1. New Opportunities in Existing CRTs Presented by Evan Unzelman, Chief Operating Officer

2. Sterling Foundation Management
Founded in 1998
Oldest national foundation management firm in U.S.
Support advisors
Provider of charitable planning solutions
Private foundation administration
Administration of other charitable entities
Sales of income interests in CRTs
Offices nationwide
Anthony Segala

3. New Opportunities Applicability Existing clients Prospective clients
Attorneys and CPA networks

4. Charitable Remainder Trusts
Tax-planning vehicle
Defer capital gains tax on appreciated assets
Income tax deduction
Diversify concentrated position
Client outcomes
Tax benefits garnered early
Future benefit rooted in income from trust

5. The Problem Irrevocable Taxation Mortality Risk
Client loses control (i.e., liquidity) of donated assets upon creation of CRT
But circumstances change
Taxation
Worst in, first out
Deferral works against client if tax rates rise
Mortality Risk
Exposure to financial risk of premature death

6. The Solution 1) Sell CRT interest 2) Reinvest proceeds
Maximizes value from CRT on present value basis
Eliminates tax and life expectancy risks
Provides lump cash payment
2) Reinvest proceeds
Annuities
Life insurance

7. Tax & Legal Considerations
Income interest in a trust is a capital asset
Rev. Rul , C.B. 233
PLR
State law governs sale
No legal barriers to sale of CRT income interest
Trust Agreement

8. Background Current situation Outcome
Case Study
Background
Current situation
Outcome

9. Client Situations to Look For
Change in circumstance
Financial
Personal
Risk aversion
Tax
Mortality
Frustration with CRT performance
NIMCRUTs

10. Business Development Opportunities
Attorneys and CPAs
No knowledge of sale option
Cursory knowledge of sale option
They want to know about it
Clients
Most clients who have CRTs are unaware of sale option
Bring these clients a solution their existing advisors aren’t

11. Anthony Segala, SVP, Western Region
Evaluations
Anthony Segala, SVP, Western Region
(310)
Required information
Ages of income beneficiaries or remaining term
Payout rate
Trust value

12. Disclaimer
Sterling Foundation Management does not provide tax or legal advice, and nothing in this presentation should be construed as such. Any information or analysis provided is believed to accurate but is not guaranteed or warranted.