George Washington Martha Washington

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1 George Washington Martha Washington PLANNING ANALYSIS 1/18/2013 James Hamers Hamers & Okawa

2 Disclaimer The purpose of American Dream ner is to assist in the preparation of a thoughtful, long-term plan that will best suit the needs of the client. There are multiple inter-dependent choices; the combinations of each may have a significant impact (positive or negative) on any projected scenario. No program can predict the future. Intervening events will inevitably change the results of any projection. For example, elements of a plan such as the growth rate of assets, annual expenses or the amount or timing of an inheritance may not occur in the manner projected. Investments returns reported by American Dream ner are hypothetical and do not represent the return of any particular investment; nor do they guarantee that actual investments will be similar. You are welcome to provide hypothetical rates of return for your assets or other attributes of wealth, income and expenses, including your investments. Your assets may grow or decline at higher or lower rates depending on actual market conditions. Financial projection results in American Dream ner will reflect the detail and accuracy of the underlying model approximating the client's financial circumstances and goals. The values reported in American Dream ner do not reflect state inheritance tax calculations. The American Dream ner, LLC, and Financial Software Solutions, LLC do not give financial, tax or legal advice. Individuals should always consult their financial, tax and legal advisors. Copyright laws protect American Dream ner. Unauthorized reproduction or distribution of this program, in part or in whole, violates those laws and will be prosecuted under the full extent of the law. Ó American Dream ner LLC All Rights Reserved

3 Assumptions Thank for using the offices of James Hamers for your planning needs. This report is a result of the information that you provided to us and various planning choices. Your current personal information consists of the following: Age Age to Retire Number of Years to Project Beginning Year of Projected Year of Your wealth consists of the following current values: George Martha Investments Real Property Business Interests Individual Securities Tax Deferred Accounts Total Value Income Expenses $2,097,398 $956,684 $779,160 $523,446 $4,356,688 $84,500 $94,815 Your wealth consists of the following future values under this scenario: Investments Real Property Business Interests Life Insurance Individual Securities Tax Deferred Accounts Total Value Income Expenses Administration Fees $2,915,138 $3,099,949 $2,429,929 $3,000,000 $544,707 $11,749,929 $732,559 $811,133 $174,999 Ó American Dream ner LLC All Rights Reserved

4 Life planning choices The following choices are made in this scenario. Investments Trusts No No Tax Deferred Accounts Yes No Yes Real Property No No No No No No Business Interests No No No No No Individual Securities No No No Life Insurance Yes Yes No No Yes Investments are gifted Investments are transferred to a charitable remainder uni-trust Tax deferred accounts are gifted to charity. Tax deferred accounts are withdrawn prior to age 70. Tax deferred accounts are withdrawn in a manner different from the federal minimum distribution rules Real Property is sold. Real Property is sold using a self canceling installment note. Real Property is transferred to a charitable remainder uni-trust. Real Property is transferred to a grantor retained annuity trust. Discounts are applied to Real Property. Real Property is held for business purposes and depreciated. Business is sold. Business is sold using a self canceling installment note. Business is transferred to a charitable remainder uni-trust. Business is transferred to a grantor retained annuity trust. Discounts are applied to a Business. Securities are sold. Securities are transferred to a charitable remainder uni-trust. Securities are transferred to a grantor retained annuity trust. Life insurance is held in a trust. A credit shelter (bypass) trust is used A charitable remainder uni-trust is used A grantor retained annuity trust is used. An irrevocable life insurance trust is used. Gift to charity Yes A gift to a charity is made in the year projected. Special expenses No Yes Yes You will provide for education expenses to your beneficiaries. You will incur long term care costs You have long term care insurance. Ó American Dream ner LLC All Rights Reserved

5 The next steps to take It will take the efforts of your team of professional planning advisors (financial, insurance, accounting and legal) to assist you in achieving the results that are indicated as possible in this scenario. Those efforts will take time and each advisor must do their part to help you achieve your goals. Thank you for allowing us to help guide you through this process. Remember that the materials provided in this report are illustrative only and that no one can guarantee that the results reflected in this scenario will be achieved. It is therefore important that you meet on a regular basis with your advisors to keep each advisor up-to-date with your activities so that each advisor can be alerted to issues that were not anticipated when this report was prepared for you. Sincerely, James Hamers Hamers & Okawa 1761 Liberty Street SE Salem, Oregon (503) Ó American Dream ner LLC All Rights Reserved

6 Net Inherited Estate These charts display the taxes, gifts to charity and inheritance that might occur in the current year and year projected. The ratio that each bears to the whole will depend on the choices you make during your lifetime. $3.5M Exempt 2036 Total Estate Value Taxes Inheritance Ratio of Taxes to Total Estate Lifetime Gifts Charitable Remainder Trust GRAT Cash Gift at Death $11,749,929 $10,874,936.% $874,993 7% Business Gift at Death Irrevocable Life Ins. Trust Estate Administration Fees $3,000,000 $174,999 93% Inheritance Taxes Cash Gifts Buisiness Gifts Notes: Ó American Dream ner LLC All Rights Reserved

7 Asset Allocation An estate is the sum of everything you own. These charts display the main categories of assets: Investments, Tax Deferred Investments, Individual Securities, Real Property and Business Interests in the current year and in the year projected. The ratio that each category bears to the whole will depend on the choices you make during your lifetime. 18% 2007 Investment Accounts Tax Deferred Accounts Real Property Business Assets Individual Securities 22% 48% 12% 27% 32% 2037 Investment Accounts Tax Deferred Accounts Real Property Business Assets Individual Securities 6% 34% Notes: Ó American Dream ner LLC All Rights Reserved

8 Income This chart displays income that you anticipate receiving during the current year and year projected. The ratio that each source of income bears to the whole will depend on the choices you make during your lifetime. These choices can include when you decide to retire as well as those relating to the ownership, purchase or sale of specific assets such as real property, business interests and individual securities or the transfer of those assets to a charitable trust or grantor retained annuity trust Work Support Retirement Sale Trust Business & Property Gift Income Other 100% 2037 Work Support Retirement Sale Trust Business & Property Gift Income Other 10% 90% Notes: Ó American Dream ner LLC All Rights Reserved

9 Expenses These charts display expenses that you anticipate incurring in the current year and in the year projected. The ratio that each expense bears to the whole will depend on the choices you make during your lifetime. These choices can include expenses relating to maintain your lifestyle as well as those relating to the ownership, purchase or sale of specific assets such as real property, business interests and individual securities or the transfer of those assets to a charitable trust or grantor retained annuity trust % Ordinary Expenses Discretionary Education Expenses Insurance Real Property Asset Purchase & Sale Gifts Estate Admin. Fees 18% 56% 7% 17% 16% 2037 Ordinary Expenses Discretionary Education Expenses Insurance Real Property Asset Purchase & Sale Gifts Estate Admin. Fees 3% 2% 61% Notes: Ó American Dream ner LLC All Rights Reserved

10 Investment Accounts These charts display the value of the main investment accounts you own (jointly or separately) in the current year and in the year projected. The ratio that each individual account bears to the whole will depend on the choices you make during your lifetime. All sources of income, sale proceeds and expenses are added to or subtracted from these account(s) during the years projected Joint Inv. Account George Client Inv. Inv. Account Martha Spouse Inv. Account 100% 2037 Joint Inv. Account George Client Inv. Inv. Account Martha Spouse Inv. Account Notes: 100% Ó American Dream ner LLC All Rights Reserved

11 Investment Allocation These charts display the value of the individual components of your investment allocation model(s) in the current year and in the year projected. The ratio that each individual account bears to the whole will depend on the choices you make during your lifetime. 11% 5% 24% 2007 Cash Tax Free Asset Class 3 Asset Class 4 Asset Class 5 Asset Class 6 Asset Class 7 14% 10% 18% 18% 12% 6% 19% 2037 Cash Tax Free Asset Class 3 Asset Class 4 Asset Class 5 Asset Class 6 Asset Class 7 16% 19% 11% 19% Notes: Ó American Dream ner LLC All Rights Reserved

12 Asset Allocation An estate is the sum of everything you own. This chart displays the main categories of assets: Investments, Tax Deferred Investments, Individual Securities, Real Property and Business Interests during the years projected. The ratio that each category bears to the whole will depend on the choices you make during your lifetime. 10M 8M 6M 4M 2M 0M Individual Securities Business Assets Real Property Tax Deferred Accounts Investment Accounts Notes: Ó American Dream ner LLC All Rights Reserved

13 Income This chart displays income that you anticipate receiving during the years projected. The ratio that each source of income bears to the whole will depend on the choices you make during your lifetime. These choices can include when you decide to retire as well as those relating to the ownership, purchase or sale of specific assets such as real property, business interests and individual securities or the transfer of those assets to a charitable trust or grantor retained annuity trust. 800K 700K 600K 500K 400K 300K 200K 100K 0K Other Gift Income Business & Property Trust Sale Retirement Support Work Notes: Ó American Dream ner LLC All Rights Reserved

14 Expenses This chart displays expenses that you anticipate incurring during the years projected. The ratio that each expense bears to the whole will depend on the choices you make during your lifetime. These choices can include expenses relating to maintain your lifestyle as well as those relating to the ownership, purchase or sale of specific assets such as real property, business interests and individual securities or the transfer of those assets to a charitable trust or grantor retained annuity trust. 1200K 1000K 800K 600K 400K 200K 0K Estate Admin. Fees Gifts Asset Purchase & Sale Real Property Insurance Education Expenses Discretionary Ordinary Expenses Notes: Ó American Dream ner LLC All Rights Reserved

15 Tax Deferred Accounts This chart displays the value of the tax deferred accounts you own during the years projected. The ratio that each account bears to the whole will depend on the choices you make during your lifetime. These choices can include how it is invested, how much is contributed, how much is withdrawn and when those withdrawals occur. 800K 700K 600K 500K 400K 300K 200K 100K 0K Other d N/A d N/A d N/A d N/A d N/A d Martha d George d Notes: Ó American Dream ner LLC All Rights Reserved

16 Investment Allocation This chart displays the value of the individual components of your investment allocation model(s) during the years projected. The ratio that each individual account bears to the whole will depend on the choices you make during your lifetime. 3200K 2800K 2400K 2000K 1600K 1200K 800K 400K 0K AssetClass 7 Asset Class 6 Asset Class 5 Asset Class 4 Asset Class 3 Tax Free Cash Notes: Ó American Dream ner LLC All Rights Reserved

17 Investment Liquidation This chart displays the value of the income and expenses that you anticipate incurring during the years projected. In those years that income (positive values) is not adequate to pay for expenses (negative values) an amount is withdrawn from your investments to pay for those additional expenses. 1000K 800K 600K 400K 200K 0K Income After Expenses Sold To Pay Expenses Notes: Ó American Dream ner LLC All Rights Reserved

18 Real Property This chart displays the value of any real property you own during the years projected. The ratio that each property bears to the whole will depend on the choices you make during your lifetime. These choices can include the purchase, sale or transfer of a property to a charitable trust or a grantor retained annuity trust. 3200K 2800K 2400K 2000K 1600K 1200K 800K 400K 0K Other d N/A N/A d N/A d d N/A d d Beach N/A Home d Whitehouse d Notes: Ó American Dream ner LLC All Rights Reserved

19 Business Assets This chart displays the value of any business interests you own during the years projected. The ratio that each business bears to the whole will depend on the choices you make during your lifetime. These choices can include the purchase, sale or transfer of a business to a charitable trust or a grantor retained annuity trust. 2800K 2400K 2000K 1600K 1200K 800K 400K 0K Other d N/A d N/A d N/A d N/A d N/A d N/A d dcontinental documents Notes: Ó American Dream ner LLC All Rights Reserved

20 Individual Securities This chart displays the value of any individual securities you own during the years projected. The ratio that each individual security bears to the whole will depend on the choices you make during your lifetime. These choices can include the purchase, sale or transfer of an individual security to a charitable trust or a grantor retained annuity trust Other d d d d d d d d Notes: Ó American Dream ner LLC All Rights Reserved

21 Asset Allocation An estate is the sum of everything you own. This chart displays the main categories of assets: Investments, Tax Deferred Investments, Individual Securities, Real Property and Business Interests during the years projected. The ratio that each category bears to the whole will depend on the choices you make during your lifetime. 3200K 2800K 2400K 2000K 1600K 1200K 800K 400K 0K Investment Accounts Tax Deferred Accounts Real Property Business Assets Individual Securities Notes: Ó American Dream ner LLC All Rights Reserved

22 Income This chart displays income that you anticipate receiving during the years projected. The ratio that each source of income bears to the whole will depend on the choices you make during your lifetime. These choices can include when you decide to retire as well as those relating to the ownership, purchase or sale of specific assets such as real property, business interests and individual securities or the transfer of those assets to a charitable trust or grantor retained annuity trust. 700K 600K 500K 400K 300K 200K 100K 0K Work Support Retirement Sale Trust Business & Property Gift Other Ó American Dream ner LLC All Rights Reserved

23 Expenses This chart displays expenses that you anticipate incurring during the years projected. The ratio that each expense bears to the whole will depend on the choices you make during your lifetime. These choices can include expenses relating to maintain your lifestyle as well as those relating to the ownership, purchase or sale of specific assets such as real property, business interests and individual securities or the transfer of those assets to a charitable trust or grantor retained annuity trust. 700K 600K 500K 400K 300K 200K 100K 0K Ordinary Discretionary Education Insurance Real Property Asset Purchase & Sale Gifts Estate Admin. Fees Notes: Ó American Dream ner LLC All Rights Reserved

24 Tax Deferred Accounts This chart displays the value of the tax deferred accounts you own during the years projected. The ratio that each account bears to the whole will depend on the choices you make during your lifetime. These choices can include how it is invested, how much is contributed, how much is withdrawn and when those withdrawals occur. 450K 400K 350K 300K 250K 200K 150K 100K 50K 0K George d Martha d N/A d N/A d N/A d N/A d N/A d Other d Notes: Ó American Dream ner LLC All Rights Reserved

25 Investment Allocation This chart displays the value of the individual components of your investment allocation model(s) during the years projected. The ratio that each individual account bears to the whole will depend on the choices you make during your lifetime. 600K 500K 400K 300K 200K 100K 0K Cash Tax Free Asset Class 3 Asset Class 4 Asset Class 5 Asset Class 6 AssetClass 7 Notes: Ó American Dream ner LLC All Rights Reserved

26 Investment Liquidation This chart displays the value of the income and expenses that you anticipate incurring during the years projected. In those years that income (positive values) is not adequate to pay for expenses (negative values) an amount is withdrawn from your investments to pay for those additional expenses. 800K 700K 600K 500K 400K 300K 200K 100K 0K Sold To Pay Expenses Income After Expenses Notes: Ó American Dream ner LLC All Rights Reserved

27 Real Property This chart displays the value of any real property you own during the years projected. The ratio that each property bears to the whole will depend on the choices you make during your lifetime. These choices can include the purchase, sale or transfer of a property to a charitable trust or a grantor retained annuity trust. 2400K 2000K 1600K 1200K 800K 400K 0K dwhitehouse dbeach Home dn/a dn/a dn/a dn/a dn/a dother Notes: Ó American Dream ner LLC All Rights Reserved

28 Business Assets This chart displays the value of any business interests you own during the years projected. The ratio that each business bears to the whole will depend on the choices you make during your lifetime. These choices can include the purchase, sale or transfer of a business to a charitable trust or a grantor retained annuity trust. 2800K 2400K 2000K 1600K 1200K 800K 400K 0K dcontinental documents dn/a dn/a dn/a dn/a dn/a d N/A dother Notes: Ó American Dream ner LLC All Rights Reserved

29 Individual Securities This chart displays the value of any individual securities you own during the years projected. The ratio that each individual security bears to the whole will depend on the choices you make during your lifetime. These choices can include the purchase, sale or transfer of an individual security to a charitable trust or a grantor retained annuity trust d d d d d d d d Other Notes: Ó American Dream ner LLC All Rights Reserved

30 Financial Statement Year Estate Value Investments Tax Deferred Accounts Individual Securities Real Property Less Debt 2007 $4,356,688 $2,097,398 $523,446 $956, $4,537,049 $2,179,145 $548,016 $999, $4,726,000 $2,265,469 $573,768 $1,044, $4,923,947 $2,356,612 $600,757 $1,090, $5,031,072 $2,352,579 $629,046 $1,137, $5,139,642 $2,345,455 $658,698 $1,187, $5,255,061 $2,340,456 $689,780 $1,238, $5,387,353 $2,347,407 $722,363 $1,292, $5,539,310 $2,368,894 $756,520 $1,347, $5,684,969 $2,404,138 $766,930 $1,404, $5,810,944 $2,438,290 $754,914 $1,464, $5,939,903 $2,471,220 $743,122 $1,526, $6,071,853 $2,502,786 $731,548 $1,590, $6,206,800 $2,532,837 $720,187 $1,656, $6,344,741 $2,561,210 $709,037 $1,725, $6,485,671 $2,587,729 $698,092 $1,796, $6,629,577 $2,612,207 $687,348 $1,870, $6,776,440 $2,634,444 $676,801 $1,947, $6,926,235 $2,654,223 $666,447 $2,027, $7,078,930 $2,671,314 $656,282 $2,109, $7,234,482 $2,685,471 $646,303 $2,195, $7,392,842 $2,696,429 $636,504 $2,284, $7,553,950 $2,703,908 $626,883 $2,376, $7,717,737 $2,707,606 $617,437 $2,472, $7,884,442 $2,707,523 $608,161 $2,571, $8,054,133 $2,703,968 $598,558 $2,674, $8,272,911 $2,743,784 $587,626 $2,781, $8,504,929 $2,799,680 $575,000 $2,883, $8,743,793 $2,856,797 $560,715 $2,989, $11,749,929 $2,915,138 $544,707 $3,099,949 Ó American Dream ner LLC All Rights Reserved

31 Financial Statement Year Business Interests Contract Receivables Income After Tax Expenses Gifts 2007 $779,160 $84,500 $94,815 $20, $810,327 $87,035 $97,312 $20, $842,740 $89,646 $99,896 $20, $876,449 $92,335 $102,572 $20, $911,507 $105,343 $20, $947,968 $108,211 $20, $985,886 $5,200 $111,181 $20, $1,025,322 $19,708 $114,255 $20, $1,066,335 $36,159 $117,439 $20, $1,108,988 $51,226 $120,734 $20, $1,153,347 $51,610 $124,146 $20, $1,199,481 $52,037 $127,679 $20, $1,247,461 $52,508 $131,336 $20, $1,297,359 $53,024 $135,123 $20, $1,349,253 $53,587 $139,043 $20, $1,403,223 $54,197 $143,102 $20, $1,459,352 $54,857 $147,304 $20, $1,517,727 $55,568 $151,656 $20, $1,578,436 $56,331 $156,160 $20, $1,641,573 $57,148 $160,825 $20, $1,707,236 $58,021 $165,654 $20, $1,775,525 $58,952 $170,654 $20, $1,846,546 $59,941 $175,831 $20, $1,920,408 $60,993 $181,191 $20, $1,997,225 $62,412 $186,740 $20, $2,077,114 $64,499 $192,486 $20, $2,160,198 $369,067 $456,111 $20, $2,246,606 $666,514 $740,749 $20, $2,336,470 $698,763 $775,128 $20, $2,429,929 $732,559 $986,132 $894,993 Ó American Dream ner LLC All Rights Reserved

32 Income Year Total Earned Rental Social Security Real Property Sale Proceeds 2007 $84,500 $84, $87,035 $87, $89,646 $89, $92,335 $92, $5,200 $5, $19,708 $19, $36,159 $20, $51,226 $21, $51,610 $22, $52,037 $23, $52,508 $23, $53,024 $24, $53,587 $25, $54,197 $26, $54,857 $28, $55,568 $29, $56,331 $30, $57,148 $31, $58,021 $32, $58,952 $34, $59,941 $35, $60,993 $36, $62,412 $38, $64,499 $39, $369,067 $41, $666,514 $43, $698,763 $44, $732,559 $46,706 Ó American Dream ner LLC All Rights Reserved

33 Income Year Business Sale Proceeds Securities Sale Proceeds Defined Benefit Spousal Support Child Support Ó American Dream ner LLC All Rights Reserved

34 Income Year Buy Out Annuity Royalty Tax Deferred Account Withdrawals CRT And GRAT $15, $29, $29, $28, $28, $28, $27, $27, $26, $26, $25, $25, $25, $24, $24, $24, $24, $24, $25, $25, $26, $27,271 Ó American Dream ner LLC All Rights Reserved

35 Income Year Trust Fund Gift Income Installment Note Business Income Dividend Income Ó American Dream ner LLC All Rights Reserved

36 Income Year Other Income Long Term Care Insurance Benefit Additions To Investments $302, $597, $627, $658,582 Ó American Dream ner LLC All Rights Reserved

37 Expenses Total Cash Outflow Ordinary Expenses Discretionary Expenses Life Insurance Premiums Life Insurance Premiums Gifts Year 2007 $87,115 $60,000 $20, $89,612 $62,100 $20, $92,196 $64,274 $20, $94,872 $66,523 $20, $97,643 $68,851 $20, $100,511 $71,261 $20, $103,481 $73,755 $20, $106,555 $76,337 $20, $109,739 $79,009 $20, $113,034 $81,774 $20, $116,446 $84,636 $20, $119,979 $87,598 $20, $123,636 $90,664 $20, $127,423 $93,837 $20, $131,343 $97,122 $20, $135,402 $100,521 $20, $139,604 $104,039 $20, $143,956 $107,681 $20, $148,460 $111,449 $20, $153,125 $115,350 $20, $157,954 $119,387 $20, $162,954 $123,566 $20, $168,131 $127,891 $20, $173,491 $132,367 $20, $179,040 $137,000 $20, $184,786 $141,795 $20, $452,911 $146,758 $20, $740,749 $151,894 $20, $775,128 $157,210 $20, $986,131 $162,713 $20,000 Ó American Dream ner LLC All Rights Reserved

38 Expenses Year Education Expenses Long Term Care Expenses Installment Debt Real Property Debt Payments Real Property Down Payments 2007 $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $7,700 $8, $269,875 $8, $560, $588, $617,420 Ó American Dream ner LLC All Rights Reserved

39 Expenses Year Real Property Maintenance Real Property Taxes Security Purchase Business Purchase Cost Of Asset Sales 2007 $10, $11, $11, $12, $12, $13, $13, $14, $14, $15, $15, $16, $16, $17, $18, $18, $19, $20, $20, $21, $22, $23, $24, $24, $25, $26, $27, $28, $29, $30,999 Ó American Dream ner LLC All Rights Reserved

40 Expenses Year Cash Gifts Gift Taxes Estate Administration Fees $174,999 Ó American Dream ner LLC All Rights Reserved

41 Gift Accounts Year Total Gifts Remaining Lifetime Exemption Client Remaining Lifetime Exemption Spouse Joint Investments George Investments 2007 $20,000 $5,000,000 $5,000,000 $2,101,638 $(4,240) 2008 $20,000 $5,000,000 $5,000,000 $2,187,862 $(8,717) 2009 $20,000 $5,000,000 $5,000,000 $2,278,910 $(13,441) 2010 $20,000 $5,000,000 $5,000,000 $2,375,036 $(18,423) 2011 $20,000 $5,000,000 $5,000,000 $2,376,253 $(23,674) 2012 $20,000 $5,000,000 $5,000,000 $2,374,659 $(29,204) 2013 $20,000 $5,000,000 $5,000,000 $2,375,482 $(35,026) 2014 $20,000 $5,000,000 $5,000,000 $2,388,557 $(41,150) 2015 $20,000 $5,000,000 $5,000,000 $2,416,485 $(47,591) 2016 $20,000 $5,000,000 $5,000,000 $2,458,497 $(54,360) 2017 $20,000 $5,000,000 $5,000,000 $2,499,761 $(61,471) 2018 $20,000 $5,000,000 $5,000,000 $2,540,157 $(68,938) 2019 $20,000 $5,000,000 $5,000,000 $2,579,561 $(76,775) 2020 $20,000 $5,000,000 $5,000,000 $2,617,834 $(84,997) 2021 $20,000 $5,000,000 $5,000,000 $2,654,829 $(93,619) 2022 $20,000 $5,000,000 $5,000,000 $2,690,387 $(102,658) 2023 $20,000 $5,000,000 $5,000,000 $2,724,338 $(112,131) 2024 $20,000 $5,000,000 $5,000,000 $2,756,497 $(122,053) 2025 $20,000 $5,000,000 $5,000,000 $2,786,667 $(132,444) 2026 $20,000 $5,000,000 $5,000,000 $2,814,636 $(143,322) 2027 $20,000 $5,000,000 $5,000,000 $2,840,176 $(154,706) 2028 $20,000 $5,000,000 $5,000,000 $2,863,044 $(166,615) 2029 $20,000 $5,000,000 $5,000,000 $2,882,978 $(179,070) 2030 $20,000 $5,000,000 $5,000,000 $2,899,699 $(192,093) 2031 $20,000 $5,000,000 $5,000,000 $2,913,228 $(205,706) 2032 $20,000 $5,000,000 $5,000,000 $2,923,898 $(219,931) 2033 $20,000 $5,000,000 $5,000,000 $2,978,576 $(234,792) 2034 $20,000 $5,000,000 $5,000,000 $3,049,993 $(250,314) 2035 $20,000 $5,000,000 $5,000,000 $3,123,319 $(266,522) 2036 $20,000 $5,000,000 $5,000,000 $3,198,580 $(283,442) Ó American Dream ner LLC All Rights Reserved

42 Gift Accounts Year Martha Investments Joint Intended Cash Gifts George Intended Cash Gifts Martha Intended Cash Gifts Joint Lifetime Business Gifts Ó American Dream ner LLC All Rights Reserved

43 Gift Accounts George Martha Lifetime Lifetime Business Joint ILIT George Martha Year Business Gifts Gifts Premium ILIT Premium ILIT Premium 2007 $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20, $20,000 Ó American Dream ner LLC All Rights Reserved

44 Gift Accounts Year Taxable Gifts Gift Taxes Ó American Dream ner LLC All Rights Reserved

45 Gift Beneficiaries Year Total Gifts Total Investment Gifts Total Business Gifts Total ILIT Premium Gifts 2007 $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10, $10,000 $10,000 Ó American Dream ner LLC All Rights Reserved

46 Investment Account Values Year Total Investment Accounts Value Total Income Total Expenses Joint Investments Account Income To Joint Investments 2007 $2,097,398 $84,500 $94,815 $2,101,638 $84, $2,179,145 $87,035 $117,312 $2,187,862 $87, $2,265,469 $89,646 $119,896 $2,278,910 $89, $2,356,612 $92,335 $122,572 $2,375,036 $92, $2,352,579 $125,343 $2,376, $2,345,455 $128,211 $2,374, $2,340,456 $5,200 $131,181 $2,375,482 $5, $2,347,407 $19,708 $134,255 $2,388,557 $19, $2,368,894 $36,159 $137,439 $2,416,485 $36, $2,404,138 $51,226 $140,734 $2,458,497 $51, $2,438,290 $51,610 $144,146 $2,499,761 $51, $2,471,220 $52,037 $147,679 $2,540,157 $52, $2,502,786 $52,508 $151,336 $2,579,561 $52, $2,532,837 $53,024 $155,123 $2,617,834 $53, $2,561,210 $53,587 $159,043 $2,654,829 $53, $2,587,729 $54,197 $163,102 $2,690,387 $54, $2,612,207 $54,857 $167,304 $2,724,338 $54, $2,634,444 $55,568 $171,656 $2,756,497 $55, $2,654,223 $56,331 $176,160 $2,786,667 $56, $2,671,314 $57,148 $180,825 $2,814,636 $57, $2,685,471 $58,021 $185,654 $2,840,176 $58, $2,696,429 $58,952 $190,654 $2,863,044 $58, $2,703,908 $59,941 $195,831 $2,882,978 $59, $2,707,606 $60,993 $201,191 $2,899,699 $60, $2,707,523 $62,412 $206,740 $2,913,228 $62, $2,703,968 $64,499 $212,486 $2,923,898 $64, $2,743,784 $369,067 $476,111 $2,978,576 $369, $2,799,680 $666,514 $760,749 $3,049,993 $666, $2,856,797 $698,763 $795,128 $3,123,319 $698, $2,915,138 $732,559 $831,133 $3,198,580 $732,559 Ó American Dream ner LLC All Rights Reserved

47 Investment Account Values Year Expenses From Joint Investments George Investments Account Income To George Investments Expenses From George Investments Martha Investments Account 2007 $90,683 $-4,240 $4, $113,055 $-8,717 $4, $115,513 $-13,441 $4, $118,057 $-18,423 $4, $120,692 $-23,674 $4, $123,421 $-29,204 $4, $126,247 $-35,026 $4, $129,173 $-41,150 $5, $132,204 $-47,591 $5, $135,343 $-54,360 $5, $138,593 $-61,471 $5, $141,959 $-68,938 $5, $145,445 $-76,775 $5, $149,054 $-84,997 $6, $152,793 $-93,619 $6, $156,664 $-102,658 $6, $160,674 $-112,131 $6, $164,826 $-122,053 $6, $169,126 $-132,444 $7, $173,579 $-143,322 $7, $178,191 $-154,706 $7, $182,967 $-166,615 $7, $187,913 $-179,070 $7, $193,036 $-192,093 $8, $198,341 $-205,706 $8, $203,835 $-219,931 $8, $467,200 $-234,792 $8, $751,570 $-250,314 $9, $785,674 $-266,522 $9, $821,395 $-283,442 $9,738 Ó American Dream ner LLC All Rights Reserved

48 Investment Account Values Income To Expenses From Martha Martha Year Investments Investments Ó American Dream ner LLC All Rights Reserved

49 Tax Deferred Accounts Year Total George Total George Contribution George Withdrawal After Tax Martha Total 2007 $523,446 $263,519 $259, $548,016 $277,770 $270, $573,768 $292,791 $280, $600,757 $308,624 $292, $629,046 $325,314 $303, $658,698 $342,906 $315, $689,780 $361,450 $328, $722,363 $380,996 $341, $756,520 $401,599 $15,662 $354, $766,930 $397,918 $15,519 $369, $754,914 $394,270 $15,377 $360, $743,122 $390,656 $15,236 $352, $731,548 $387,074 $15,096 $344, $720,187 $383,526 $14,958 $336, $709,037 $380,010 $14,820 $329, $698,092 $376,527 $14,685 $321, $687,348 $373,075 $14,550 $314, $676,801 $369,655 $14,417 $307, $666,447 $366,266 $14,284 $300, $656,282 $362,909 $14,153 $293, $646,303 $359,582 $14,024 $286, $636,504 $356,285 $13,895 $280, $626,883 $353,019 $13,768 $273, $617,437 $349,783 $13,642 $267, $608,161 $346,577 $13,821 $261, $598,558 $342,906 $14,380 $255, $587,626 $338,131 $14,850 $249, $575,000 $332,334 $15,320 $242, $560,715 $325,461 $15,787 $235, $544,707 $317,460 $16,248 $227,248 Ó American Dream ner LLC All Rights Reserved

50 Tax Deferred Accounts Martha Martha Year Contribution Withdrawal After Tax $14, $14, $13, $13, $13, $12, $12, $12, $11, $11, $11, $11, $10, $10, $10, $10, $10, $10, $10, $10, $11,023 Ó American Dream ner LLC All Rights Reserved

51 Investment Allocation Year Total Cash Tax Free Asset Class 3 Asset Class $2,097,398 $501,911 $372,813 $374,330 $211, $2,179,145 $519,081 $387,672 $389,243 $220, $2,265,469 $537,214 $403,363 $404,991 $229, $2,356,612 $556,362 $419,929 $421,617 $239, $2,352,579 $552,479 $419,613 $421,292 $239, $2,345,455 $547,697 $418,770 $420,436 $239, $2,340,456 $543,265 $418,326 $419,982 $239, $2,347,407 $541,537 $420,027 $421,680 $240, $2,368,894 $543,130 $424,334 $425,995 $243, $2,404,138 $547,847 $431,109 $432,788 $247, $2,438,290 $552,112 $437,717 $439,411 $252, $2,471,220 $555,886 $444,134 $445,843 $256, $2,502,786 $559,127 $450,338 $452,060 $260, $2,532,837 $561,789 $456,301 $458,035 $264, $2,561,210 $563,826 $461,997 $463,742 $267, $2,587,729 $565,186 $467,396 $469,149 $271, $2,612,207 $565,815 $472,466 $474,224 $274, $2,634,444 $565,655 $477,171 $478,934 $278, $2,654,223 $564,644 $481,476 $483,240 $281, $2,671,314 $562,717 $485,340 $487,104 $283, $2,685,471 $559,804 $488,722 $490,482 $286, $2,696,429 $555,831 $491,577 $493,330 $288, $2,703,908 $550,717 $493,854 $495,597 $290, $2,707,606 $544,380 $495,504 $497,234 $292, $2,707,523 $536,806 $496,527 $498,240 $293, $2,703,968 $528,058 $496,980 $498,673 $294, $2,743,784 $529,385 $505,184 $506,888 $300, $2,799,680 $534,210 $516,294 $518,019 $307, $2,856,797 $538,949 $527,673 $529,420 $315, $2,915,138 $543,586 $539,324 $541,093 $322,626 Ó American Dream ner LLC All Rights Reserved

52 Investment Allocation Year Asset Class 5 Asset Class 6 Asset Class $302,651 $220,795 $112, $315,068 $229,854 $117, $328,180 $239,419 $122, $342,023 $249,518 $127, $342,198 $249,646 $127, $341,969 $249,479 $127, $342,087 $249,565 $127, $343,970 $250,939 $128, $347,992 $253,873 $129, $354,042 $258,287 $132, $359,984 $262,622 $134, $365,802 $266,866 $136, $371,476 $271,005 $138, $376,988 $275,026 $140, $382,315 $278,913 $142, $387,436 $282,649 $144, $392,325 $286,215 $146, $396,956 $289,594 $148, $401,301 $292,764 $149, $405,329 $295,702 $151, $409,007 $298,385 $152, $412,300 $300,788 $153, $415,170 $302,882 $154, $417,578 $304,639 $155, $419,527 $306,060 $156, $421,063 $307,181 $157, $428,937 $312,925 $160, $439,222 $320,428 $163, $449,781 $328,132 $167, $460,619 $336,039 $171,850 Ó American Dream ner LLC All Rights Reserved

53 Investment Liquidation Year Income After Tax Expenses Investments Sold To Pay Expenses Investments Tax Deferred Accounts 2007 $84,500 $94,815 $10,315 $2,097,398 $523, $87,035 $97,312 $10,277 $2,179,145 $548, $89,646 $99,896 $10,250 $2,265,469 $573, $92,335 $102,572 $10,237 $2,356,612 $600, $105,343 $105,343 $2,352,579 $629, $108,211 $108,211 $2,345,455 $658, $5,200 $111,181 $105,981 $2,340,456 $689, $19,708 $114,255 $94,547 $2,347,407 $722, $36,159 $117,439 $81,280 $2,368,894 $756, $51,226 $120,734 $69,508 $2,404,138 $766, $51,610 $124,146 $72,536 $2,438,290 $754, $52,037 $127,679 $75,642 $2,471,220 $743, $52,508 $131,336 $78,828 $2,502,786 $731, $53,024 $135,123 $82,099 $2,532,837 $720, $53,587 $139,043 $85,456 $2,561,210 $709, $54,197 $143,102 $88,905 $2,587,729 $698, $54,857 $147,304 $92,447 $2,612,207 $687, $55,568 $151,656 $96,088 $2,634,444 $676, $56,331 $156,160 $99,829 $2,654,223 $666, $57,148 $160,825 $103,677 $2,671,314 $656, $58,021 $165,654 $107,633 $2,685,471 $646, $58,952 $170,654 $111,702 $2,696,429 $636, $59,941 $175,831 $115,890 $2,703,908 $626, $60,993 $181,191 $120,198 $2,707,606 $617, $62,412 $186,740 $124,328 $2,707,523 $608, $64,499 $192,486 $127,987 $2,703,968 $598, $369,067 $456,111 $87,044 $2,743,784 $587, $666,514 $740,749 $74,235 $2,799,680 $575, $698,763 $775,128 $76,365 $2,856,797 $560, $732,559 $811,133 $78,574 $2,915,138 $544,707 Ó American Dream ner LLC All Rights Reserved

54 Life Insurance Year Total Of All Premium Total Premiums As Gifts Joint Account Premiums George Premiums Martha Premiums Total Death Benefit 2007 $20,000 $20,000 $3,000, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20, $20,000 $20,000 Ó American Dream ner LLC All Rights Reserved

55 Trust Fund Year Total Trust Fund Value Total Disbursements 2007 $99, $99, $98, $98, $97, $97, $96, $96, $95, $95, $94, $94, $93, $93, $93, $92, $92, $91, $91, $90, $90, $89, $89, $89, $88, $88, $87, $87, $87, $86,611 Ó American Dream ner LLC All Rights Reserved

56 Real Property Year Fair Market Value Fair Market Value Less Debt Net Cash Flow Rental Income After Tax Real Estate Taxes 2007 $1,094,977 $956,684 $-19,415 $10, $1,134,644 $999,561 $-19,812 $11, $1,175,774 $1,044,023 $-20,223 $11, $1,218,421 $1,090,128 $-20,649 $12, $1,262,642 $1,137,940 $-21,092 $12, $1,308,497 $1,187,521 $-21,550 $13, $1,356,047 $1,238,939 $-22,026 $13, $1,405,355 $1,292,262 $-22,519 $14, $1,456,487 $1,347,562 $-23,030 $14, $1,509,512 $1,404,913 $-23,560 $15, $1,564,501 $1,464,392 $-24,110 $15, $1,621,528 $1,526,080 $-24,680 $16, $1,680,669 $1,590,059 $-25,272 $16, $1,742,005 $1,656,416 $-25,885 $17, $1,805,617 $1,725,241 $-26,521 $18, $1,871,591 $1,796,626 $-27,181 $18, $1,940,017 $1,870,669 $-27,865 $19, $2,010,987 $1,947,469 $-28,575 $20, $2,084,597 $2,027,130 $-29,311 $20, $2,160,946 $2,109,760 $-30,075 $21, $2,240,138 $2,195,472 $-30,866 $22, $2,322,281 $2,284,383 $-31,688 $23, $2,407,485 $2,376,612 $-32,540 $24, $2,495,867 $2,472,286 $-33,424 $24, $2,587,546 $2,571,534 $-34,341 $25, $2,682,648 $2,674,493 $-35,292 $26, $2,781,303 $2,781,303 $-36,278 $27, $2,883,643 $2,883,643 $-28,836 $28, $2,989,810 $2,989,810 $-29,898 $29, $3,099,949 $3,099,949 $-30,999 $30,999 Ó American Dream ner LLC All Rights Reserved

57 Real Property Year Maintenance Expenses Management Fees Debt Balance Debt Payment Amount Principal Payments 2007 $138,293 $8,465 $3, $135,083 $8,465 $3, $131,751 $8,465 $3, $128,293 $8,465 $3, $124,703 $8,465 $3, $120,976 $8,465 $3, $117,108 $8,465 $4, $113,093 $8,465 $4, $108,926 $8,465 $4, $104,600 $8,465 $4, $100,109 $8,465 $4, $95,448 $8,465 $4, $90,610 $8,465 $5, $85,588 $8,465 $5, $80,376 $8,465 $5, $74,965 $8,465 $5, $69,348 $8,465 $5, $63,518 $8,465 $6, $57,467 $8,465 $6, $51,186 $8,465 $6, $44,666 $8,465 $6, $37,898 $8,465 $7, $30,873 $8,465 $7, $23,581 $8,465 $7, $16,012 $8,465 $7, $8,155 $8,465 $8, $8, Ó American Dream ner LLC All Rights Reserved

58 Real Property Year Interest Payments Contract Receivable Principal And Interest Total Net Sale Proceeds Net Sale Principal Proceeds 2007 $5, $5, $5, $4, $4, $4, $4, $4, $4, $3, $3, $3, $3, $3, $3, $2, $2, $2, $2, $1, $1, $1, $1, $ $ $ Ó American Dream ner LLC All Rights Reserved

59 Real Property Year Net Sale Interest Proceeds Taxes On Sale Proceeds Cost Of Sale Tax Basis Of Property Capital Gains 2007 $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600, $600,000 Ó American Dream ner LLC All Rights Reserved

60 Real Property Year Capital Gains Exemption Realized Taxable Capital Gains Cumulative Depreciation Ó American Dream ner LLC All Rights Reserved

61 Business Assets Year Total Total Discounted Business Gifts Principal And Interest Contract Recievables 2007 $779, $810, $842, $876, $911, $947, $985, $1,025, $1,066, $1,108, $1,153, $1,199, $1,247, $1,297, $1,349, $1,403, $1,459, $1,517, $1,578, $1,641, $1,707, $1,775, $1,846, $1,920, $1,997, $2,077, $2,160, $2,246, $2,336, $2,429,929 Ó American Dream ner LLC All Rights Reserved

62 Business Assets Year Net Proceeds On Sale Sale Principle Payments Sale Interest Payments Sale Proceed Taxes Cost Of Sale Ó American Dream ner LLC All Rights Reserved

63 Individual Securities Year Total Investment Securities Value Net Proceeds From Sale Cost Of Sale Ó American Dream ner LLC All Rights Reserved

64 Trusts - CRUT Year Trust Value Income After Tax Management Fee Total Contributions Ó American Dream ner LLC All Rights Reserved

65 Trusts - GRAT Year Total Contributions Trust Value Before Tax Annuity Payments Trust Value Less Annuity Residual Benefit To Beneficiaries Ó American Dream ner LLC All Rights Reserved

66 Trusts - GRAT Year After Tax Income After Tax Principal After Tax Interest Payments Management Fees Ó American Dream ner LLC All Rights Reserved

67 Estate and financial planning concepts An estate is the sum of everything you own. For most people, estate planning is viewed as passing the accumulation of a lifetime to their heirs at death. In reality, estate planning involves much more. It includes: - A way for a trusted person to make medical care decisions for you when a serious disability due to an illness or injury without having to go to court (Guardianship) to obtain the needed authority to act. - A way for a trusted person to pay bills for you during a time of disability due to an illness or injury without having to go to court (Conservatorship) to obtain the needed authority to act. - A way for a trusted person to pay your last bills and transfer assets to those you designate without having to go to court (Probate) to obtain the needed authority to act. - A way to minimize income, gift and estate taxes which could be assessed during the transfer of wealth from you to someone else. - A way to transfer ownership of an ongoing business to one member of a family in a manner in which the other members of the family are treated fairly yet gives the business its best chance of success to those who receive it. Techniques that are used in the development of an estate plan include the following : - Power of Attorney - Advance Directive for Health Care - Will - Revocable Living Trust - Bypass or Credit Shelter Trust - Marital Trusts (QTIP Trusts) - Irrevocable Life Insurance Trusts (ILIT) - Generation Skipping Transfers - Qualified Personal Residence Trusts (QPRT) - Grantor Retained Trusts - Charitable Trusts - Use of business entities (LLC, FLP, Corporations) - Annual Gifting Your estate plan will involve various combinations of these legal techniques plus choices you make as to the financial attributes of your estate. Those choices include: - When you retire. - What you earn before and after retirement. - What you spend before and after retirement. - How much you save and the manner in which you save it. - What type of assets you purchase over your lifetime such as investments, tax deferred investments, individual securities, real property and business interests. Ó American Dream ner LLC All Rights Reserved

68 Investments Investments can take many forms, including (but not limited to) the following: - Stocks - Bonds (corporate and government) - Mutual Funds - Certificates of Deposit. - Checking and Money Market accounts - Savings accounts - Treasury Notes - Annuities Investments are subject to a variety or market forces that must be considered in light of the owner s tolerance to those market forces, including but not limited to the following: - The expected total return from income and the appreciation of capital. - Preservation of principal. - The effects of inflation and deflation. - General economic conditions. - The expected tax consequences of investment decisions or strategies; - The role that each investment or course of action plays within an overall portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property. - Needs for liquidity, regularity of income and preservation or appreciation of capital. - An asset s special relationship or special value to the owner or the owner s beneficiaries Investments can be held in a manner which is exposed to income taxes, including the following: - Income taxes are assessed annually. This is commonly seen in Mutual Funds or when the bank issues a 1099 at the end of each year to report the amount of growth that occurred in the account during the year. - Income taxes are assessed when an asset is sold. This commonly occurs when individual securities are held for a period of time and then sold. - Income taxes are assessed when the owner makes a withdrawal from the account that holds the investments. This occurs with retirement funds or other tax qualified assets such as IRAs, 401k or 403b plans, SEP, SERP, annuities or similar programs. - There are exceptions to these general guidelines, such as Roth IRAs or certain bonds that are exempted from income taxes. Tax deferred accounts have a special status when it comes to the ownership of investments that set them apart from other types of investments. Unique rules apply to these investments which must be considered when deciding how much to place into these types of accounts, including: - Withdrawals must occur after the owner attains the age of 70 ½ years. - Withdrawals prior to when the owner is 55 years old must be structured in a manner that does not expose them to certain penalties imposed by the IRS and other tax authorities. - Were the investments in the account purchased with after-tax or before-tax dollars? - Withdrawals after age 70 ½ are a calculated amount based on the lifespan of the owner or can include others using formulas accepted by the IRS and other tax authorities. Ó American Dream ner LLC All Rights Reserved