From: Eileen Alexanderson To: 'Jeffrey Epstein' <[email protected]> Subject: FW: Leon Black Children-use of Gift and GST tax exemptions Date: Thu, 13 Dec 2012 19:40:53 +0000 I reached out to Elyse for input on the kids trusts we have been speaking about. I then ran the output of that conversation by Ada. Below is her response to Elyse. Just thought this input would be helpful as you think about it also. I also have input from Ralph Lerner on the art foundation. Would like to speak about cashflow also. I am leaving for a doctors appt but just finished al theft we needed, will clean up the presentation and send to you in the morn. I left a phone message for Harry this mom. Going out looking at space tomorrow afternoon. From: Clapp, Ada [mailto: Sent: Thursday, December 13, 2012 9:59 AM To: Elyse G. Kirschner ( Cc: Eileen Alexanderson Subject: Leon Black Children-use of Gift and GST tax exemptions Hi Elyse, I was speaking with Eileen earlier about the plan for Leon's children to make exemption gifts by year end. I understand that you are considering having the 4 children create an LLC and in exchange for a 25% interest, they would each give the LLC his or her promissory note for $5 million. Thereafter, they would each transfer a 25% interest in the LLC to a new 2012 Trust. I have a few questions about this proposal and one big concern. It is my understanding that only one or possibly two of the children have any real entitlement to assets at this point—that is Ben and possibly Josh in respect of the distribution they should have received from the 1992 Trust. I also understand that Alex and Victoria do not have sufficient assets to make a promissory note from them a viable alternative, as they would not be creditworthy borrowers. Since there is no collateral and no other assets from which a lender could reasonably expect repayment, I am afraid the IRS will not view the exchange of their notes for LLC interests as a bona fide loan. Rather I am