heavy financial need described at paragraph (a) (including amounts necessary to pay any federal, state or local income taxes and penalties reasonably anticipated as a result of the distribution); (ii) Before a Participant can receive a hardship distribution under this Section, such Participant must have obtained all distributions (other than hardship distributions) currently available under all plans maintained by the Employer, including a request for dividend distribution. A Participant who makes a hardship distribution request under this Section 11.06 and who has previously elected (or is deemed to have previously elected) reinvestment of Designated Dividends in the Qualifying Employer Securities Fund in accordance with Section 24.11, shall be deemed to have affirmatively elected to receive Designated Dividends in cash on the date the hardship distribution is made. The Participant’s election to receive Designated Dividends in cash shall remain in effect until the Participant subsequently makes an affirmative election otherwise in accordance with Section 24.11(a); and (iii) The Participant represents (in writing, by an electronic medium (including via a recorded telephone call), or in such other form as determined by the Plan Administrator and prescribed by the Commissioner of the IRS) that he or she has insufficient cash or other liquid assets to satisfy the need. The Plan Administrator may rely on the Participant’s representation, unless the Plan Administrator has actual knowledge to the contrary. Hardship distributions shall be made pro rata from the Participant’s Pre-Tax Elective Deferral Account and ▇▇▇▇ Elective Deferral Account, if any, including Net Earnings allocated to such accounts, and from any Profit Sharing Account, Whitney Profit Sharing Account, Rollover Account, ▇▇▇▇ Rollover Account and In-Plan ▇▇▇▇ Rollover Contribution Account and Transfer Account, if any, allocated to the Participant’s account. In no event shall hardship distributions be made from a Participant’s Basic Employer Contribution Account, Enhanced Employer Contribution Account, Matching Contribution Account, or HWC Safe Harbor Contribution Account. Any hardship distribution to a Participant under this Section 11.06 shall be in cash in a single sum. This Amen...
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Distribution necessary to satisfy need. A Hardship distribution under this subsection (2) need not satisfy the requirements under subsection (1)(ii) above. Instead, all relevant facts and circumstances are considered to determine whether the Employee has other resources reasonably available to relieve or satisfy the need. For this purpose, resources include assets of the Employee's Spouse and minor children that are reasonably available to the Employee. In addition, the amount withdrawn for hardship may include amounts necessary to pay federal, state or local income taxes, or penalties reasonably anticipated to result from the distribution. The Employer or Plan Administrator may rely upon the Employee's written representation that the need cannot be reasonably relieved through the following sources: (A) Reimbursement or compensation by insurance; (B) Liquidation of the Employee's assets; (C) Cessation of Salary Deferrals or After-Tax Employee Contributions under the Plan; (D) Other currently available distributions or nontaxable loans from the Plan or any other plan maintained by the Employer (or any other employer); (E) Borrowing from commercial sources on reasonable commercial terms in an amount sufficient to satisfy the need.
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Related to Distribution necessary to satisfy need

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  • Distribution Restrictions The Employer must elect in Section 6.03 the Adoption Agreement the distribution events permitted under the Plan. The distribution events applicable to the Participant's Deferral Contributions Account, Qualified Nonelective Contributions Account and Qualified Matching Contributions Account must satisfy the distribution restrictions described in paragraph (m) of Section 14.03.

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