Private Banking Customized Financial Planning For William Wyatt

Private Banking Customized Financial Planning For William Wyatt – “Preparing for the Future”

Presented by Dr. Kai Poetschke, MBA n Economist and Journalist n MBA: London School of Economics, Ph. D: New York University n Worked for Bank of Scotland Chase Manhattan Bank n Moderator of own TV-Show: “Your business is my business” since 1967 (Titel of the presentation, Date, Department, Name) · Page 2

Excellence through Strength - An uncompromising attitude to quality n Founded in 1870, Deutsche Bank is currently the largest financial institution in the world, with assets exceeding USD 800 billion. a strength that is able to reach around the world, identify opportunities and realize them for the benefit of its clients. n One of the most highly rated banks in the world. n Pre-eminent reputation among world major banks, based on the strength and depth of its business, on its innovative approach to new opportunities, and on enduring client relationships. (Titel of the presentation, Date, Department, Name) · Page 3

Relationships - Strong client partnerships n Our aim is to establish an all encompassing financial plan with expertise and care that addresses all issues n With an appropriate wealth management strategy, the overall objective is wealth preservation and enhancement through a disciplined approach to investment, combining: 1. A thorough understanding of your individual circumstances, income requirements, return expectations, risk appetite and other objectives. 2. A complete and detailed analysis on your personal business including recommendation regarding succession planning, buy-outs, IPOs & any other customized solutions. 3. Asset allocation and selection expertise that reflects our client’s specific goals. 4. A well-established, prudent investment philosophy. 5. Strong emphasis on client communication and reporting. (Titel of the presentation, Date, Department, Name) · Page 4

Relationships - Strong client partnerships n Deutsche Bank Private Banking is able to access a wide range of resources and expertise from its large global network within the Deutsche Bank Group. n Irrespective of location, the group works closely together as a team in the interests of the clients and as an integral part of Deutsche Bank Private Banking worldwide network. n Deutsche Bank Private Banking brings to you professionals who have long and varied experiences in private client work (Titel of the presentation, Date, Department, Name) · Page 5

Added Value Services n Trust & Fiduciary Services - Deutsche Bank International Trust Company Limited (DBITC), headquartered in Guernsey and with presences in DB’s regional private banking centers, provides trust, fiduciary and other related services to our private clients. n Confidentiality & Privacy are key: Creditor Protection, efficient tax planning Your Private Banker in Deutsche Bank can access and co-ordinate with the professionals at DBITC who have expertise in Trust and Estate Planning in order to safeguard your wealth and facilitate effective wealth conservation. US based Trust & Estate Planning incorporating all aspects of US laws & regulations are accessed through our local Trust experts in NY (Titel of the presentation, Date, Department, Name) · Page 6

Key Issues to be addressed n Businesses: Plastic Company & French Restaurant n Personal Investments n Personal Retirement Plans n Insurance n Estate Planning (Titel of the presentation, Date, Department, Name) · Page 7

Businesses: (1) Plastic Company (2) French Restaurant (Titel of the presentation, Date, Department, Name) · Page 8

Presented by Dr. h. c. Joerg Sulimma, Attorney n 75 years of experience as international lawyer and tax advisor n Financial and law degrees of the universities of Harvard, Capetown, Stockholm and Cuala Lumpur n Over 150 publications in the main law and financial magazins of the world (Titel of the presentation, Date, Department, Name) · Page 9

Business Presented by Dr. Samantha Ho n 25 years of experience advising top-tier clients on business related issues n Articles published in Leading Wealth Management Journals n B. S. Finance: Boston University MBA: Wharton Business School Ph. D in Philosophy & Political Science: Harvard University (Titel of the presentation, Date, Department, Name) · Page 10

Business 1 : Plastic Company Liquidity Planning / Re-capitalizing n Main objective: More access to capital & aggressive business plan & to grow the business n 4 partners with equal share n One partner is looking to sell n Strong cash position : $2 million EBIT n Possible Solutions for partner to : (1) Buy-Sell Agreement (using Insurance) (2) Management Buy-Out (MBO): Formal Buy-out Agreement, Stock Options for employees (3) Private Equity (4) Strategic Partner n Retirement plan for the firm: 401(k) Pension Fund (defined contribution), defined benefit, Stock Options (Titel of the presentation, Date, Department, Name) · Page 11

Suggestion (1): Buy-Sell Agreement n Orderly transfer of business if any partners of the partners wants to sell out or dies n Permits co-owners to continue in their business roles n Allows a fair-market price for the business to be agreed upon today n Who will fund this Agreement? ? ? – Through an Insurance (Business has good strong cash position able to buy this insurance) (Titel of the presentation, Date, Department, Name) · Page 12

Suggestion (2) : Management Buy-Out § Succession Planning § Employees have possibility of putting money into company: Ø Stock Options (can also be included in the retirement plan) Ø Issue new equity (voting vs. non-voting) § Partners may sell out their shares but could remain involved in the business as a Business Advisor or Director => Consultant agreement § Employees to purchase the shares of any partners who want to sell-out => Possibly could get increase in credit (Titel of the presentation, Date, Department, Name) · Page 13

Suggestion (3): Private Equity Investor n Non-traditional low-cost source of financing n Adds discipline to management & possible expertise know-how n More contacts leading to new business opportunities & new clients n More access to capital from existing creditors (Titel of the presentation, Date, Department, Name) · Page 14

Suggestion (4) : Strategic Partnership n Raise additional capital n Synergies n Find a partner who could bring additional value to the firm: Example, a firm / partner who is strong in distribution or marketing n Strategic partners – to consolidate with competitors (although you may get the lower value) n Could possibly get increase in credit (Titel of the presentation, Date, Department, Name) · Page 15

Plastic Company: Retirement Plan n 401(K) : Defined Contribution & Defined Benefit – Menu of portfolios to choose from – Deferred income tax: low tax bracket vs. current tax income n Stock Options (Titel of the presentation, Date, Department, Name) · Page 16

Business: French Restaurant n A 50% Co-Owner n Earnings from restaurant: $10, 000 per year n Son: Chef & Manager. Would like to continue business n Solution: Limited partnership (Father), General Partner (Son) with a management contract: I. e. Bonus Base or Fee Base (tax deductible) n Son tax bracket: Low n Gift from father: $10, 000 worth of sharse of the restaurant per year (up to $650, 000 tax exemption). (Titel of the presentation, Date, Department, Name) · Page 17

Personal Investments Asset Allocation Recommendations (Titel of the presentation, Date, Department, Name) · Page 18

Presented by Professor Dr. Sandra Duncan n BSc Finance, MBA, JD, Ph. D (Tax Efficient investments) n Author of best selling book “Damn it, Take Control of Your Finances – How to legally pay no taxes”. n 27 years of experience in structured investments with Goldman Sachs, Merrill Lynch, Deutsche Bank n Associate Professor of Tax planning New York University (Titel of the presentation, Date, Department, Name) · Page 19

Personal Investment Used assets are not included n Is your current investment asset allocation adequate? Cash Equivalents Certificate of Deposit U. S. Treasury Notes Municipal Bonds Large Cap U. S. Growth Stocks Commercial Real Estate French Restaurant Stock in Plastics Company (Titel of the presentation, Date, Department, Name) · Page 20 $ 57, 000 $ 100, 000 $ 175, 000 $ 310, 000 $ 285, 000 $ 375, 000 $ 55, 000 $ 380, 000 (3. 38%) (5. 93%) (10. 37%) (18. 38%) (16. 89%) (22. 23%) (3. 26%) (22. 53%)

Current Overall Asset Allocation (Titel of the presentation, Date, Department, Name) · Page 21

Recommendations I n Commercial real estate investment ties up too much capital n ROE (Cash Flow) too low (7. 7%) n Suggestion: Refinance existing mortgage up to maximum allowed value Interest cost of mortgage is tax deductible n Solution: Additional cash becomes available for investment in company (Titel of the presentation, Date, Department, Name) · Page 22

Current Financial Markets Asset Allocation (Titel of the presentation, Date, Department, Name) · Page 23

Recommended Asset Allocation Conservative – Balanced Portfolio (Titel of the presentation, Date, Department, Name) · Page 24

Recommendations II n Current financial market asset allocation is not balanced enough! n Goals: 1. Capital Appreciation on investments 2. Restructure to a Balanced Portfolio: 10% Cash/CDs, 40% Equities, 50% Fixed Income 3. Switch USD Large Cap Growth Stock Portfolio to globally diversified Portfolio of Growth Stocks 4. This allocation should produce stable returns on a risk-adjusted basis 5. To reduce cash by approximately 7% 2. Minimize taxes I. e. The Gift-Tax Annual: tax exclusion of $10, 000 (preferably to transfer to someone with a low tax bracket) Suggestion: – Enable you to give $10, 000 p. a. to each grandchild (Titel of the presentation, Date, Department, Name) · Page 25

Trust Structures (Titel of the presentation, Date, Department, Name) · Page 26

Presented by Dr. HC Alexandra Schulz, Chief Trust Officer n 29 Years of experience in Trust and Estate Planning n Founder of Deutsche Bank’s Trust and Estate Planning Division n BSC, Astrophysics, MSc, Mathematics, Ph. D Financial Planning M. I. T and Stanford University n Voted “Best Financial Advisor”, Global Financial Advisors Guild 1998 (Titel of the presentation, Date, Department, Name) · Page 27

Presented by Dottore Filippo Pignatti Morano di Custoza n Economist, MBA and Ph. D at University of Palermo n Long time Specialist in Italian and Austrian economies n Worked for Nat. West Bank, Banco di Italia, Banco Santander, National Westminster Bank and Banco di Palermo, Banca Criminale Organizato Di Italia n President of the Italian Communist Party, candidate for the presidential elections in the year 2000 (Titel of the presentation, Date, Department, Name) · Page 28

QTIP Trust I QTIP Trust • To include the current life insurance Property Owner Bill Wyatt Income Beneficiary June Wyatt Principal Beneficiary Grace Wyatt (Daughter) (Titel of the presentation, Date, Department, Name) · Page 29

QTIP Trust I n Income to spouse for lifetime n Daughter is principal beneficiary and receives the property after death of her mother n Grantor retains ultimate control over the final beneficiary of the assets n Trust ends after death of the spouse (Titel of the presentation, Date, Department, Name) · Page 30

Charitable Remainder Trust I Recommendation: To be included in the Will Charity Remainder Trust Property Owner Bill Wyatt Income Beneficiary June Wyatt Principal Beneficiary College (Titel of the presentation, Date, Department, Name) · Page 31

Charitable Remainder Trust II Recommendation: To be included in the Will n Assets will be transferred into the trust after grantor’s death n Trust will pay income to the spouse as beneficiary n Trust ends after death of the spouse n Principal beneficiary receives the property (Titel of the presentation, Date, Department, Name) · Page 32