Planning for Foreign Nationals

1. Planning for Foreign Nationals • Andrea Valdez-Brandon, J.D., CLU, ChFC • Consultant, Advanced Marketing

2. All solicitation and communication (including marketing materials) concerning the sale of the life insurance products, including all telephone, fax, or other electronic or delivered correspondence to a foreign national must take place in the U.S. For details, refer to “Growing Your Business Through the Foreign National Market, Guide to Foreign National Underwriting and Support (OLA 1871). This material was not intended or written to be used, and cannot be used, to avoid penalties imposed under the Internal Revenue Code. This material was written to support the promotion or marketing of the products, services, and/or concepts addressed in this material. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely solely on their own independent advisors regarding their particular situation and the concepts presented here.

3. Importance of Estate Planning for Foreign Individuals • Expanding global economy • Need for planning • Impact of U.S. transfer taxes

4. Breadth of the Market Source: U.S. Census Bureau, 2005-2007 American Community Survey The foreign-born population includes anyone who was not a U.S. citizen or a U.S. national at birth.This includes respondents who indicated they were a U.S. citizen by naturalization or not a U.S. citizen. (U.S. Census Bureau, American Community Survey 2007 Subject Definitions).

5. Introduction to the Market • Non-U.S. citizens fall into 2 categories: • Resident Aliens • Non-Resident Aliens

6. Resident Aliens • Non-U.S. citizen with permanent U.S. home • Worldwide assets subject to U.S. estate and gift tax • Deprived of certain tax advantages available to U.S. citizens

7. Non-Resident Aliens • Only U.S. assets subject to U.S. estate and gift tax • Non-U.S. citizen with permanent home in another country

8. Estate Tax Comparison: RA vs. NRA * Intangible property includes stock in a U.S. corporation and interest in a U.S. partnership

9. Ideal Candidates • Non-Resident Aliens with significant U.S.-based assets • Married couples consisting of at least one non-U.S. citizen

10. Sample Fact Finding Questions • Sorting Out Citizenship and Residency Status Are you and your spouse U.S. citizens?

11. Sample Fact Finding Questions • Sorting Out Citizenship and Residency Status Do you own a home in the U.S.? Do you own a home in another country?

12. Sample Fact Finding Questions • Sorting Out Citizenship and Residency Status How much time do you spend in this country versus any other country?

13. Sample Fact Finding Questions • Sorting Out Citizenship and Residency Status Where are your friends and family located?

14. Sample Fact Finding Questions • Sorting Out Citizenship and Residency Status What is your immigration status? Green card?

15. Indonesian National with Significant U.S. Assets • WeningWulandari • Indonesian national • Widowed • $10,000,000 in U.S. based real estate and investments • What is Wening’s exposure to U.S. estate and gift tax?

16. Why Planning Is Important: NRAs • Wening Wulandari, Indonesian national, Non-Resident Alien • $10 million in U.S. property and investments • No advanced planning • Death in either 2011 or 2012 Tentative Federal Estate Tax ($3,480,800) Less: Credit $13,000 Net Estate Taxes ($3,467,800) Net U.S. Assets $6,532,200 • Estate Shrinkage = 35%

17. Gift Tax Comparison: RA vs. NRA * Tangible property includes cash, jewelry, paintings, automobiles

18. Sample Fact Finding Questions What is the value of your U.S.-based assets?

19. Sample Fact Finding Questions Did you know that the amount your children inherit may be reduced significantly due to U.S. federal estate tax?

20. Sample Fact Finding Questions Will your children have enough cash to pay the estate tax bill upon your death?

21. NRA with Significant U.S. Assets Corporation Wening’s Estate Real estate & investments Non-Resident AlienWeningWulandari Daughter Son Daughter

22. NRA with Significant U.S. Assets Alternate Solution: Life Insurance Wening’s Estate Lifetime Guaranteed Level Death Benefit* Death benefit = $3.5 million Annual Premium = $54,430 Real estate & investments Non-Resident AlienWeningWulandari *Female, 62, preferred nonsmoker

23. Nonresident Aliens: U. S. Gift and Estate Situs Rules * A gift of a life insurance policy on oneself may be subject to the IRC §2035 look back rule, and therefore may be subject to estate taxes if included within the decedent’s estate.

24. Non-citizen Married to Citizen • Mark and Anna, mid-60s • Mark is a U.S. citizen • Anna is a Swedish citizen and Resident Alien

25. Non-citizen Married to Citizen Mark U.S. Citizen Anna Swedish citizen Resident Alien Unlimited Marital Deduction No Deduction

26. Sample Fact Finding Questions • Are you and your spouse U.S. citizens?

27. Sample Fact Finding Questions • What is the value of your worldwide estate?

28. Non-citizen Married to Citizen Mark U.S. Citizen Anna Swedish Citizen Resident Alien Unlimited Marital Deduction

29. Non-citizen Married to Citizen Alternate Solution: Life Insurance Mark U.S. Citizen Anna Swedish Citizen Resident Alien Legacy Trust withLife Insurance

30. Why Transamerica? • Dedicated international underwriting team • Access to experts & marketing materials • Expand market • No product limitations • Low or no minimum face amount* • Close more business • Best underwriting risk class generally available • * $25,000 minimum face amount for TransTermSM product.

31. Tapping Into the Foreign Nationals Market • Align with immigration and/or international tax attorneys • Do you have contacts in a U.S. immigrant community? • Partner with international banking and investment institutions • Are you fluent in more than one language?

32. Tapping Into the Foreign Nationals Market • Develop a champion client • Do you live in a location with high foreign national investment? • Do you live in a resort/vacation destination?

33. Seizing the Opportunity • Review your book of business • Reach out to contacts that match the client profile • Strengthen and build your referral network

34. Transamerica Life Insurance Company (“Transamerica”), and its representatives do not give tax or legal advice. The material in this presentation is provided for informational purposes only and should not be construed as tax or legal advice. Clients and other interested parties must be urged to consult with and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Discussions of the various planning strategies and issues are based on our understanding of the applicable federal tax laws in effect at the time of presentation. However, tax laws are subject to interpretation and change, and there is no guarantee that the relevant tax authorities will accept Transamerica’s interpretations. Additionally, this material does not consider the impact of applicable state or foreign laws and regulations upon clients and prospects. Clients should consult with and rely on their own legal and/or tax advisor to determine the consequences, if any, of owning or receiving proceeds from a Transamerica policy. Although care is taken in preparing this material and presenting it accurately, Transamerica disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it. This information is current as of August 2011. OLA 2119 0811