Cushing Dolan PC Affordable Estate Planning with Joint

Cushing & Dolan, PC. Affordable Estate Planning with Joint Trust for Medium Size Estates and Large Retirement Plans A Power. Point Presentation By Leo J. Cushing, Esq. , CPA, LL. M. Cushing & Dolan, P. C. Attorneys at Law 24 School Street, Suite 300 Boston, MA 02108 -5113 www. cushingdolan. com lcushing@cushingdolan. com Tel: 617 -523 -1555 Fax: 617 -523 -5653 November 15, 2004 The Boston Security Analysts Society CHICAGO 500 N. Michigan Ave. , Suite 2000 Chicago, IL 60611 T: 866 -692 -1556 (Toll Free) F: 708 -246 -3864 WILMINGTON 187 Ballardvale Street Suite A 180 Wilmington MA 01887 T: 978 -988 -1222 F: 978 -988 -1223 WESTBOROUGH 276 Turnpike Road Westboro MA 01581 T: 508 -870 -1666 F: 508 -870 -1818 NORWOOD 520 Providence Hwy. Route 1 - Suite #10 Norwood MA 02062 T: 781 -278 -9901 F: 781 -278 -9911 CHESTNUT HILL 1330 Boylston Street Chestnut Hill, MA 02467 T: 617 -264 -7999 F: 617 -264 -4445 1

Estate Planning Philosophy l User Friendly – Spouse as Trustee l Inexpensive l Understandable 2

Planning in the Twilight Zone Year Mass. Exemption Federal Exemption 2003 2004 2005 2006 2007 2008 2009 2010 2011 $700, 000 $850, 000 $950, 000 $1 million $1 million $1. 5 million $2 million $3. 5 million No Federal Estate Tax $1 million 3

Estates Between $1, 000 & $3, 000 and Large IRAs l Recommend using a joint trust l Revenue Rulings -- 200101821 -- 200110051 4

Estates Between $1, 000 & $3, 000 and Large IRA’s (con’t) Step-by-Step Analysis l Surviving Spouse is Sole Trustee l Husband & Wife are Donors and Trustees l Children are Trustees Upon Death of Survivor l 5

Estate Tax Treatment All trust assets are includible in estate of first spouse to die Deceased spouse assets includible under § 2038 (revocable) Surviving Spouse Assets includible under IRC§ 2041 General Power of Appointment Trusts break down into 3 shares Federal Marital Mass. Marital (QTIP) By Pass Federal Marital - income and principal to spouse upon request – – – Mass Marital - income to spouse for life. Principal payable to spouse to maintain health and support By Pass - income payable to spouse for life. Principal to Spouse and issue for health, education, maintenance and support. (May include NON support distributions if co. Trustee is named) Death of Surviving Spouse - Trust divides into as may equal shares as there are children living; and children deceased leaving issue. Surviving Spouse interest so does not have retained By Pass assets are not includible. 6

Pre-Death Funding l l l Joint Assets Transferred directly to the Trust Use Social Security Number Real Estate Transferred to the Trust Retirement Plans payable to spouse with trust as contingent Costs $2, 500 - $3, 500 No need to re-allocate based on rising exemptions 7

Not appropriate for estates in excess of $3, 000 For estates in excess of $3, 000 - two trusts - one for the husband one for the wife are recommended. l Assets allocated equally but always fractionalized ownership interests using Real Estate and LLC's for equities. l Marital share must be QTIP with co-trustee to assure favorable l discount planning on the 1 st death and on the 2 nd death. l 8

Example A 10 million dollar estate with a 35% discount will save $1, 750, 000 in estate taxes, with no significant loss of control. 9

Key to Efficiency February 11, 2004 Mr. and Mrs. John Q. Public 65000 Pennsylvania Avenue Anywhere, USA 91101 RE: Estate Planning Information Request Dear Mr. and Mrs. Public: Thank you for selecting Cushing & Dolan, P. C. We have received your signed engagement letter and look forward to completing your estate plan. In order to make this process move efficiently and avoid unusual circumstances, it is important that you provide us with the following documents and information prior to our next meeting: (1) Deeds: Copies of the most recent deed(s) for each property you wish to transfer to your trust(s). Please note that we will not be undertaking a title examination. If you cannot find a copy we can obtain a copy of the most recent deed from a Massachusetts Registry at a cost of $100 per deed. [Optional] Please note we have already received a copy of the deed for {PROPERTY} dated {DATE}. (2) Investment Statements: Copies of most recent statements for investment accounts showing the names on the accounts and account numbers you wish to transfer to your trust(s) as discussed in the engagement letter, as well as the name, address and telephone number of the investment advisor(s). (3) Change of Beneficiary Forms – Retirement Plans: Verification of existing beneficiaries of retirement plans and blank change of beneficiary forms for each retirement plan, including IRAs, 401(k) plans, tax deferred annuities, and the like that you wish to change the beneficiary designation, according to the engagement letter. 10

(4) Change of Beneficiary Forms – Life Insurance: Verification of existing beneficiary designations and blank change of beneficiary and owner forms for each life insurance policy owned and/or controlled by you as well as contact information for the life insurance agent, if any, that you wish to make payable to the trust(s) as specified in the engagement letter. (5) Homeowner’s Hazard Insurance: Provide the name, address, and telephone number of the Homeowner’s or other property insurance carrier, and of the insurance agent, for each property owned. The realty trust will become an “additional insured” on each policy. Also, if possible, please send a copy of the Coverage Selection page for each policy. (6) Title Insurance: If insured, provide the name, address, and telephone number of the insurance agent and the name of the Title Insurance company for each property owned. Also please provide a copy of the title insurance policy. If you have any questions concerning this, please contact us by phone or by e-mail at any time. We will be sending you a draft of your estate planning documents under separate cover. If you do not send this information to us prior to our next meeting, additional costs may be incurred if you wish to fund your trusts with the above assets. A self-addressed envelope has been provided for your convenience. Thank you. Very truly yours, {Name of Paralegal} {Telephone} {e-mail address cc: Referral Source 11