EFTA02599949.pdf

From: Richard Kahn Sent: Tuesday, July 10, 2018 12:16 AM To: Jeffrey Epstein Subject: Fwd: Marital Trusts - Richard Kahn HBRK Associates =nc. 575 Lexington =venue, 4th Floor New York, NY =0022 telM fa cel Begin forwarded message: From: =/b>Noam Chomsky Subject: =/b>Fwd: Marital =rusts - Date: =/b>July 9, 2018 at 6:25:58 PM =DT To: =/b>Max Kohlenberg Cc: Richard Kah Thanks for the comments. A few =ore of my own, for clarification. In red. I should add =hat Harry's recent behavior, including this utterly outrageous =ocument, might make it necessary to go to litigation. The last =hing I want, but he may force me to it. If necessary, I may have =o make public the way the Trustees have handled the Trust since 2009, =hen I appointed Harry as trustee to replace me. Many serious =uestions. It is the last thing I want to =e driven to, but there are some very ugly things in this proposal, not =east the very clear implication that Valeria somehow wanted to marry an =lder man for the money and that she caused the increase of expenses -- =asily refuted, it's easily documented that the cause was diversion of =RA funds for the benefit of the children and the exorbitant tax bills =esulting. All so disgraceful I'm not going =o let it stand. Forwarded message EFTA_R1_01786739 EFTA02599949  From: =b class=" mail sendername">Max Kohlenberg <mailto Date: Sun, Jul 8, 2018 at 5:02 AM Subject: RE: Marital Trusts To: =oam Chomsky mailto: Cc: Richard Kahn =It; mailto >> Noam — I'm not sure if you wanted =urther comments from me before responding to my message in greater =etail, but I have added a couple of comments below in black text, =here it seemed that a reply to your comments was appropriate. I will look forward to your fuller =esponse in due course, if you are so inclined, but again noting that =hile providing me with the financial information that I've asked for would be helpful, you may instead want to focus =n the subject of selecting my successor, and then to establishing with =im or her a better understanding about distributions from the trusts. =/div> Max A. Max Kohlenberg Howland Evangelista Kohlenberg Burnett, =LP One Financial Plaza — Suite =600 Providence, Rhode Island 02903 Dire Ma Fax: www.hekblaw.com <http://www.hekblaw.com/> 2 EFTA_R1_01786740 EFTA02599950  This email and any attachments thereto =re intended only for use by the addressee(s) named herein and may =ontain legally privileged and/or confidential information. If you are not the intended recipient of this email, you are hereby =otified that any dissemination, distribution or copying of this email, =nd any attachments thereto, is strictly prohibited. If you have =eceived this email in error, please immediately notify me by return email and permanently delete the original and any copy of =his message or attachment. Thank you. =/span> <=iv dir="ltr" class=""> From: Noam Chomsky (mailto: Sent: Sunday, July 08, 2018 1:34 AM To: Max Kohlenberg Cc: Richard Kahn Subject: Fwd: Marital Trusts =/div> Before responding to your letter =n full, I would like to clarify a few matters. Interspersed =elow. Noam Forwarded messa e - From: Max Kohlenberg Date: Sat, Jul 7, 2018 at 4:43 AM Subject: Marital Trusts To: Noam Choms mailto Cc: Richard Kahn <mailt > >> =/span> 3 EFTA_R1_01786741 EFTA02599951  adiv> Noam - Thank you for your reply. As you =ndicate that you are not being represented by counsel I will reply directly to you, with a copy to Rich (as you suggest). Please =onsider: 1. As a starting point, let me note that I =hink you and Rich may have misunderstood (at least initially) the terms =f the settlement that Harry proposed through his attorney. Rich and I discussed this in a call about 10 days ago and I'm =oping that misunderstanding has been cleared up, but as I'm not = party to your exchanges (and Rich's exchanges) with Harry'= attorney I can't be sure. I'm also not certain =hether the terms of the proposed settlement have changed. All I can say for sure is =hat characterizing the offer as one in which distributions to you =annot exceed S100K per year is not consistent with my understanding of =hat has been offered. The reason why the proposal is too =utrageous to discuss has nothing to do with the technicalities of the =andout that Harry is graciously offering. I'll review the =ackground, once again. =/span> adiv> As I've discussed before, the Marital =rust was established in Carol's name for tax purposes. The =bvious intention, clearly understood by Carol and me, and of course =ric Menouya, was that it would be available to the survivor -- Carol we assumed -- =nd then what remains would go to the beneficiaries. The idea that =e intended that Carol would control "her" funds and I would control =mine" is too ludicrous to discuss, though I understand the legalistic conjuring that can be adduced to reach this =onclusion. As you note, I was not working with you at the time =ou and Carol drew up your wills and trusts, but what you describe is =ot consistent with Eric's notes (which I have), nor with the facts as I understand them. You are right that tax savings =ere a major driver to the planning (and the plan did in fact result in substantial savings of both =state and income taxes) but it was not drafted with the expectation =hat Carol would survive you. The question of who would be the survivor =s irrelevant. Carol and I assumed that she would be the survivor, =ut there was no reason to tell anyone, and it has no bearing at all on =he fact that our intention was that the principal would be available to =he survivor, then going to the children The =ecision to fund Carol's trust with both financial assets and =our Cape and Lexington homes was made whenWas already ill and (as far as the notes indicate) with =he expectation that she would predecease =ou. This is =uite surprising, and I would like some clarification. Most =mportant, I don't see how any significant decisions could have been =ade during those years, who could have made them, or why it was =one. Obviousl\Mcould not have done so. She had to =ndergo massive brain radiation as soon as the biopsy was taken, and =erious cognitive and physical decline was immediate. Nor could I =ave been involved. I very much wanted to keep her at home, rather =han the only alternative -- a nursing home. I managed to do so =or two years, until the end, but it required 24-hour care, and I was in =o position to think about such matters. If I had been informed -- = don't recall anything of the sort -- I couldn't have paid any =ttention or granted truly informed consent. So I would like to =earn more about these decisions. 4 EFTA_R1_01786742 EFTA02599952  Secondly, = don't understand them. How could the Cape and Lexington homes =und the Trust? Did the funds from selling the Lexington house go =o the Trust? How was it funded before. Would appreciate =larification on this. Of =ourse we knew by then that she would predecease me. It was a =edical miracle that she was able to survive that long, on experimental =rugs, as a last =esort. The records that I have seen do not =ndicate what your expectations (or Carol's) were as to how the =arital Trusts were to be made available to you after Carol was gone 40=93 for that the independent trustee of the trusts (whether me or my =uccessor) has to rely on the terms of the trusts themselves, the information that's given by the trust =eneficiaries, and the law surrounding such =rusts. =/div> I'd be interested, of =ourse, in knowing about the records you have seen, but it would hardly =e surprising if there is no explicit record of what is obvious simply =o common sense. We were a married couple who cared for each other =nd for our children, putting a Trust in Carol's name for tax =urposes. What sort of lunacy would it to set up a Trust for one =f us to have access to but not the other? So of course you are =nlikely to find notes about it. If Harry forces this to =itigation, all of this will have to come up, either in court or in =ublic in some other manner. <=div> When I appointed Harry to replace me as =rustee, I took for granted that he would handle the trust as I =ad. His behavior since, and this latest proposal, make it very =tear how wrong that assumption was. This proposal calls for him to be =n complete charge, which means, as he has shown, that I can only plead =or some funds by accepting conditions that he knows I will not =ccept. You recall, I presume, that this was true even when I faced an enormous tax bill because my IRA was being depleted for =he benefit of the family. To refresh your memory, let me repeat =gain what was happening with my IRA until I learned about it. =here is a mandatory withdrawal. Half was being distributed to =amily. The other half was being used for taxes and management fees for the =ntire estate. In order to payMnedical expenses, and to pay =50,000 a year for rent and upkeep on the house in Wellfleet that we had =iven to the children and that I was barely using, I had to withdraw extra funds from the IRA, with the onerous tax =urden. The same when I withdrew something to live on. Under =hese circumstances, Harry refused to release funds from the Trust for =ax relief without onerous and humiliating conditions that he knew I would not accept. Easy to predict what might happen =nder less extreme conditions. It was not until 2017 that I was =ble to overcome the accumulated burden of these actions. =/span> In the previous paragraph you offer to "refresh=my memory" and in the prior paragraph you say "You =ecall, I presume ". Without going into detail, = have to note that my recollection of the events you describe is not consistent with yours (though it may not be =ntirely consistent with Harry's either — I am not =ure). In =y case it is not recollections. When I began to understand what =as happening, I looked into the matter, and have the documents at hand, =ncluding the mail interchanges about Harry's refusal. The rest is =traightforward and unambiguous documents. adiv> Since my own recollections may be the subject =f testimony in the legal proceeding that Harry has initiated, or in one =hat you may commence, I think it better that I not recite my own recollections =ere. 5 EFTA_R1_01786743 EFTA02599953  Note that Harry's exhibit B, beginning =ith section 9, is utterly false, and consciously so. All of the above =as been explained to him over and over. It is not only consciously false, but is framed as a vicious and ugly attack on Valeria, =mplicitly accusing her of responsibility for the escalation of expenses =hich, as Harry knows, was caused by the actions just described once =gain. For such reasons, Harry's proposal is, =s I said, too outrageous to discuss. 2. As you know, Harry's attorney =as commenced a legal action that is intended to facilitate my =esignation and the appointment of a successor trustee to take my =lace. Since you've wanted me removed for some time and since I've =aid (from the first time you and I met) that I only wanted to serve as =rustee if all the family members wanted me to serve, I'm =ooking forward to resigning as soon as the court determines how I am to do so and how my successor is to be selected. 3. Given that my replacement is impending, =t might be worth waiting until my successor is in place before =esponding to my requests for financial disclosure, as it's =ossible that my successor won't share my views as to what the trustee =f the trusts needs to know before making decisions about =istributions. Likewise, if my successor will be identified soon =t might make sense for me to hold off on any distributions and leave it to the new trustee to work with you on figuring all of this =ut. In this regard I'm kind of a "lame duck"=trustee, wouldn't you say? 4. To the extent that you want to push =orward while I remain the trustee, let me again state the basis for =inancial disclosure by you. It is that, as trustee, I owe a duty to you and I owe a duty to your children (as the remainder =eneficiaries of the trusts). For the present my primary duty is =o you and it is to distribute to you all income earned by the trusts, =et of expenses, Until I asked about =he matter recently, I am aware of no income distributed to me earned from the trusts. I cannot be sure, because I have no =ecord of having received any accounting of what is happening to the =rusts, including distributions to others (or as required, to me). =ould you then please send me the records on these matters since 2009, when I appointed Harry to replace me as =rustee. =/span> I provided reports on income, expenses and =istributions to Deborah Pechet Quinan last October and I copied those reports to Richard (and updated them) in the last 60 days. I =hink it might be easiest if Richard forwarded those reports to you, but =f he can't for some reason then I will do so when I am back in =y office. I =ould like to know more about this. Richard Kahn did forward reports to =e, but all that I see is from the last few years, after I requested =nformation. I don't have any records for the years since 2009, =hen I appointed Harry trustee, neither about the income that was =upposed to be paid to me or about distributions from the Trust or any =ccounting of those years. So =ould you send them to both of us, along with documentation about any =istributions that were made. In particular, I would like to know =he reason why there is virtually no income from the trust -- whether it =as paid to me from 2009 or not. And about the instructions for =ny distributions that may have been made from the Trust. 6 EFTA_R1_01786744 EFTA02599954  and to distribute to you (or pay on =our behalf) additional monies as reasonably needed to the extent that your income from other sources is not =ufficient to support your reasonable expenses. Notwithstanding your statement that =E2404>As for the claim about concern for my later years, that has been =horoughly refuted" it =as not been refuted in the context of my trusteeship and it remains my =uty to consider distributions in light of the possibility that you will have a reasonable need for distributions from the trust for many more =ears, and perhaps in increasing amounts, depending on your =ircumstances in the future. <=div> I didn't respond before but perhaps I should =ave. I will be 90 years old in a few months. I'm not going =o live forever. You know how much is in the Trust. You also =now my spending habits. Harry would not have millions of dollars =f I hadn't been working all my life and saving money for him and his =isters. Despite the ugly implications about Valeria in Harry's =etter, nothing material changed after our marriage beyond what I =escribed and can readily document, with one exception. In =exington, I was living rent-free, the mortgage having been paid years =arlier. Valeria and I decided that taking care of a big house with =teps everywhere and everything else that owning a house in Lexington =ntails -- snow removal, etc., and a difficult drive to work through New =ngland winter weather -- made no sense at my age, and that we =hould move to an apartment close to work with no steps or other =roblems. =/div> Not your business, but one thing that shocked =e about Harry's letter was his complaint that I moved from a house to a =new home" -- insinuation obvious -- in fact an apartment with no winter =riving to my office and convenient for someone my age. q=iv> S. As for the specifics of disclosure, =hat I need to consider is (a) what your income was in 2017, since that =as the basis for the tax payments you seek to have reimbursed, (b) what your income is likely to be this year and going forward, (c) =hat your expenses were in 2017 and are likely to be in 2018, and (d) =hether any of your income (or other resources) are being used for =urposes that the trust cannot support (such as gifts to third parties). So far, Rich has provided me with some =ough information about your 2017 expenses. There are some gaps in =hat information, but nothing that can't be cleared up pretty =asily (I think). Rich has also assured me that you have not made any gifts that have diminished your resources and I assume you would =onfirm that to me. What I don't have at this point is enough information =bout your income, so that I can consider what the gap is between your =xpenses and your income, which is the gap the trusts might help to =lose up. With respect to your income in 2017, all I can see is that your income tax obligations seem to be much higher than they were =reviously. I'm assuming that reflects a jump in income =rom (i) the profit made on the sale of the condominium, and (ii) large =ithdrawals from your IRA. If you want to provide me with more information (bearing in mind what I noted in item #3, above) then =nformation about your 2017 income and what your income is likely to be =his year is what I most need. There is a very simple reason for the =ncome tax obligations. The depletion of the IRA that I reviewed =gain above imposed a huge tax burden, which we were still attempting to deal with in 2017. After Harry's refusal to release some funds =rom the trust to pay the exorbitant taxes resulting from what was =appening, I of course had to withdraw funds from the IRA to pay taxes =n the whole estate, incurring a new exorbitant tax burden. Despite 7 EFTA_R1_01786745 EFTA02599955 some small relief later from the trust after I =ad repeatedly pointed this out, it carried over through the 2017 tax =ill. So for that reason, taxes were extremely high. That =urious episode is at last finally over, leaving many questions unresolved about what was happening while I was paying little =ttention, relying on advisers to ensure that matters were proceeding =ppropriately I hope this is helpful and will wait to =ear more from you and/or Rich. <=div> Max A. Max Kohlenberg Howland Evangelista Kohlenberg Burnett, =LP One Financial Plaza — Suite =600 Providence, Rhode Island 02903 Dire Ma' Fax: www.hekblaw.com <http://www.hekblaw.com/> This email and any attachments thereto =re intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential =nformation. If you are not the intended recipient of this email, =ou are hereby notified that any dissemination, distribution or copying =f this email, and any attachments thereto, is strictly =rohibited. If you have received this email in error, please immediately notify me =y return email and permanently delete the original and any copy of this =essage or attachment. Thank you. 8 EFTA_R1_01786746 EFTA02599956  From: Noam Chomsky [maiIto: Sent: Friday, July 06, 2018 8:5 To: Max Kohlenberg Subject: Re: Marital Trust I am not represented on this issue, so you can send the =nformation to me directly, copying Richard Kahn. Noam On Fri, Jul 6, 2018 at 4:24 AM, =ax Kohlenberg <mailto > wrote: Noam — Thanks for your message and your =nquiry. I would like to reply in some detail, but before I do so please tell me whether you are now represented by legal =ounsel. If you are then I believe I'm obliged to copy =our counsel on our exchanges. I would also plan on copying Rich =ahn, since my last communications about distributions to you from the =rusts have been with him. Please also bear in mind that since =according to Rich) you are preparing to bring a legal action against me, I have been in contact with my firm's malpractice =nsurance carrier. As my exchanges with you may also need to be =eviewed with our carrier that may delay (and/or limit) my =esponses. Max A. Max Kohlenberg Howland Evangelista Kohlenberg Burnett, =LP One Financial Plaza — Suite =600 Providence, Rhode Island 02903 Direct:- 9 EFTA_R1_01786747 EFTA02599957  Mai Fax: www.hekblaw.com <http://www.hekblaw.com/> This email and any attachments thereto =re intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential =nformation. If you are not the intended recipient of this email, =ou are hereby notified that any dissemination, distribution or copying =f this email, and any attachments thereto, is strictly =rohibited. If you have received this email in error, please immediately notify me =y return email and permanently delete the original and any copy of this =essage or attachment. Thank you. From: Noam Chomsky (mails Sent: Thursday, July 05, 2018 To: Max Kohlenberg Subject: Marital Trust Max, I presume it is clear =hat the recent proposal transmitted by Harry's lawyer that I =hould be satisfied with a handout of 100k a year from the Marital Trust =s too disgraceful for comment. I would like to know what further =nformation you require for reimbursement for tax payment. We have =reviously transmitted a great deal of financial information in order =or you to reimburse our taxes, including proof of payment and more. Exactly what more do you require, and with what =ustification? We see little reason that you cannot act on the =nformation already provided. As for the claim about concern =or my later years, that has been thoroughly refuted. Noam =/div> 10 EFTA_R1_01786748 EFTA02599958 </=iv> please note The information contained in this =ommunication is confidential, may be attorney-client =rivileged, may constitute inside information, and is =ntended only for the use of the addressee. It is the =roperty of JEE Unauthorized use, disclosure =r copying of this communication or any part thereof is =trictly prohibited and may be unlawful. If you have =eceived this communication in error, please notify us =mmediately by return e-mail or by e-mail to [email protected], and destroy this =ommunication and all copies thereof, including all =ttachments. copyright -all rights reserved 11 EFTA_R1_01786749 EFTA02599959