GRAT vs. Sale to Grantor Trust

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1 GRAT vs. Sale to Grantor Trust An Illustration Comparing the Use of a Grantor Retained Annuity Trust with an Installment Sale to a Grantor Trust AN ANALYSIS PREPARED EXCLUSIVELY FOR Jack & Jill Flash Estate Freeze Planning Technique Comparison for ShopRight, Inc. 1

2 Disclaimer This financial plan is designed to provide educational and/or general information and is not intended to provide specific legal, accounting and/or tax advice. Any comparisons and projections including expected rates of return are presented for purposes of illustration only. Nevertheless, we believe that the comparisons as well as the other projections shown provide an important and valid basis for consideration when planning for your financial future. IMPORTANT: The projections or other information generated by this financial plan regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results herein may vary with each use of the software tool(s) used to generate this financial plan and over time. The financial plan may contain ideas for your consideration concerning aspects of your life such as tax, retirement and estate planning, but these are not presented as, and must not be taken for, legal or tax advice. It is your responsibility to determine if, and how, the suggestions contained in the financial plan should be implemented or otherwise followed. You must carefully consider all relevant factors in making these types of decisions. For specific advice on these aspects of your overall financial plan, you should consult your professional tax and legal advisors. The report that follows is based upon: - information and assumptions that you have provided or reviewed; - current tax laws; - appropriate financial planning concepts; - historic asset class characteristics; - additional assumptions and information discussed with your advisor. The outcome of the analysis will be dependent to a significant extent upon the information and the reasonableness of the planning assumptions. It is your responsibility to provide accurate and complete information. Please contact your advisor with any changes to your information and/or planning assumptions. Inaccurate information and/or unreasonable planning assumptions can materially impact the results of this financial plan. The simulation of returns at the individual asset, account and/or portfolio level drives the investment projections and proposed financial plan. In all cases investment projections are not to be considered definitive estimates of how the individual assets you own now or in the future will perform. Therefore, it is important that you recognize that the comparisons shown may include comparisons of two asset allocation models the asset allocation of your current portfolio and the asset allocation projected in our proposed plan and not comparisons of the individual securities you own. Model comparisons and the projected rates of return are based on past performance of the relevant asset classes. Past performance is not a guarantee of future results. No future rate of return can be predicted with certainty. The report that follows does not make specific investment recommendations or analyze particular securities. Rather, the report typically contains a proposed asset allocation model based upon your stated risk tolerance, age, current asset allocation and value of your assets. The asset allocation models we use are continuously re-evaluated and are periodically changed as a result. We are under no obligation to revise any financial planning report already prepared if an allocation model is changed after it is issued to you. Actual results are influenced by events that are both within and outside of your control. The rates actually returned by asset classes will differ from our projections. The rates actually returned by any allocation model noted within the financial plan will likely differ from those returned by any individual portfolio of securities constructed to follow a specific allocation model. Any rate of return shown or used in the financial plan is not intended to predict nor guarantee the actual results of an investment product. 2

3 Disclaimer the actual results of an investment product. This financial plan is designed to provide educational and/or general information and is not intended to provide specific legal, accounting and/or tax advice. IMPORTANT: Investments in stocks, bonds, mutual funds, and other securities are not bank products, are not FDIC insured, and may be subject to loss of principal. We have read and understand the above information and disclosures. We understand the basis upon which the report that follows was prepared. We recognize the nature of the asset allocation comparisons and estimated returns as illustrations only. We acknowledge that the report may contain a recommendation for adjusting the asset allocation of our current investment portfolio(s), but it does not provide any guaranteed rates of return, advice on particular securities or any specific legal, tax or accounting advice. Customer Signature 3

4 GRAT vs. Sale to Grantor Trust - Estate Freeze Planning Technique Comparison for ShopRight, Inc. Summary Jack & Jill Flash Sale to Grantor In 2023 Baseline GRAT Rolling GRATs Trust Taxable gift NA ,000 Value of trust at the end of the GRAT or note term NA 3,575,109 4,271,782 9,623,462 Grantor's accumulations/-estate depletion 13,209,286 7,859,319 6,896,710 2,563,210 Total transferable value in ,209,286 13,209,287 13,209,278 13,209,285 Estate taxes or tax savings -3,906,708-2,422,804-2,104,703-1,155,284 Deferred capital gains and Medicare taxes 0-913,460-1,006,656-1,917,224 Net to heirs 9,302,578 9,873,023 10,097,919 10,136,777 Planning advantage/-disadvantage over baseline 570, , ,200 Present value of 3.0% 424, , ,723 Wealth Transfer Comparison in $Thousands Sale to Grantor Trust Rolling GRATs GRAT Baseline $8,800 $9,000 $9,200 $9,400 $9,600 $9,800 $10,000 $10,200 NOTE: Please refer to the accompanying reports illustrating the GRAT and installment sale to grantor trust planning techniques for the detailed schedules, charts and planning assumptions used for this comparative analysis. 4

5 GRAT vs. Sale to Grantor Trust - Estate Freeze Planning Technique Comparison for ShopRight, Inc. Annual Net to Heirs Comparison Jack & Jill Flash Wealth Transfer Comparison $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Baseline GRAT Rolling GRATs Sale to Grantor Trust The chart above compares a GRAT and an installment sale to a grantor trust to the baseline over the planning horizon. 5

6 Grantor Retained Annuity Trust An Illustration of the Use of a Grantor Retained Annuity Trust AN ANALYSIS PREPARED EXCLUSIVELY FOR Jack & Jill Flash Transfer $5MM ShopRight, Inc. to 6-Year GRAT or Five Rolling GRATs 1

7 Summary Jack & Jill Flash 6-Year Five Rolling In 2023 Baseline GRAT 2-Year GRATs Taxable gift NA Value of GRATs at the end of 6 years in 2019 NA 3,575,109 4,271,782 Grantor's GRAT-related accumulations/-estate depletion 13,209,286 7,859,319 6,896,710 Total transferable value in ,209,286 13,209,287 13,209,278 Estate taxes or tax savings -3,906,708-2,422,804-2,104,703 Deferred capital gains and Medicare taxes 0-913,460-1,006,656 Net to heirs 9,302,578 9,873,023 10,097,919 Planning advantage/-disadvantage over baseline 570, ,341 Present value of 3.0% 424, ,808 Wealth Transfer Comparison in $Thousands Rolling GRATs GRAT Baseline $8,800 $9,000 $9,200 $9,400 $9,600 $9,800 $10,000 $10,200 2

8 Actuarial Summary Jack & Jill Flash Valuation of Split Interests for Gift Tax Purposes 0.0% 100.0% Retained Interest Transferred Interest Relevant Actuarial Calculations & Applicable Tests Retained interest factor % Transferred interest factor % Annuity exhaustion test of the Sec Regs & Rev. Rul Passed Taxable gift 23 Retained Interest Annuity Rolling GRATs Factor Exhaustion Test Taxable Gift Rolling GRAT % Passed 10 Rolling GRAT % Passed 5 Rolling GRAT % Passed 8 Rolling GRAT % Passed 7 Rolling GRAT % Passed 7 3

9 Assumptions Jack & Jill Flash Personal Jack Jill Age Calculated life expectancy Life expectancy override Year of death Planning Illustration Transfer date 01-Jan-2014 Planning term 10 years Transfer of Property Transferor Jack Gift-splitting election No Trust Assumptions Type of trust Fixed term Annuity is valued as an interest for a term certain Yes Trust term 6 years Rolling GRATs trust term 2 years Number of GRATs in rolling GRAT sequence 5 Annuity Valuation Single GRAT Rolling GRATs Method for determining annuity payments Target remainder Target remainder GRAT annuity factor First-year annuity payout rate % % Annual increase in annuity rate 0.0% 0.0% Annuity payment frequency Annual Annual Contingent spousal annuity No No Section 7520 rate 3.0% 2.2% Section 7520 mortality table 2000CM 2000CM Estate & Gift Tax Jack Jill DSUE amount inherited 0 0 Post-1976 adjusted taxable gifts 0 0 Unified credit used 0 0 4

10 Assumptions Jack & Jill Flash Property Transferred Undiscounted value of property 5,000,000 Basis of property 1,500,000 Type of property transferred S corporation stock Gift tax valuation discount 35.0% Estate tax valuation discount 35.0% Apply estate tax valuation discount in baseline scenario Yes Sale of GRAT Property GRAT sale during trust term Grantor tax reimbursement No NA Tax Rates Jack Transferee Federal tax bracket See schedule See schedule Federal capital gains tax rate See schedule See schedule State income tax rate 5.0% 5.0% Estate tax rate See schedule NA Investment Rates S corp Other Current cash yield 5.0% 2.0% Inc/-dec rate of cash yield 0.0% NA Tax yield multiple 100.0% NA Qualified dividend percentage 100.0% 100.0% Base growth rate 7.0% 6.0% Percentage of taxable income and realized gains subject to Medicare surtax 0.0% 100.0% Present value discount rate NA 3.0% Other Property distributions from the trust are grossed up for valuation discounts Yes Distribute corpus to grantor trust after GRAT term No Summary results are shown net of deferred capital gains and Medicare taxes Yes Inflation rate 3.0% 5

11 Annual Net to Heirs Comparison Jack & Jill Flash Wealth Transfer Comparison $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Baseline GRAT Rolling GRATs The chart above compares a GRAT and a series of rolling GRATs to the baseline over the planning horizon. 6

12 Annual Net to Heirs Comparison Jack & Jill Flash Net to Heirs Comparison Present Value Present Value Year Projected GRAT Projected Rolling GRATs Ending GRAT Adv/-Disadv Rolling GRATs Adv/-Disadv In Baseline GRAT Rolling GRATs Adv/-Disadv 3.0% Adv/-Disadv 3.0% ,074,500 4,074,500 4,074, ,481,979 4,481,979 4,575, ,166 87, ,925,141 4,925,141 5,076, , , ,406,903 5,406,903 5,644, , , ,930,412 5,930,412 6,256, , , ,499,058 6,770,677 6,931, , , , , ,116,501 7,450,684 7,625, , , , , ,786,681 8,191,033 8,381, , , , , ,513,847 8,996,692 9,203, , , , , ,302,578 9,873,023 10,097, , , , ,808 7

13 Grantor Retained Annuity Trust Illustration Jack & Jill Flash Assumes a Level Annuity and No Sale of Transferred Property during the GRAT Term Jack S Corp Stock $5,000,000 Taxable Gift $23 6-Year GRAT $3,250,000 Discounted Value Economic PV of Annuity $3,164,339 Value of GRAT in 2019 $3,575,109 Cap Gains & Medicare Taxes $913,460 Net to Heirs in 2023 $9,873,023 Assuming the transferred property is sold following Jack's death, the use of a GRAT in this manner is projected to produce a net after-tax benefit of $570,445, or $424,465 in today's dollars. If, however, the property is not sold, the projected benefit of a GRAT would be 1,483,905, or 1,104,165 in today's dollars. 8

14 Rolling GRATs Illustration Jack & Jill Flash Assumes a Level Annuity, Five Rolling 2-Year GRATs and No Sale of Transferred Property during the GRAT Term Annuity Payments $3,357,602 Jack S Corp Stock $5,000,000 2-Year GRAT $3,250,000 Discounted Value Annuity Payments $1,754,686 2-Year GRAT $1,678,801 Discounted Value Annuity Payments $2,671,686 2-Year GRAT $2,556,144 Discounted Value Annuity Payments $2,313,226 2-Year GRAT $2,213,185 Discounted Value Annuity Payments $2,605,120 2-Year GRAT $2,492,456 Discounted Value GRAT Value in 2015 $1,032,153 GRAT Value in 2016 $470,112 GRAT Value in 2017 $697,272 GRAT Value in 2018 $562,418 GRAT Value in 2019 $610,920 Cap Gains & Medicare Taxes $1,006,656 Net to Heirs in 2023 $10,097,919 9

15 Grantor Retained Annuity Trust Sensitivity Analyses AN ANALYSIS PREPARED EXCLUSIVELY FOR Jack & Jill Flash Transfer $5MM ShopRight, Inc. to 6-Year GRAT or Five Rolling GRATs 10

16 Sensitivity Analysis - Growth Rates Jack & Jill Flash 2023 Net to Heirs Projected Adv/-Disadv PV of Adv/-Disadv Growth 6-Year Five Rolling 6-Year Five Rolling 6-Year Five Rolling GRAT 2-Year GRATs GRAT 2-Year GRATs GRAT 2-Year GRATs 0.0% 5,137,908 5,180, , , , , % 6,241,343 6,332, , , , , % 7,542,674 7,687, , , , , % 9,074,685 9,280, , , , , % 10,874,626 11,149, , , , , % 12,984,755 13,338, ,038 1,149, , ,482 Planning Advantage/-Disadvantage over Baseline in Today's Dollars $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Pretax Growth Rates GRAT Rolling GRATs The illustration above shows the impact of pretax growth rate assumptions on the projected results. The graph shows the advantages or disadvantages of a single GRAT, as well as a series of rolling GRATs, as compared to the baseline scenario, in today's dollars. Note that all other assumptions are the same as those listed on the Assumptions schedule. 11

17 Sensitivity Analysis - GRAT Term Jack & Jill Flash Varies GRAT Summary Comparison to Baseline GRAT Term Projected PV of Annuity Net to Heirs Adv/-Disadv Adv/-Disadv 2 1,678,801 9,614, , , ,131,335 9,698, , , ,675 9,770, , , ,524 9,829, , , ,129 9,873, , , ,032 9,899, , ,010 Planning Advantage/-Disadvantage over Baseline in Today's Dollars $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $ GRAT Term The illustration above shows the impact of the GRAT term (in years) on the projected results. The graph shows the advantages or disadvantages of a GRAT, as compared to the baseline scenario, in today's dollars. All other assumptions are the same as those listed on the Assumptions schedule. 12

18 Grantor Retained Annuity Trust Supporting Schedules for BASELINE SCENARIO AN ANALYSIS PREPARED EXCLUSIVELY FOR Jack & Jill Flash Transfer $5MM ShopRight, Inc. to 6-Year GRAT or Five Rolling GRATs 13

19 Baseline Illustration Jack & Jill Flash Part 1 of 3 S Corp Stock Year Beginning Ending Gross Estate Ending Property Cash Unrealized Property Value In Value Yield Growth Gains Value 65.0% ,000, , ,000 3,850,000 5,350,000 3,477, ,350, , ,500 4,224,500 5,724,500 3,720, ,724, , ,715 4,625,215 6,125,215 3,981, ,125, , ,765 5,053,980 6,553,980 4,260, ,553, , ,779 5,512,759 7,012,759 4,558, ,012, , ,893 6,003,652 7,503,652 4,877, ,503, , ,256 6,528,907 8,028,908 5,218, ,028, , ,024 7,090,931 8,590,932 5,584, ,590, , ,365 7,692,296 9,192,297 5,974, ,192, , ,461 8,335,757 9,835,758 6,393,243 14

20 Baseline Illustration Jack & Jill Flash Part 2 of 3 Investments Qualified Year Beginning Current Cash from Dividends + Income Ending Ending Investment Income Growth S Corp Ordinary & Medicare Capital Gains Investment In Balance 2.0% 6.0% Stock Income Taxes Taxes Balance , , , , ,500 3,850 11, , , , , ,748 8,195 24, , ,420 1,246 73, , ,136 13,083 39, , ,343 1,989 82, , ,263 18,565 55, , ,264 2,822 92,451 1,234, ,234,950 24,699 74, , ,337 3, ,370 1,577, ,577,260 31,545 94, , ,728 4, ,314 1,958, ,958,515 39, , , ,616 5, ,369 2,382, ,382,319 47, , , ,193 7, ,630 2,852, ,852,578 57, , , ,666 8, ,199 3,373,528 15

21 Baseline Illustration Jack & Jill Flash Part 3 of 3 Net to Heirs Year Gross Ending Estate Estate Net In Value Taxes to Heirs ,670,000 1,468,000 4,074, ,130,673 1,652,269 4,481, ,635,526 1,854,210 4,925, ,188,350 2,075,340 5,406, ,793,243 2,317,297 5,930, ,454,634 2,581,854 6,499, ,177,305 2,870,922 7,116, ,966,425 3,186,570 7,786, ,827,571 3,531,028 8,513, ,766,771 3,906,708 9,302,578 16

22 Grantor Retained Annuity Trust Supporting Schedules for GRANTOR RETAINED ANNUITY TRUST SCENARIO AN ANALYSIS PREPARED EXCLUSIVELY FOR Jack & Jill Flash Transfer $5MM ShopRight, Inc. to 6-Year GRAT or Five Rolling GRATs 17

23 GRAT Illustration - Wealth Transfer Summary Jack & Jill Flash Part 1 of 2 GRAT Property & Investments Grantor GRAT-Derived Accumulations Year GRAT Gross Estate GRAT Grantor Gross Estate Grantor Ending S Corp Value GRAT Gross Estate Unrealized S Corp Value Investments/ In Stock 65.0% Investments Value Gains Stock 65.0% -Defunding ,835,955 3,143, ,480, , , , ,647,809 3,021, ,429,936 1,076, , , ,432,020 2,880, ,346,665 1,693,195 1,100, , ,184,526 2,719, ,226,820 2,369,454 1,540, , ,900,670 2,535, ,066,333 3,112,089 2,022,858 1,234, ,575, ,860,435 3,928,543 2,553,553 1,577, ,825, , ,110,693 4,203,541 2,732,302 1,820, ,093, , ,378,469 4,497,789 2,923,563 2,089, ,379, , ,664,989 4,812,634 3,128,212 2,384, ,686, , ,971,565 5,149,518 3,347,187 2,709,801 18

24 GRAT Illustration - Wealth Transfer Summary Jack & Jill Flash Part 2 of 2 Net to Heirs GRAT Value Capital Gains Year +/- Grantor GRAT & Medicare Ending Investments/ Gross Taxable Estate Estate Taxes on Net In -Defunding Estate Gift Tax Base Taxes Trust Property to Heirs ,542,500 3,670, ,670,000 1,468, ,074, ,134,248 4,130, ,130,673 1,652, ,481, ,779,351 4,635, ,635,526 1,854, ,925, ,482,243 5,188, ,188,350 2,075, ,406, ,247,709 5,793, ,793,243 2,317, ,930, ,080,912 4,130, ,130,836 1,652, ,900 6,770, ,987,423 4,553, ,553,198 1,821, ,459 7,450, ,973,251 5,012, ,012,926 2,005, ,048 8,191, ,044,876 5,513, ,513,092 2,205, ,947 8,996, ,209,287 6,056, ,057,011 2,422, ,460 9,873,023 19

25 GRAT Illustration - Annuity Payments Jack & Jill Flash Required Annuity Payment Source of Annuity Payment Undiscounted Present Value Year Cash from GRAT GRAT Value of of Annuity Ending Annuity Annuity S Corp Investment Property Property Payments In Rate Payment Stock Distribution Distribution Distribution 3.0% % 584, , , , , % 584, , , , , % 584, , , , , % 584, , , , , % 584, , , , , % 584, , , , ,199 20

26 GRAT Illustration - Trust Flows Jack & Jill Flash Part 1 of 2 S Corp Stock Year Beginning Unrealized Ending Distribution Ending Ending Property Cash Gains Unrealized to Satisfy Property In Value Yield Growth Distributed Gains Annuity Value ,000, , , ,920 3,480, ,045 4,835, ,835, , , ,661 3,429, ,663 4,647, ,647, , , ,618 3,346, ,136 4,432, ,432, , , ,087 3,226, ,735 4,184, ,184, , , ,404 3,066, ,773 3,900, ,900, , , ,945 2,860, ,608 3,575, ,575, , , ,110, ,825, ,825, , , ,378, ,093, ,093, , , ,664, ,379, ,379, , , ,971, ,686,239 21

27 GRAT Illustration - Trust Flows Jack & Jill Flash Part 2 of 2 Investments Qualified Year Beginning Current Cash from Distribution Dividends + Income Ending Total Ending Investment Income Growth S Corp to Satisfy Ordinary & Medicare Capital Gains Investment Ending In Balance 2.0% 6.0% Stock Annuity Income Taxes Taxes Balance GRAT Value , , , ,835, , , , ,647, , , , ,432, , , , ,184, , , , ,900, , , , ,575, , , , ,642 3,963, ,642 2,753 8, , , , ,979 4,386, ,979 5,860 17, , , , ,722 4,847, ,722 9,354 28, , ,338 1,422 58, ,729 5,349,968 22

28 GRAT Illustration - Grantor Jack & Jill Flash Part 1 of 2 S Corp Stock Year Beginning Gains GRAT Ending Ending Property Cash Transferred Unrealized Annuity Property In Value Yield Growth In Gains Payment Value , , , , ,045 25,702 35, , , ,663 1,076, ,076,691 53,835 75, ,618 1,278, ,136 1,693, ,693,195 84, , ,087 1,827, ,735 2,369, ,369, , , ,404 2,446, ,773 3,112, ,112, , , ,945 3,143, ,608 3,928, ,928, , , ,418, ,203, ,203, , , ,712, ,497, ,497, , , ,027, ,812, ,812, , , ,364, ,149,518 23

29 GRAT Illustration - Grantor Jack & Jill Flash Part 2 of 2 Investments and/or Estate Defunding Qualified Year Beginning Current Cash from GRAT Dividends + Income Ending Total Ending Investment Income Growth S Corp Annuity Ordinary & Medicare Capital Gains Investment Combined In Balance 2.0% 6.0% Stock Payment Income Taxes Taxes Balance Value , , , , , ,500 3,850 11,550 25, , , , ,748 1,486, ,748 8,195 24,585 53, , ,420 1,246 73, ,136 2,347, ,136 13,083 39,248 84, , ,343 1,989 82, ,263 3,297, ,263 18,565 55, , , ,264 2,822 92,451 1,234,950 4,347, ,234,950 24,699 74, , , ,337 3, ,370 1,577,260 5,505, ,577,260 31,545 94, , ,972 4,795 74,200 1,820,873 6,024, ,820,873 36, , , ,595 5,535 81,845 2,089,340 6,587, ,089,340 41, , , ,676 6,352 90,168 2,384,857 7,197, ,384,857 47, , , ,329 7,250 99,227 2,709,801 7,859,319 24

30 GRAT Illustration - Basis of Transferred Property Jack & Jill Flash Part 1 of 2 Total Adjusted Basis of Property Year Net Ending Beginning Basis Ending Beginning Ending In Basis Adjustments Basis Value Value ,500, ,500,000 5,000,000 5,350, ,500, ,500,000 5,350,000 5,724, ,500, ,500,000 5,724,500 6,125, ,500, ,500,000 6,125,215 6,553, ,500, ,500,000 6,553,980 7,012, ,500, ,500,000 7,012,759 7,503, ,500, ,500,000 7,503,652 8,028, ,500, ,500,000 8,028,908 8,590, ,500, ,500,000 8,590,932 9,192, ,500, ,500,000 9,192,297 9,835,758 25

31 GRAT Illustration - Basis of Transferred Property Jack & Jill Flash Part 2 of 2 Adjusted Basis & Unrealized Gains Apportioned to GRAT Adjusted Basis & Unrealized Gains Apportioned to Grantor Year Ending Ending Ending Beginning Beginning Ending Ending Unrealized Beginning Beginning Ending Ending Unrealized In Value Basis Value Basis Gains Value Basis Value Basis Gains ,000,000 1,500,000 4,835,955 1,355,875 3,480, , , , ,835,955 1,355,875 4,647,809 1,217,873 3,429, , ,125 1,076, , , ,647,809 1,217,873 4,432,020 1,085,355 3,346,665 1,076, ,127 1,693, ,645 1,278, ,432,020 1,085,355 4,184, ,706 3,226,820 1,693, ,645 2,369, ,294 1,827, ,184, ,706 3,900, ,337 3,066,333 2,369, ,294 3,112, ,663 2,446, ,900, ,337 3,575, ,674 2,860,435 3,112, ,663 3,928, ,326 3,143, ,575, ,674 3,825, ,674 3,110,693 3,928, ,326 4,203, ,326 3,418, ,825, ,674 4,093, ,674 3,378,469 4,203, ,326 4,497, ,326 3,712, ,093, ,674 4,379, ,674 3,664,989 4,497, ,326 4,812, ,326 4,027, ,379, ,674 4,686, ,674 3,971,565 4,812, ,326 5,149, ,326 4,364,192 26

32 Grantor Retained Annuity Trust Supporting Schedules for ROLLING GRATs SCENARIO AN ANALYSIS PREPARED EXCLUSIVELY FOR Jack & Jill Flash Transfer $5MM ShopRight, Inc. to 6-Year GRAT or Five Rolling GRATs 27

33 Rolling GRATs Illustration - Wealth Transfer Summary Jack & Jill Flash Part 1 of 2 GRAT Property & Investments Grantor GRAT-Derived Accumulations Year GRAT Gross Estate GRAT Grantor Gross Estate Grantor Ending S Corp Value GRAT Gross Estate Unrealized S Corp Value Investments/ In Stock 65.0% Investments Value Gains Stock 65.0% -Defunding ,151,845 2,048, ,268,150 2,198,155 1,428, , ,618,894 1,031, ,932,661 3,105,606 2,018, , ,974,341 1,559,886 39, ,001,067 2,150,874 1,398, , ,423,835 1,327, , ,411,358 2,130,145 1,384, , ,390,417 1,481, , ,237,429 1,622,341 1,054,522 1,034, ,939, , ,152,274 3,563,788 2,316,462 1,245, ,215, , ,428,063 3,813,253 2,478,614 1,455, ,510, , ,723,158 4,080,180 2,652,117 1,687, ,826, , ,038,911 4,365,793 2,837,765 1,943, ,164, ,148, ,376,766 4,671,398 3,036,409 2,225,312 28

34 Rolling GRATs Illustration - Wealth Transfer Summary Jack & Jill Flash Part 2 of 2 Net to Heirs GRAT Value Capital Gains Year +/- Grantor GRAT & Medicare Ending Investments/ Gross Taxable Estate Estate Taxes on Net In -Defunding Estate Gift Tax Base Taxes Trust Property to Heirs ,542,500 3,670, ,670,000 1,468, ,074, ,134,248 3,459, ,459,784 1,383, ,190 4,575, ,779,352 3,572, ,572,368 1,428, ,455 5,076, ,482,244 3,537, ,537,387 1,414, ,473 5,644, ,247,709 3,570, ,570,614 1,428, ,510 6,256, ,080,910 3,561, ,561,839 1,424, ,023 6,931, ,987,419 3,934, ,934,124 1,573, ,454 7,625, ,973,243 4,339, ,339,669 1,735, ,326 8,381, ,044,868 4,781, ,781,224 1,912, ,949 9,203, ,209,278 5,261, ,261,758 2,104,703 1,006,656 10,097,919 29

35 Rolling GRATs Summary Illustration - Annuity Payments Jack & Jill Flash Source of Annuity Payment Undiscounted Present Value Year Required Cash from GRAT GRAT Value of of Annuity Ending Annuity S Corp Investment Property Property Payments In Payment Stock Distribution Distribution Distribution 3.0% ,678, , ,428,801 2,198,155 1,629, ,556, , ,000 2,018,644 3,105,606 2,409, ,213, , ,500 1,398,069 2,150,874 2,025, ,492, , ,327 1,384,594 2,130,145 2,214, ,459, ,599 1,196,053 1,054,521 1,622,341 2,121, ,302, , ,188,124 1,827,883 1,090,873 30

36 Rolling GRATs Summary Illustration - Trust Flows Jack & Jill Flash Part 1 of 2 S Corp Stock Year Beginning Capital Unrealized Ending Distribution Ending Ending Property Cash Gains Gains Unrealized to Satisfy Property In Value Yield Growth Triggered Distributed Gains Annuity Value ,000, , , ,581,850 2,268,150 2,198,155 3,151, ,350, , , ,291,839 1,932,661 3,105,606 2,618, ,724, , , ,624,148 3,001,067 2,150,874 3,974, ,125, , , ,642,622 3,411,358 2,130,145 4,423, ,553, , , ,275,329 4,237,429 1,622,341 5,390, ,390, , , ,462,484 3,152,274 1,827,883 3,939, ,939, , , ,428, ,215, ,215, , , ,723, ,510, ,510, , , ,038, ,826, ,826, , , ,376, ,164,355 31

37 Rolling GRATs Summary Illustration - Trust Flows Jack & Jill Flash Part 2 of 2 Investments Qualified Year Beginning Cash from Distribution Dividends + Income Ending Total Ending Investment Current S Corp to Satisfy Ordinary & Medicare Capital Gains Investment Ending In Balance Income Growth Stock Annuity Income Taxes Taxes Balance GRAT Value , ,151, ,000 5,000 15, , , ,618, ,500 10,750 32,250 51, , , ,870 39,738 4,014, ,855 17,097 51,291 78, , , , ,684 4,526, ,210,546 24,211 72, ,100 1,196, , , ,842 5,591, ,842 4,017 12, , , , ,919 4,271, ,919 6,638 19, , ,632 1,009 51, ,041 4,718, ,041 10,061 30, , ,843 1,529 57, ,801 5,205, ,801 13,896 41, , ,433 2,112 64, ,153 5,735, ,153 18,183 54, , ,508 2,764 72,233 1,148,213 6,312,568 32

38 Rolling GRATs Summary Illustration - Grantor Jack & Jill Flash Part 1 of 2 S Corp Stock Year Beginning Gains GRAT Ending Ending Property Cash Transferred Unrealized Annuity Property In Value Yield Growth In Gains Payment Value ,581,850 1,581,850 2,198,155 2,198, ,198, ,291,839 2,291,839 3,105,606 3,105, ,105, ,624,148 1,624,148 2,150,874 2,150, ,150, ,642,622 1,642,622 2,130,145 2,130, ,130, ,275,329 1,275,329 1,622,341 1,622, ,622,341 81, ,564 1,462,484 2,851,377 1,827,883 3,563, ,563, , , ,100, ,813, ,813, , , ,367, ,080, ,080, , , ,653, ,365, ,365, , , ,958, ,671,398 33

39 Rolling GRATs Summary Illustration - Grantor Jack & Jill Flash Part 2 of 2 Investments and/or Estate Defunding Qualified Year Beginning Cash from GRAT Dividends + Income Ending Total Ending Investment Current S Corp Annuity Ordinary & Medicare Capital Gains Investment Combined In Balance Income Growth Stock Payment Income Taxes Taxes Balance Value , , , ,500 2,390, ,500-1,150-3, , , , ,748 3,515, ,752-2,555-7, , ,812 1,246 61, ,399 2,765, ,718-4,014-12, ,107, ,823 1,868 63, ,580 2,955, ,282-5,646-16, ,404, ,110 2,510 63,168 1,034,109 2,656, ,034,109 20,682 62,047 81, , ,771 3,145 63,904 1,245,340 4,809, ,245,340 24,907 74, , ,096 3,786 63,898 1,455,473 5,268, ,455,473 29,109 87, , ,772 4,425 70,633 1,687,515 5,767, ,687,515 33, , , ,759 5,130 77,972 1,943,422 6,309, ,943,422 38, , , ,158 5,908 85,966 2,225,312 6,896,710 34

40 Rolling GRATs Summary - Basis of Transferred Property Jack & Jill Flash Part 1 of 2 Total Adjusted Basis of Property Year Basis Basis Other Net Ending Beginning Transferred Transferred Basis Basis Ending Beginning Ending In Basis In Out Adjustments Adjustments Basis Value Value ,500, ,500,000 1,500,000 5,000,000 5,350, ,500, , , ,500,000 5,350,000 5,724, ,500, , , ,500,000 5,724,500 6,125, ,500, , , ,500,000 6,125,215 6,553, ,500, , , ,500,000 6,553,980 7,012, ,500, ,500,000 7,012,758 7,503, ,500, ,500,000 7,503,651 8,028, ,500, ,500,000 8,028,905 8,590, ,500, ,500,000 8,590,927 9,192, ,500, ,500,000 9,192,293 9,835,753 35

41 Rolling GRATs Summary - Basis of Transferred Property Jack & Jill Flash Part 2 of 2 Adjusted Basis & Unrealized Gains Apportioned to GRAT Adjusted Basis & Unrealized Gains Apportioned to Grantor Year Ending Ending Ending Beginning Beginning Ending Ending Unrealized Beginning Beginning Ending Ending Unrealized In Value Basis Value Basis Gains Value Basis Value Basis Gains ,000,000 1,500,000 3,151, ,695 2,268, ,198, ,305 1,581, ,350,000 1,500,000 2,618, ,233 1,932, ,105, ,767 2,291, ,724,500 1,500,000 3,974, ,274 3,001, ,150, ,726 1,624, ,125,215 1,500,000 4,423,835 1,012,477 3,411, ,130, ,523 1,642, ,553,980 1,500,000 5,390,417 1,152,988 4,237, ,622, ,012 1,275, ,390,417 1,152,988 3,939, ,589 3,152,274 1,622, ,012 3,563, ,411 2,851, ,939, ,589 4,215, ,589 3,428,063 3,563, ,411 3,813, ,411 3,100, ,215, ,589 4,510, ,589 3,723,158 3,813, ,411 4,080, ,411 3,367, ,510, ,589 4,826, ,589 4,038,911 4,080, ,411 4,365, ,411 3,653, ,826, ,589 5,164, ,589 4,376,766 4,365, ,411 4,671, ,411 3,958,987 36

42 Rolling GRAT Illustration - Trust 1 Wealth Transfer Summary Jack & Jill Flash Part 1 of 2 GRAT Property & Investments Grantor GRAT-Derived Accumulations Year GRAT Gross Estate GRAT Grantor Gross Estate Grantor Ending S Corp Value GRAT Gross Estate Unrealized S Corp Value Investments/ In Stock 65.0% Investments Value Gains Stock 65.0% -Defunding ,151,845 2,048, ,268,150 2,198,155 1,428, , ,032, ,696 2,340,321 1,521,209 60, ,104, , , , ,181, , , , ,264, , , , ,352, , ,082, , ,447, , ,177, , ,548, , ,278, , ,657, , ,386, , ,773, , ,502, ,110 37

43 Rolling GRAT Illustration - Trust 1 Wealth Transfer Summary Jack & Jill Flash Part 2 of 2 Net to Heirs GRAT Value Capital Gains Year +/- Grantor GRAT & Medicare Ending Investments/ Gross Taxable Estate Estate Taxes on Net In -Defunding Estate Gift Tax Base Taxes Trust Property to Heirs ,542,500 3,670, ,670,000 1,468, ,074, ,432,953 1,581, ,581, , ,190 2,625, ,041, , ,790-41, , , ,157, , ,810-43, , , ,284, , ,182-46, ,614 1,101, ,422, , ,928-48, ,972 1,222, ,573, , ,069-51, ,754 1,354, ,737, , ,628-54, ,061 1,498, ,917, , ,630-57, ,000 1,655, ,112, , ,100-61, ,684 1,827,661 38

44 Rolling GRAT Illustration - Trust 1 Annuity Payments Jack & Jill Flash Required Annuity Payment Source of Annuity Payment Undiscounted Present Value Year Cash from GRAT GRAT Value of of Annuity Ending Annuity Annuity S Corp Investment Property Property Payments In Rate Payment Stock Distribution Distribution Distribution 3.0% % 1,678, , ,428,801 2,198,155 1,629, % 1,678, , ,521,209 2,340,321 1,582, % % % %

45 Rolling GRAT Illustration - Trust 1 Flows Jack & Jill Flash Part 1 of 2 S Corp Stock Year Beginning Capital Unrealized Ending Distribution Ending Ending Property Cash Gains Gains Unrealized to Satisfy Property In Value Yield Growth Triggered Distributed Gains Annuity Value ,000, , , ,581,850 2,268,150 2,198,155 3,151, ,151, , , ,727, ,696 2,340,321 1,032, ,032,153 51,608 72, , ,104, ,104,404 55,220 77, , ,181, ,181,712 59,086 82, , ,264, ,264,432 63,222 88, ,082, ,352, ,352,942 67,647 94, ,177, ,447, ,447,648 72, , ,278, ,548, ,548,983 77, , ,386, ,657, ,657,412 82, , ,502, ,773,431 40

46 Rolling GRAT Illustration - Trust 1 Flows Jack & Jill Flash Part 2 of 2 Investments Qualified Year Beginning Current Cash from Distribution Dividends + Income Ending Total Ending Investment Income Growth S Corp to Satisfy Ordinary & Medicare Capital Gains Investment Ending In Balance 2.0% 6.0% Stock Annuity Income Taxes Taxes Balance GRAT Value , ,151, , ,032, , , ,870 39,738 1,144, , ,384 55, , ,432 84,585 1,266, ,585 1,692 5,075 59, , , ,034 1,399, ,034 2,701 8,102 63, , , ,622 1,544, ,622 3,832 11,497 67, , , ,932 1,702, ,932 5,099 15,296 72, , , ,595 1,874, ,595 6,512 19,536 77, , , ,298 2,061, ,298 8,086 24,258 82, ,957 1,229 26, ,784 2,265,215 41

47 Rolling GRAT Illustration - Trust 1 Grantor Jack & Jill Flash Part 1 of 2 S Corp Stock Year Beginning Gains Gains GRAT Ending Ending Property Transfer to Cash Transferred Transferred Unrealized Annuity Property In Value New GRAT Yield Growth In Out Gains Payment Value ,581, ,581,850 2,198,155 2,198, ,198,155 2,198, ,727,083 1,581,850 1,727,083 2,340,321 2,340, ,340,321 2,340, ,727,

48 Rolling GRAT Illustration - Trust 1 Grantor Jack & Jill Flash Part 2 of 2 Investments and/or Estate Defunding Qualified Year Beginning Current Cash from GRAT Dividends + Income Ending Total Ending Investment Transfer to Income Growth S Corp Annuity Ordinary & Medicare Capital Gains Investment Combined In Balance New GRAT 2.0% 6.0% Stock Payment Income Taxes Taxes Balance Value , , , ,500 2,390, , ,000-1,150-3, , , ,188 60,479 2,400, , ,592-1,942-5, , , , , , ,056-6, , , , , , ,176-6, , , , , , ,304-6, , , , , , ,439-7, , , , , , ,582-7, , , , , , ,733-8, , , , , , ,893-8, , , , ,110 43

49 Rolling GRAT Illustration - Trust 1 Basis of Transferred Property Jack & Jill Flash Part 1 of 2 Total Adjusted Basis of Property Year Basis Basis Other Net Ending Beginning Transferred Transferred Basis Basis Ending Beginning Ending In Basis In Out Adjustments Adjustments Basis Value Value ,500, ,500,000 1,500,000 5,000,000 5,350, ,500, , , ,695 3,151,845 3,372, , , , ,457 1,032,153 1,104, , ,457 1,104,404 1,181, , ,457 1,181,712 1,264, , ,457 1,264,432 1,352, , ,457 1,352,942 1,447, , ,457 1,447,648 1,548, , ,457 1,548,983 1,657, , ,457 1,657,412 1,773,431 44

50 Rolling GRAT Illustration - Trust 1 Basis of Transferred Property Jack & Jill Flash Part 2 of 2 Adjusted Basis & Unrealized Gains Apportioned to GRAT Adjusted Basis & Unrealized Gains Apportioned to Grantor Year Ending Ending Ending Beginning Beginning Ending Ending Unrealized Beginning Beginning Ending Ending Unrealized In Value Basis Value Basis Gains Value Basis Value Basis Gains ,000,000 1,500,000 3,151, ,695 2,268, ,198, ,305 1,581, ,151, ,695 1,032, , , ,340, ,238 1,727, ,032, ,457 1,104, , , ,104, ,457 1,181, , , ,181, ,457 1,264, , , ,264, ,457 1,352, ,457 1,082, ,352, ,457 1,447, ,457 1,177, ,447, ,457 1,548, ,457 1,278, ,548, ,457 1,657, ,457 1,386, ,657, ,457 1,773, ,457 1,502,

51 Rolling GRAT Illustration - Trust 2 Wealth Transfer Summary Jack & Jill Flash Part 1 of 2 GRAT Property & Investments Grantor GRAT-Derived Accumulations Year GRAT Gross Estate GRAT Grantor Gross Estate Grantor Ending S Corp Value GRAT Gross Estate Unrealized S Corp Value Investments/ In Stock 65.0% Investments Value Gains Stock 65.0% -Defunding ,586,741 1,031, ,170, , , , , ,987 1,227, ,006 28, , , , , , , , , , , , , , , , , , , , , , , , , , , , ,484 46

52 Rolling GRAT Illustration - Trust 2 Wealth Transfer Summary Jack & Jill Flash Part 2 of 2 Net to Heirs GRAT Value Capital Gains Year +/- Grantor GRAT & Medicare Ending Investments/ Gross Taxable Estate Estate Taxes on Net In -Defunding Estate Gift Tax Base Taxes Trust Property to Heirs ,701,295 1,878, ,878, , ,950, ,726, , , ,667 81,647 1,314, ,471-53, ,643-21,457 89, , ,966-56, ,785-22,714 97, , ,294-60, ,111-24, , , ,861-63, ,631-25, , , ,104-67, ,358-26, , , ,499-71, ,303-28, , , ,555-75, ,479-30, , ,599 47

53 Rolling GRAT Illustration - Trust 2 Annuity Payments Jack & Jill Flash Required Annuity Payment Source of Annuity Payment Undiscounted Present Value Year Cash from GRAT GRAT Value of of Annuity Ending Annuity Annuity S Corp Investment Property Property Payments In Rate Payment Stock Distribution Distribution Distribution 3.0% % % 877, , , , , , % 877,343 79, ,006 1,227, , % % %

54 Rolling GRAT Illustration - Trust 2 Flows Jack & Jill Flash Part 1 of 2 S Corp Stock Year Beginning Capital Unrealized Ending Distribution Ending Ending Property Cash Gains Gains Unrealized to Satisfy Property In Value Yield Growth Triggered Distributed Gains Annuity Value ,198, , , ,756 1,170, ,285 1,586, ,586,741 79, , , ,987 1,227, , ,112 23,506 32, , , ,020 25,151 35, , , ,231 26,912 37, , , ,907 28,795 40, , , ,220 30,811 43, , , ,355 32,968 46, , , ,510 35,276 49, , ,896 49

55 Rolling GRAT Illustration - Trust 2 Flows Jack & Jill Flash Part 2 of 2 Investments Qualified Year Beginning Current Cash from Distribution Dividends + Income Ending Total Ending Investment Income Growth S Corp to Satisfy Ordinary & Medicare Capital Gains Investment Ending In Balance 2.0% 6.0% Stock Annuity Income Taxes Taxes Balance GRAT Value ,000 5,000 15, , , ,586, , , , , ,406 18, , , ,086 25, , ,118 38, , , ,312 26, , ,899 61, , ,503 1,230 3,690 28, , ,755 87, , ,277 1,746 5,237 30, , , , , ,112 2,322 6,967 32, , , , , ,297 2,966 8,898 35, , , , ,039 50

56 Rolling GRAT Illustration - Trust 2 Grantor Jack & Jill Flash Part 1 of 2 S Corp Stock Year Beginning Gains Gains GRAT Ending Ending Property Transfer to Cash Transferred Transferred Unrealized Annuity Property In Value New GRAT Yield Growth In Out Gains Payment Value , , , , , , , , ,050 1,227,701 1,227, ,227,701 1,227, ,

57 Rolling GRAT Illustration - Trust 2 Grantor Jack & Jill Flash Part 2 of 2 Investments and/or Estate Defunding Qualified Year Beginning Current Cash from GRAT Dividends + Income Ending Total Ending Investment Transfer to Income Growth S Corp Annuity Ordinary & Medicare Capital Gains Investment Combined In Balance New GRAT 2.0% 6.0% Stock Payment Income Taxes Taxes Balance Value , , , ,269 1,114, , , , ,337 78, ,684 28,657 1,256, ,657 79,337-1,014-3, , ,648-53, , ,073-3, , ,790-56, , ,136-3, , ,045-60,116-60, , ,202-3, , ,106-63,636-63, , ,273-3, , ,171-67,363-67, , ,347-4, , ,239-71,308-71, , ,426-4, , ,312-75,484-75,484 52

58 Rolling GRAT Illustration - Trust 2 Basis of Transferred Property Jack & Jill Flash Part 1 of 2 Total Adjusted Basis of Property Year Basis Basis Other Net Ending Beginning Transferred Transferred Basis Basis Ending Beginning Ending In Basis In Out Adjustments Adjustments Basis Value Value , , ,305 2,198,155 2,352, , , , ,776 1,586,741 1,697, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,896 53

59 Rolling GRAT Illustration - Trust 2 Basis of Transferred Property Jack & Jill Flash Part 2 of 2 Adjusted Basis & Unrealized Gains Apportioned to GRAT Adjusted Basis & Unrealized Gains Apportioned to Grantor Year Ending Ending Ending Beginning Beginning Ending Ending Unrealized Beginning Beginning Ending Ending Unrealized In Value Basis Value Basis Gains Value Basis Value Basis Gains ,198, ,305 1,586, ,776 1,170, , , , ,586, , , , , ,227, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

60 Rolling GRAT Illustration - Trust 3 Wealth Transfer Summary Jack & Jill Flash Part 1 of 2 GRAT Property & Investments Grantor GRAT-Derived Accumulations Year GRAT Gross Estate GRAT Grantor Gross Estate Grantor Ending S Corp Value GRAT Gross Estate Unrealized S Corp Value Investments/ In Stock 65.0% Investments Value Gains Stock 65.0% -Defunding ,399,825 1,559, ,812, , , , , ,688 1,870,541 1,215,852 42, , , , , , , , , , , , , , , , , , , , , ,046, , , ,186 55

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