EFTA00983587

From: Ada Clapp < To: Jeffrey Epstein <jeevacationO:grnail.com> CC: Richard Joslin < >, Eileen Alexanderson • Subject: Estate Planning Status Update Date: Thu, 13 Feb 2014 20:28:50 +0000 Importance: low I just found this in my drafts folder from Last Friday—not sure you received it. Hi Jeffrey, Below is a high level overview of the status of the estate planning which I sent to Leon earlier today. I am not entirely sure what you want in terms of a weekly status up-date. Since you asked for the "to do list", that makes me think you want the 9 page open items list. I will send that to you shortly if you want to get into the weeds. Please note that I am using the office email address now rather than my gmail. Have a nice weekend. Ada Clapp Elysium Management LLC Suite 1401 New York, New York 10022 Direct Dial: Fax: Email: IRS Circular 230 Disclosure: Pursuant to IRS regulations, I inform you that any tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, by any person or entity for the purposes of (i) avoiding tax related penalties imposed by any governmental tax authority, or (ii) proposing, marketing or recommending to another party any transaction or matter discussed herein. I advise you to consult with an independent tax advisor on your particular tax circumstances. This communication and any attachment is for the intended recipient(s) only and may contain information that is privileged, confidential and/or proprietary. If you are not the intended recipient, you are hereby notified that further dissemination of this communication and its attachments is prohibited. Please delete all copies of this communication and its attachments and notify me immediately that you have received them in error. Thank you. From: Ada Clapp Sent: Friday, February 07, 2014 3:11 PM To: Melanie Spinella Cc: Eileen Alexanderson Subject: Estate Planning Status Update Importance: Low EFTA00983587 Hi Leon, Following is a brief estate planning update: 2006 Trust Decanting. The 2006 Trust decanting is now complete and all assets have been transferred to the APO1 Trust. 1997 Trust Decanting. Jeffrey has now given us the green light to move forward with the 1997 Trust decanting. The APO2 Trust will not be used in connection with unwinding the split-dollar agreements as we were considering. Yesterday, Alan sent me the APO2 Agreement and revised decanting instruments. They should be ready for signature in the next couple of days. The Trustees already approved of the decanting. Valuation for August 15th Transactions. Final valuation reports for the three transactions executed on August 15, 2013 (namely, (i) the 2009 GRAT repayment of a loan to the 2006 Trust with Black Family Partner LP ("BFP") limited partner interests, (ii) the 2009 GRAT payment to you of your final annuity with BFP LP interests and (iii) the substitution of your Note into the 2006 Trust in exchange for its BFP LP interests) were received. Assignment documents reciting the percentages of BFP LP interests transferred were sent to you for signature. Termination of 2009 GRAT. An Assignment, whereby the 2009 GRAT assigns the BFP LP interests constituting the GRAT remainder to the 1997 Trust, was sent to you for signature. APO1 GRAT First Quarter Annuity Payment. As you know, you received your first quarterly annuity payment from the APO1 GRAT (this is the GRAT you created on October 25, 2013 to which you transferred a 37.75% LP interest in BFP) was paid to you on January 24, 2014. It was paid to you in part with cash and the balance with BFP LP interests. An Assignment dated January 24, 2014, whereby the APO1 GRAT assigns to you BFP LP interests in satisfaction of the in-kind portion of your annuity payment, was sent to you for signature. APO1 GRAT No. 3. As we understand that you want to re-GRAT (i.e., gift to a new GRAT) the BFP LP interests you just received as your annuity payment from the APO1 GRAT, I have an execution copy of the APO1 GRAT No. 3 and Assignment ready for your signature. Once you and Jeffrey have agreed on the timing for the new GRAT, I will send the documents to you for signature. We have been discussing timing issues with Jeffrey. Split-Dollar. We prepared a memorandum for the trustees of the APO1 Trust requesting a distribution of approximately $13 million from the APO1 Trust to the Leon D. Black 1999 Insurance Trust #2 to enable Trust #2 to terminate the split- dollar agreement. As you may recall, Trust #2 must repay AIF IV for premiums advanced with non-policy assets. We will organize a conference call next week to discuss with Richard and John. Barry has already approved of the distribution. We expect to receive updated policy illustrations for the second-to-die policies held in Trust #2 by mid-month. Art held in LDB 2011 LLC. To eliminate the payment of rent (and attendant NYS sales tax) with respect to art held in the LDB 2011 LLC (the "2011 LLC"), we intend to implement the following plan: • A new entity ("Newco") will be created by the 2011 LLC; • The 2011 LLC will contribute its BFP LP interests to Newco; • The 2011 LLC will then distribute its interests in Newco to its members (the four children's trusts under the Black 2011Family Trust); and • The four children's trusts will then sell their interests in the 2011 LLC to the APO1 Trust in exchange for an installment note. Thereafter, the 2011 LLC will be owned by a trust of which Debra is a beneficiary and accordingly, the Trustees of the APO1 Trust have discretion to let Debra use the art, rent-free. Because the 2011 LLC is an "old and cold" entity holding both art and other financial assets (including an interest in Phaidon), there is a stronger argument that the sale is of intangible personal property (and thus, not taxable) for NYS sales tax purposes. Wills for your Children. Ben signed a Will and Revocable Trust on December 30, 2013. EFTA00983588 As we move further along on the balance of the planning issues we are working on, I will provide you with an update. Ada Clapp Elysium Management LLC Suite 1401 New York, New York 10022 Direct Dial: Fax: Email: IRS Circular 230 Disclosure: Pursuant to IRS regulations, I inform you that any tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, by any person or entity for the purposes of (i) avoiding tax related penalties imposed by any governmental tax authority, or (ii) proposing, marketing or recommending to another party any transaction or matter discussed herein. I advise you to consult with an independent tax advisor on your particular tax circumstances. This communication and any attachment is for the intended recipient(s) only and may contain information that is privileged, confidential and/or proprietary. If you are not the intended recipient, you are hereby notified that further dissemination of this communication and its attachments is prohibited. Please delete all copies of this communication and its attachments and notify me immediately that you have received them in error. Thank you. EFTA00983589