EFTA01156971.pdf

J.P.Morgan 0 EFTA01156971 ram IT lamina Ilk cona.'al•asah.1I. 61 n&n.J a. taxa 11.4.41catapata l A. onup,N essagaaJaansl len u wo postal Isaac do gnaws toad lama aLe;gala aa0a to. 44 WA *am, iith you a..e away uJ ala ea alexia as 64 'no aaalot %fake Jo alms chaa him aa dal caanura... ramp. Oar k Ca itta nil pans h....al sla ••• re ea. amasse. leplaMa beams. to plead si tomb woa pant par kid al as alroas pa. sae for.aa will par con Saw. Ji Morgan EFTA01156972 Pe•foncl Puyallup re® (PM to to narkn naiad m oniuncrod wall trait app.-unser sag • Daman Stuuisty Tnm Reposes to 'freeze the value of assets Ihet wig be included in the senior eanevalton's estate and shirt Mx excess appreciation to the junta gentrabon(s)wilhoul additional Innate, lax. • It enables investors to transfer to beneficiwien anticipated appreciation in a tax-efficient manner whie retaining a lame pat:onof the investmenl and a raced return • Investment is divided into Managing Units. Preferred Units. and Residual Units • Preferred Units represent majority of initial asset value and carry a fixed (*imitative. nowcomputridirgi rale of retail • Residual Urns represent balance of brim' asset value pilot anticipated appredalicn in excess of the preened relum • Residual Urns are gifted amity soli to beneficiaries IPMorgan EFTA01156973  %%sauna Prima P.natn ee O O ••••••. an %%Am ••••• mu. • IN4•••••• f•••• ion) • %%vs 1.••••••••••••••••••••••• ••••••••••••%•••• •••••••••• soma • Pe•••••••.I to% 4.11 LJI L.L•A•.1...,•• •••• •J .S... ••••••••c••• %Now.. ann. • %Ana Om prAY • Ibmt %nth.% •• nal r••••• •• woke Fray %%Ise a+. -w Dalryektia 'man ••••% I% ,1 u.. it4 diernd la• a ••••••1••J • %%I •• WA.... %Mayo, 141...•••...w:.4 tr. pm.”•••••••,••••••••• Hu% %Es • 11.44•11.••••pami•%••••••,•%••••••••• ray.% I Vs' M.o....Belk% fe•••4 tiwa•••4•••••1•••••• %vial r•••••11%•••••• • NJ %min% alti. %ants/ •pr....• •••••••••• Im.lremnieholco•I U.% Tr. •1Odon• ••-• gum.. nom • ••••••••• ...••• dM x44. 4.4 ....M... 0 <••••••• %.i% mausbn" C re E l Mulct lltac hetwrol Lba• 79% 1% • •••••••• 1.. 10 e••• ••r J.P.Morgan 1. Morgan can provide a professional °pommel that suggests a range of hypotheecal valuation discounts EFTA01156974  %seas 4Faded Fitton, Fna• 6 .1 Iwo!. 4 4. Mr.••••• two, 4.1.1ta..4.1...•••4 .1•1•• l•••Lapn. or+ • .• ova 4.ti 6••ft. ..... . Ail ?anal Mitt. owing O JISBIgun Gen, Jpd. dram arilba. rrin.rp uvershao u /nom ova Ills a.m.. hat an• •••••• •• d aroaa. - ramps Ca ••••••. f Maya ••J LW.L 11•41.1%.1.-• Lana win .Fla Senne Gaily nankin Padionl lini• v. Awl= l•• ••• isali bow o — Knaiaante Tina. 1. Morgan can provide a professional soprano! Mat suggests a range of hypothetical valuation discounts EFTA01156975 PW apaaltssa en Dassnaa assrais loss End sans of st sass ass stesmas„ • l.AM dsabily for el Win herder*. eve n that oankipate in reffnegernent • Conti:NOW ty of NI w%I herder* IS OfNerved es Wine name of me vust and the name and some of the Delman trustee need lobe dsclosed • DinOlutfon doe. no necessany occur upon the death. ixeceply or bankruptcy of e and holder • Flaatatit•O reed SO ehen0(4 M MOUE*NY or lax laws to feCillfOf the enenginO needs el trust parbepans • Trustee 4 STOnd 000 inveelment eutrarey SO employ mom poloso theory and netblny of deleoVo ~ammo', daemons ho other minors J.RMorgan 5 EFTA01156976 _ad Fortryssn rarer, re Sc. E.43.4 Unary ena)..4 d. WF • ceo cfr...nt mistion The tomb:bran 01e eglete freeze Strategy is elreb» and elOnelfileal cotaaldhed Mora a Cerbficate of Trust "nth the Delman, Secretary of Slate • investment menedement C0818 Gen be reduced ~al, economies ol Kale • JPSIcegorr's fdunary system proodes Na Icrlarting: dOlurrontecen d the value of vacs Irantallfred 8nØ ran* member* eaeriClariCe 10 lax 00MblenCe manic-fleecea( the records of No Estate Freeze Scram to preserve rb integrity far laxpurposes a: a BOOM% legal efeily J.RMorgan 6 EFTA01156977 DoUna/. rdainamtus torpmebits• • Account set-up • Ong0ing commtntaten tuaministratne mallets including record keepng and market value slatomonla Felutlary °sista:pal br ropallS0S/ end Otenning 00n5i0Ort1(arni • Ao:ount admnatraton Investment maintenance Ito. subsencepon agreements and offering memoranda) • Ongong commtntation nth Managing Urn 710400(5 and Inv anent manager Custody notiding safekeeping. noarne collection and optional trading platform • Responsibity ItsielattAS altallbUlealaS SOO VillbaldakaliS Preferred payments. tax distributions. redemptions Executing di:into:ion transactions .ndudng deferral of profaned parents Ealoatn0 distobution'redeMpti0n requests fr0M Wit-NANO Doarmining amounts and lining 04 all alStibull00S Obtamirg valuxons to supparldisInkotions. as nocemarY C0mplyng Mtn MIlkilfd Revenue Code Seetan 2701 rues and p4evia0n8 of eslaa freeze gratin) &Kamera CnStal0vi analysis for preferred Ormolu/ alalottaritql tliCaSnall inCOMOtrindiDal ledgers • Delegated respenstility fee tax complain. - COMOISCan 0e DennOrShO return we" peon - Review and execution of palrershp returns and K-Is - Evaluation of film poseons including Section 155 Nations J.RMorgan EFTA01156978 Tinai6. us 09•113400. • InIsnal Revenue Code Section 2701 describes and sancbans the estate freeze strategy • Gin lax value of Residual Una% mugt bee 10% MUM Gagner account fund® value Of *State freeze s1a1i,i • Discounts may apply to funding.calaileilion of the enemne preferred rate & valuationa( Residual Dries • APpreCialleil h estate freebie Me% exceeding SWIM, referred Oftment rate aCCruild 10 bens of Residual Uris holders inabe causing additional gal or estate tax • Preferred PayllflaB: - Based on previaIng lArirket Rae' of return. lwcally determined by valuationprofessionals appraisal end may be &Wild fro ara On a foling basis - ~renal preferred real frey be reduced by CoSCOurded fundhg deferral bf preferred paymend and benefit of all capital fincludrg ~moo tarts) xØ to medico amen, necessary le pay the lower "CIA. rare - 4.yare deferral of payment on a ccdrig basis • PPP maybe lag likely lobe ButneC110 IRS *Many man standard famed United partneMbi00 - FtelnleirCed ter Me Independent TrueleeeiCOnlrol Over 0$01)ubCati LPMorgan EFTA01156979  vaga...naua • PPF Pvarw. Sh»Jwy Truste~fed ås porininbef lOr neCete blap~2441. ConlrOulan ganene/ n-luni corintratne donet cane Krmellete gen ~grenen - excapicesmorwify. mens, • ~mei m.o.t" reke - cherotIceiza • ~rei Cilltritulall 4.0>M 101åkllas øturrod by pteli4ralip - Salta sitepuiniperuwe alocamas probuolbiion gåh tonkb",4 &IS te tø. ~gulna]. - Pzirethp'elsvps nam. art es corrne.ezwe tom - PrIP0.6 tap, CILAS$ Cash ~di:WM.0 twettol<omneviea menn • •War/C.1 - nri51ti:PC:am*, ~ara IMM and Reints31 eroczMe ro p, " aocce,ole boom. woncl to Prekt« Unes for mor aJdØwlMfm. f wci lo meretr, efreis Ølm, ~ete erd omena tv« arn.leete nevn. on:11cooll lo ~ba Ull% - toffeW t0 Caron~nr, Inn tertefillgel~11 trd Ccamta ~tg, Unen unle recAce0 lo zero tien ~end to Narra: Lita unill rolu[b w nr* • Preken poret meaeony fron, net cvn.iiine ka nid Po. nmixa. se Pnferred winher•etlinide,neenit up roinnel 110~ •Muln, ptentiellip Ns uruke ~mo - guntelårld pågnlab tc.h tles itguhd rOgård•Id)hrgre 4nd whdi ane lai.] a, crelnuy num* vai pkownhp ~lied (nem whon salsled n.lårb - Plonliegfe 41.1ård chlitultm CE lXvrOmIcl «ran an to icnn gtolana3 ~va. • De/Mr/tom - Coa aleetxnen lende l)po,ty as emnet rrn ony rre.ceeds taus - Sminty. **tonen gremt, nil tvml • Ex«Oten Dinnwhn Crint‘40;fi ‘ntnS arve«. reG:Qn$ NiocCer$, Y00~b~C~I - Ilt~Tdirle»66010,Sa.p.flrgel",r~ acctn Lkpidivingtidaftainn.ponrals mag. basa dloounn. gysa b ron ~bra ~i ,n1nscX" 4.40~ oixado Uno CMPb00OMPMJnIdm:YtlOM ennl v.s.a-vi:n Su dana., ~n mo >alna ctrott..)n • Salta ath Fartøy LigibIdP0114.1"» J.P.Morgan EFTA01156980 Akospess far Pfeaulri. • MAMA:0ln lundne IS% mauanan CISCOunl on aaset duo tonOIMy and lack al ellatkOlablay • leleir20%/Asneengerefoneel.Reveluel Unt soll • 15% esbmsled roll rokm' • Etainated 7 5% meinen ixed enel; pornonts netadstio b reehere0 Unis, • %Woilkes gilt. to beiekenne ol docouned 'roh». - IC% «Male Saouni on ovorol witio OST - 30% skilionel discounlonnloo ol Renloni Ures • UnzlecOsleel 'reue gn 39 200003 devotromv.b., *ze nimm -•- Oloni rus alroaay uflaad &Wune 94 OxOrnpan • GM lanatO (2010k 36% • Esiale 1ox rate acnor 55% • 4 yoor dotorral of niarelatOry exed annal paylnonls m Pagegrad Unns • Grane. rotains ;nenne tax labile ab, to graglat Mal Zaus borxdoafes* aua., 11?Morgan EFTA01156981  ill•••••••• Awm•••••/•••• •••••••••fr ••••• ..r.7.ma chav PPF brafkmam mak SS wheat me • Ca* fbn.vM. l , t0%MO.r1. H%nlvnen.net. Viet •••••••.1 0 OMmumed mum $100‘40, 10.)44.000 OAO la ..nommd umm, rft d$10.1401 10 w1u of stye. agaulmbn skraom Oalo.. loam 10044,00) HAW tlpe SaatM SA") 0'0 Net amolth beneridem. >9.130L016 OmlA. 11.6713.1 il014.000 SAWS. foul maeY benet-o:mies 11001016 s.eign• 0, •••••••••”•' 4•••• Maas tm.•••••W• • Ow.. imae.•••••01.001•1•• Idlinalse• • P.. IlAv• pork.. lioyi.a• • •••• ••••1••••••••40..1“0.1Mbt. OI• estsioresi. •••• Yin I II.a •••••• IRMorgan EFTA01156982  Tam poild••••••••••• alb limn Eli m••••••••• ...nem pp Cams& Ban d PPP Pan*. Med (SW .x.n. OSP) Om,. w.... st•••••••1 nee.. Wellifleimp stroon• woef•••• Aisne •••••••••nwnro Von es... •••••••.•••••. 14...•.• narVerTi OWN. °Remit...0 •••••••••• 104 41.4040 01.4 a !Ali. 1114460 41•A• wirA) OttioX0 Via. 0201D .4.1%,010 it eJ 1lMp 24104) q.•44.”) }430 SSW* }.....1•0 • TM'S/ OANAgo MINIM ?MOO n lea* 41•100 ()Int, UM./ 141•440:0 NWT MPOM AMMO •• !Env. .1la "axis 117.1.0P MN4(01 Se 311.01.1.1 /SSP 01 >MAN MN4(01 DIY 'ism MM.. Ida/ 01 tIlb MN >MAN MN4(01 PSI IMMIX 4.11:0PII •n2/0) )02).S) 1.3"40:0 Sae. 73)07* 0.11•111 I•60•70 .10 Mg* 'Oat 014007 KIWIS DIV Isi• i• IRMorgan EFTA01156983  Pei ups.l Demme re oat m t rundm. amt. ase Teed vim of astir, $136•M LITYL•elee Vim. 50100 Tome Ts to Span ires.kin....d.ara era 10•••••••.i.1• Nr.,•=•• •••••••I • ...h. J.P. Morgan *Fixed annual payment required to profaned unit holder is defemened by a valuation expert - additionally. me discount rates are defemened by a valuation expert •The payment amount is calculated by: Preferred rate x preferred discounted value. In the current example this is 36.715.000 x 7.5% = 503.625. •When preferred payment is made to preferred unit holder- managing 1% must also receive a distribution. Thus. entity must actually accrue for 4 years and ultimately pay annually ssot 712 = 3503.625 + 1% x $508,712 *Entire 100% of undiscounted entity value helps to fund the 7.5% required payment- reducing the effective rate •The ability to defer each years payment 4 years adds additional benefit - this means year 1payment is deferred to year 4. year 2 is deferred to year 5. etc. •Fmally. the discount on the asset contributed further reduces the effective rate on me freeze entity 13 EFTA01156984  • N.* W4•••• I MAI anh•••• ts. en/was In 6. las Oa aaids.CMI. duo n n tour • Csi&la ...Se In Was • S.n 6P"...., 16"." . "••• ."+“1 1— xt-so.a • 611.• *In • non ••• ntlhal domes dirla anon • 114 / .6.4.l.• ...s. w. • a$116...6 of •Insial • dry. am a swat. Son pAnollobylits..•teMes• ••./ myth. • WS ea.., le Len Imo Afloat am, la r• Masao L.. J Vi •Ir4••••1par.a.lanmal Is, Ws • 115,” own, a 111•••• reason ...Lamb • Vanlysei moo. .44.11••••••• V. -tomL. I. Go An,* tor am pa«dtata•• saw. J.P.Morgan 1 The estate freeze hurdle rare is calculated based on the folkowing assumptions: Pre-tax. pre-fee rate of return: no distnbutions poor to year 15: no consideration of income taxation: preferred units of 395a 000 plus 8.5% cumulative. non-compounding coupon: common unks of 350.000. with a 40% discount for gift tax purposes: transfer tax rate = 55%. 2 February 1999 long-term AFR. 3 February 1999 Section 7520 rate. 14 EFTA01156985 caw. es d Reid Usu.., funk. wIrirr. S ?Pr • Gigs lo grantee bust - investor remains responsible for incone taxes of trust. allowing the bust principal to grow tax-kee - bust provisions may provide for asset substitution. allowing investor to transfer high basis property/cash to bust n exchange for the low basis properly in order to receive benefit of stepped up estate tax basis • Gills to generalicehskipping ousts - value passes beyond chridren's generation without second level transfer taxes - Perpeltwl Delaware Trust compounds estate tax free for successive generations • Other wealth transfer strategies may be integrated with the PPF J.P.Morgan EFTA01156986  rty 1.•• • .4, •....••• ••••••••••• Its • me •10$ ma II • ..V....mq“ Itairiml fai • GUT Cah How name. S16000030 15%:n man al* ...,..161•• I...a • CM. sonaros was Ines. Sia-14•44,110Isiets •• If•T anial Ir.." s.0 Med sun COAT tat PnIeral 0 Osevniad ass S110)21330 100, 11 CO2 /2* Olt tasinatruelupen fl u 10 V410.014001•0(04 0100.1i01 41725124 '2 UP 10.7µ0A 612(62 401=544 Else $. 170.0730, 70) 15,1047001 Pvml *neat. eo 000$081$ 211211$ 6101419 4.14(0) 23.141 LOHMAN 21 1.0193.611 70141•44410 0010604,10. 52101 561,77.237 "Se 1.4.4 pabl,•••••••• ..m.••••• • In ad.. sp• an al /mg ••••• WT ..* •• MASI .1.411.1.• 04•111, 141111S •Ok • • ....•••••••••••••••..••••.• %ow eeds••••.• ow le wt....est+ woo, llundwedpiloweallames.......4. .resin el -0.ml M. -041.“..,11••••••••4•1.4.14m. J.RMorgan EFTA01156987  L 0.1•••••••••••••••••••••••••••••••••••••• 'M1 Ns llooklod alb fm.I • fears GUT emayiN 41. WWI_ f.pm - db... ISM mumm•Inalrol won c.. nos togook< $14.030.030 mono IS% Mum M oseic 0 Cucounled al. SI3, COO $1074CCOO $1 GO Mt roared won gift 10 Woo of oseltupco IquiOnion 'COMM 01744.030 Ce.122 411100.90 Gas* cm 1515.601 latOt200) men) MX wenn to Cotenants 0431AIT 034100 i0i.B10 ateasn ..---,...---• 41109397 MOMS .thilod by lEgirt• haat ••••••walaus m•II••••• 4•1••••••••••••••14..• •••••••.1.1.•••••••••#. J.P.Morgan EFTA01156988 important tntomutice AI aelthipaa..•pu.....O1...• 'via• •••••• • •leonpw.e• Sm. V•1•1.41•Samm•.1“......aul• Sky ..... ••••• •••••=plorma Oemtl," dave ma4 in • infra ••••••AseM •••••••10wee.• •••Immn.Jew •••••••••••••• Sopd•••••• Seg. •••••••••••.•• ••••••••••••mram.••••••••••••••1.1.••••••••••••••••••••• 1011•0•••.4,••0,••.•• •••••••••••••••••••• •••••.11,••••••./..... •...mw.“.•• • %me• ••••••...ei.. yellow arasSimffe tall•Sdo.... ••••••••••••II••••••••••••••••.ammal .. 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