Who gets your percentage of the business when you retire, die or sell it? Your partner, a spouse, or your children? Are you doing the best to maximize tax advantages? What are you doing to protect your interest and assets? How are you positioning employee retention and loyalty?

2. CRN200502-1000421 Business Owner Planning For Family-Owned And Independently-Owned Businesses Andy Hoang Financial Planner January 16, 2009

3. Workshop Materials PRESENTATION GUIDE SUCCESSION PLANNING WORKBOOK For Your Benefit

4. PRESENTATION GUIDE SUCCESSION PLANNING WORKBOOK EVALUATION For Our Benefit Workshop Materials

8. The Fate of the Family Business 1st Generation 58% 3rd Generation 12% 2nd Generation 30% Source: Family Firm Institute web site (www.FFI.org), 2007

9. Family Conflict

11. Failure to Plan Business Owners Who Fail To Plan Business Owners Who Plan Ahead Source: Family Firm Institute web site (www.FFI.org), 2007 37% 63%

13. Transfer Taxes Form 709 Gift Tax Total Gift from Line 42, $ aslkdjalskoqijlaksjdlasidj ;aslkda;lsdka;sldka;lsdka; $________ Total Gift from LIne 42, minus Line 40aaalsdalkj $ skejflskdfjlkjlsdfsdfloipq $________ skdfjsdfjwj;lajspopqowie $________ Total Gift from Line 42, minus Line 40 $ Form 706 Estate Tax Total value of estate on line 2 $ aslkdjalskoqijlaksjdlasidj ;aslkda;lsdka;sldka;lsdka; $ Total from LIne 42, minus Line 40aaalsdalkj $ skejflskdfjlkjlsdfsdfloipq $_________ skdfjsdfjwj;lajspopqowie $_________ $_________ Total value of estate listed on line 42, minus Line 40 $

22. Sources of Income: Sell Business FOR SALE

23. Sources of Income: Keep Business/Stay Employed Owner/Employee Rents Dividends Benefits Wages

24. Sources of Income: Keep Business/No Longer Employed Former Employee Non-Qualified Plan Non-Compete Covenant Installment Payments Consulting Rent Qualified Plan

25. Planning Priorities 1. Providing for your own financial security 2. Transferring the business 3. Minimizing the impact of taxes

41. Sell At Death: Buy-Sell Agreement Sell Active Heirs Estate IRS Other Heirs Stock Certificate

44. Four Transfer Options 1. Sell during lifetime 2. Sell at death 3. Gift at death 4. Gift during lifetime

46. Estate Tax Bite $2,000,000 Marginal Rate (effective 2007) Taxable Estate

49. Will Equal Distribution Harm the Business? Personal Property $100,000 Real Estate $500,000 Savings Investments $250,000 Qualified Plans & IRAs $450,000 Life Insurance $500,000 Business Interest $1,200,000 OTHER CHILDREN $1,350,000 IRS $450,000 CHILD IN BUSINESS $1,200,000

52. Four Transfer Options 1. Sell during lifetime 2. Sell at death 3. Gift at death 4. Gift during lifetime

53. Advantages of a Lifetime Gift Total Outlay $1 million* Transfer Tax Savings: $167,000 *Assumes a 50% effective rate on capital Family Family IRS IRS Bequest Gift

57. Pyramid of Pain Lifetime GSTT Generation Skipping Lifetime Payment of Gift Tax Lifetime Gift of Credit Gift Split Annual Exclusion Do Nothing During Lifetime

62. Succession Planning Workshop Summary & Next Steps

67. Thank you for your attending and for your time. Please let me know if you have any questions or concerns. -Andy