Private Banking Customized Financial Planning

1. Private Banking Customized Financial Planning For William Wyatt • “Preparing for the Future”

2. 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

3. 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.

4. 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.

5. 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

6. 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

7. Key Issues to be addressed • Businesses: Plastic Company & French Restaurant • Personal Investments • Personal Retirement Plans • Insurance • Estate Planning

8. Businesses: (1) Plastic Company (2) French Restaurant

9. 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

10. 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

11. 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 : • Buy-Sell Agreement (using Insurance) • Management Buy-Out (MBO): Formal Buy-out Agreement, Stock Options for employees • Private Equity • Strategic Partner • Retirement plan for the firm: 401(k) Pension Fund (defined contribution), defined benefit, Stock Options

12. 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)

13. 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 Suggestion (2) : Management Buy-Out

14. 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 Suggestion (3): Private Equity Investor

15. 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 Suggestion (4) : Strategic Partnership

16. 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

17. 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).

18. Personal Investments Asset Allocation Recommendations

19. 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

20. Personal InvestmentUsed 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%)

21. Current Overall Asset Allocation

22. 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 value Interest cost of mortgage is tax deductible • Solution: Additional cash becomes available for investment in company

23. Current Financial Markets Asset Allocation

24. Recommended Asset AllocationConservative – Balanced Portfolio

25. 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

26. Trust Structures

27. 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

28. 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

29. QTIP Trust I QTIP Trust • To include the current life insurance Property Owner Bill Wyatt Income Beneficiary June Wyatt Principal Beneficiary Grace Wyatt (Daughter)

30. QTIP Trust I • 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

31. 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

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