An Integrated Approach to Managing Your Wealth. Personal Trust Services

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1 An Integrated Approach to Managing Your Wealth Personal Trust Services A

2 B Many wealthy individuals compartmentalize their finances, investing with brokerage firms and establishing trusts at trust companies. Unfortunately, that strategy often creates disconnects, preventing resources from working together to accomplish your goals. Morgan Stanley Smith Barney is prepared to play a more integrated role, assisting you with risk management and the eventual transfer of wealth while helping to support your current aspirations. Unlike a freestanding trust company, Personal Trust Services, a division of Morgan Stanley Private Bank, National Association, has been thoughtfully engineered to help manage your interests comprehensively. The services of Personal Trust Services are offered through your Morgan Stanley Smith Barney Financial Advisor. Building on a thorough knowledge of you and your goals, your Financial Advisor can work with specialists at Personal Trust Services to help you make sure all of your assets, including your trust assets, are effectively aligned with your overall objectives whether you are integrating an existing trust into your wealth plan or establishing a new one.

3 Perspective / p3 / A view that encompasses your full wealth picture and your most important goals 3 4 Customized Support / p7 / Personal Trust Services: An experienced team to shoulder fiduciary responsibilities Access / p4 / A broad offering of investments and investment services 7 1

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5 PersPective / Managing connections for rewarding outcomes The Full Picture Trusts can touch many aspects of your financial life, including investments, retirement income, wealth transfer and philanthropic giving. Working with your personal attorney, your Morgan Stanley Smith Barney Financial Advisor and Personal Trust Services can leverage and balance these important connections, helping create rewarding outcomes. You can give money to your children while enhancing rather than undermining the incentive to complete their education and lead meaningful careers. You can give your spouse income during his or her life and then provide for your children from a prior marriage with the assets remaining in the trust. You can create a financial legacy while accumulating assets outside of your estate, so they are not subject to estate and gift tax, and receive creditor protection and prudent administration for your children and grandchildren, with additional tax benefits for great-grandchildren and future generations. You can receive income over your lifetime or a term of years, using the same assets you have ultimately set aside for your alma mater or other charity. Unless a trust is properly structured and administered and coordinated with your portfolio it can become inflexible and its scope can be limited to a single purpose rather than encompassing the various concerns that affect your life. For example, if your overall asset allocation fails to embrace both trust and nontrust assets, it may unintentionally duplicate and concentrate risks or limit valuable tax reduction opportunities. There are also personal advantages to choosing Personal Trust Services. Rather than dealing with trust officers you don t know at an institution you simply inherited, you work through your Financial Advisor and your Trust Officer as your key points of contact, individuals who understand your objectives and the role trusts play in your financial picture. The lives of those establishing trusts and those benefiting from them are complex and multifaceted. That is why a full perspective is essential. Our goal is to help you achieve significantly broader planning and legacy objectives, based on a thorough understanding of you and what you most value. 3

6 access / resources focused on you Investment Choices and an Objective View Assets held in trust can account for a large share of your wealth. They need to be invested, accounted for and monitored with the same skill and rigor you apply to the rest of your holdings. That is where we can help. The in-house investment management capabilities of trust companies vary, and they may or may not provide you with adequate access to investment vehicles and management styles. However, when you have your trust at Personal Trust Services, you have access to the resources of Morgan Stanley Smith Barney. 1 Morgan Stanley Smith Barney is one of the nation s leading managers of personal wealth with client assets of $1.6 trillion and with a robust offering dedicated to the needs of investors, including trustees of personal trusts. Morgan Stanley Smith Barney offers: Proprietary and nonproprietary investment products Active and passive management approaches A focus on strong returns that strive to outpace inflation, fees and taxes Research analysts at Morgan Stanley Smith Barney screen independent money managers across a wide variety of investment styles, evaluating 1,300 strategies each quarter. This extensive platform is what supports the proactive, customized strategies that address your full wealth picture. Recommendations can include index-linked exchange-traded funds, mutual funds, alternative investments and a wide range of investments-appropriate for your goals. Each investment is carefully reviewed to make sure it is consistent with trust provisions, taking into account the age and health of beneficiaries, distribution needs, tax consequences and other important considerations. Once appropriate investments have been identified, your Financial Advisor will work with Personal Trust Services to keep abreast of progress on an ongoing basis. The goal is to be sure that your plan and your strategy stay current with the circumstances of your life. 1 The party with investment discretion makes the investment decisions, which often will be Morgan Stanley Private Bank, National Association. 4

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9 customized support / easing your burden Helping You Accomplish What You Need Trusts involve much more than managing investments. The many responsibilities of trust administration making payments to beneficiaries, paying taxes, ongoing reporting take time and an eye for detail. In cases where the trustee is also a member of the family, the tasks can become even more complicated. A trustee is charged with carrying out both the spirit and the letter of the trust. Family members are frequently chosen for this assignment. In theory, it makes good sense. In practice, however, the demands of administering a trust can become cumbersome and the risks can be significant sometimes including considerable financial liabilities. Trustees may be required to: Manage accounting functions such as quarterly reporting, allocation of receipts and expenses, filing of tax returns and segregation of income and principal Disburse payments to beneficiaries Collect income Oversee investments, either by investing independently or by hiring a reputable outside manager Maintain a fiduciary commitment to act solely in the best interests of the trust You may be best served by having a seasoned professional to shoulder these responsibilities. Your Financial Advisor can connect you with a Trust Specialist in Personal Trust Services who will assist in the review of the trust document and the on-boarding of the account. Once the account is opened, Personal Trust Services will help you select investment managers, prepare taxes and perform all required accounting functions. You may remain as a co-trustee, continuing to ensure that the provisions of the trust are met. If you prefer, you can also appoint Personal Trust Services as agent to complete administrative tasks while you make the investment decisions. Together, we can determine which role might be most suitable, given your individual experience and preferences. 7

10 8 Continuity and Experience. Morgan Stanley Smith Barney s approach to you and your trust differs from that of financial institutions that view trusts in isolation. We see your trust as a vital part of your overall financial picture one that warrants absolute commitment to you. Supported by the resources and experience of Personal Trust Services, your trust can become a dynamic facet of your life and legacy, extending your vision and the benefits of your wealth to the next generation and beyond.

11 Trust and fiduciary services are provided by Morgan Stanley Private Bank, National Association, Purchase, New York. Morgan Stanley Private Bank, National Association is an FDIC-insured national bank that is regulated by the Office of the Comptroller of the Currency. Morgan Stanley Private Bank, National Association, its representatives and affiliates, and Morgan Stanley Smith Barney Financial Advisors do not provide tax, tax accounting, or legal advice. This material was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer under U.S. federal income tax laws. Clients should consult their own legal, tax investment or other advisors, at both the onset of any transaction and on an ongoing basis, to determine the laws and analyses applicable to their specific trust and estate planning and other legal matters. Morgan Stanley Smith Barney LLC and Morgan Stanley Private Bank, National Association are affiliates. C

12 D 2011 Morgan Stanley, Morgan Stanley Smith Barney LLC. Member SIPC. ps /11 clf90030