Griffin Family Wealth Goal Achiever - InKnowVision Advanced Estate Planning

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The Family Wealth Goal Achiever™ is a plan design book (like a blueprint) that explains in easy to understand text and graphics the planning ideas being recommended by the planning team. It solves for high net worth tax planning, advanced estate planning, business transition planning, asset protection planning.

Learn more at www.inknowvision.com

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Griffin Family Wealth Goal Achiever - InKnowVision Advanced Estate Planning

  1. 1. InKnowVision’s Monthly HNW Webinar Series Case Study Webinar ©2012. InKnowVision LLC. All rights reserved. www.inknowvision.com
  2. 2. FAMILY WEALTH GOAL ACHIEVER™ - INITIAL PREPARED FOR: LARRY AND MEREDITH GRIFFIN August 31, 2011 PRESENTED BY Scott Hamilton InKnowVision, LLC 715 Enterprise Dr. Oakbrook, IL scott@ikvllc.com Phone: (630)596-5090Copyright 2011 InKnowVision, LLC
  3. 3. YOUR GOALS AND OBJECTIVES LARRY AND MEREDITH GRIFFINMaintain our customary lifestyle. This should take about $200,000 annually after taxes and gifts.Provide for the financial security of the surviving spouse.Maintain adequate liquidity for emergencies and investment opportunities. We prefer to keep at least$1,000,000 in cash and readily marketable securities.Assure we have sufficient liquid assets available at our deaths to eliminate the forced liquidation of our businessor real estate assets.Give John a life interest in 50% of the gas/oil income, property and property rights and 25% of the residual ofour estate. The other 50% interest in the gas/oil income, property and property rights and the remaining 75%residual of our estate we wish to pass to George.Provide for our grandchildrens education.Provide for a $100,000 gift to the Institute upon Larrys death and 10% to our church.Protect our familys wealth, and future wealth, from potential creditors.Reduce income taxes if possible.Eliminate or reduce estate taxes. Page 2
  4. 4. FAMILY INFORMATION LARRY AND MEREDITH GRIFFIN CLIENTS Larry Griffin Date of Birth December 10, 1939 Meredith Griffin Date of Birth March 6, 1941 CHILDRENCHILDS NAME DATE OF BIRTH John Griffin June 16, 1965 George Griffin May 6, 1973 GRANDCHILDREN NAME DATE OF BIRTH Jackie Griffin October 5, 2005 Jeff Griffin October 5, 2005 Page 3
  5. 5. PERIODIC TABLE OF ESTATE PLANNING ELEMENTS - CONSIDERED LARRY AND MEREDITH GRIFFINIn our planning process, we start with the universe of available planning tools. While this universe is constantly changing, the following chartoutlines many of the available tools. We examine each of these strategies and discard those that are not suitable for meeting your goals andobjectives. Charitable Rental Home - Family Limited Charitable Lead Remainder Uni- 412(e) Private Annuity Limited Liability SCIN Partnership Annuity Trust Trust Company Qualified Personal Sale for Installment Series Limited GDOT Owned Life Family LLC TCLAT Flip CRT Residence Trust Note Liability Company Insurance Beneficiary Preferred Limited Defective Maximized Gift to Corporate Premium Finance 529 Plans ILIT partnership Inheritors Trust Trust Recapitalization (BDIT) Charitable Life Annuity Walton GRAT Private Foundations NIMCRUT Asset Protection SPIA/Life Arbitrage Estate Withdrawal Revocable Living Principal Protected International Irrevocable Non-SPIA/Life in a CLAT Trusts, DPAs and Crummey Powers Dynasty Trust Notes VUL Grantor Trust POAs International Supporting IRA/Annuity to Gift Annuity Remainder Sales Life Estates Business Risk LLC/CRTs Organizations Charity Management Charitable Succession Defined Benefit Qualified Plan Bargain Sales Risk Management Remainder Annuity ESOP Planning Planning Plans Limited Partnership Trust Page 4
  6. 6. PLAN ASSUMPTIONS LARRY AND MEREDITH GRIFFINThe plan is based on numerous assumptions. Important among these are the yield and growth assumptionscontained on the balance sheet in the Financial Analysis section. Other important assumptions are contained onthis Plan Assumptions page. Tax Rate Assumptions State Income Tax Rate 5.75% State Inheritance - Estate Tax No state estate tax Tax on IRD Unless a qualified plan is given to charity, we assume the beneficiary designations are changed to provide for a stretch out distribution. 7520 Rates Highest rate 2.9% May, 2011 Current rate 2.4% August, 2011 Lowest rate 2.4% August, 2011 Long Term AFR Rate 3.9% August, 2011 Annual increase in Larrys earned income 0% Number of years Larrys income is expected to continue 4 Lifestyle Need Assumptions Net annual outlay for Larry and Merediths lifestyle needs, not including gifts or income taxes $200,000 Annual cost of living increase used in the plan 2% Settlement and Administrative Expenses Fixed estate settlement costs $25,000 Variable estate settlement costs, 1st death 0.50% (of assets) Variable estate settlement costs, 2nd death 2.00% (of assets) Page 5
  7. 7. INTRODUCTION TO THE PLAN STRATEGIES ROADMAP LARRY AND MEREDITH GRIFFINThe following section of the plan contains a step by step roadmap for each of the strategies that we are recommending.You will notice that the strategies are often interdependent; that is, in order for one strategy to be successful, you mustcomplete another strategy as well. It is the integration of each of these strategies that allows you to most efficientlyaccomplish your goals.Also keep in mind that there is often more than one way to get from point A to point B. This is true in wealth transferplanning. If a particular strategy or combination of strategies is not acceptable to you, we may be able to reach the desiredresult in a less efficient but perhaps more acceptable way.The following pages are a conceptual road map only, there are numerous details contained in each strategy that are notdetailed in the overall plan that follows.Figures shown in the following illustrations are projections and estimates only and not predictions or guarantees. Actualresults could be significantly different than the projected values contained in this analysis. Page 6
  8. 8. GIFT LAND/ROYALTIES TO LARRY LARRY AND MEREDITH GRIFFIN Meredith makes an unlimited marital gift to Larry in 2011.MEREDITH Gift land & royalties worth LARRY $6,700,000 Now owns land & royalties worth $6,700,000 Page 7
  9. 9. CREATE AND FUND A FAMILY LIMITED PARTNERSHIP LARRY AND MEREDITH GRIFFIN Larry creates a limited partnership and a management LLC. He receives limited partnership shares and LLC receives GP shares. The new entity is organized to develop new investments, protect family members, streamline business succession planning, create a gifting mechanism and provide centralized management of investments. LARRY FAMILY LIMITED PARTNERSHIPLP & 1/3 LLC interests LLC GP SHARES LP SHARES 1/3 - Larry, 1/3 - 1% 99% John, 1/3 - George Page 8
  10. 10. CREATE AND FUND A FAMILY LIMITED PARTNERSHIP LARRY AND MEREDITH GRIFFIN Larry transfers $6,700,000 of assets to the limited partnership.LARRY FAMILY LIMITED PARTNERSHIP $6,700,000 Detail of Assets Transferred Land - Gas wells/Oil Royalties 100,000 Land - Gas wells/Oil Royalties 6,600,000 Total Assets Contributed 6,700,000 Page 9
  11. 11. HAVE THE LIMITED PARTNERSHIP SHARES APPRAISED LARRY AND MEREDITH GRIFFIN Larry hires an appraiser to value the limited partnership shares he owns. The appraiser will value the shares taking all of the following into account: ▪ Liquidity of the shares ▪ Transferability of the shares ▪ Degree of control that accompanies ownership of the shares ▪ The assets owned by the partnership LARRY Appraisal FAMILY LIMITED PARTNERSHIP Valuation adjustmentAppraised value of LP shares is $4,355,000 assumed to be 35% Inside value of assets is $6,700,000 The appraisal value of the LP units is assumed for illustration purposes only. Note: Business appraisal is not an exact science. The IRS does not like valuation adjustments. A well regarded appraiser should be retained to value the interests being sold. Page 10
  12. 12. BUSINESS PURPOSE LARRY AND MEREDITH GRIFFINThe Family entity must have a legitimate business purpose for being organized and these purposes should be well documented. Legitimate business purposes examples are asfollows:a. To Make a Profit – The primary reason for creating this Entity is to make a profit.b. To Increase Wealth – This Entity will provide an effective legal vehicle to increase the wealth of the Members and their families.c. To Provide Centralized Management of Investments – This Entity is designed to hold investment assets and allow for centralized management of those assets.d. To Manage and Develop Real Estate – This Entity will provide the legal vehicle to effectively manage and/or develop any real estate owned or acquired by the Company.e. To Avoid Two Layers of Taxation on Profits – This Entity provides flexibility in business planning not available to the Members through trusts, corporations, or other businessentities.f. To Make Gifts Without Fractionalizing Assets – This Entity establishes a method by which annual gifts may be made without fractionalizing family assets.g. To Make Gifts Without Causing a Loss of Incentive – This Entity provides a method of ownership which allows gifts to be made to children and other beneficiaries withoutcausing a loss of productivity or the incentive to strive to do well.h. To Control Cash Flow to Members – This Entity provides a structure by which the Manager can control the assets and the cash flow to Members to achieve the legitimatepurposes of the Company.i. To Provide a Buy-Sell Arrangement – This Entity provides an orderly buy-sell arrangement between the members of the families that own membership interests to keep theownership of Company assets in those families.j. To Resolve Disputes Privately – This Entity provides for mediation and binding arbitration in disputes by Members that is intended to prevent expensive and embarrassingpublic litigation of private family business matters.k. To Require the Losers of Disputes to Pay the Dispute Costs – This Entity requires the loser in any dispute to pay for the costs of the dispute.l. To Restrict the Right of Non-Members to Acquire Interests – This Entity restricts the right of non-Members to acquire interests in Company assets.m. To Prevent Transfers of Membership Interests Because of Failed Marriages – This Entity prevents the transfer of a family member’s interest in the Company because of a failedmarriage.n. To Prevent Commingling of the Assets of Gift Recipients – This Entity creates a method of ownership that will prevent gifts made to family members from being commingledwith assets owned by others.o. To Make it Difficult to Withdraw – The restrictions in this Operating Agreement make it difficult for any of the parties to withdraw from the Company once they become aMember.p. To Protect Members from the Company’s Creditor Claims – This Entity limits the liability of Members from the Company’s creditors and further limits the liability of Membersholding particular Series of the Company from liability associated with other Series of the Company.q. To Provide Asset Protection for Members – This Entity protects the family resource base from the claims of future creditors of Members.The entity may conduct any lawful business and investment activity permitted under the laws of the State and/or country of organization in which it may have a business orinvestment interest.The entity may own, acquire, manage, develop, operate, sell, exchange, finance, refinance, lease and otherwise deal with real estate, personal property and any type of businessas the Manager may from time to time deem to be in the best interest of the entity.The entity may engage in any other activities that are related or incidental to the foregoing purposes. Page 11
  13. 13. CREATE AN IRREVOCABLE NON-GRANTOR TRUST LARRY AND MEREDITH GRIFFIN Larry creates an irrevocable non-grantor trust (Dynasty Trust). The Trust can be drafted to provide asset protection and long term estate tax savings through the use of dynasty trust provisions. LARRY NON-GRANTOR TRUST (DYNASTY TRUST)Note: Trust should be formed in a jurisdiction thatprovides favorable GST planning and state income taxplanning. HEIRSPotential Jurisdictions: Beneficiaries can include children,- Alaska grandchildren and Meredith as a remote- South Dakota beneficiary- Wyoming- Nevada- Delaware Page 12
  14. 14. GIFT TO DYNASTY TRUST LARRY AND MEREDITH GRIFFINLarry makes a gift of $3,048,500 of his limited partnership interests (assumed to be 70%) from the Family Limited Partnership to theDynasty Trust. This gift is designed to maximize available gifting exemption with an appreciating asset. Larry Griffin Gift of limited partnership NON-GRANTOR TRUST (DYNASTY interests worth $3,048,500 TRUST) Owns limited partnership interests worth $3,048,500 HEIRS Beneficiaries can include children, grandchildren and Meredith as a remote beneficiaryPlanning Goals Accomplished: - Controls assets so inheritance provides opportunities while minimizing problems for children, grandchildren and future generations. - Reduces estate taxes on appreciating assets - Provides enhanced asset protection - Heirs can have access to income generated from assets in the trust, while not being burdened with asset management decisions Page 13
  15. 15. DYNASTY TRUST/FAMILY BANK TO HOLD INHERITANCES LARRY AND MEREDITH GRIFFINThe Trust should be set-up as a Dynasty Trust. This trust would hold the inheritances for children and future generationsin a asset protected and tax advantaged trust, while protecting heirs from having too much too soon.The example on this page assumes annual distributions of 3% of the total Trust principal. This payout could be higher orlower. In addition, payments of principal could be made for health, education, maintenance, support or other items youfeel would be appropriate to allow. DYNASTY TRUST/FAMILY BANK FOR CHILDREN $12,323,377** For example the Trust could distribute annual income to beneficiaries JOHN GEORGE $184,851 $184,851The Trust, acting as a family bank, may lend money to an heir to purchase a home or to start a business but will firstassess the appropriateness of the transaction against a set of guidelines that have been drafted into the formationdocuments.** Assumed value of excess FLP interests and net equity of the Dynasty Trust in 2029. Page 14
  16. 16. CREATE AN IRREVOCABLE LIFE INSURANCE TRUST LARRY AND MEREDITH GRIFFIN Meredith creates an Irrevocable Life Insurance Trust (ILIT).MEREDITH ILIT HEIRS Beneficiaries can include children, grandchildren and future generations Page 15
  17. 17. GIFT TO IRREVOCABLE LIFE INSURANCE TRUST LARRY AND MEREDITH GRIFFINMeredith makes a gift of the Rental Home property worth $750,000 to the Trust. This gift is designed to utilize available giftingexemption with an appreciating asset. MEREDITH GRIFFIN Gift of real estate worth ILIT $750,000 Owns Rental Home property worth $750,000Note: Consider placing the Rental Home property into its ownlimited liability company prior to gifting it to the trust. HEIRS Page 16
  18. 18. PURCHASE LIFE INSURANCE IN TRUST LARRY AND MEREDITH GRIFFIN Annual premiums of $120,000 LARRY & MEREDITH are paid each year ** ILIT Owns second to die life insurance with a death benefit of $6,000,000** Premium funding in order of priority:- Rental income from Rental Home property owned by trust- ILIT will be named a discretionary beneficiary of Larrys Dynasty Trust- Annual cash gifts can be made by Larry & Meredith to pay premiums HEIRS $6,000,000 in assets are distributedPremium Payment Details according to the terms of the ILITPremiums in the amount of $120,000 are paid annually bythe ILIT. Premiums are scheduled to be paid for all years.The premium is based on certain assumptions. This is for illustration purposes only. Actual insurance numbers can only be determined byapplying for insurance. Page 17
  19. 19. INTERNAL RATE OF RETURN ON LIFE INSURANCE LARRY AND MEREDITH GRIFFINLARRYS AGE MEREDITHS AGE YEAR PREMIUM DEATH BENEFIT IRR 72 70 2011 120,000 6,000,000 4900.00% 73 71 2012 120,000 6,000,000 558.87% 74 72 2013 120,000 6,000,000 229.68% 75 73 2014 120,000 6,000,000 133.16% 76 74 2015 120,000 6,000,000 89.85% 77 75 2016 120,000 6,000,000 65.92% 78 76 2017 120,000 6,000,000 50.98% 79 77 2018 120,000 6,000,000 40.87% 80 78 2019 120,000 6,000,000 33.62% 81 79 2020 120,000 6,000,000 28.21% 82 80 2021 120,000 6,000,000 24.03% 83 81 2022 120,000 6,000,000 20.72% 84 82 2023 120,000 6,000,000 18.05% 85 83 2024 120,000 6,000,000 15.84% 86 84 2025 120,000 6,000,000 14.00% 87 85 2026 120,000 6,000,000 12.45% 88 86 2027 120,000 6,000,000 11.12% 89 87 2028 120,000 6,000,000 9.97% 90 88 2029 120,000 6,000,000 8.97% 91 89 2030 120,000 6,000,000 8.10% 92 90 2031 120,000 6,000,000 7.32% 93 91 2032 120,000 6,000,000 6.64% 94 92 2033 120,000 6,000,000 6.03% 95 93 2034 120,000 6,000,000 5.48% Page 18
  20. 20. CREATE AND FUND A QUALIFIED PERSONAL RESIDENCE TRUST LARRY AND MEREDITH GRIFFIN Larry creates a qualified personal residence trust (QPRT) with a term of 5 years. LARRY Deed LARRYs QPRT Larry gifts an undivided interest in property Meredith gifts a 1/2 undivided interest in property123 Main St. 1,000,000 123 Main St. 500,000 Sub Total 1,000,000 Sub Total 500,000Note: If you die before the QPRT term ends, the property is back in your estate. Page 19
  21. 21. QPRT APPRAISAL - GIFT OF REAL ESTATE LARRY AND MEREDITH GRIFFIN Larry hires an appraiser to value the real estate.LARRY Appraisal of Gift LARRYs QPRT The value of Larrys QPRT gift is expected to be $743,060 QPRT ASSUMPTIONS Term (years) 5 7520 Rate 2.40% Larrys age 72 Page 20
  22. 22. AFTER THE QPRT TERM ENDS (I) LARRY AND MEREDITH GRIFFIN Larrys QPRT will name Meredith as a beneficiary. As such, Meredith can continue to use the residence without rent.LARRY LARRYs QPRT Meredith is a beneficiary of Larrys QPRT Page 21
  23. 23. AFTER THE QPRT TERM ENDS (II) LARRY AND MEREDITH GRIFFIN At death, the real estate and any accumulated rental income, passes to your heirs without estate tax. The trusts can be structured for distributions according to your particular goals and objectives. LARRYS QPRT HEIRS The value of the real estate is assumed to be $1,719,336 as of 2029Note: This illustration assumes no rent is paid; however, under certain circumstances fair market rent may need to be paid.For example, if Larry outlives Meredith and wants to continue to use their home, he will need to pay fair market rent. Theadvantage to this is that rent is a very effective way to move additional assets outside of the taxable estate. Page 22
  24. 24. LEAVE YOUR IRA/ANNUITY TO CHARITY LARRY AND MEREDITH GRIFFIN At the 2nd death, leave your qualified plans and annuity to charity. IRA/ANNUITY $298,787 GRIFFIN FAMILY TRUSTAdvantagesNo estate taxNo income in respect of a decedent taxMost efficient asset to satisfy charitable intent Page 23
  25. 25. TESTAM TESTAMENTARY CHARITABLE LEAD ANNUITY TRUST (Part I) LARRY AND MEREDITH GRIFFIN Include language in your trust or Will that creates a testamentary charitable lead trust (TCLAT) at the second death. LARRY & MEREDITH TCLAT At death $1,463,079 of the assets taxable TCLAT owns assets with a value of in your estate will pass to the TCLAT. $1,463,079 after your death. This should bring your estate tax to $0. Note: Assets passing to the TCLAT reflect todays favorable tax law. Future funding to TCLAT could be greater in years with less favorable tax laws. GRIFFIN FAMILY CHARITY TCLAT Assumptions The charity will receive payments ofAsset growth rate 5.00% $78,504 each year for a period of 25 yearsTCLAT payout rate 5.37% totaling $1,962,611.Present value discount rate 5.00%Assumed date of death 2011 Page 24
  26. 26. TESTAMENTARY CHARITABLE LEAD ANNUITY TRUST (Part II) LARRY AND MEREDITH GRIFFIN At the end of the TCLAT term, your heirs will receive all of the remaining trust assets. TCLAT HEIRS The amount passing to beneficiaries is entirely dependent on the rate of return ofAt the end of the 25 year term, the TCLAT the assets in the trust. A higher rate of assets will be distributed to your heirs. return means more passing to heirs and a lower rate of return could mean that nothing passes to heirs.Based on the plan assumptions, your heirs could expect to inherit $392,125 from the TCLAT. The amount passingto heirs is a present value number using a discount rate of 5%. Page 25
  27. 27. PERIODIC TABLE OF ESTATE PLANNING ELEMENTS - RECOMMENDED LARRY AND MEREDITH GRIFFINThe highlighted tools are those we have determined are most suited to achieving your goals and objectives. Charitable Rental Home - Family Limited Charitable Lead Remainder Uni- 412(e) Private Annuity Limited Liability SCIN Partnership Annuity Trust Trust Company Qualified Personal Sale for Installment Series Limited GDOT Owned Life Family LLC TCLAT Flip CRT Residence Trust Note Liability Company Insurance Beneficiary Preferred Limited Maximized Gift to Corporate Premium Finance Defective Inheritors 529 Plans ILIT partnership Trust Recapitalization Trust (BDIT) Annuity Walton GRAT Private Foundations Charitable Life Estate NIMCRUT Asset Protection SPIA/Life Arbitrage Withdrawal Revocable Living Principal Protected International Irrevocable Non-SPIA/Life in a CLAT Trusts, DPAs and Crummey Powers Dynasty Trust Notes VUL Grantor Trust POAs International Supporting IRA/Annuity to Gift Annuity Remainder Sales Life Estates Business Risk LLC/CRTs Organizations Charity Management Charitable Succession Defined Benefit Qualified Plan Bargain Sales Risk Management Remainder Annuity ESOP Planning Planning Plans Limited Partnership TrustGreen equals a new Blue equals a social Yellow equals an planning tool for capital or existing planning family charitable tool tool Page 26
  28. 28. LARRY AND MEREDITH GRIFFINLIFETIME SPENDING AND LIQUIDITY Page 27
  29. 29. YOUR LIQUID ASSETS - PROPOSED PLAN LARRY AND MEREDITH GRIFFIN $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 - $2,000,000 $1,500,000 $1,000,000 $500,000 $- 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Liquid Assets Proposed Total Living ExpensesMost of our clients want to know that they have sufficient income and liquid assets to pay their living expenses for the rest of their lives. This chartassumes full implementation of the proposed plan and shows your liquid assets over your life expectancy compared with your annual living expenses.Liquid assets include cash, stocks, bonds, annuities and qualified retirement accounts but do not include any other assets you might own such aspromissory notes, businesses or real estate. Page 28
  30. 30. LARRY AND MEREDITH GRIFFININCOME TAX RESULTS Page 29
  31. 31. TOTAL INCOME TAXES - CURRENT VS. PROPOSED LARRY AND MEREDITH GRIFFIN $600,000 $550,000 $500,000 $450,000 $400,000 $350,000 - $300,000 $250,000 $200,000 $150,000 $100,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Current Plan Proposed PlanThis chart compares the income tax liability in the existing plan as against the proposed plan. The proposed plan includes both personal income taxesand trust income taxes. Page 30
  32. 32. INCOME TAXES - PROPOSED PLAN LARRY AND MEREDITH GRIFFINYEAR Personal Income Taxes Dynasty Trust Income Taxes ILIT Income Taxes2011 200,239 253,765 65,4682012 184,526 222,160 65,5212013 191,718 193,715 65,6802014 177,180 168,115 65,8442015 66,995 156,595 66,0132016 61,639 145,651 66,1862017 56,541 135,254 66,3662018 51,640 125,377 66,5502019 47,013 115,994 66,7402020 42,896 107,080 66,9362021 38,950 98,612 67,1382022 35,166 90,567 67,3452023 33,125 82,924 67,5592024 31,469 75,664 67,7802025 29,897 68,766 68,0072026 28,403 62,214 68,2402027 26,983 55,989 68,4812028 25,632 50,075 68,7292029 24,310 44,457 68,985 Page 31
  33. 33. LARRY AND MEREDITH GRIFFININCREASE INHERITANCEAND REDUCE ESTATE TAX Page 32
  34. 34. COMPARISON OF PLAN RESULTS - PLAN YEAR 2011 LARRY AND MEREDITH GRIFFIN Existing Plan Proposed Plan Advantage Estate Value $ 13,834,712 $ 7,527,868 Heirs Receive Immediately $ 11,026,110 $ 17,491,665 $ 6,465,555 Heirs Receive from Deferred Inheritance $ - $ 392,125 $ 392,125 Total Benefits to Family $ 11,026,110 $ 17,883,790 $ 6,857,680 Family Charity $ 100,000 $ 1,907,430 $ 1,807,430 Estate and Income Tax $ 2,393,646 $ - $ 2,393,646This chart assumes that you both die this year and compares the results of the current plan with the proposed plan.Deferred Inheritance is a general approximation based on the long term performance of the TCLAT. Page 33
  35. 35. COMPARISON OF PLAN RESULTS - PLAN YEAR 2011 LARRY AND MEREDITH GRIFFIN CURRENT PLAN PROPOSED PLAN 1% 10% 81% 18% 0% 90% Heirs Estate Tax Charity Heirs Estate Tax Charity Heirs $11,026,110 Heirs $17,883,790 Estate Tax $2,393,646 Estate Tax $0 Charity $100,000 Charity $1,907,430In the current plan, a portion of the benefit to heirs is qualified plan money. Withdrawals from these plans will be treated as ordinary income. Page 34
  36. 36. COMPARISON OF PLAN RESULTS - PLAN YEAR 2029 LARRY AND MEREDITH GRIFFIN Existing Plan Proposed Plan Advantage Estate Value $ 23,670,319 $ 5,006,263 Heirs Receive Immediately $ 11,233,629 $ 21,773,405 $ 10,539,776 Heirs Receive from Deferred Inheritance $ - $ 1,058,254 $ 1,058,254 Total Benefits to Family $ 11,233,629 $ 22,831,659 $ 11,598,030 Family Charity $ 100,000 $ 4,609,540 $ 4,509,540 Estate and Income Tax $ 11,797,639 $ - $ 11,797,639 Present Value of total to Heirs $6,598,573 $13,411,193 Discount rate for PV calculation 3.00%This chart assumes that you both die at life expectancy and compares the results of the current plan with the proposed plan.Deferred Inheritance is a general approximation based on the long term performance of the TCLAT. Page 35
  37. 37. COMPARISON OF PLAN RESULTS - PLAN YEAR 2029 LARRY AND MEREDITH GRIFFIN CURRENT PLAN PROPOSED PLAN 49% 0% 83% 17% 0% 51% Heirs Estate Tax Charity Heirs Estate Tax Charity Heirs $11,233,629 Heirs $21,773,405 Estate Tax $11,797,639 Estate Tax $0 Charity $100,000 Charity $4,609,540In the current plan, a portion of the benefit to heirs is qualified plan money. Withdrawals from these plans will be treated as ordinary income. Page 36
  38. 38. ASSETS PASSING TO YOUR FAMILY - CURRENT VS. PROPOSED LARRY AND MEREDITH GRIFFIN $25,000,000 $22,000,000 $19,000,000 $16,000,000 - $13,000,000 $10,000,000 $7,000,000 nt 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 re 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 ur C Current Plan Proposed Plan Proposed Plan w/out Life InsThis chart compares the amount of your assets that will pass to heirs immediately, after estate taxes and costs of implementation in the current plan asagainst the proposed plan. The proposed plan inheritances do not include any potential deferred inheritances because of the uncertainty surroundingthe remainder value at the termination of the TCLAT 25 years out. Page 37
  39. 39. LARRY AND MEREDITH GRIFFIN INCREASE INCHARITABLE GIVING Page 38
  40. 40. COMPARISON OF CHARITY RESULTS - PLAN YEAR 2011 LARRY AND MEREDITH GRIFFIN Existing Plan Proposed Plan Increase in Charity Charity receives from TCLAT $ - $ 1,600,000 $ 1,600,000Charitable gift of IRA/Annuity assets $ - $ 300,000 $ 300,000 Outright gift to charity $ 100,000 $ - $ (100,000) Family Charity $ 100,000 $ 1,900,000 $ 1,800,000 Page 39
  41. 41. COMPARISON OF CHARITY RESULTS - PLAN YEAR 2029 LARRY AND MEREDITH GRIFFIN Existing Plan Proposed Plan Increase in Charity Charity receives from TCLAT $ - $ 4,300,000 $ 4,300,000Charitable gift of IRA/Annuity assets $ - $ 300,000 $ 300,000 Outright gift to charity $ 100,000 $ - $ (100,000) Family Charity $ 100,000 $ 4,600,000 $ 4,500,000 Page 40
  42. 42. COST BENEFIT ANALYSIS LARRY AND MEREDITH GRIFFINAll strategies have an element of risk; a chance that the program adopted does not work as planned. Estate planning strategies carry an element ofrisk as well. Many advisors warn their clients of risk but do not make an effort to quantify those risks. We have taken the position in our planningthat if a risk is quantifiable, it should be identified as such and the cost of the risk should be disclosed to our client. When the risk is notquantifiable, this should also be disclosed.Any risk analysis begins with two questions: What is the reward to be gained by taking the risk? What is the cost of the potential loss if the plan fails totally? If you are satisfied that the reward is worth the risk and that the risk of loss is acceptable, it would then make sense to pursue the strategy. If the risk is such that you could not comfortably accept the loss, then the risk should not be taken.Is the reward worth the risk?The reward of the proposed plan results in an advantage to your heirs today of $6,857,680 over your existing plan.The reward of the proposed plan results in an advantage to your heirs at life expectancy of $11,598,030 over your existing plan.What if the Plan fails totally?There are 4 basic areas of potential risk involved in this comprehensive plan. We assume total failure of all planning techniques in order toprovide a worst case analysis. Transaction costs Planning Fees 40,000 Attorneys Fees 95,000 Valuation Fees 15,000 Total $ 150,000 Annual Maintenance Fee $ 6,500 Taxes This represents the taxes that will have to be paid if the plan fails entirely. Note that this is the same amount that would be paid without the planning. Total additional tax over current plan = $0 Page 41
  43. 43. COST BENEFIT ANALYSIS (Continued)Interest (cost of money) Interest is charged on late tax payments by the IRS at the rate of the applicable federal rate plus 3%. You must invest at a rate less than this rate to lose money. Assuming that assets earn in excess of that rate, there should be no risk of loss due to cost of money. Nonetheless, we assume that assets actually earn 2% less than the IRS interest rates, and the risk of loss would be $41,962.Penalties Assuming the plan is implemented with the help of knowledgeable advisors, the only potential penalty is for substantial undervaluation. The penalty comes into play in the case of a challenge to asset valuation. If the value reported for a transaction is less than 65% of the value as finally determined for tax purposes (by the IRS or the courts) then there is a 25% substantial undervaluation penalty. The valuation adjustment assumed in this plan is 35.00%. Therefore, an adjustment should not result in a substantial valuation penalty. Risk Analysis $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- Benefit to Heirs 2011 Benefit to Heirs 2029 Potential Loss (Total Failure) Page 42
  44. 44. DETAILED FINANCIAL ANALYSIS LARRY AND MEREDITH GRIFFIN INTRODUCTIONThe following section of the plan contains all of the financial analysis used to show you where youstand with your current plan and what is possible with the proposed plan.All of the numbers are based on information provided by you or gleaned from statements and taxreturns. If numbers do not look correct, please let us know so that we can make appropriatechanges.Assumed growth and yield numbers are all listed on the Net Worth pages contained in these sections.Figures shown in the following financials are projections and estimates only and not predictions orguarantees. Actual results could be significantly different than the projected values contained in thisanalysis. Page 43
  45. 45. DETAILED FINANCIAL ANALYSIS LARRY AND MEREDITH GRIFFIN CURRENT PLAN FINANCIALSIn the Current Plan Section you will find a Net Worth Statement and a detailed cash flow and assetvalue projection analysis. Page 44
  46. 46. CURRENT NET WORTH STATEMENT LARRY AND MEREDITH GRIFFIN LARRY MEREDITH JOINT TOTAL YIELD GROWTHCASH AND EQUIVALENTS Savings - - 100,000 100,000 0.0% 0.0% Cash 3,000 - - 3,000 0.0% 0.0% Cash - - 25,179 25,179 0.0% 0.0% Cash - - 730,450 730,450 0.0% 0.0% Cash - - 875,491 875,491 0.0% 0.0% Total of Cash and Equivalents 3,000 - 1,731,120 1,734,120 0.0% 0.0%MARKETABLE SECURITIES - FIXED INCOME Merrill Lynch 314,431 - - 314,431 4.1% 0.0% Total of Fixed Income 314,431 - - 314,431 4.1% 0.0%NON-TAXABLE MARKETABLE SECURITIES Merrill Lynch Cash - - 240,970 240,970 0.0% 0.0% Merrill Lynch Cash - - 33,050 33,050 0.0% 0.0% Merrill Lynch Cash 237,665 - - 237,665 0.0% 0.0% Merrill Lynch 199,611 - - 199,611 1.9% 0.0% Merrill Lynch Munis 750,333 - - 750,333 4.1% 0.0% Total of Non-Taxable Marketable Securities 1,187,609 - 274,020 1,461,629 2.4% 0.0%ANNUITIES/DEFERRED COMPENSATION Annuity - 15,177 - 15,177 4.0% Total of Annuities - 15,177 - 15,177 4.0% Page 45
  47. 47. CURRENT NET WORTH STATEMENT (Page 2) LARRY AND MEREDITH GRIFFIN LARRY MEREDITH JOINT TOTAL YIELD GROWTHOTHER INVESTMENTS Land - Gas wells/Oil Royalties - 100,000 - 100,000 22.4% -5.0% Land - Gas wells/Oil Royalties - 6,600,000 - 6,600,000 22.4% -5.0% Total of Other Investments - 6,700,000 - 6,700,000 22.4% -5.0%RETIREMENT PLANS/IRAs ML IRA 82,711 - 82,711 0.0% 5.0% ML SEP 207,258 - 207,258 0.0% 5.0% Total Retirement Plans 289,969 - 289,969 0.0% 5.0% Page 46
  48. 48. CURRENT NET WORTH STATEMENT (Page 3) LARRY AND MEREDITH GRIFFIN LARRY MEREDITH JOINT TOTAL YIELD GROWTHINVESTMENT REAL ESTATE Rental Home - - 750,000 750,000 2.0% 3.0% Vacation Home - - 310,000 310,000 0.0% 3.0% Total of Real Estate Holdings - - 1,060,000 1,060,000 1.4% 3.0%RESIDENTIAL REAL ESTATE 123 Main St. - - 1,000,000 1,000,000 0.0% 3.0% Total of Personal Residences - - 1,000,000 1,000,000 0.0% 3.0%PERSONAL PROPERTY Personal Property - - 250,000 250,000 0.0% 0.0% Total of Personal Property - - 250,000 250,000 0.0% 0.0%TOTAL ASSETS 1,795,009 6,715,177 4,315,140 12,825,326TOTAL LIABILITIES - - - -NET WORTH 1,795,009 6,715,177 4,315,140 12,825,326 Page 47
  49. 49. FINANCIAL ANALYSIS - EXISTING PLAN ASSET VALUE PROJECTIONS - EXISTING PLAN 3,910,000 ($2,000,000) -20.00% 5% -5.00% -10.00%YEAR Current 2011 2012 2013 2014 2015 2020 2025 2029Asset ValuesCash and cash equivalents 1,734,120 1,734,120 1,734,120 1,734,120 1,734,120 1,734,120 1,734,120 1,734,120 1,734,120Marketable securities - Fixed Income 314,431 314,431 314,431 314,431 314,431 314,431 314,431 314,431 314,431Municipal bonds 1,461,629 1,461,629 1,461,629 1,461,629 1,461,629 1,461,629 1,461,629 1,461,629 1,461,629Annuities 15,177 15,377 15,992 16,632 17,297 17,989 21,887 26,628 31,152Other investments 1 6,700,000 6,700,000 6,365,000 6,046,750 5,744,413 5,457,192 4,222,671 3,267,422 2,661,336 2Excess Cash Flow - Growth Securities - 995,291 1,935,278 2,764,997 3,556,204 4,208,573 7,428,626 10,693,484 13,438,783Retirement plans/IRAs 289,969 283,410 286,106 288,390 290,216 291,535 289,478 268,985 237,036Investment real estate 1,060,000 1,070,525 1,102,640 1,135,720 1,169,791 1,204,885 1,396,792 1,619,265 1,822,497Personal residences 1,000,000 1,009,929 1,040,227 1,071,434 1,103,577 1,136,684 1,317,728 1,527,608 1,719,336Personal property 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000Total assets in estate 12,825,326 13,834,712 14,505,423 15,084,102 15,641,678 16,077,038 18,437,361 21,163,572 23,670,319Combined net worth $ 12,825,326 $ 13,834,712 $ 14,505,423 $ 15,084,102 $ 15,641,678 $ 16,077,038 $ 18,437,361 $ 21,163,572 $ 23,670,3191 Beginning in 2012, we assume a 5% value decrease in the oil/gas land.2 5% Growth. Page 48
  50. 50. TAXABLE INCOME PROJECTIONS - EXISTING PLAN 14%YEAR Current 2011 2012 2013 2014 2015 2020 2025 2029Sources of taxable incomeMarketable securities - Fixed Income 12,860 12,860 12,860 12,860 12,860 12,860 12,860 12,860Other investments 1 1,500,000 1,350,000 1,215,000 1,093,500 1,038,825 803,823 621,983 506,609 Depletion (@ 14%) (210,000) (189,000) (170,100) (153,090) (145,436) (112,535) (87,078) (70,925)Retirement plans/IRAs 11,327 11,474 12,021 12,593 13,192 16,267 19,485 21,608Investment real estate 15,011 15,160 15,615 16,083 16,566 19,204 22,263 25,057Client earned income 250,641 250,641 250,641 250,641 250,641 - - - -Social security income 33,323 33,323 33,323 33,323 33,323 33,323 33,323 33,323Gross income $ 1,613,163 $ 1,484,459 $ 1,369,361 $ 1,265,911 $ 969,331 $ 772,943 $ 622,837 $ 528,5321 Decreases by 10% for the first 3 years. Beginning in 2015, we assume an annual decrease in income of 5%. Page 49
  51. 51. INCOME TAX PROJECTIONS - EXISTING PLANYEAR Current 2011 2012 2013 2014 2015 2020 2025 2029Income tax EstimationAdjusted gross income:Earned and other income 1,613,163 1,484,459 1,369,361 1,265,911 969,331 772,943 622,837 528,532 Adjusted gross income 1,613,163 1,484,459 1,369,361 1,265,911 969,331 772,943 622,837 528,532DeductionsReal estate tax 11,192 11,192 11,416 11,644 11,877 12,115 13,375 14,768 15,985State income taxes 92,757 85,356 78,738 72,790 55,737 44,444 35,813 30,391Charitable gifts 100,000 100,000 102,000 104,040 106,121 108,243 119,509 131,948 142,825Charitable Deduction available 100,000 102,000 104,040 106,121 108,243 119,509 131,948 142,825Charitable Deduction allowed 100,000 102,000 104,040 106,121 108,243 119,509 131,948 142,825Deduction carried over - - - - - - - -Total deductions 203,949 198,772 194,422 190,788 176,094 177,329 182,529 189,200Reductions - - (36,077) (32,973) (24,076) (18,184) (13,681) (10,852)Deductions allowed 203,949 198,772 158,346 157,814 152,018 159,145 168,847 178,348Taxable income 1,409,214 1,285,687 1,211,015 1,108,097 817,312 613,798 453,989 350,184Federal and State income tax $ 555,853 $ 505,218 $ 522,367 $ 475,663 $ 343,459 $ 251,575 $ 179,660 $ 134,173 Page 50
  52. 52. CASH FLOW PROJECTIONS - EXISTING PLANYEAR Current 2011 2012 2013 2014 2015 2020 2025 2029Sources of income for LifestyleDistribution from Marketable Securities - - - - - - - -Depletion Add Back 210,000 189,000 170,100 153,090 145,436 112,535 87,078 70,925Non-taxable Social Security Income 5,881 5,881 5,881 5,881 5,881 5,881 5,881 5,881Consumable income (taxable) 1,613,163 1,484,459 1,369,361 1,265,911 969,331 772,943 622,837 528,532Consumable income (tax exempt) 34,701 34,701 34,701 34,701 34,701 34,701 34,701 34,701Total income available for lifestyle 1,863,744 1,714,040 1,580,042 1,459,583 1,155,348 926,060 750,496 640,039Uses of CashLiving expenses 200,000 204,000 208,080 212,242 216,486 239,019 263,896 285,649Income tax 555,853 505,218 522,367 475,663 343,459 251,575 179,660 134,173Cash gifts to family 12,600 12,600 12,600 12,600 12,600 12,600 12,600 12,600Cash gifts to charity 100,000 102,000 104,040 106,121 108,243 119,509 131,948 142,825Total uses of cash 868,453 823,818 847,087 806,626 680,789 622,703 588,104 575,247Surplus $ 995,291 $ 890,222 $ 732,955 $ 652,957 $ 474,559 $ 303,357 $ 162,392 $ 64,792 Page 51
  53. 53. FIRST ESTATE TAX ESTIMATION AND DISTRIBUTION - EXISTING PLANYEAR Current 2011 2012 2013 2014 2015 2020 2025 2029Tax calculation on Larrys deathCombined net worth 12,825,326 13,834,712 14,505,423 15,084,102 15,641,678 16,077,038 18,437,361 21,163,572 23,670,319Larrys estimated estate 3,952,579 4,263,657 4,470,361 4,648,701 4,820,538 4,954,709 5,682,127 6,522,305 7,294,848Total gross estate 3,952,579 4,263,657 4,470,361 4,648,701 4,820,538 4,954,709 5,682,127 6,522,305 7,294,848Settlement expenses (44,763) (46,318) (47,352) (48,244) (49,103) (49,774) (53,411) (57,612) (61,474)Joint, personal and IRA to Meredith (2,447,539) (2,610,786) (2,726,314) (2,825,948) (2,921,573) (2,996,132) (3,391,145) (3,829,276) (4,219,030)Outright or in trust to Meredith - - - (794,510) (869,862) (928,804) (1,257,571) (1,655,418) (2,034,344)Taxable estate 1,460,277 1,606,553 1,696,694 980,000 980,000 980,000 980,000 980,000 980,000Plus Larrys lifetime taxable gifts 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000Tax base 1,480,277 1,626,553 1,716,694 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000Federal Estate Tax - - - - - - - - -Distribution of Larrys estateSettlement expenses 44,763 46,318 47,352 48,244 49,103 49,774 53,411 57,612 61,474To family trust 1,460,277 1,606,553 1,696,694 980,000 980,000 980,000 980,000 980,000 980,000Joint, personal and IRA to Meredith 2,447,539 2,610,786 2,726,314 2,825,948 2,921,573 2,996,132 3,391,145 3,829,276 4,219,030Outright or in trust to Meredith - - - 794,510 869,862 928,804 1,257,571 1,655,418 2,034,344Total $ 3,952,579 $ 4,263,657 $ 4,470,361 $ 4,648,701 $ 4,820,538 $ 4,954,709 $ 5,682,127 $ 6,522,305 $ 7,294,848AssumptionsWe assume that Larry dies first, followed immediately by Meredith.Taxes under "Distribution of First Estate" include estate and income taxes. Page 52
  54. 54. SECOND ESTATE TAX ESTIMATION AND DISTRIBUTION - EXISTING PLANYEAR Current 2011 2012 2013 2014 2015 2020 2025 2029Tax Calculation on Merediths deathMerediths assets 8,872,747 9,571,055 10,035,063 10,435,401 10,821,140 11,122,329 12,755,235 14,641,267 16,375,471Plus assets from Larrys estate 2,447,539 2,610,786 2,726,314 3,620,457 3,791,435 3,924,936 4,648,716 5,484,694 6,253,374Merediths estimated estate 11,320,286 12,181,840 12,761,377 14,055,859 14,612,575 15,047,265 17,403,951 20,125,961 22,628,845Gift to Charity (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000)Settlement expenses (251,406) (268,637) (280,228) (306,117) (317,251) (325,945) (373,079) (427,519) (477,577)Merediths taxable estate 10,968,880 11,813,204 12,381,150 13,649,741 14,195,323 14,621,319 16,930,872 19,598,442 22,051,268Plus Merediths lifetime taxable gifts 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000Tax base 10,988,880 11,833,204 12,401,150 13,669,741 14,215,323 14,641,319 16,950,872 19,618,442 22,071,268Federal Estate Tax 2,096,108 2,391,621 2,590,402 6,996,845 7,324,194 7,579,792 8,965,523 10,444,343 11,793,397Tax on IRD 1,973 2,025 2,185 1,447 1,553 1,664 2,288 3,427 4,241Total Estate Tax Due 2,098,081 2,393,646 2,592,587 6,998,292 7,325,747 7,581,456 8,967,811 10,447,770 11,797,639Distribution of Merediths estateSettlement expenses 251,406 268,637 280,228 306,117 317,251 325,945 373,079 427,519 477,577Taxes 2,098,081 2,393,646 2,592,587 6,998,292 7,325,747 7,581,456 8,967,811 10,447,770 11,797,639Qualified plan to heirs 289,969 283,410 286,106 288,390 290,216 291,535 289,478 268,985 237,036Gift to Charity 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000Residual estate to heirs 8,580,830 9,136,148 9,502,456 6,363,059 6,579,360 6,748,328 7,673,583 8,881,686 10,016,594Total $ 11,320,286 $ 12,181,840 $ 12,761,377 $ 14,055,859 $ 14,612,575 $ 15,047,265 $ 17,403,951 $ 20,125,961 $ 22,628,845AssumptionsWe assume that Larry dies first, followed immediately by Meredith.Taxes under "Distribution of Second Estate" include estate and income taxes. Page 53
  55. 55. SUMMARY OF BENEFITS TO FAMILY - EXISTING PLANYEAR Current 2011 2012 2013 2014 2015 2020 2025 2029Benefits to FamilyFamily trust 1,460,277 1,606,553 1,696,694 980,000 980,000 980,000 980,000 980,000 980,000Residual estate 8,580,830 9,136,148 9,502,456 6,363,059 6,579,360 6,748,328 7,673,583 8,881,686 10,016,594Qualified plan assets 289,969 283,410 286,106 288,390 290,216 291,535 289,478 268,985 237,036Total assets to heirs $ 10,331,076 $ 11,026,110 $ 11,485,257 $ 7,631,450 $ 7,849,576 $ 8,019,864 $ 8,943,061 $ 10,130,672 $ 11,233,629 Page 54
  56. 56. DETAILS OF LARRYS QUALIFIED PLAN - EXISTING PLANYEAR Current 2011 2012 2013 2014 2015 2020 2025 2029Larrys Qualified PlansLarrys Age 72 73 74 75 76 81 86 90Merediths Age 70 71 72 73 74 79 84 88Minimum distribution factor 25.6 24.7 23.8 22.9 22.0 17.9 14.1 11.4Plan contributions - - - - - - - -Plan balance 289,969 283,410 286,106 288,390 290,216 291,535 289,478 268,985 237,036Minimum distribution 11,327 11,474 12,021 12,593 13,192 16,267 19,485 21,608Preferred distribution - - - - - - - -Actual distribution 11,327 11,474 12,021 12,593 13,192 16,267 19,485 21,608 Page 55
  57. 57. DETAILED FINANCIAL ANALYSIS LARRY AND MEREDITH GRIFFIN PROPOSED PLAN FINANCIALSIn the Proposed Plan Section you will find a balance sheet which reflects the repositioning of assetsas set out in the step by step roadmap in the proceeding section. You will also find detailed cashflow and asset projection information on each of the proposed planning strategies. Page 56
  58. 58. NET WORTH STATEMENT AFTER PLAN IMPLEMENTATION LARRY AND MEREDITH GRIFFIN LARRY MEREDITH JOINT TOTAL YIELD GROWTHCASH AND EQUIVALENTS Savings - - 100,000 100,000 0.0% 0.0% Cash 3,000 - - 3,000 0.0% 0.0% Cash - - 25,179 25,179 0.0% 0.0% Cash ** - 730,450 - 730,450 0.0% 0.0% Cash ** - 875,491 - 875,491 0.0% 0.0% Total of Cash and Equivalents 3,000 1,605,941 125,179 1,734,120 0.0% 0.0%MARKETABLE SECURITIES - FIXED INCOME Merrill Lynch 314,431 - - 314,431 4.1% 0.0% Total of Fixed Income 314,431 - - 314,431 4.1% 0.0%NON-TAXABLE MARKETABLE SECURITIES Merrill Lynch Cash ** - 240,970 - 240,970 0.0% 0.0% Merrill Lynch Cash ** - 33,050 - 33,050 0.0% 0.0% Merrill Lynch Cash 237,665 - - 237,665 0.0% 0.0% Merrill Lynch 199,611 - - 199,611 1.9% 0.0% Merrill Lynch Munis 750,333 - - 750,333 4.1% 0.0% Total of Non-Taxable Marketable Securities 1,187,609 274,020 - 1,461,629 2.4% 0.0%ANNUITIES/DEFERRED COMPENSATION Annuity - 15,177 - 15,177 4.0% Total of Annuities - 15,177 - 15,177 0.0% 4.0% ** Previous joint asset accounts moved into Merediths name alone to help equalize estate values for tax efficiency. Page 57
  59. 59. REVISED NET WORTH STATEMENT (Page 2) LARRY AND MEREDITH GRIFFIN LARRY MEREDITH JOINT TOTAL YIELD GROWTHRETIREMENT PLANS/IRAs ML IRA 82,711 - 82,711 0.0% 5.0% ML SEP 207,258 - 207,258 0.0% 5.0% Total Retirement Plans 289,969 - 289,969 0.0% 5.0%INVESTMENT REAL ESTATE Vacation Home - - 310,000 310,000 0.0% 3.0% Total of Real Estate Holdings - - 310,000 310,000 0.0% 3.0%PERSONAL PROPERTY Personal Property - - 250,000 250,000 0.0% 0.0% Total of Personal Property - - 250,000 250,000 0.0% 0.0%OTHER STRATEGY ASSETS Family Limited Partnership 2,010,000 - 2,010,000 QPRT Property 1,000,000 - - 1,000,000 Total of Other Strategy Assets 3,010,000 - - 3,010,000TOTAL ASSETS 4,805,009 1,895,138 685,179 7,385,326TOTAL LIABILITIES - - - -NET WORTH 4,805,009 1,895,138 685,179 7,385,326 Page 58

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