ESTATEVIEW INSTANTPLAN

COMPREHENSIVE PLANNING
STRATEGIES

PREPARED FOR

John and Mary Sample

PRESENTED BY

TABLE OF CONTENTS

·
INTRODUCTION TO THE FEDERAL ESTATE TAX SYSTEM

·
ASSUMPTIONS

·
ILLUSTRATION
1 - NO PLANNING

·
ILLUSTRATION
2 - USE OF A BYPASS TRUST

·
ILLUSTRATION
3 - QPRT

·
ILLUSTRATION
4 - USE OF ANNUAL GIFTING

·
ILLUSTRATION
5 - USE OF DISCOUNTED ANNUAL GIFTING

·
ILLUSTRATION
6 - LARGE GIFT

·
ILLUSTRATION
7 - ROLLING GRATS

·
ILLUSTRATION
8 - USE OF INSTALLMENT SALE

·
ILLUSTRATION
9 - TESTAMENTARY CHARITY

* This letter is provided for informational purposes only
and should not be considered legal, tax, or financial advice.  We are not responsible for any actions
taken based on the information provided in this letter.

This illustration was prepared by the planner on October 4,
2025, and assumes residential property worth $3,000,000 growing at 3.75% and
Business and Investment assets of $25,500,000 growing at 7.50%.

Assumes John lives until 2035 and
Mary lives until 2045.

Note from the planner:

Disclaimer: Please note that this letter is based upon a number of assumptions which may be refined by your planner
in our comprehensive module. Please ask your planner for further information.

NOTE: This explanation and
attached projections are in rough draft form, and have
not been tailored to the individual situation of the clients.  They are provided for illustration
purposes only, and do not constitute a complete or necessarily accurate
depiction of the present or future expected scenarios.  We nevertheless believe that this sample
explanation and its accompanying charts may be useful to facilitate
understanding the estate tax system and how optional planning scenarios can affect  John and
Mary's estate tax liability and family.

Under the federal estate tax
system, the value of a decedent's assets are
determined, to include individually owned real and personal property, the
proportionate share of jointly owned property, and the value of the decedent's
rights in certain trusts, and any "incidents of ownership" held in
life insurance policies on the decedent's life will be included in the total.

Deductions from the gross estate
include funeral and administration expenses, the value of assets passing to
qualified charities or a surviving spouse who must be a U.S. citizen to qualify
an outright disposition for the marital deduction – but if not a U.S.
citizen, then a lifetime income trust called a Qualified Domestic Trust (QDOT)
will work. The unlimited marital deduction also applies to a trust that pays
all income to a surviving spouse called a QTIP Trust – which can also be
a QDOT if the surviving spouse is not a U.S. citizen.

Every U.S. citizen is entitled to
a personal unified estate and gift tax exemption which may be used during life
to offset taxable gifts with any exemption remaining at death to offset estate
tax liability.  An Estate Tax Form
706 must be filed within 9 months of death if the decedent's total assets
exceed the exemption amount, even if the net assets after liabilities are below
the exemption amount.

No estate tax is due if the value
of an estate minus allowable deductions is less than the decedent's remaining
available estate tax exemption. However, filing Form 706 may still be necessary
in order to report deductions or apply an available exemption against a
potentially taxable gross estate or to make elections such as applying a
deceased spouse's unused exemption (DSUE) or to elect to apply the alternate
valuation date (if it results in lower overall valuation) as of six months
after the date of death.

The illustrations under this
letter do not take into account the IRS’s position that a trust that
holds assets that are not subject to estate tax will normally not receive a new
fair market value income tax basis for its assets, meaning that there may be
income tax costs to the heirs of an estate who are the beneficiaries of such a
trust.  There are planning
techniques that address such risk that are not discussed in this letter.

Further, some of the ways that
the techniques under this letter may be used could be challenged by the IRS or
“backfire” depending on how the strategy is used, the amount of discounts taken, the rate of return on
investments, and how long a person lives.
There is no substitute for having an experienced tax planning
professional or professionals and appropriate skilled and licensed lawyers
design and draft proper documents for an estate plan, and for having a skilled
and experienced Certified Public Accountant understand the plan and provide
appropriate tax returns, financial statements and other services that are
consistent therewith.

Once a plan is put into place it
should be reviewed periodically and adjusted appropriately from year to year.

Federal Unified Estate and Gift Tax Exemption

Under current law, the federal
unified estate and gift tax exemption is annually indexed for the Chained
Consumer Price Index, which is lower than the Consumer Price Index and much
lower than the actual rate of inflation.
In 2024 each individual's exemption is
$13,990,000 per person. Additionally, a deceased spouse's unused exemption
(DSUE) may be added to the surviving spouse's available personal exemption.
This "portability" feature is elected on a timely filed Form 706 to
entitle the surviving spouse to combine the Deceased Spouse's Unused Exemption
(DSUE) with their personal $13,990,000 (net of the survivor's prior taxable
gifts, adjusting for future annual inflationary adjustments).

For example, if Spouse A only
used $1,000,000 of his or her $13,990,000 exemption either through lifetime
taxable transfers or against his or her taxable estate, then surviving Spouse B
may use Spouse A's unused $12,990,000 in addition to Spouse B's full
$13,990,000 exemption, thereby giving Spouse B the ability to shelter
$26,980,000 against future taxable gifts or against Spouse B's future estate at
death.  The DSUE that transfers to
the surviving spouse does not increase with inflation.

If the first dying spouse's gross
assets are less than the estate tax exemption amount
then the estate and surviving spouse have up to five years after the date of
death of the first dying spouse to file a Form 706 Estate Tax Return that
elects for the portability allowance to pass to the surviving spouse.

The Internal Revenue Code has
provided relief to estates making late portability elections of DSUEs without
requiring any user fee or a private letter ruling. This simplified method
permits an extension of time under § 301.9100-3 of the Procedure and
Administrative Regulations for the surviving spouse to make a portability
election under I.R.C. § 2010(c)(5)(A) up to five years after a proper
election should have been made on Form 706 from a deceased spouse's estate.

If a surviving spouse remarries,
any properly elected DSUE is not necessarily lost. Rather, a surviving spouse
may combine their own personal unused exemption with a properly elected DSUE
from their last dying spouse in a new marriage to shelter lifetime taxable
gifts or future estate tax liability. However, if the new spouse predeceases
them, then the newly deceased spouse's unused exemption is applied.

Lifetime gifts exceeding an
annual gift exclusion (currently set at $19,000 per Donee
as of 2025, and further explained below) reduce a
person's lifetime $13,990,000 exemption on a pro rata basis.

Annual Gifting

An individual may make certain
annual gifts to other non-exempt persons or irrevocable trusts without
incurring gift tax.  The annual
excludable amount is indexed for inflation, and is
presently set at $19,000 per Donee recipient (for
2025).  Spouses may elect (on a Gift
Tax Return Form 709) to combine their annual excludable gifts, permitting a
couple to make a gift in the amount of $38,000 per Donee
recipient.  The individual or couple
may make gifts to as many different people or properly drafted trusts as they
wish each year, and often desire to follow an annual
gifting schedule the same Donee
recipients.

Gifts are commonly made to
irrevocable Gifting Trusts also known as "Crummey Power Trusts" where
beneficiaries have a temporary right to withdraw, in order to
qualify contributions to be treated as if they were transferred to
individuals.  The "Crummey
Power" is named after a 1968 Ninth Circuit U.S. Court of Appeals case D. Clifford Crummey v. Commissioner of
Internal Revenue which established that a beneficiary's right to
withdraw contributions to the trust constitutes a gift of a present interest
even when the beneficiary waives his or her right.  A "Crummey Notice" should be
given to the beneficiary or guardian advising of the right to withdraw
contributions for a limited time. Subsequent cases have held that beneficiaries
who do not receive notice of contributions may still qualify if there was a
legal right to make a withdrawal, especially if the beneficiary had general
knowledge from the past that contributions were being made.

Gifts below the current $19,000
individual or $38,000 joint spousal threshold will not affect the lifetime
exemption amount of $13,990,000. Gifts between spouses who are U.S. citizens
are always estate and gift tax free, regardless of amount.

Annual gifting may be combined
with various estate planning techniques to minimize allowable transfers that
avoid federal estate tax.
Individual or joint gifts of values exceeding the current annual
exclusion amount of $19,000 or $38,000 to an individual Donee
require reporting on a Gift Tax Return (Form 709), where cumulative taxable
gifts are subtracted from the Donor(s)' lifetime exemption amount available.

In other words, each individual is currently entitled to a maximum
$13,990,000 exemption from gift or estate taxes. In each year that an
individual makes taxable gifts exceeding the current $19,000 per Donee excludable amount, the excess value of those gifts are subtracted from the beginning balance of $13,990,000 on
Form 709 which is filed with the IRS. Whatever balance remains unused at death
becomes the amount available to shelter an individual's federal estate tax
liability.

There are several ways to
strategically utilize the first dying spouse's exemption to maximize the estate
tax shield applied to the surviving spouse's estate. The illustrations produced
by this software demonstrate how certain estate planning techniques may impact
an estate plan and a family's legacy.

NOTE:  If Congress does not extend the current
estate exemption legislation by 2030, then a living person's unused exemption
will be proportionately reduced (based on the new lower lifetime exemption,
minus any amounts previously utilized), but not less than zero. In other words,
there will be no Congressional "claw back" for an individual's use of
previous allowable exemption amounts that exceed a new lower threshold.

Illustrations in this program can
show the impact of various strategies under the assumption that the current
exemption of $13,990,000 will continue to be indexed for inflation AND whether
the exemption will be reduced by approximately one half of what they would have
otherwise been in 2030, when the current estate legislation is scheduled to
"sunset."

In the event
that one spouse dies before 2025 and leaves a portability allowance,
then any such portability allowance will not be reduced if the surviving spouse
later qualifies to use it.

This illustration also assumes
that the surviving spouse will be able to use any portability allowance that
may be passed by the first dying spouse, and therefore
assumes that the surviving spouse will not remarry someone who dies before him
or her.

ASSUMPTIONS

Clients

Name

John Sample

Mary Sample

Age

70

64

Sex

Male

Female

Tobacco User?

No

No

Lifetime Gift Exclusion Used

$0

$0

Projected Year of Death

2035

2045

Annual Savings (Initial)

$250,000 → $0 → $100,000

$250,000 → $0 → $100,000

Transition Ages

Age 80 → Age 0

Age 80 → Age 0

Savings Structure

3-Tier: Initial → Tier 2 → Rest of Life

3-Tier: Initial → Tier 2 → Rest of Life

Portability

Assume no portability?

No

Exemption Adjustment

Exemption Adjustment Option:

Assume Exemption drops 50% in 2030

Business and Investments

Current Value

$25,500,000

Annual Growth Rate

7.50%

Annual Investment Costs Rate

0.40%

Annual Investment Tax Rate (as %
of assets)

2.00%

Personal Residence and Property

Current Value

$3,000,000

Annual Growth Rate

3.75%

Qualified Personal Residence Trust (QPRT)

Number of QPRTs

1

Percentage of Residence Value to
QPRT(s)

100.00%

QPRT Residence Value

$3,000,000

QPRT 1 - § 7520 Rate

4.60%

QPRT 1 - Term

8

QPRT 1 - Exemption Used

$1,674,780

QPRT 1 - Annual Rent % After
Possessory Term

8.00%

QPRT 1 - Valuation Discount Rate

N/A

Bypass Trust

Bypass Trust Value

$10,400,000

Gifting

Initial Gifting Trust Value

$0

Exempt Gifts per year

2 Donees

Number of Years

10

Subsequent Gifts per year

6 Donees

Percentage of Gifts to Gifting
Trust

100.00%

Percentage of Gifts using
Discounting

100.00%

Discount Percentage for Gifting

25.00%

Installment Sale

Year One Gift Amount

$1,500,000

Year One Gift Discount Rate

0.00%

Year One Gift After Discount

$1,500,000

Sale Value before Discount

$15,000,000

Discount Rate

30.00%

Sale Value after Discount

$10,500,000

Total Sale Value

$10,500,000

Note Amount

$12,250,000

Note Interest Rate

4.68%

Note Payment Amount

$573,300

Type of Note

Conventional

Note Term in Years

20

Year to Toggle Off Grantor
Status

N/A

Additional Income for
Installment Sale Trust (Reduces Net Yearly Savings/Outgo)

$200,000

Number of Years of Additional
Income for Installment Sale Trust

30

Note Discount On
Death

0.00%

Annual Guarantee Fee Type (% or
$)

Percent

Annual Guarantee Fee (% of Note)

0.00%

Annual Guarantee Fee Paid to
Gift Trust?

True

Rates

Consumer Price Index Growth Rate

3.71%

Real Inflation

4.01%

Estate Tax Rate

40.00%

Adjust for Real Inflation

No

Charity

Charity, CLAT, or CRT?

Charity

Charity Name

Percent of Residue to Charity

100.00%

ILLUSTRATION 1 - NO PLANNING

This first illustration assumes no annual gifting.

The first row shows John and Mary's assets in 2025.

The second row illustrates the assumption that John's death occurs first and
reflects the increase in asset values as of the date of the first death. This
row shows all assets transferred to the surviving spouse to defer potential
federal estate tax until the second death.

Many couples will allow this to occur, utilizing the deceased spouse's
unused exemption (DSUE).

In this illustration the surviving spouse will be eligible to utilize a total
exemption of $40,360,000 ($10,400,000 from John's projected DSUE + $29,960,000
from Mary's projected available exemption).

The third row illustrates Mary's projected estate values at their death in 20
years leaving $85,069,694 worth of personal assets exposed to federal estate
tax.

Applying John's DSUE of $10,400,000 leaves Mary's net estate of $44,709,694
subject to federal estate tax. Assuming a 40.00% estate tax rate, the estate
tax would be $17,883,878 and is normally owed 9 months after the surviving
spouse's date of death.

For estates substantially comprised of large closely held businesses, an
executer may be entitled to make an election under I.R.C. § 6166 to defer
the payment of estate taxes up to five years with interest-only payments,
thereafter making equal payments over the following ten years. Such an election
alleviates an estate's illiquidity and may avoid the need to sell assets at a
disadvantageous time triggering a loss.

ILLUSTRATION 2 - BYPASS TRUST

An irrevocable Bypass Trust, also known as a "Family
Trust" or "Credit Shelter Trust" may provide lifetime income to
a surviving spouse while shielding the trust assets from federal estate tax at
the death of the surviving spouse. The Bypass Trust may also allow principal
distributions for the surviving spouse's health, education, maintenance, and
support (known as the HEMS standard). The Bypass Trust may be funded according
to provisions in the Decedent's Will or by a procedure whereby the surviving
spouse disclaims certain assets which then pass into the Bypass Trust for the
beneficiaries' remainder interest.

The amount of assets used to fund the Bypass Trust often utilize the Decedent's
maximum available estate exemption, with the excess amount funding a Marital
Trust over which the surviving spouse would have full discretion, and thus will
be includable in the surviving spouse's estate.

Assets remaining in the Bypass Trust upon the second spouse's death may be
allocated to a separate Generation Skipping Trust (GST) to benefit individuals
who are more than one generation younger than the original Grantor (including a
grandchild or any other individual at least 37.5 years younger than the
Grantor). However, without proper planning, transfers to a "skip
generation" beneficiary could trigger a stacked 40% GST tax on top of any
estate taxes. Your experience estate planning professional will be able to
discuss further options for utilizing the separate GST exemption in addition to
any available estate tax exemption ported between spouses.

In this illustration, the Bypass Trust is funded in the amount of $10,400,000
upon the first death. The deceased spouse's estate tax exemption is used to the
extent of $10,400,000 by funding of the Bypass Trust shown in the second
column, at John's death in 2035

Under this scenario, the Bypass Trust grows to $17,102,535 based upon the
assumed 5.10% rate of return, and will not be subject to federal estate tax at
the second death.

Applying a 40.00% estate tax rate, funding the Bypass Trust saves $2,681,014 in
federal estate tax.

Because John Sample had $10,400,000 in exemption when he died, and only
$10,400,000 went to the Bypass Trust, the portability allowance that can pass
to Mary Sample was $0 and will be usable by her unless she remarries someone
who dies before her, in which event that next dying spouse's portability, if
available, would apply.

ILLUSTRATION 3 - QPRT

This illustration shows estate tax savings from using one or
more Qualified Personal Residence Trusts.

A Qualified Personal Residence Trust (QPRT) is an irrevocable trust created
when the owner of a primary residence and/or vacation home makes a gift
transferring the property's title to the trust. Thus, the value of the home and
its future appreciation is removed from the owner's estate, while the owner
retains the right to reside in the home for a term of years. Since the transfer
does not represent a gift of a present interest, the value of the property
cannot be reduced by the annual exclusion ($19,000 in 2025).

The QPRT represents an IRS-sanctioned exception to the general rule that
Grantors are prohibited from the use or enjoyment of property that qualifies as
a gift. To comply with IRS rules, the trust term is set to a specific period of time that is expected to be shorter than the
owner's life expectancy. At the end of the term, title passes to the trust
beneficiaries, and the owner begins paying fair market rent to them if the
owner desires to continue residing in the home. These rental payments do not
constitute taxable gifts.

This technique freezes the value of the home when it is transferred into the
trust, and the gift is discounted according to actuarial assumptions applied to
the remainder interest transferred to beneficiaries using IRS mortality tables
and the Sec. 7520 rate in effect. The higher the 7520 rate, the lower the gift
value, and thus the higher the potential estate tax savings.

When the term of the Trust is over, we show that John pays rent based on 8% of
the value of the property held in QPRT 1 each year, beginning in year 8 (2033)
and ending with John dies in year 10 (2035). We are showing that Mary pays rent
for the use of the property interest owned under QPRT 2 beginning in year 0
(2025) and until Mary's death in year 20 (2045).

The total rent paid, plus the growth on the amounts received at the 8% growth
rate, comes to $1,206,615 in QPRT 1 and $0 in QPRT 2. This does not take
account of the fact that QPRT 1 will be subject to income tax on its investment
income after John's death.

ILLUSTRATION 4 - ANNUAL GIFTING

This illustration shows the use of annual gifting.

Under current law (2025) individuals do not need to report gifts up to $19,000
per year, per Donee, or joint gifts up to $38,000 per
year, per Donee made by married spouses. There is no
limit on the number of Donee recipients in a single
year.

Gifts may be given directly to recipients or through the use
of a Gifting Trust, whereby a Trustee controls the investments and
distributions to beneficiaries. A Gifting Trust may protect beneficiaries from
claims of their creditors, divorcing spouses, or simply from making
inappropriate financial decisions with their cash gifts.

This example shows John and Mary jointly making non-reportable gifts of $19,000
each per child, or grandchild, totaling $38,000 per year. This illustration
reflects projected increases in annual gifts with CPI inflationary adjustments,
totaling $4,725,554 in 20 years.

Applying a 40% estate tax rate, the combined savings from the annual gifting
for both John and Mary is $1,890,221.

ILLUSTRATION 5 - DISCOUNTED ANNUAL GIFTING

Valuation discounts may apply when certain ownership
interests are transferred, such as interests in family limited partnerships
(FLPs) or limited liability companies (FLLCs) holding businesses or
investments. There are advantages to gifting partial ownership interests in
lieu of cash. When less than 50% business interests are gifted, the asset may
be entitled to a valuation discount due to minority interests lacking
management control and lacking outside marketability of a partial interest in a
closely-held family business.

The amount of the discount entails a subjective case-by-case determination;
however, a 30% discount is often justified. Valuation discounts provide an
opportunity to transfer more assets (and the future appreciation) out of the
Donor's estate.

For example, if John and Mary transferred $1,000,000 worth of assets into an
FLP or FLLC and then made a gift of a 10% minority interest or non-voting
interest from the entity, this nominal transfer of $100,000 out of their estate
might only utilize the discounted amount of $75,000 of their lifetime
exemption, assuming a 25% valuation discount.

This example shows John and Mary jointly making non-reportable gifts of $19,000
each per child, or grandchild, totaling $76,000 per year. Applying a 25%
discount to their gifts and projected increases in annual gifts adjusted for
inflation removed a total of $6,300,738 from their taxable estates.

The estate tax savings from the discount feature, based upon gifting $76,000
per year during John and Mary's lifetime, and later gifting $38,000 per year of
gifting during Mary's survivorship, is $633,013.

ILLUSTRATION 6 - LARGE GIFT

The next illustration shows a large gift to the gifting
trust in year one.

ILLUSTRATION 7 - ROLLING GRATS

The next illustration shows Rolling GRAT(s) funded in year
one.

ILLUSTRATION 8 - YEAR 1 GIFT / INSTALLMENT SALE

One of the most effective tools available to reduce Estate
Tax exposure is the Installment Sale to an irrevocable trust.

An "Irrevocable Sale Trust" is established to purchase assets from John
and Mary in exchange for an installment note. The Trust is thereby excluded
from their estate and the sale does not utilize any
lifetime gift exemption since it is structured as a sale rather than a gift. John
and Mary may choose to continue to pay income taxes attributable to the trust's
taxable activity to further reduce their estate assets without their payment
utilizing any of their lifetime Gift Tax exemption. However, John and Mary may
toggle the income tax inclusion at any time so that the trust begins paying its
income taxes at the trust level.

This illustration assumes that John and Mary will always pay the income taxes
on the trust.

This illustration shows John and Mary making a $1,500,000 year one gift to the
trust, and shortly thereafter selling an ownership interest in an LLC or Family
Limited Partnership in exchange for a Promissory Note.

The business interest worth $15,000,000 is discounted by 30.00% resulting in a
sale of $10,500,000 asset. In addition, 0% of the explosive asset worth $0 is
sold to the trust to bring the total sale value to $10,500,000. Selling the
explosive asset to the Irrevocable Sale Trust in year one means the high-growth
projected for this asset over the next 0 years will occur outside the taxable
estate.

We are showing that you would make a $1,500,000 year one capital gift to the
trust, and shortly thereafter sell an ownership interest in an LLC or Family
Limited Partnership in exchange for a Promissory Note.

In exchange for the transfer John and Mary receive a 4.68% note for the
$12,250,000 sales price. The note is structured to pay interest only with a balloon
payment of the principal due in 20 years. Before or at its maturity the note
may be refinanced, or potentially converted to a
Self-Canceling Installment Note ("SCIN").

This illustration shows the sale occurring in 2025 and growth of assets through
the 2nd death in 2045. At that time, the Irrevocable Sale Trust will hold
$27,737,995 of assets that can pass outside of the estate into trusts providing
lifetime benefits to children or other beneficiaries without triggering estate
tax upon their deaths.

The estate tax savings from this installment sale of discounted assets would be
$10,784,035 based upon the assumptions set forth herein.

ILLUSTRATION 9 - TESTAMENTARY CHARITY

The next illustration shows that allowing a residuary estate
to pass to a Charity, a Family Charitable Foundation, or Charitable Lead
Annuity Trust (CLAT) will always result in zero estate taxes, but will reduce
the total amount passing to non-charitable Beneficiaries.

Here we show John Sample and Mary Sample's residuary estate of $0 that would
otherwise be subject to 40% estate tax passing to a Charity, resulting in $0
Estate Tax.

Whether passing the residuary estate directly to charities, or by utilizing a
CLAT, estate taxes will be zeroed-out. However, the advantage of utilizing a
CLAT is that the assets continue to grow during the charitable payment term,
resulting in potentially more remainder assets passing to family Beneficiaries
after the end of the charitable payment term.

For example, if John Sample and Mary Sample's net taxable estate passed
directly to one or more qualified Charities, the amount passing to
non-charitable Beneficiaries would be $85,040,298.

However, passing the $0 residuary estate to a CLAT allows more time for the
assets to grow tax-free while making annual payments to one or more charities.

To effectuate a testamentary CLAT John Sample and Mary Sample's Will and Trust
documents would contain specific provisions directing the Personal
Representative or Trustee to allocate the maximum assets that would offset the
finally determined estate tax liability.