John Hancock Life Insurance Company (U.S.A.), Boston, MA (not licensed in New York); John Hancock Life Insurance Company of New York, Valhalla, NY MLINY Estate Planning and You

2 of 19 Someday... You could make someone wealthy... Your Family? The person who buys your estate at forced sale prices because your family needs CASH? The Government?

3 of 19 Highest Federal Estate Tax Bracket YearPercent 2001=55% 2002=50% 2003=49% 2004=48% 2005=47% 2006=46% YearPercent 2007=45% 2008=45% 2009=45% 2010=0% 2011=55% (?)

4 of 19 Estates of Famous Persons Estates where the marital deduction WAS USED NameGross EstateTotal Settlement Costs Net EstatePercent Shrinkage Stan Laurel$ 91,562$ 8,381$ 83,1819% W.C.Fields$ 884,680$ 329,793$ 554,88737% Clark Gable$ 2,806,526$ 1,101,038$ 1,705,48830% Dean Witter$ 7,451,055$ 1,830,717$ 5,620,38825% Walt Disney$ 23,004,851$ 6,811,943$16,192,90830% Henry J. Kaiser$ 55,910,373$ 1,030,415$54,879,9582% Joe Robbie$156,000,000$82,000,000$74,000,00055% Source: Minneapolis Heart Institute Foundation

5 of 19 Estates of Famous Persons Estates where the marital deduction WAS NOT USED NameGross EstateTotal Settlement Costs Net EstatePercent Shrinkage Marilyn Monroe$ 819,176$ 448,750$ 370,42655% Cecil B. De Mille$ 4,043,607$ 1,396,064$ 2,647,54335% Elvis Presley$ 10,165,434$ 7,374,635$ 2,790,79973% Alwin C. Ernst, CPA$ 12,642,431$ 7,124,112$ 5,518,31956% J.P. Morgan$ 17,121,482 $11,893,691$ 5,227,79169% Jackie Onassis$119,000,000$ 3,800,000$115,200,0003% John D. Rockefeller, Jr$160,598,584 $24,965,954$135,632,63016% Source: Minneapolis Heart Institute Foundation

6 of 19 The Magnitude of Estate Taxes on Survivor’s Estate Net Estate Passing To Surviving Spouse Estate Tax Assuming No Estate Growth Estate Tax Assuming 7.2% Estate Growth For 10 Years $1,000,000$0$437,073 $2,000,000$0$1,499,654 $3,000,000$460,000$2,601,982 $4,000,000$920,000$3,704,309 $5,000,000$1,380,000$4,807,694 $7,000,000$2,300,000$7,212,772 $10,000,000$3,680,000$10,677,472 $25,000,000$10,580,000$27,212,381 The data shown is taken from a hypothetical calculation. It assumes a hypothetical rate of return and may not be used to project or predict investment results.

7 of 19 At death: A common misconception How Estate Taxes Attack Your Estate LIQUID SEMI-LIQUID ILLIQUID

8 of 19 What really happens! How Estate Taxes Attack Your Estate SEMI-LIQUID ILLIQUID CASH DRAIN

9 of 19 Cash is Needed to Pay Your Estate Taxes! A $5 million estate with a $2,000,000 exemption in 2007 – Look again... 73% For Your Heirs 27% For the IRS THE ESTATE TAX BITE

10 of 19 Estate Planning Worksheet With A Plan IRS Without A Plan IRS Family

11 of 19 Avoid double taxation Pay estate taxes with discounted dollars Use all available exemptions Maximize the lifetime value of your assets Transfer personal capital Estate Planning Objectives

12 of 19 Planning for Distribution of Assets Identifying the estate tax liability Limiting the estate tax liability Funding the estate tax liability Deciding how much control the estate owner wants over the disbursement of the funds

13 of 19 Cash –Estate must have sufficient cash available –Assets may have to be sold quickly –Substantial loss to HEIRS Estate Borrows the Money –Money has to be repaid with interest –Estate assets might have to be used as collateral –Substantial portion of the estate will not be available to your HEIRS How to Pay Estate Taxes?

14 of 19 IRS Installment Payments –IRS code section 6166 allows payments of taxes plus interest over 14 years –Closely held business must be a large portion of the estate –Debt payments could be a substantial burden Discounted Dollars (Life Insurance) –Plan ahead to prepay the taxes with life insurance –A small portion of the existing estate pays future taxes –Taxes are paid without reducing the value to the heirs How to Pay Estate Taxes?

15 of 19 Net Worth:$5,000,000Growth Rate:8% Real Net Worth:$3,000,000Real Growth Rate:4% IRS Owns:$2,000,000Growth Rate:4% The “1%” Solution Assumption: 40% Estate Tax Rate

16 of 19 Net Worth: $5,000,000Growth Rate: Use the 1%* to purchase Life Insurance to protect the entire $5,000,000 estate. Isn’t it better to have a $5,000,000 estate growing at 7%, rather than a $3,000,000 estate growing at 4%? 7% 8% The “1%” Solution * Costs may vary with the age, sex and health of the insured(s). Medical testing and underwriting approval is also required to purchase the policy.

17 of 19 The “1%” Solution It’s your Choice… 55% IRS and State Government 1% IRS (Irrevocable Life Insurance Trust) 45% Family99% Family Without An ILITWith An ILIT Trusts should be drafted by an attorney familiar with such matters in order to take into account income and estate tax laws (including the generation-skipping tax). Failure to do so could result in adverse tax treatment of trust proceeds. Assumption: 40% Federal Estate Tax Rate, 15% State Estate Tax Rate

18 of 19 For more information, please contact your Regional Director or call Advanced Markets at (888) , option 3

19 of 19 Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA (not licensed in New York), and John Hancock Life Insurance Company of New York, Valhalla, NY Insurance policies and/or associated riders and features may not be available in all states. This material is for informational purposes only. Although many of the topics presented may also involve tax, legal accounting or other issues, neither John Hancock nor any of its agents, employees, or registered representatives are in the business of offering such advice. The above material was not intended or written to be used, and it cannot be used, for the purpose of avoiding any penalty that may be imposed by the Internal Revenue Service. The above material may have been written to support the promotion or marketing of the transactions or topics addressed by the written material. Individuals interested in these topics should consult with their own professional advisors to examine legal, tax, accounting or financial planning aspects of these topics. ©2007. John Hancock. All rights reserved. Disclosures