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Robert D. Hodges BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510

Planning in a Perpetual Fiscal Cliff Environment. Robert D. Hodges BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510 Telephone: 515-242-2465 E-mail: hodges@brownwinick.com. Tax Disclaimers.

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Robert D. Hodges BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510

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  1. Planning in a Perpetual Fiscal • Cliff Environment Robert D. Hodges BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510 Telephone: 515-242-2465 E-mail: hodges@brownwinick.com

  2. Tax Disclaimers IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that, except to the extent expressly provided to the contrary, any federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. Please consult your tax advisor for advice specific to your individual situation. This presentation should be considered general in nature and not specific legal advice. No attorney-client relationship is intended or implied.

  3. Planning Considerations • Perpetually changing environment • Beneficiary conflict • Business continuity

  4. Estate and Gift Tax Environment • Unified credit translates to $5,340,000 in 2014 • Increased rate to 40% • “Portability” permanent • GST mirrors unified credit • Annual exclusion gifting still viable

  5. “Chopping Block” Items • Unified credit amount • Discounts • “File and suspend” for Social Security • “Rolling GRATs”

  6. Beneficiary Considerations • Beware of “cookie-cutter” approaches • Communicate the plan to beneficiaries • There may not be a “perfect solution” • Develop a team • Don’t forget charitable planning

  7. Prevent Conflicts • The beneficiaries will not amicably figure it out • “Fair” is not always “equal” • Fix a valuation formula in your documents

  8. Don’t Kill the Goose • If the business suffers; the family suffers • Outside management may be best • Plan for a liquidity event

  9. Non-Tax Planning • “Black Swan” contingencies • Family governance • Fund “buy-sell” provisions adequately

  10. What Others Have Said… • In this world nothing can be said to be certain except death and taxes. -Benjamin Franklin • Plans are nothing; planning is everything. • -Dwight D. Eisenhower • Think ahead. Don’t let day to day operations drive out planning. -Donald H. Rumsfeld

  11. Website: www.brownwinick.com Toll Free Phone Number: 1-888-282-3515 OFFICE LOCATIONS: 666 Grand Avenue, Suite 2000 Des Moines, Iowa 50309-2510 Telephone: (515) 242-2400 Facsimile: (515) 283-0231 616 Franklin Place Pella, Iowa 50219 Telephone: (641) 628-4513 Facsimile: (641) 628-8494 DISCLAIMER: No oral or written statement made by BrownWinick attorneys should be interpreted by the recipient as suggesting a need to obtain legal counsel from BrownWinick or any other firm, nor as suggesting a need to take legal action. Do not attempt to solve individual problems upon the basis of general information provided by any BrownWinick attorney, as slight changes in fact situations may cause a material change in legal result.

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