From: "Morris, Paul V" To: Jeffrey Epstein <[email protected]> Subject: FW: Preferred Partnership Freezes by N. Todd Angkatavanich & Edward A. Vergara Date: Thu, 26 May 2011 13:51:21 +0000 Attachments: 2011-05 Preferred Partnership_Freezes.pdf Thought you might want to see this article. From: LlebeskInd, Rebecca Sent: Wednesday, May 18, 2011 12:22 PM To: McGraw, Thomas Subject: Preferred Partnership Freezes by N. Todd Angkatavanich & Edward A. Vergara May 1, 2011 12:00 PM Preferred Partnership Freezes They come in different flavors; and provide a menu of creative planning solutions By N. Todd Angkatavanich & Edward A. Vergara Preferred partnerships (Pps) are very useful and versatile estate planning vehicles that have been around for decades, yet still appear to fly under the radar. From an economic perspective, a PP is often well-suited to act as a multi-generational family investment vehicle; older generations are typically seeking a steady income flow and protection of capital, while younger family members are often willing to forego current income and capital security for the prospect of capturing upside growth. Much as one balances an investment portfolio between fixed income and equities based upon the particular needs at a given stage of one's life, a PP can provide for such a division of economic interests within a private investment vehicle. From an estate planning perspective, these partnerships are sometimes referred to as "freeze partnerships," because they provide a structure that enables one class of partnership interests, typically held by a senior generation family member, to be "frozen" or limited to a fixed rate of return, thereby enabling the future appreciation in excess of that fixed rate to inure to the benefit of the other class of partnership interests, typically held by younger generations or trusts for their benefit. As with many estate freeze techniques, such as grantor retained annuity trusts (GRATs) or sales