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

For William Wyatt

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Presented by Dr. Kai Poetschke, MBA

Economist and Journalist

MBA: London School of Economics, PhD: New York University

Worked for Bank of Scotland and Chase Manhattan Bank

Moderator of own TV-Show: “Your business is my business” since 1967

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Excellence through Strength- An uncompromising attitude to quality

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.

One of the most highly rated banks in the world.

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.

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Relationships- Strong client partnerships

Our aim is to establish an all encompassing financial plan with expertise and care that addresses all issues

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.

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Relationships- Strong client partnerships

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.

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.

Deutsche Bank Private Banking brings to you professionals who have long and varied experiences in private client work

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Added ValueServices

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.

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

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Key Issues to be addressed

Businesses: Plastic Company & French Restaurant

Personal Investments

Personal Retirement Plans

Insurance

Estate Planning

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Businesses:

(1) Plastic Company

(2) French Restaurant

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Presented by Dr. h.c. Joerg Sulimma, Attorney

75 years of experience as international lawyer and tax advisor

Financial and law degrees of the universities of Harvard, Capetown, Stockholm and Cuala Lumpur

Over 150 publications in the main law and financial magazins of the world

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Business Presented by Dr. Samantha Ho

25 years of experience advising top-tier clients on business related issues

Articles published in Leading Wealth Management Journals

B.S. Finance: Boston University MBA: Wharton Business School PhD in Philosophy & Political Science: Harvard University

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Business 1 : Plastic CompanyLiquidity Planning / Re-capitalizing Main objective: More access to capital & aggressive business

plan & to grow the business

4 partners with equal share

One partner is looking to sell

Strong cash position : $2 million EBIT

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

Retirement plan for the firm: 401(k) Pension Fund (defined contribution), defined benefit, Stock Options

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Suggestion (1): Buy-Sell Agreement

Orderly transfer of business if any partners of the partners wants to sell out or dies

Permits co-owners to continue in their business roles

Allows a fair-market price for the business to be agreed upon today

Who will fund this Agreement???– Through an Insurance (Business has good strong cash position

able to buy this insurance)

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Suggestion (2) : Management Buy-Out

Succession Planning Employees have possibility of putting money into

company: Stock Options (can also be included in the retirement plan) 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

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Suggestion (3): Private Equity Investor

Non-traditional low-cost source of financing

Adds discipline to management & possible expertise know-how

More contacts leading to new business opportunities & new clients

More access to capital from existing creditors

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Suggestion (4) : Strategic Partnership

Raise additional capital

Synergies

Find a partner who could bring additional value to the firm: Example, a firm / partner who is strong in distribution or marketing

Strategic partners – to consolidate with competitors (although you may get the lower value)

Could possibly get increase in credit

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Plastic Company: Retirement Plan

401(K) : Defined Contribution & Defined Benefit– Menu of portfolios to choose from– Deferred income tax: low tax bracket vs. current tax income

Stock Options

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Business: French Restaurant

A 50% Co-Owner

Earnings from restaurant: $10,000 per year

Son: Chef & Manager. Would like to continue business

Solution: Limited partnership (Father), General Partner (Son) with a management contract: I.e. Bonus Base or Fee Base (tax deductible)

Son tax bracket: Low

Gift from father: $10,000 worth of sharse of the restaurant per year (up to $650,000 tax exemption).

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Personal Investments

Asset Allocation

Recommendations

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Presented by Professor Dr. Sandra Duncan

BSc Finance, MBA, JD, PhD (Tax Efficient investments)

Author of best selling book “Damn it, Take Control of Your Finances – How to legally pay no taxes”.

27 years of experience in structured investments with Goldman Sachs, Merrill Lynch, Deutsche Bank

Associate Professor of Tax planning New York University

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Personal Investment Used assets are not included

Is your current investment asset allocation adequate?

Cash Equivalents $ 57,000 (3.38%)Certificate of Deposit $ 100,000 (5.93%)U.S. Treasury Notes $ 175,000 (10.37%)Municipal Bonds $ 310,000 (18.38%)Large Cap U.S. Growth Stocks $ 285,000 (16.89%)Commercial Real Estate $ 375,000 (22.23%)French Restaurant $ 55,000 (3.26%)Stock in Plastics Company $ 380,000 (22.53%)

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Current Overall Asset Allocation

Cash/CDs9% Treasuries

10%

Bonds18%

Equity16%

Real Estate22%

Businesses25%

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Recommendations I

Commercial real estate investment ties up too much capital

ROE (Cash Flow) too low (7.7%)

Suggestion: Refinance existing mortgage up to maximum allowed valueInterest cost of mortgage is tax deductible

Solution: Additional cash becomes available for investment in company

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Current Financial Markets Asset Allocation

Cash/CD's17%

Treasuries18%

Bonds34%

Equity31%

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Recommended Asset AllocationConservative – Balanced Portfolio

Equity40%

Cash10%

Fixed Income50%

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Recommendations II

Current financial market asset allocation is not balanced enough!

Goals: – Capital Appreciation on investments– Restructure to a Balanced Portfolio: 10% Cash/CDs, 40% Equities,

50% Fixed Income– Switch USD Large Cap Growth Stock Portfolio to globally diversified

Portfolio of Growth Stocks – This allocation should produce stable returns on a risk-adjusted basis– 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

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Trust Structures

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Presented by Dr. Dr. HC Alexandra Schulz, Chief Trust Officer

29 Years of experience in Trust and Estate Planning

Founder of Deutsche Bank’s Trust and Estate Planning Division

BSC, Astrophysics, MSc, Mathematics, PhD Financial Planning M.I.T and Stanford University

Voted “Best Financial Advisor”, Global Financial Advisors Guild 1998

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Presented byDottore Filippo Pignatti Morano di Custoza

Economist, MBA and PhD at University of Palermo

Long time Specialist in Italian and Austrian economies

Worked for NatWest Bank, Banco di Italia, Banco Santander, National Westminster Bank and Banco di Palermo, Banca Criminale Organizato Di Italia

President of the Italian Communist Party, candidate for the presidential elections in the year 2000

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QTIP Trust I

QTIP Trust• To include the current life insurance

Income BeneficiaryJune Wyatt

Property OwnerBill Wyatt

Principal BeneficiaryGrace Wyatt (Daughter)

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Income to spouse for lifetime

Daughter is principal beneficiary and receives the property after death of her mother

Grantor retains ultimate control over the final beneficiaryof the assets

Trust ends after death of the spouse

QTIP Trust I

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Charitable Remainder Trust I Recommendation: To be included in the Will

CharityRemainder

Trust

Income BeneficiaryJune Wyatt

Property OwnerBill Wyatt

Principal BeneficiaryCollege

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Assets will be transferred into the trust after grantor’s death

Trust will pay income to the spouse as beneficiary

Trust ends after death of the spouse

Principal beneficiary receives the property

Charitable Remainder Trust II Recommendation: To be included in the Will