FID User Guide

A Guide for Adding and Amending Companies in ALARS

TABLE OF CONTENTS

GLOSSARY .................................................................................................................................................. 1

SOLE PROPRIETOR .................................................................................................................................. 2

CHARACTERISTICS ..................................................................................................................................... 2 REQUIRED DOCUMENTATION FOR REGISTRATION AND/OR TITLING ......................................................... 2

ADDING THE SSN TO THE ALARS RNM SCREEN ............................................................................ 2

CHANGING AN ADDRESS FOR A SOLE PROPRIETOR .................................................................. 3

AMENDING FROM A DBA NAME TO A SOLE PROPRIETOR NAME ............................................ 3

CHANGING FROM A SOLE PROPRIETOR TO A CORPORATION ................................................. 3

IS SALES TAX DUE? ................................................................................................................................... 3 PROOF OF FID FOR A SOLE PROPRIETOR ................................................................................................. 3

GENERAL PARTNERSHIP ....................................................................................................................... 4

CHARACTERISTICS ..................................................................................................................................... 4 REQUIRED DOCUMENTATION FOR REGISTRATION AND/OR TITLING ......................................................... 4 CHANGING AN ADDRESS FOR A GENERAL PARTNERSHIP ......................................................................... 4 PROOF OF FID FOR A GENERAL PARTNERSHIP ........................................................................................ 4

INCORPORATED COMPANY .................................................................................................................. 5

CHARACTERISTICS ..................................................................................................................................... 5 REQUIRED DOCUMENTATION FOR REGISTRATION AND/OR TITLING ......................................................... 5 CHANGING A COMPANY ADDRESS ............................................................................................................. 5 CORPORATION NAME CHANGES – WHEN ITS AN AMENDMENT .................................................................. 5 PROOF OF FID FOR A CORPORATION ........................................................................................................ 5

LEASING COMPANIES ............................................................................................................................. 6

CHANGING AN ADDRESS FOR A LEASING COMPANY ................................................................................. 6

TRUST ........................................................................................................................................................... 7

CHARACTERISTICS ..................................................................................................................................... 7 REQUIRED DOCUMENTATION FOR REGISTRATION AND/OR TITLING ......................................................... 7 CHANGING AN ADDRESS FOR A TRUST ...................................................................................................... 7 PROOF OF FID FOR A TRUST ..................................................................................................................... 7

FOREIGN CORPORATION ....................................................................................................................... 8

CHARACTERISTICS ..................................................................................................................................... 8 REQUIRED DOCUMENTATION FOR REGISTRATION AND/OR TITLING ......................................................... 8 CHANGING AN ADDRESS FOR A FOREIGN CORPORATION ......................................................................... 8 PROOF OF FID FOR A FOREIGN CORPORATION ........................................................................................ 8

SEARCHING THE SECRETARY OF COMMONWEALTH’S (SOC) WEBSITE ............................... 9

VERIFYING INCORPORATION ................................................................................................................ 9

DOCUMENTS THAT PROVE FID .......................................................................................................... 10

DOCUMENT SAMPLES ........................................................................................................................... 11

SAMPLE FORM 8109 ................................................................................................................................ 12 SAMPLE FORM 147C ............................................................................................................................... 13 FORM ST-2............................................................................................................................................... 14 FORM 5732 .............................................................................................................................................. 15 SAMPLE CP 575 NOTICE ......................................................................................................................... 15 SAMPLE CP 575 NOTICE #2 – UNACCEPTABLE ...................................................................................... 17 SAMPLE CP 575 NOTICE #3 – UNACCEPTABLE ...................................................................................... 17 SAMPLE SS-4 APPLICATION FORM .......................................................................................................... 19 TRUSTS ..................................................................................................................................................... 19 TRUST SAMPLE #1 ................................................................................................................................... 20 TRUST SAMPLE #2 ................................................................................................................................... 21

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Glossary Articles of Amendment Articles of Amendment are used to make important changes to a corporation by amending its Articles of Incorporation. Anytime a change needs to be made to a corporation, the state requires the filing of an Article of Amendment with the Secretary of the Commonwealth. Company A company is any formal business entity for profit, which may be a corporation, a partnership, association or individual proprietorship. Often people think the term "company" means the business is incorporated, but that is not true. Corporation A legal entity created by the registration of appropriate incorporating documents with the supervising government office. This may be private (ownership held by specific individuals and not traded on a public stock exchange) or public (shares traded on stock exchange). Shareholders are protected from liability for the actions of the corporation. Corporations may enter contracts and own property. Employer Identification Number (EIN) (FID) (FEIN) Employer Identification Number or EIN (also known as Federal Employer Identification Number or FEIN), assigned by the IRS, is the corporate equivalent to a Social Security number, although it is issued to anyone, including individuals, who have to pay withholding taxes on employees. It is obtained by filing an SS-4 application form with the IRS. Foreign Corporation A foreign corporation is a company that has incorporated in another state. If a foreign corporation wants to do business in Massachusetts, it needs to register as a foreign corporation with the Secretary of the Commonwealth of Massachusetts. General Partnership General partnerships are unincorporated businesses that are owned by two or more individuals. All partners who are authorized to sign legal documents on behalf of the whole partnership are referred to as General Partners. The business name of a general partnership is a DBA. As with a sole proprietor, vehicles owned by a general partnership cannot be registered or titled under the DBA name. Instead, all vehicles owned by the general partnership are registered and titled in the name(s) of one or more of the general partners. See the General Partnership section for exceptions. Incorporate To obtain an official charter or articles of incorporation from the state for an organization, this may be a profit-making business, a professional business, such as a law office or medical office; or a non-profit entity that operates for charity. Principal Partner The principal partner is the general partner who signs all the legal documents for a General Partnership. Sole Proprietor A sole proprietor is an individual who owns an unincorporated business. A sole proprietor may or may not have a Federal Identification Number (FID). The unincorporated business name used by a sole proprietor is referred to as a Doing Business As (DBA) name. Since a DBA is not an incorporated business entity, vehicles cannot be registered or titled under the business name. Instead, vehicles must be owned and registered under the sole proprietor’s (i.e. the individual’s) name. If a sole proprietor has an FID number, for tax or other reasons, he or she may choose to register a vehicle under that FID, or he/she may decide to simply register the vehicle as any ordinary individual would – under his/her name and license number. Trust A trust is a legal arrangement whereby money or property is managed by one person (or persons, or organizations) for the benefit of another but is owned by the 'Trust'. The trust is governed by the terms of the trust document, which is usually written and in deed form.

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Sole Proprietor

A sole proprietor is an individual who owns an unincorporated business. Unlike an incorporated company, a sole proprietor is not required to register with the Secretary of Commonwealth. Characteristics

• A sole proprietor may or may not have a Federal Identification Number (FID).

• The unincorporated business name used by a sole proprietor is referred to as “Doing Business As” (DBA), or trade name.

• If a sole proprietor has an FID number, he or she may choose to register a vehicle under that FID, or he/she may decide to simply register the vehicle as any ordinary individual would – under his/her name and license number.

Note: Since a DBA is not an incorporated business entity, vehicles cannot be registered or titled under the DBA business name. Instead, vehicles must be owned and registered under the sole proprietor’s (i.e. the individual’s) name using the FID number. Required Documentation for Registration and/or Titling As part of the Registration Residency Requirement for individuals, a sole proprietor who is registering a vehicle with an FID number must provide his/her SSN on the application.

• If Customer has an FID Number and SSN the following documents are required:

o Title or MCO, and supporting documentation, signed over to the individual o RMV-1 that lists the individual owner name on Corp/Co/Organization Name block

and the FID number in the EIN/FID # block o The SSN must be listed in the Owner License #/ID#/or SSN o Proof of FID which agrees with the paperwork, if the Sole proprietor has not

previously been entered

• If Customer does not have an FID Number the following documents are required: o Title or MCO, and supporting documentation, signed over to the individual o RMV-1 must list the individual owner name on the Owner 1 name block and the

driver license number in the Owner 1 License field

RMV Use: When adding an FID to ALARS (on the RNM screen) for the first time for a sole proprietor, the SSN must also be added. If the sole proprietor cannot provide an SSN, the transaction cannot be processed as a sole proprietor transaction and instead, the customer will need to register the vehicle as an individual and meet the residency requirement for individuals.

Adding the SSN to the ALARS RNM Screen To add the SSN to a sole proprietor’s record on the RNM screen, follow these steps:

• Enter the FID number on the RNM screen. • Enter “S” in the ACTION field. • Enter “Y” in the SOLE PROPRIETOR field. • Enter the sole proprietor’s SSN in the SSN field and hit Enter.

Once you hit enter, verify the correct name populates in the SSN NAME field. If the field does not populate this means there is no record of this person in ALARS. You can create a profile for the customer on the ULCA screen using the existing process.

• The RESID ADDR fields must be completed if:

o The sole proprietor’s mailing address is not located in Massachusetts OR o The sole proprietor’s mailing address is a P.O. Box

• This can also be completed using the “S” action code. • Press F12 and then continue with the transaction.

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Changing an Address for a Sole Proprietor A sole proprietor is required to submit their social security number. If a sole proprietor exists on ALARS, you must go to the RNM screen to verify the SSN is listed. If the SSN is listed, you can return to the previous screen to complete the address change transaction. To change the address the following documents are required:

• A request in writing to change the address o Letter must be signed by the sole proprietor

• Proof of FID listing the sole proprietor’s name, new address, and the FID number. o Proof must be less than 2 years old

• Social Security number listed on RNM

If the SSN is not listed and the sole proprietor cannot provide an SSN, the transaction cannot be processed and the customer will need to re-register all vehicles as an individual and meet the residency requirement for individuals.

Amending from a DBA Name to a Sole Proprietor Name If a record is identified as being a DBA, the record must be changed to an acceptable identity. To change from a DBA to a Sole Proprietor, first verify the sole proprietor has a social security number. If there is a SSN, the transaction can be treated as an amendment by changing the information and adding the SSN to the RNM screen. Customer must provide Proof of FID. Once the record has been changed and the SSN has been added, the customer must submit:

• A completed RMV3 form (for each active vehicle) • A completed Application for Title Amendment with the title • Note: Since the DBA name was entered in error, there is no fee for the amendments.

Changing from a Sole Proprietor to a Corporation When a sole proprietor decides to convert to a Corporation, a new FID number is issued by the IRS. This is considered a new business entity and the following is required:

• A completed RMV-1 Application for Registration and Title • Proof of FID • Previous title reassigned to the new company name • Articles of Organization to verify the date of organization • If formed within 90 days, MVU-25 form • Registration, title and sales tax fee (if applicable)

Is Sales Tax Due? When a sole proprietor incorporates, this is considered new business; however, the transaction may be tax exempt.

• If the new Corporation was organized over 90 days a sales tax is due • If the new Corporation was organized within the last 90 days a sales tax is not due

o In order to be eligible for the exemption, the customer must provide a copy of the Articles of Organization showing the dates. If necessary, this information can be verified on the Secretary of Commonwealth’s website.

Proof of FID for a Sole Proprietor A Sole Proprietor will most often be listed on an IRS document in a fashion similar to… Nancy Smith Nancy’s Floral Shop 123 Main Street Boston, MA 02115

The DBA name is “Nancy’s Floral Shop.” Since the business is unincorporated, the FID is for the individual’s name, not the business name (DBA). Note: A sole proprietor without an FID, is an individual, and should be registered as such using their name and driver license number.

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General Partnership A general partnership is an unincorporated business that is owned by two or more individuals. Characteristics

• A general partnership will have an FID number.

• The unincorporated business name used by a general partnership is referred to as “Doing Business As” (DBA), or trade name.

• The general partnership will have identified one individual as the principal partner

• The principal partner is authorized to sign legal documents on behalf of the whole partnership.

• A General Partnership is not required to register with the Secretary of Commonwealth so it is considered a DBA and vehicles should be registered and titled in the name of the principal partner, under the partnership’s FID number. (Please see exception below)

Note on adding DBA for General Partnerships: A General Partnership may request to have vehicles registered and titled in the name of the Business (DBA). There is an exception where we can accommodate this request. If a General Partnership requests the name to be added as the DBA they are required to submit a Business Certificate, issued by the city or town in which the business is located. Only then can we add the DBA. This is the ONLY instance where it is acceptable to add the DBA.

Required Documentation for Registration and/or Titling

• Title or MCO, and supporting documentation signed over to the name of the principal partner, or business name (see note above)

• RMV-1 that lists the registrant name or the DBA (if requested) on Corp/Co/Organization Name block and the general partnership’s FID number in the EIN/FID # block

• Proof of FID which agrees with the paperwork, if not already listed in ALARS • Registration, title and sales tax fee (if applicable)

Changing an Address for a General Partnership To change the address we will accept either:

• Proof of FID document listing the name, new address, and the FID number • Or, a letter on letterhead requesting the address change. • The letter must include the old address, new address, FID number and it must be signed by

the principal partner. • New address must be updated with the Secretary of Commonwealth

Proof of FID for a General Partnership A general partnership will most often be listed on an IRS document in a fashion similar to… Smith Landscaping Jack Smith Gen Ptr 123 Main Street Boston, MA 02115 The DBA or business name is “Smith Landscaping” and the General Partner is Jack Smith Unless the customer specifically requests the name be added in the DBA, and submits a copy of a valid Business Certificate, ALARS should display “Jack Smith Gen Ptr”

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Incorporated Company An incorporated company is a business that has filed the appropriate paperwork and paid the applicable fees to the Massachusetts Secretary of the Commonwealth or to another state’s Secretary of State, in order to turn their business into a corporation.

Characteristics

• The most common types of corporations include an S corporation, a C corporation, a Close corporation, a Limited Liability Corporation (LLC) and a Limited Liability Partnership (LLP).

• A corporation may or may not have an FID number. However, in order to register a vehicle in the name of a Corporation in Massachusetts, a FID number must be provided.

• Incorporation in Massachusetts can be verified by searching on the Massachusetts Secretary of the Commonwealth (SOC) website.

• Corporations from other states must register with the MA SOC as “foreign corporations” in order to do business here. All businesses registered as foreign corporations can be verified by searching on the Massachusetts Secretary of the Commonwealth (SOC) website.

Required Documentation for Registration and/or Titling

• Title or MCO, and supporting documentation signed over to the name of the corporation • RMV-1 that lists the corporation’s name on Corp/Co/Organization Name block and the

corporation’s FID number in the EIN/FID # block • Proof of FID which agrees with the paperwork, if the Corporation has not previously been

entered

Changing a Company Address The following must be submitted:

• Proof of FID listing the company name, new address, and the FID number. o Proof must be less than 2 years old

• The address should be updated with the Secretary of Commonwealth

RMV Use: Once acceptable proof is submitted, use the RNM Screen to change the address or fax the documents to the FID section at 857-368-0822. Corporation Name Changes – when its an amendment If a company is simply changing their business name, a new FID number is not required and the transaction should be processed as an amendment. The required documents include:

• RMV3 Application for Amendment with insurance stamp • Proof of FID (if not already amended in ALARS) • Articles of Amendment (issued by Secretary of Commonwealth) • Do not turn a customer away of they do not have the Articles of Amendment. Instead, verify

on the Secretary of Commonwealth website. • If non-profit organization, ST-2 Certificate showing new information • Application for Title Amendment for each vehicle and the title • $25.00 fee for each registration amendment • $25.00 fee for each title amendment

Verify the Secretary of Commonwealth website is updated with the new information prior to completing this transaction. If a new FID number has been issued, in most cases this indicates new ownership and should be treated as a new Registration and Title transaction.

Proof of FID for a Corporation A Corporation will most often be listed on an IRS document in a fashion similar to…

Smith Landscaping, Inc. 123 Main Street Boston, MA 02115

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Leasing Companies Changing an Address for a Leasing Company Address changes for leasing companies can only be made by the FID section or RMV Business Support. The following is required:

• Proof of FID • A letter on the Leasing Company letterhead requesting the change • Leasing Company must update their new address with the Secretary of Commonwealth and the

Department of Revenue. This must be done before the RMV can change the address on our database.

The documentation may be faxed to the FID section at 857-368-0822.

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Trust A trust is a legal arrangement whereby money or property is managed by one person (or persons, or organizations) for the benefit of another but is owned by the 'Trust.'

Characteristics

• There are different kinds of trusts. Some of the most common trusts include a simple trust, a charity trust, a revocable trust, and a family trust.

• A trust may or may not have an FID number. • A trust must be added to ALARS under the Trust name, with the FID Number field listing

either the FID number of the trust (if the trust has one), or the Social Security Number of the Trustee.

• If the trust has an FID, then proof of FID must be submitted before the trust can be added to ALARS.

• A trust does not have to be registered with the Secretary of the Commonwealth.

Required Documentation for Registration and/or Titling • Title or MCO, and supporting documentation signed over to the name of the trust or trustee • RMV-1 that lists the trust name on Corp/Co/Organization Name block and the FID number in

the EIN/FID # block • If registering with a FID, proof of FID which agrees with the paperwork, if the Trust has not

previously been entered • Documentation showing the trust exists • Proof of Trust must include;

o Name of trust o Name of trustee o Signature of trustee (Signature page)

• If the trust has an FID Number, proof of FID is required

Changing an Address for a Trust To change the address the following documents are required: • A request in writing to change the address

o Letter must be signed by the trustee • Proof of FID listing the trust name, new address, and the FID number.

o Proof must be less than 2 years old • Trust document proving the trustee name and signature page

Proof of FID for a Trust A Trust will most often be listed on an IRS document in a fashion similar to:

Nancy Smith Trust Jane Doe, Trustee 123 Main Street Boston, MA 02115

A trust is entered into ALARS using the Trust name. In the sample above, ALARS would read: Nancy Smith Trust

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Foreign Corporation A foreign corporation is a company that has incorporated in another state.

Characteristics A foreign corporation may or may not be registered with the Secretary of the Commonwealth (SOC). There are two kinds of foreign corporations;

Ones that do business in Massachusetts

• FID can only be added to ALARS if the corporation has registered with the SOC. This can be verified by looking to see if the company is listed on the SOC website.

• If the company has not registered with the SOC, then the business cannot register or title any vehicles in Massachusetts.

Ones that do not do business in Massachusetts, but own one or more vehicles that are in the custody of Massachusetts residents.

• These corporations do not need to be registered with the SOC • However, they do need to be incorporated – to verify incorporation from another state, please

see the Verifying Corporation section on page 12.

Required Documentation for Registration and/or Titling

• Title or MCO, and supporting documentation, is signed over to the name of the corporation • RMV-1 that lists the corporation’s name on Corp/Co/Organization Name block and the

corporation’s FID number in the EIN/FID # block • Proof of FID which agrees with the paperwork • For foreign corporations who do not do business in MA, proof of incorporation • For foreign corporations who do business in MA, a printout from the SOC website may be

submitted, but finding the company listed on the SOC website is all that is required.

Changing an Address for a Foreign Corporation To change the address the following documents are required:

• A request in writing to change the address o Letter must be signed by an officer of the company

• Address needs to be updated on Secretary of Commonwealth website

Proof of FID for a Foreign Corporation A foreign corporation will most often be listed on an IRS document in a fashion similar to…

Smith Landscaping, Inc. 123 Main Street Huntington, NY 11743

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Searching the Secretary of Commonwealth’s (SOC) Website The RMV uses the Secretary of the Commonwealth’s website to verify information on incorporated business entities. For example, you can use the website to verify a name change, check a company’s business status, or verify that a company has incorporated. Here is the direct link to the search page: http://corp.sec.state.ma.us/CorpWeb/CorpSearch/CorpSearch.aspx For additional information on how to search the Corporate Database please refer to the Job Aid located in the training resources section on TransNet.

Verifying Incorporation For foreign corporations doing business in Massachusetts, incorporation can be verified by looking up the business name on the SOC website. For these companies, the process is identical to verifying incorporation for a business that has incorporated in Massachusetts. For foreign corporations that do not do business in Massachusetts, but who own one or more vehicles in the custody of Massachusetts residents, their incorporation cannot be verified on the SOC website. Since they do not do business in Massachusetts, they are not required to register with the Massachusetts SOC. This means that you will need to see adequate proof of the company’s incorporation. The determination regarding what constitutes adequate proof is left to each branch manager’s discretion.

Suggested guidelines for verifying incorporation from another state:

• The document presented should list the company name and appear to have been created by the Secretary of State’s office for whichever state the customer claims to have incorporated in.

• It should be an application form that has been validated by the Secretary of State’s office or in some other fashion marked “Approved” or “Received.”

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Documents That Prove FID (Documents can be no more than 2 years old)

Any IRS-created form or correspondence that includes . . .

• Company name • Address • FID/EIN Number

Commonly Accepted proof of FID Documents include…

• Federal Tax Deposit Coupon - Form 8109 • Form 147C • Notice of New Employer Identification Number Assigned - Form 5372 • CP 575 notice (issued by the IRS). This is a letter sent to customers to confirm issuance of an

FID number. • Any other IRS form or letter that has the customer’s information printed by the IRS, not by the

customer, and that includes company name, address, and FID/EIN number • Certificate of Exemption - Form ST-2 (issued by DOR)

NOTE: The IRS no longer collects or displays Federal ID number on their website. In most instances, the ID number that is listed on the Commonwealth of Secretary’s website is filler number. DO not use this number.

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Document Samples This section contains samples of documents that often presented as proof of FID, as well as samples of trust-related documents: • Form 8109

• Form 147C

• Form ST-2

• Form 5732

• CP 575 Notice

• CP 575 Notice #2 - Unacceptable

• CP 575 Notice #3 – Unacceptable

• SS-4 Application Form

• Trust Sample #1

• Trust Sample #2

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Sample Form 8109

13

Sample Form 147C

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Form ST-2

NOTES on ST-2

• The ST-2, Certificate of Exemption is good for 10 years. It is acceptable if a form is dated over 2 years old.

• In some instances the customer will present an extension letter after the ST-2 Certificate of Exemption has expired. In this instance the customer must present BOTH the expired ST-2 AND the extension letter.

15

Form 5732

16

Sample CP 575 Notice

17

Sample CP 575 Notice #2 – Unacceptable

The EIN numbers do not match. This CP 575 Notice is not valid proof of FID.

18

Sample CP 575 Notice #3 – Unacceptable

The document below is unacceptable due to the absence of the company’s name.

Notice that the company’s name and address are missing. This CP 575 Notice is not valid proof of FID.

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Sample SS-4 Application Form SS-4 Application Forms are no longer accepted as proof of FID. No application form, of any kind, is accepted as proof of FID

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Trusts There are many different kinds of trusts, and even within the same type, the formation documents for a trust may vary greatly. For this reason, there are no firm guidelines regarding what to look for on these documents, other than that they must include:

• The name of the trust • The name(s) of the trustee(s) • Signature of the trustee (Always make sure this is present.)

The next two images illustrate just some of the variations in trust documents. There are others.

Trust Sample #1

CERTIFICATE OF TRUSTEE AND CERTIFICATION OF TRUST NAME OF TRUST: David R. Greene Revocable Trust NAME OF TRUSTEE(S): David R. Greene DATE OF TRUST: August 18, 2004 TRUST IS REVOCABLE The undersigned hereby certifies the following:

1. That the undersigned is/are the sole/all Trustee(s) of the above designated Trust.

2. That the Trust is valid under Massachusetts law and is in full force and effect.

3. The the undersigned has/have all those powers relative to the above designated Trust which are generally granted Trustees under the laws of the Commonwealth of Massachusetts.

4. That the undersigned specifically has full and absolute power under the Trust to open depository accounts, to manage same, and to freely deposit and withdraw monies from any such account and any individual or entity shall not be bound to inquire whether the undersigned has such power or is properly exercising said power or to see to the application of any funds paid out at the direction of the undersigned.

5. That the undersigned understands and agrees only the undersigned or a duly qualified successor(s) will have access to any depository account established.

6. That any deposit, withdrawal, or other direction given by the undersigned relative to any depository account shall be a recertification that all statements made herein remain true as of the date of such deposit, withdrawal or other direction.

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Trust Sample #2

DECLARATION OF TRUST By the execution of this Declaration of Trust (“Instrument”), DEBORAH A. BURR (“Settlor”), does hereby create the DEBORAH A. BURR LIVING TRUST (“Original Trust”) and, without consideration, does transfer certain property (“property” or “corpus”) to the trustees named hereafter, and does hereby direct that such property, plus any additions thereto, shall be held in trust, administered and distributed as provided hereafter in this Instrument.

ARTICLE I REVOCATION AND AMENDMENT OF THE TRUST:

Section 1.01 Revocation of The Trust: Except as otherwise specifically provided herein or by operation of law, the Trust may be revoked (either in whole or in part) by the Settlor at any time prior to the full distribution of the corpus thereof. Section 1.02 Amendment of The Trust: Except as otherwise specifically provided herein or by operation of law, the Trust may be amended by the Settlor at any time prior to the full distribution of the corpus thereof.

ARTICLE II DISTRIBUTIONS DURING SETTLOR’S LIFETIMES:

Section 2.01 Mandatory Payments of the Income of the Original Trust: (a) At all times while the Settlor is living, the trustees hereof shall either pay directly to, or apply for the benefit of the Settlor, all the net income of the ORIGINAL TRUST. (b) All payments required under the provisions of this section shall be made in quarter-annual or more frequent installments. Section 2.02 Mandatory Payments of the Principal of the Original Trust: Notwithstanding any other provisions contained herein, the trustee hereof shall either pay to, or apply for the benefit of, the Settlor such amounts of the principal of the ORIGINAL TRUST as the trustees determine in the trustees’ sole discretion may be necessary for such Settlor’s:

(1) Support in her accustomed manner of living;

(2) Education, including college and professional education;

(3) Health; or

(4) Medical, dental, hospital and nursing expenses and expenses of invalidism.