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 ESTATE         (Estate Planning Mistakes)




                               Estate Planning
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                                TH E

                       DISCLAIMER

    This presentation is designed to be educational in
    nature and is not intended to provide tax or legal advice.

    Consult with your tax advisor and/or legal counsel for
    suitability for your specific situation.

    Rates of return assumed in this discussion are
    hypothetical --as are the related projections implied by
    these numbers. Rates of return are not guaranteed and
    are for illustrative purposes only.

    Projected rates do not reflect the actual or expected
    performance within any example or financial product.



                                Disclaimer
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                 ESTATE PLANNING


                  A RECENT SURVEY
                                 OF


          TRANSFER TAXES
                                AN D


                     FORM 706


                                  Intro
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                 ROOTS
                  Saga of an American Family



                     ALEX
                     HALEY


                                 Roots
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      JET
Haley's Farm Sold
The 126 acre family farm,
which was owned by the
late Pulitzer Prize winning
author Alex Haley, was
recently sold to cover the
unexpectedly high costs of
capital gains taxes.


               Source: JET magazine, May 23, 1994
                                 Alex Haley
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                      Alex Haley's Widow Wins
                      Share of His Estate and
                      Right to Complete Books
                       Myran Haley, the widow of ROOTS
                       author, Alex Haley, arrives at the
                       Chancery Court in Knoxville, Tenn.
                       before the jury awarded her only a
                       portion of her late husband's estate.



     BOTH MISTAKES WERE
         AVOIDABLE !
               Source: JET magazine, May 16, 1994
                                Haley’s Widow
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BRITAIN
Diana’s family to sue over crash
                          LONDON - The family of
                        Princess Diana is planning to sue
                        Mohamad Fayed for at least $13.3
                        million over her death in a high-
                        speed car crash in Paris in August.
                          The sum is the amount of the
                        transfer tax bill on the $35 million
                        she left to her sons, the Princes,
                        William and Harry.


HER CHARITY SUFFERED MOST
            Source: Chicago Tribune, December 12, 1997
                                Princess Diana
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    Wayne’s Ranch is Sold
                              Transfer tax problems
                              have forced the sale
                              of all 47,000 acres of the
                              Red River Ranch outside
                              of Phoenix, Arizona.

                              Son, Mike Wayne, said
                              his father never planned
       JOHN WAYNE             for the transfer of assets.



      IMAGINE WHAT THE LAND
         IS WORTH TODAY !
              Source: United Press International, 1979
                                  John Wayne
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20   city/suburbs             Chicago Sun-Times, August 8, 1978




   Wrigley Sues for
   Permit to Destroy
    Family Mansion
                       By Lillian Williams

William Wrigley, the chewing             force Joseph F. Fitzgerald,
gum magnate, filed suit                  city commissioner, of the
Tuesday in Circuit Court to              Department of Buildings, to
gain his family's legal right to         sign the permit for demolition.



              Source: Chicago Sun Times, August 8, 1978
                              Phillip and Helen Wrigley
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                      Crain's Chicago Business, August 9, 1999




Wrigley's Estate
Mired in a Sticky
Marital Dispute
                      By Michael Fritz

Wrigley, didn't secure any  Mr. Wrigley seems to have
  SHOULD HAVE made at least two bad estate
prenuptial agreement when LEARNED FROM
                             MISTAKES…also
                                     decisions…he
       HIS PARENT'Splanningreside in Wisconsin.
he married this third wife,
who is now staking a claim. chose to



             Source: Chicago Sun Times, August 8, 1999
                                William Wrigley
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   Onassis Estate Auction
   Raises over $34.5 Million:
                                   Most Will Go to Taxes
                                     The Jacqueline Kennedy
                                   Onassis auction has raised
                                   $34,500,000.
                                    The majority of all the
                                   proceeds from the auction will
                                   go to pay transfer taxes
                                   according to her executor, Mr.
     Jackie's famed pearls were    Alex Forger, an attorney with
     bought by the Franklin Mint   Millbank /Tweed.


   TRUST PLANNING FAILURE
                Source: Wall Street Journal, April 29, 1996
                                     Jackie O.
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                     GROSS ASSETS                            $23,000,000
                     Charitable Bequests                     $ 9,965,000
                     Federal Estate Tax                      $ 3,745,500
                     State Death Tax                         $ 770,000
                     Administration Fees                     $         0
                     Executor's Fees                         $ 125,000
                     Attorney's Fees                         $ 150,000
SHRINKAGE            Outstanding Debts                       $ 2,025,000
                     Final Expenses                          $         0
  29%
                      Total Transfer Cost                    $ 6,815,500
   71%               Net Assets to Heirs                     $16,184,500

                Source: Longman Publishing, Classic Cases, 1990
                                     Walt Disney
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                     GROSS ASSETS                            $ 9,775,000
                     Charitable Bequests                     $         0
                     Federal Estate Tax                      $ 3,110,500
                     State Death Tax                         $ 315,000
                     Administration Fees                     $    35,000
                     Executor's Fees                         $         0
                     Attorney's Fees                         $    65,000
SHRINKAGE            Outstanding Debts                       $    260,000
                     Final Expenses                          $          0
  39%
                      Total Transfer Cost                    $ 3,785,500
   61%               Net Assets to Heirs                     $ 5,989,500

                Source: Longman Publishing, Classic Cases, 1990
                                    Natalie Wood
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                     GROSS ASSETS                            $30,520,000
                     Charitable Bequests                     $ 9,495,000
                     Federal Estate Tax                      $ 7,120,000
                     State Death Tax                         $ 155,000
                     Administration Fees                     $         0
                     Executor's Fees                         $ 400,000
                     Attorney's Fees                         $ 400,000
SHRINKAGE            Outstanding Debts                       $ 4,410,000
                     Final Expenses                          $     5,000
  40%
                      Total Transfer Cost                    $12,490,000
   60%               Net Assets to Heirs                     $18,030,000

                Source: Longman Publishing, Classic Cases, 1990
                                    Conrad Hilton
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                  Form 1273
                   Department of the Treasury - Internal Revenue Service
                  Report of Estate Tax Examination Changes

                 1. Name of Decedent    Conrad N. Hilton
                 2. Taxable Estate on Return $ 2,645,114
                 3. Corrected Estate Value   $15,658,516

                               Previous Tax                   As Corrected

                             $ 521,019                       $ 7,118,796


UNDERESTIMATED TAX BY 1,366%!
                 Source: Hilton Estate Form 1273
                            Hilton’s Estate Tax Correction
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      Denver's Spousal Disputes
                                    Singer John Denver's
                                current and former wives
                                are contesting validity of
                                the former star's will.
                                    His former wife will
                                seek a higher share of the
                                estate for the benefits of
      Songwriter, John Denver   his biological children.




                    Source: John Denver’s will
                                    John Denver
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                                   Chief Justice could have
                                   used Legal help on Will
                                      Warren Burger's three sentence
WEDNESDAY, NOVEMBER 11, 1995
                                    will, may cost his heirs $450,000.00
                                                 WHY NOT
                                    in probate fees and transfer taxes.
                                       "If he had spent a few thousand
                                                  TRY TO
                                    dollars planning, there would be no
                                                AVOID THE
                                    cost at all," says George Dodge…
                                    …a lawyer, who came across the
                                                 COSTS?
                                    will in a public courthouse and
                                    wrote about it in a local lawyer's
 WARREN BURGER                      newsletter.


                      Source: USA Today, November 11, 1995
                               Warren Burger (Chief Justice of the U.S. Supreme Court)
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      Are you counting on
       estate tax reform ?




                              Estate Tax Reform
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  Sunset Provision for Estate Taxes in 2011




      Assumes: estate increases at a hypothetical 5.0% annual growth rate
                                  Estate Tax Graph
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  Sunset Provision for Estate Taxes in 2011




   ESTATE
      Assumes: estate increases at a hypothetical 5.0% annual growth rate
                                  Estate Tax Graph
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  Sunset Provision for Estate Taxes in 2011




   ESTATE               ESTATE TAX                   STATE DEATH TAX
   Assumes: estate increases at a 5% annual growth rate with state death tax at 15%
                                  Estate Tax Graph
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            Should my family
                inherit
               WEALTH
                              or
                VALUES
                       …or
                   BOTH ?
                            Inherit wealth, values or both?
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     STRATEGIES                                        Tommy’s trust provided a
      MONEY GUIDE                                      payout when he married…
                                                           You may recall the story of
                                                        Tommy Manville, son of the
                                                        founder of Johns-Manville Corp.
                                                           Manville’s trust provided for
                                                        a $250,000 distribution when
                                                        he married.
AP/Wide World




                                                       He eventually married 13 times
                                                       -- whenever he needed more of
   Bon vivant Johns-Manville heir Tommy Manville.      the family’s money.


                        Source: Forbes, "Perils of Family Money, June 19, 1995
                                                    Tommy Manville’s Trust
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                  What gives
                  our children
                   a proper
                   sense of

                  “SELF”
          …when inheriting

              WEALTH ?
                            What gives children values?
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                   What
              teaches a child
                to become
                     a

                 GIVER
                 rather than a

              TAKER ?
                           What teaches children to give?
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                    Rewarding

     UNSELFISH
                      behavior




                           Rewarding Unselfish Behavior...
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                            Give generously
                            Reward an Heir's
                               to Charity
                            Charitable Work                       Reward Heirs
  GiveExpect the
       Scholarships                                            Get kids involved
                                                                Who Volunteer for
   Best from Others
  for Good Grades                                              in the Community
                                                               Community Service

        Follow the
 Support Heirs who                                             Show Empathy
                                                             Help Finance an Heir's
      “Golden Rule”
work for a good cause                  $                       …and Humility
                                                                Missionary work

Compensate a                Family Values
       Live by any              Trust
                                                                        Provide
                                                                 Instill a Strong
   the Heirs who
Of Code of Ethics                                                Trust Distributions
                                                                   Work Ethic
 are Caregivers                                                 to Heirs that Equal
     to Elderly               Supports                          any Earned Income
                                Raise
                          Heirs who become
                           Children Right
                            Stay-at-Home
                               Parents
                                     Family Values Trust ™
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                  Value-based

  INCENTIVES !


                             Values-based Incentives !
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 ESTATE         (Estate Planning Mistakes)




                               Estate Planning

				
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