EFTA00991974.pdf

From: "Jeffrey E." <[email protected]> To: "Barry J. Cohen" Subject: Re: East 70th Street townhouse purchase Date: Tue, 01 Jul 2014 22:05:56 +0000 single life easy, thats the way to go On Tue, Jul 1, 2014 at 6:03 PM, Barry J. Cohen < > wrote: Is it a problem for Debra to pay out of her own funds? Defer to you whether that would have positive or negative estate planning objectives. From: Ada Clapp [mailto: Sent: Tuesday, July 01, 2014 5:53 PM To: Barry J. Cohen; John Hannan; Richard Ressler ( Cc: Halperin, Alan S; Eileen Alexanderson; Jeffrey E. Subject: East 70th Street townhouse purchase Dear Barry, Richard and John, As you know, the discretionary trust under the APOI Agreement (the "Trust") created the NY 70th Street LLC (the "LLC") and the LLC intends to enter into a split interest purchase of a residence. Attached for your reference is a Paul Weiss overview of the technique. To assist with the decision as to whether the LLC's remainder interest will vest upon Leon's death or upon the death of the survivor of Leon and Debra, I attach a chart comparing the split interest purchase technique structured with a single life interest and with successive life interests. You will see that with successive life interests, the LLC's initial contribution would be reduced by about $4.5 million (assuming a $48 million purchase price). In exchange for this savings, the LLC may be giving up some flexibility. This is because, assuming Leon dies first, the LLC would not take title to the residence until Debra's death. Accordingly, for the LLC to sell the residence during Debra's lifetime, it would need her consent. There would also be no flexibility to charge Debra rent (so that she could transfer assets to the Trust, gift-tax free) as she would have the right to live in the residence for her lifetime. Of course, these restrictions would also exist in the case of a single life interest-but for a shorter period of time. Two final points to consider: with successive life interests, an actuary will likely need to be retained to determine the share of the purchase price (and of capital expenditures) to be borne by Leon and Debra as the life interest holders and to allocate that charge between Leon and Debra. Each of Leon and Debra must satisfy his or her proportionate share from independent funds. Please let me know your preference for moving forward with the split-interest property purchase. Of course, I am happy to answer any questions you may have. Best regards, EFTA00991974  Ada Clapp Elysium Management LLC 445 Park Avenue Suite 1401 New York, New York 10022 Direct Dial: 646-589-0303 Fax: 646-589-0330 Email: This communication and any attachment is for the intended recipient(s) only and may contain information that is privileged, confidential and/or proprietary. If you are not the intended recipient, you are hereby notified that further dissemination of this communication and its attachments is prohibited. Please delete all copies of this communication and its attachments and notify me immediately that you have received them in error. Thank you. This email and any files transmitted with it are confidential and intended solely for the person or entity to whom they are addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon this information by persons or entities other than the intended recipient is prohibited. If you have received this email in error please contact the sender and delete the material from any computer. Apollo Global Management, LLC please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to [email protected], and EFTA00991975 destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA00991976