From: Eileen Alexanderson < To: " " <[email protected]> Subject: Fw: Leon Black Children-use of Gift and GST tax exemptions Date: Fri, 14 Dec 2012 13:04:48 +0000 From: Kirschner, Elyse [mailto: Sent: Friday, December 14 2012 06:18 AM To: Clapp, Ada < Cc: Eileen Alexanderson Subject: RE: Leon Black Children-use of Gift and GST tax exemptions I am I could not respond yesterday. I was in meeting most of the day. I told Eileen that we had suggested the LLC plan for other clients who did not currently have appropriate liquid assets to transfer to a trust, but that I wasn't sure it made sense here because we did not know if all of the children would generate enough of their own liquid assets to repay the note. If you want to discuss your specific questions anyway, we can do so later today. Clearly, the best solution would be to find $5 million of assets each of the children have in their own name, have them make gifts to the trusts and allocate their GST exemptions to those trusts. If they don't have such assets, and the children would end up "wasting" their $5 million gift tax credits, then I agree that the next best solution would be to distribute assets out of the non-GST exempt trusts, have the children gift them to new trusts, and allocate their GST exemptions to those new trusts. Elyse G. Kirschner I Partner McDermott Will & Emery LLP 1340 Madison Avenue, New York, NY 10173 From: Clapp, Ada [mailto: Sent: Thursday, December 13, 2012 9:59 AM To: Kirschner, Elyse 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