CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED COMMUNICATION

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED COMMUNICATION
CALDERWOOD & HARKNESS LLP Counselors at Law 375 Park Avenue, 42nd Floor New York, NY 10152 Tel: (212) 555-7800
Fax: (212) 555-7801
www.calderwoodharkness.com
September 29, 2023
Matter No.: 1034-00004 Billing Code: 78412-JRC
Mr. Jonathan Robert Caldwell 418 East 72nd Street, Apt. 14A New York, NY 10021
Dear Jonathan:
1. Introduction and Purpose
We write with reference to the Engagement Letter dated February 15, 2023 (the "Engagement Letter"), pursuant to which you retained Calderwood & Harkness LLP ("C&H" or the "Firm") to provide comprehensive generational estate planning services on your behalf. We are pleased to inform you that the engagement has been completed in accordance with its terms, and the matter is being closed effective September 29, 2023.
As contemplated by the Engagement Letter and as further refined through our collaborative planning process over the past seven months, the estate plan that has been designed and implemented on your behalf encompasses the following principal structures and instruments:
•  A series of three Grantor Retained Annuity Trusts ("GRATs"), including the Caldwell 2023 Securities GRAT ("GRAT A"), the Caldwell 2023 Realty GRAT ("GRAT B"), and the Caldwell 2023 Carried Interest GRAT ("GRAT C");
•  The Caldwell Family Dynasty Trust, a perpetual Delaware trust designed to receive the GRAT remainder interests and hold wealth for the benefit of multiple generations of Caldwell family members;
•  The Caldwell Family Foundation, a New York not-for-profit corporation organized and recognized by the Internal Revenue Service as a private foundation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code" or "IRC");
•  The Caldwell Family Insurance Trust (the "ILIT"), an irrevocable life insurance trust holding a $15,000,000 second-to-die universal life insurance policy;
•  An Amended and Restated Caldwell Revocable Trust, incorporating updated credit shelter trust and marital QTIP trust provisions;
•  A new Last Will and Testament with pour-over provisions to the Caldwell Revocable Trust; and
•  Updated Durable General Power of Attorney, Health Care Proxy, Living Will/Advance Directive, and HIPAA Authorization documents.
The purpose of this closing letter is fourfold: (i) to provide a comprehensive summary of the completed work and the structures that have been implemented; (ii) to catalog all executed documents and related work product generated in connection with the engagement; (iii) to identify ongoing obligations and action items that will require your attention or the attention of your advisors on a periodic basis going forward; and (iv) to provide our recommendations for future review of the plan in light of changes in law, family circumstances, or asset composition.
We wish to acknowledge the coordinated and collaborative effort that made this engagement successful. At Calderwood & Harkness, the matter was staffed by the following professionals:
•  Victoria Chambers, Responsible Partner, Trusts & Estates Practice Group;
•  Sylvia Hartwell, Tax Specialist Partner;
•  Monica Reyes, Lead Associate;
•  Elliot Nguyen, Working Associate; and
•  Howard Quinn, Billing Partner.
In addition, the successful implementation of this plan required the invaluable assistance of the following outside advisors, each of whom contributed their respective expertise throughout the engagement:
•  Martin J. Prescott, CPA, Strathmore Corporation & Greaves LLP — Tax return preparation, tax advisory coordination, and Form 709 filing;
•  Diana R. Linden, CFP®, Havensbrook Wealth Advisors LLC — Wealth management, investment policy guidance, and asset allocation;
•  Philip A. Rossiter, Northgate Trust Company of Delaware — Institutional trustee services for the Dynasty Trust and the ILIT;
•  Dr. Leonard K. Whitfield, ASA, Ashford Valuation Group LLC — Qualified appraisals of Stonecrest Realty Holdings LLC membership interests and Caldwell Ridgeline Capital LP interests and carried interest positions;
•  Rachel F. Dunlap, Esq., Pemberton, Locke & Strauss LLP — Independent counsel to Eleanor V. Caldwell in connection with spousal consent and acknowledgment;
•  Nathan C. Freed, Glenmore Insurance Brokerage LLC — Life insurance policy procurement and underwriting coordination; and
•  Margaret A. Colvin, Esq., Ridgewell & Thorn LLP — Delaware counsel to Northgate Trust Company of Delaware.
We extend our appreciation to each of these professionals for their diligent and timely contributions to the engagement.
2. Overview of the Estate Plan
2.1 Estate Context
As documented in the Preliminary Asset Inventory and Summary completed on March 1, 2023, and as refined through further analysis and valuation work conducted throughout the engagement, your gross estate at the commencement of planning was approximately $300,000,000. The composition of your estate is summarized as follows:
With respect to the real estate holdings, the $134,000,000 value attributable to Stonecrest Realty Holdings LLC reflects the aggregate fair market value of eleven commercial and residential properties located across New York, New Jersey, and Connecticut, as determined by the appraisals conducted by Ashford Valuation Group LLC. All mortgage indebtedness associated with the Stonecrest properties is held at the entity level and is non-recourse to you personally. Accordingly, there are no significant personal liabilities that reduce the gross estate for transfer-tax purposes.
2.2 Pre-Plan Tax Exposure
Without the implementation of any estate planning, the projected federal estate tax exposure upon your death would have been significant. Based on the 2023 federal estate tax rate of 40% applicable to taxable estates in excess of the applicable exclusion amount, and taking into account your prior taxable gifts of $6,750,000, the analysis was as follows:
•  2023 lifetime gift tax exemption: $12,920,000
•  Less: prior taxable gifts: ($6,750,000)
•  Remaining lifetime exemption prior to plan implementation: $6,170,000
•  Estimated gross estate: $300,000,000
•  Less: estimated deductions and exemption: ($6,170,000)
•  Estimated taxable estate: approximately $293,830,000
•  Estimated federal estate tax (40%): approximately $117,532,000
This estimate does not account for New York State estate tax, which would impose an additional layer of tax on estates exceeding the New York exemption amount (currently $6,580,000 for 2023, with a "cliff" provision that eliminates the exemption entirely if the estate exceeds 105% of the exemption amount). The New York estate tax was addressed separately in the State Income Tax Planning Memorandum (Document 19).
2.3 Plan Objectives and Projected Savings
The overarching objective of the estate plan is the efficient transfer of wealth across multiple generations of the Caldwell family while minimizing federal estate, gift, and generation-skipping transfer ("GST") tax exposure. The specific planning objectives, as identified during our initial consultations and refined throughout the engagement, included the following:
(a) Leveraging the favorable interest rate environment and the currently elevated lifetime gift tax exemption to transfer substantial asset appreciation outside the taxable estate through zeroed-out GRATs;
(b) Establishing a perpetual dynasty trust in Delaware to hold and manage family wealth for the benefit of current and future generations, free from estate and GST tax at the beneficiary level;
(c) Creating a charitable giving platform through a private foundation that reflects the family's philanthropic values while generating income tax deductions;
(d) Providing estate tax liquidity through a properly structured irrevocable life insurance trust;
(e) Updating the revocable trust and testamentary plan to ensure coordination among all estate planning structures; and
(f) Executing comprehensive incapacity planning instruments.
Based on the structures implemented and the assumptions underlying our analyses, the projected benefits of the plan are as follows:
•  Projected estate tax savings: Approximately $24,000,000 to $30,000,000, assuming that the assets held in the three GRATs outperform the applicable Section 7520 hurdle rate of 5.0% by approximately 4% annually over their respective terms.
•  Excess appreciation transferred to the Dynasty Trust: An estimated $35,000,000 to $50,000,000 in excess appreciation is projected to pass to the Caldwell Family Dynasty Trust through the GRAT remainder interests upon termination of GRATs A, B, and C. This range reflects varying assumptions regarding asset growth, real estate appreciation, and private equity fund returns as modeled in the GRAT Sensitivity Analysis (Document 11).
•  Remaining lifetime exemption after plan implementation: $1,170,000 ($6,170,000 remaining exemption less $5,000,000 direct gift to the Dynasty Trust). The $10,000,000 contribution to the Caldwell Family Foundation was split equally between you and Eleanor ($5,000,000 each), with each spouse's contribution charged against his or her respective lifetime exemption.
3. Summary of Structures Implemented
3.1 Grantor Retained Annuity Trusts (GRATs)
The cornerstone of the estate plan's wealth transfer strategy is a series of three GRATs, each structured as a "zeroed-out" GRAT in which the present value of the retained annuity interest equals (or nearly equals) the fair market value of the property transferred to the trust, resulting in a taxable gift of zero for federal gift tax purposes. The GRATs are designed to transfer any appreciation in excess of the Section 7520 rate to the Caldwell Family Dynasty Trust as the designated remainder beneficiary, without additional gift tax cost.
Each GRAT is treated as a "grantor trust" for federal income tax purposes during the annuity term, meaning that all income, gains, losses, deductions, and credits of the trust are reportable on your individual federal income tax return (Form 1040). This grantor trust status is an additional planning benefit, as it allows the trust assets to grow without the economic drag of income taxes being paid from trust corpus.
3.1.1 GRAT A — Caldwell 2023 Securities GRAT.  
•  Trust Agreement: Executed April 15, 2023.
•  Corpus: $60,000,000 in publicly traded equity and fixed-income securities, as described in Schedule A to the GRAT A Trust Agreement.
•  Term: Two (2) years.
•  Section 7520 Rate (March 2023): 5.0%.
•  Annuity Amount: $32,195,122 per year, payable on each anniversary of the funding date (April 15, 2024 and April 15, 2025).
•  Gift Tax Value of Remainder Interest: $0 (zeroed-out GRAT).
•  Grantor and Trustee During Annuity Term: Jonathan R. Caldwell.
•  Remainder Beneficiary: Caldwell Family Dynasty Trust.
GRAT A was funded with a diversified portfolio of publicly traded securities. Because these assets have readily ascertainable fair market values and are highly liquid, the annuity payments during the two-year term can be satisfied through in-kind distributions of securities or through the sale of securities and payment in cash, at your discretion as trustee.
3.1.2 GRAT B — Caldwell 2023 Realty GRAT.  
•  Trust Agreement: Executed May 1, 2023.
•  Corpus: $80,000,000 in Stonecrest Realty Holdings LLC membership interests, representing approximately 59.7% of the total equity interests in Stonecrest (total entity value: $134,000,000).
•  Valuation discounts: A combined 25% lack-of-marketability and lack-of-control discount was applied, as supported by the qualified appraisal prepared by Ashford Valuation Group LLC (Dr. Leonard K. Whitfield, ASA). The resulting fair market value for gift tax purposes was $60,000,000.
•  Term: Three (3) years.
•  Section 7520 Rate (April 2023): 5.0%.
•  Annuity Amount: $29,375,859 per year, payable on each anniversary of the funding date (May 1, 2024, May 1, 2025, and May 1, 2026).
•  Gift Tax Value of Remainder Interest: $0 (zeroed-out GRAT).
•  Grantor and Trustee During Annuity Term: Jonathan R. Caldwell.
•  Remainder Beneficiary: Caldwell Family Dynasty Trust.
The transfer of Stonecrest membership interests to GRAT B was effected through an Assignment of Membership Interest executed on May 1, 2023 (Document 27). We note that the annual annuity payments from GRAT B are substantial relative to the liquidity profile of the underlying Stonecrest interests. Accordingly, annuity payments may need to be satisfied through in-kind distributions of Stonecrest membership interests back to you as grantor, or through coordinated liquidity events at the Stonecrest entity level (e.g., refinancings or property dispositions). We recommend that you coordinate with Robert M. Sinclair at Stonecrest Realty Holdings LLC well in advance of each annuity payment date to ensure adequate liquidity planning.
3.1.3 GRAT C — Caldwell 2023 Carried Interest GRAT.  
•  Trust Agreement: Executed June 1, 2023.
•  Corpus: $38,000,000 in limited partnership interests and carried-interest positions in Caldwell Ridgeline Capital LLC, consisting of:
•  Fund IV LP Interest: $12,000,000 (pre-discount value); 35% combined lack-of-marketability and lack-of-control discount applied.
•  Fund V LP Interest: $14,000,000 (pre-discount value); 35% combined lack-of-marketability and lack-of-control discount applied.
•  Fund VI Carried Interest: $12,000,000 (pre-discount value); 30% combined discount applied.
•  Blended Post-discount Fair Market Value: $25,300,000, calculated as follows: ($26,000,000 × 0.65) + ($12,000,000 × 0.70) = $16,900,000 + $8,400,000 = $25,300,000.
•  Term: Three (3) years.
•  Section 7520 Rate (May 2023): 5.0%.
•  Annuity Amount: $13,953,759 per year, payable on each anniversary of the funding date (June 1, 2024, June 1, 2025, and June 1, 2026).
•  Gift Tax Value of Remainder Interest: $0 (zeroed-out GRAT).
•  Grantor and Trustee During Annuity Term: Jonathan R. Caldwell.
•  Remainder Beneficiary: Caldwell Family Dynasty Trust.
The transfer of the Caldwell Ridgeline Capital interests to GRAT C was effected through an Assignment executed on June 1, 2023 (Document 31). The valuation discounts applied to the Fund IV, Fund V, and Fund VI interests were supported by qualified appraisals prepared by Ashford Valuation Group LLC. Because the timing and magnitude of distributions from private equity funds are inherently uncertain, satisfying the annual annuity obligations from GRAT C may require careful coordination with Gregory S. Fenton at Caldwell Ridgeline Capital LLC to align fund distribution timing with annuity payment dates. If fund distributions are insufficient to satisfy the annuity in any given year, the annuity may be paid in kind through the distribution of LP interests or carried-interest positions back to you as grantor, or through supplemental cash contributions, subject to the terms of the trust agreement.
3.1.4 Total GRAT-Funded Assets.  In the aggregate, $178,000,000 in assets (measured at funded fair market value, before application of valuation discounts) was transferred to the three GRATs. After application of the valuation discounts described above, the aggregate discounted value for gift tax purposes was approximately $145,300,000. All three GRATs were structured as zeroed-out GRATs, resulting in a total taxable gift of $0 for federal gift tax purposes.
The combined annual annuity payments across the three GRATs are as follows:
3.2 Caldwell Family Dynasty Trust
The Caldwell Family Dynasty Trust (the "Dynasty Trust") was established to serve as the primary receptacle for the GRAT remainder interests and to hold and manage family wealth in perpetuity for the benefit of multiple generations of Caldwell family members.
•  Trust Agreement: Executed April 1, 2023.
•  Situs: Delaware. The trust is governed by Delaware law, which permits perpetual trusts with no rule against perpetuities, enabling the trust to continue indefinitely for the benefit of successive generations.
•  Initial Funding: $5,000,000 in cash, constituting a direct gift from Jonathan R. Caldwell. This gift utilized $5,000,000 of your remaining lifetime gift tax exemption, reducing the remaining exemption from $6,170,000 to $1,170,000. No gift tax was due on the initial funding.
•  GST Exemption Allocation: $5,000,000 of your generation-skipping transfer tax exemption was allocated to the initial funding of the Dynasty Trust, resulting in an inclusion ratio of zero for the trust. This allocation will be reported on your 2023 Form 709.
•  Co-Trustees: Thomas R. Caldwell (family trustee) and Northgate Trust Company of Delaware (institutional trustee; Philip A. Rossiter, Senior Vice President, Trust Administration).
•  Distribution Committee: Thomas R. Caldwell, Katherine C. Hartfield, and Olivia G. Caldwell. Unanimous approval of the Distribution Committee is required for any discretionary distribution exceeding $100,000 per beneficiary per calendar year. This mechanism provides a family-based check on significant distributions while preserving flexibility.
•  Distribution Standard: Health, education, maintenance, and support ("HEMS") as the baseline ascertainable standard. Broader discretionary distributions are permitted with Distribution Committee approval, subject to the terms and limitations set forth in Article VI of the Trust Agreement.
•  Beneficiaries: Thomas R. Caldwell, Katherine C. Hartfield, Olivia G. Caldwell, and their respective issue, per stirpes. Spouses of beneficiaries are eligible for HEMS distributions only and do not hold any withdrawal rights or powers of appointment.
•  Trust Protector: Victoria Chambers, serving in a non-fiduciary capacity. The Trust Protector holds the following enumerated powers: (i) the power to modify administrative provisions of the trust to respond to changes in law or circumstances; (ii) the power to change the situs and governing law of the trust; and (iii) the power to remove and appoint successor trustees, including the institutional trustee.
•  Expected GRAT Remainder Interests: Upon the termination of GRATs A, B, and C (in 2025 and 2026, respectively), any remaining trust assets in excess of the final annuity payments will pass to the Dynasty Trust as the designated remainder beneficiary. This is the primary mechanism through which the Dynasty Trust is expected to receive the bulk of its assets, projected at $35,000,000 to $50,000,000 in excess appreciation.
The Dynasty Trust situs in Delaware was selected following a comprehensive analysis comparing Delaware, Nevada, and South Dakota, as documented in the Dynasty Trust Situs Analysis (Document 13). Delaware was chosen based on its mature body of trust law, the absence of a rule against perpetuities, favorable directed trust statutes, the absence of state income tax on trust income from non-Delaware sources where the trust has no Delaware resident beneficiaries, and the availability of Northgate Trust Company of Delaware as a well-regarded institutional trustee.
3.3 The Caldwell Family Foundation
The Caldwell Family Foundation (the "Foundation") was established to provide a structured and enduring platform for the family's philanthropic activities, with a focus on arts, education, and environmental conservation in the New York metropolitan area.
•  Incorporation: The Foundation was incorporated as a New York not-for-profit corporation on March 20, 2023 (New York Department of State Filing No. 230320-001847).
•  Employer Identification Number: 88-3021547.
•  Registered Address: 330 Madison Avenue, Suite 2401, New York, NY 10017.
•  Tax-Exempt Status: IRS Form 1023 (Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code) was filed on May 15, 2023. The IRS determination letter granting recognition of the Foundation's tax-exempt status as a private foundation under Section 509(a) was received on July 14, 2023. A copy of the determination letter and the related transmittal memorandum are included as Document 48 in the closing document set.
•  Initial Funding: $10,000,000 in cash, contributed by Jonathan R. Caldwell and Eleanor V. Caldwell on April 1, 2023. The contribution is attributed equally to each spouse — $5,000,000 from Jonathan and $5,000,000 from Eleanor — for federal gift and income tax purposes.
•  Charitable Income Tax Deduction: Based on an estimated 2023 adjusted gross income of $22,500,000, the charitable deduction for contributions to a private foundation is limited to 30% of AGI, or $6,750,000, in the year of the contribution. The remaining $3,250,000 of the deduction may be carried forward for up to five additional tax years under Section 170(b)(1)(D) of the Code.
Board of Directors:
•  Compensation: No compensation is paid to any family-member director of the Foundation. Dr. Elsworth serves as an independent director and may receive reasonable compensation for services rendered, subject to the Foundation's conflict of interest policy.
•  Mission: The Foundation's mission is to support organizations and initiatives in the areas of arts, education, and environmental conservation, with a primary geographic focus on the New York metropolitan area.
•  Private Foundation Compliance: The Foundation's organizational documents and operating procedures are designed to ensure ongoing compliance with Sections 4940 through 4946 of the Code, including the rules governing the excise tax on net investment income (§ 4940), self-dealing (§ 4941), minimum distributions (§ 4942), excess business holdings (§ 4943), jeopardizing investments (§ 4944), and taxable expenditures (§ 4945). A comprehensive Private Foundation Compliance Memorandum (Document 15) has been prepared for the Board's reference.
3.4 Caldwell Family Insurance Trust (ILIT)
The Caldwell Family Insurance Trust (the "ILIT") was established to own a life insurance policy on the joint lives of you and Eleanor, the proceeds of which will be payable outside of both of your taxable estates, thereby providing liquidity to fund estate tax obligations and other expenses upon the second death.
•  Trust Agreement: Executed March 15, 2023.
•  Grantor: Jonathan R. Caldwell.
•  Trustee: Northgate Trust Company of Delaware (Philip A. Rossiter).
•  Life Insurance Policy: $15,000,000 second-to-die universal life insurance policy issued by Beacon Life Assurance Company, Policy No. BLA-2023-77419, insuring the lives of Jonathan R. Caldwell and Eleanor V. Caldwell. The policy was procured through Glenmore Insurance Brokerage LLC (Nathan C. Freed) following a competitive underwriting process.
•  Annual Premium: $187,500.
•  Crummey Beneficiaries: Thomas R. Caldwell, Katherine C. Hartfield, and Olivia G. Caldwell. Each Crummey beneficiary is entitled to withdraw up to $5,000 from any contribution to the ILIT within 30 days of receiving written notice of the contribution (a "Crummey withdrawal right"). The Crummey withdrawal right is designed to qualify each contribution for the annual gift tax exclusion to the extent of the withdrawal right amount.
•  Annual Exclusion Coverage: $51,000 (3 beneficiaries × $17,000 annual exclusion for 2023). Because the annual premium of $187,500 exceeds the $51,000 covered by the annual exclusions (based on the $17,000 per-donee exclusion for 2023, which exceeds the $5,000 per-beneficiary Crummey withdrawal amount — the annual exclusion coverage is effectively $51,000 based on the full per-donee exclusion applicable to the contribution, of which $15,000 per beneficiary is sheltered by the Crummey right and the remainder of the contribution is treated as a taxable gift), the balance of the premium — approximately $136,500 per year — will be treated as a taxable gift utilizing your remaining lifetime gift tax exemption.
•  Estate Tax Liquidity: The $15,000,000 in policy proceeds, payable upon the second death of you and Eleanor, will be received by the ILIT outside of both taxable estates, providing a source of liquid funds to satisfy estate tax obligations, administration expenses, and other cash needs of the estate and the surviving family members.
3.5 Amended and Restated Caldwell Revocable Trust
The Caldwell Revocable Trust was originally established by you on October 3, 2010. In connection with this engagement, the trust was amended and restated in its entirety, effective April 1, 2023, to incorporate updated provisions that coordinate with the new estate planning structures and to reflect current law and best practices.
•  Credit Shelter Trust: Upon your death, the Credit Shelter Trust (also known as the "Bypass Trust" or "Family Trust") will be funded with assets equal to the then-applicable federal estate tax exemption amount, thereby utilizing your remaining estate tax exemption and sheltering the funded amount from estate tax at Eleanor's subsequent death.
•  Marital QTIP Trust: The balance of the trust estate, after funding the Credit Shelter Trust, will pass to a Qualified Terminable Interest Property ("QTIP") trust for the benefit of Eleanor V. Caldwell. Eleanor will be entitled to all net income of the Marital QTIP Trust, payable at least quarterly, and will hold a general power of appointment over the trust assets, exercisable by will. A QTIP election will be made on your federal estate tax return to qualify the marital trust for the unlimited marital deduction.
•  Coordination: The Amended and Restated Revocable Trust is designed to work in concert with the Dynasty Trust (which will hold assets transferred during your lifetime through the GRATs and the initial direct gift), the Foundation (which holds the charitable contribution), and the ILIT (which holds the life insurance policy). Together, these structures form an integrated estate plan that maximizes the efficient transfer of wealth while providing for Eleanor's financial security during her lifetime.
3.6 Pour-Over Will
A new Last Will and Testament was executed on April 1, 2023, revoking the prior will dated October 3, 2010. The new Will contains pour-over provisions directing that any assets owned by you at death that are not otherwise disposed of by beneficiary designation, joint tenancy, or other non-probate transfer mechanism shall be distributed to the Trustee of the Caldwell Revocable Trust, to be administered and distributed in accordance with the terms of the trust.
•  Executor: Eleanor V. Caldwell.
•  Successor Executor: Thomas R. Caldwell.
•  Self-Proving Affidavit: A self-proving affidavit was executed concurrently with the Will, in compliance with New York Estates, Powers and Trusts Law § 3-2.1. The attesting witnesses were Monica Reyes and Elliot Nguyen of Calderwood & Harkness LLP.
3.7 Spousal Consent
Eleanor V. Caldwell executed a Spousal Consent and Acknowledgment on April 1, 2023, in which she consented to and acknowledged the terms of the estate plan, including the creation and funding of the GRATs, the Dynasty Trust, and the ILIT, and the contribution to the Foundation. The Spousal Consent was prepared and transmitted to Pemberton, Locke & Strauss LLP in advance of execution, and Eleanor was independently represented and advised throughout the process by Rachel F. Dunlap, Esq. of that firm. Ms. Dunlap confirmed in writing that Eleanor reviewed the relevant documents, understood their terms and implications, and executed the Spousal Consent voluntarily and with the benefit of independent legal counsel.
3.8 Powers of Attorney and Health Care Directives
The following incapacity planning instruments were executed on April 1, 2023:
•  Durable General Power of Attorney: Agent: Eleanor V. Caldwell. Successor Agent: Thomas R. Caldwell. This instrument complies with the requirements of New York General Obligations Law Article 5, Title 15, and includes broad powers to manage financial, business, and legal affairs in the event of your incapacity, including the power to make gifts and manage trust interests as specifically authorized therein.
•  Health Care Proxy: Agent: Eleanor V. Caldwell. Successor Agent: Katherine C. Hartfield. This instrument complies with New York Public Health Law Article 29-C and authorizes the designated agent to make health care decisions on your behalf if you become unable to do so.
•  Living Will / Advance Directive: This instrument documents your wishes regarding life-sustaining treatment and end-of-life care, to guide your health care agent and attending physicians in the event of a terminal condition or permanent unconsciousness.
•  HIPAA Authorization: Authorized persons: Eleanor V. Caldwell, Thomas R. Caldwell, Katherine C. Hartfield, and Olivia G. Caldwell. This authorization permits the named individuals to access your protected health information under the Health Insurance Portability and Accountability Act of 1996, as amended.
4. Complete Document Index
Set forth below is a comprehensive index of all documents generated, executed, or obtained in connection with this engagement. The documents are organized by category and numbered sequentially for ease of reference. Each document is included in the closing document set delivered to you concurrently with this letter.
4.1 Engagement and Administrative Documents (Documents 1–7)
4.2 Memoranda and Analyses (Documents 8–20)
4.3 GRAT Documents (Documents 21–32)
4.4 Dynasty Trust Documents (Documents 33–40)
4.5 Private Foundation Documents (Documents 41–50)
4.6 ILIT Documents (Documents 51–56)
4.7 Revocable Trust and Will Documents (Documents 57–62)
4.8 Powers of Attorney and Health Care Directives (Documents 63–66)
4.9 Gift Tax and Valuation Documents (Documents 67–71)
4.10 Correspondence and Closing Documents (Documents 72–75)
4.11 Document Storage Instructions
The original executed documents have been organized, indexed, and delivered to you as follows:
•  Originals: Delivered to Jonathan R. Caldwell at 418 East 72nd Street, Apt. 14A, New York, NY 10021, concurrent with the delivery of this closing letter.
•  Firm File Copies: Complete copies of all documents are maintained in the Calderwood & Harkness LLP document vault at 375 Park Avenue, 42nd Floor, New York, NY 10152, in accordance with the Firm's document retention policies. These copies will be retained for a minimum of ten years following the date of this letter, and thereafter in accordance with applicable professional responsibility requirements.
•  Institutional Trustee Copies: Copies of the Dynasty Trust Agreement, the ILIT Trust Agreement, and related fiduciary documents have been provided to Northgate Trust Company of Delaware at 1201 North Market Street, Suite 1600, Wilmington, DE 19801, for their permanent files.
We strongly recommend that you store the original documents in a secure location, such as a fireproof safe or bank safe deposit box, and that you inform Eleanor, Thomas, and your other fiduciaries of the location of the originals.
5. Ongoing Obligations and Action Items
The estate plan that has been implemented involves a number of ongoing obligations and administrative requirements. While Calderwood & Harkness's engagement has concluded as of the date of this letter, it is essential that you and your advisory team remain attentive to the following action items and compliance deadlines. We have prepared an Ongoing Obligations Summary Calendar, enclosed with this letter, that consolidates these dates for ease of reference.
5.1 GRAT Annuity Payments
The most time-sensitive ongoing obligations arise from the three GRATs, each of which requires the payment of a fixed annuity amount on the anniversary of the funding date. Failure to make a timely annuity payment could jeopardize the qualification of the GRAT under Section 2702 of the Code and result in significant adverse gift tax consequences. It is therefore critical that each annuity payment be made on or before the applicable due date.
5.1.1 GRAT A — Caldwell 2023 Securities GRAT.  
Upon the making of the final annuity payment on April 15, 2025, the remaining assets of GRAT A (i.e., any appreciation in excess of the annuity payments and the Section 7520 hurdle rate) will pass to the Caldwell Family Dynasty Trust as the designated remainder beneficiary. The GRAT will then terminate.
Annuity payments may be made in cash or in kind (i.e., through the distribution of trust assets of equivalent fair market value as of the date of distribution). Because GRAT A holds publicly traded securities with readily ascertainable market values, satisfying the annuity payments should be relatively straightforward. During the annuity term, the GRAT is treated as a grantor trust for federal income tax purposes, and all items of income, gain, loss, deduction, and credit are reportable on your individual federal income tax return (Form 1040).
5.1.2 GRAT B — Caldwell 2023 Realty GRAT.  
Upon the making of the final annuity payment on May 1, 2026, the remaining assets of GRAT B will pass to the Caldwell Family Dynasty Trust. The GRAT will then terminate.
Important Liquidity Consideration: Because GRAT B holds Stonecrest Realty Holdings LLC membership interests, which are illiquid by nature, satisfying the annual annuity payments may require one or more of the following approaches: (i) distribution of Stonecrest membership interests in kind back to you as grantor; (ii) coordination with Stonecrest management (Robert M. Sinclair) to arrange entity-level liquidity events such as property sales, refinancings, or partnership distributions; or (iii) substitution of other assets of equivalent value into the GRAT corpus in exchange for Stonecrest interests, pursuant to the substitution power reserved in the trust agreement. We recommend that planning for each year's annuity payment commence no later than three months prior to the payment date.
5.1.3 GRAT C — Caldwell 2023 Carried Interest GRAT.  
Upon the making of the final annuity payment on June 1, 2026, the remaining assets of GRAT C will pass to the Caldwell Family Dynasty Trust. The GRAT will then terminate.
Fund Distribution Coordination: The timing and magnitude of distributions from Caldwell Ridgeline Capital Funds IV, V, and VI are subject to the fund managers' discretion and the performance of the underlying portfolio investments. It is critical that you coordinate with Gregory S. Fenton at Caldwell Ridgeline Capital LLC well in advance of each annuity payment date to ensure that fund distributions are sufficient to satisfy the annuity obligations. If fund distributions are insufficient, the annuity payment may be satisfied through in-kind distributions of LP interests or carried-interest positions back to you, or through the exercise of the grantor's substitution power.
5.1.4 Mortality Risk Reminder.  As we discussed at length during the planning process, each GRAT carries an inherent mortality risk. If you die during the annuity term of any GRAT, the remaining trust corpus (or a portion thereof, as determined under the applicable regulations) will be included in your gross estate for federal estate tax purposes under IRC § 2036(a). This inclusion is a known design consideration and is the principal trade-off associated with GRAT planning. The risk is mitigated by the relatively short terms of the GRATs (two and three years, respectively) and by the presence of the ILIT, which provides $15,000,000 in estate tax liquidity outside the taxable estate. Nevertheless, we encourage you to monitor this risk and to inform us promptly of any material changes in your health status.
5.2 Foundation Annual Obligations
The Caldwell Family Foundation is subject to a comprehensive set of ongoing regulatory and compliance obligations under the private foundation provisions of the Code (Sections 4940 through 4946). The Board of Directors, in consultation with Strathmore Corporation & Greaves LLP, is responsible for ensuring that the Foundation meets these obligations on an annual basis. The key requirements are summarized below:
•  Minimum Annual Distribution (IRC § 4942): The Foundation is required to distribute at least 5% of the fair market value of its net investment assets annually for charitable purposes. Based on the initial funding of $10,000,000, the Year 1 minimum distribution target is $500,000. This amount will be recalculated each year based on the Foundation's net investment asset value as of the prior year-end.
•  Annual Tax Filing: The Foundation is required to file IRS Form 990-PF (Return of Private Foundation) annually with the Internal Revenue Service. The filing deadline is the 15th day of the fifth month following the close of the Foundation's fiscal year (May 15 for a calendar-year foundation, with extension available). Strathmore Corporation & Greaves LLP (Martin J. Prescott) will prepare and file the annual return.
•  Self-Dealing Prohibition (IRC § 4941): The Foundation may not engage in any act of self-dealing with "disqualified persons," which includes you, Eleanor, Thomas, Katherine, Olivia, and their respective family members, as well as entities in which they hold a substantial interest. Prohibited transactions include sales or exchanges of property, loans, furnishing of goods or services, and payment of compensation between the Foundation and disqualified persons. No compensation is paid to family-member directors. Any proposed transaction involving the Foundation and a disqualified person must be reviewed by legal counsel before it is consummated.
•  Excess Business Holdings (IRC § 4943): The Foundation must monitor its holdings of stock or other interests in business enterprises to ensure compliance with the excess business holdings rules, which generally limit the Foundation's combined holdings with disqualified persons to 20% of the voting stock of any incorporated business enterprise (or a comparable interest in an unincorporated enterprise).
•  Jeopardizing Investments (IRC § 4944): The Foundation may not invest its assets in a manner that jeopardizes the carrying out of its charitable purposes. The Foundation's Investment Policy Statement (Document 46) establishes guidelines designed to ensure compliance with this requirement.
•  Taxable Expenditures (IRC § 4945): The Foundation must exercise expenditure responsibility when making grants to organizations that are not classified as public charities under Section 509(a)(1), (2), or (3) of the Code. The Grant-Making Policy and Procedures Manual (Document 49) sets forth the procedures for conducting due diligence, executing grant agreements, and monitoring the use of grant funds.
•  Annual Board Meeting: We recommend that the Board of Directors hold at least one formal meeting per year to review the Foundation's financial statements, grant-making activity, investment performance, and regulatory compliance. Minutes of each meeting should be prepared and maintained in the Foundation's permanent files.
5.3 ILIT Premium Payments and Crummey Notices
The ongoing administration of the ILIT requires careful coordination among you (as the source of premium payments), Northgate Trust Company of Delaware (as trustee), and the Crummey beneficiaries (Thomas, Katherine, and Olivia). The annual premium on the Beacon Life policy (Policy No. BLA-2023-77419) is $187,500. The following administrative steps must be completed each year:
1.  Premium Contribution: You contribute the annual premium amount ($187,500) to Northgate Trust Company of Delaware as trustee of the ILIT. This contribution should be made sufficiently in advance of the premium due date to allow Northgate to process the payment to Beacon Life Assurance Company.
2.  Crummey Withdrawal Notices: Within a reasonable time following each contribution (typically 30 days or less), Northgate must send written Crummey withdrawal notices to each of the three beneficiaries (Thomas, Katherine, and Olivia), informing them of their right to withdraw up to $5,000 of the contribution during a specified withdrawal period (generally 30 days from the date of the notice). A template Crummey Withdrawal Notice (Document 55) and a template Annual Premium Funding Letter (Document 56) have been prepared for Northgate's use.
3.  Annual Exclusion and Exemption Usage: The annual contribution of $187,500 is treated for gift tax purposes as follows:
•  Annual exclusion coverage (based on Crummey withdrawal rights): $51,000 (3 beneficiaries × $17,000 annual exclusion for 2023).
•  Balance of premium treated as a taxable gift: $136,500 per year.
•  This annual taxable gift amount will be charged against your remaining lifetime gift tax exemption ($1,170,000 after plan implementation). At the current rate of $136,500 per year, the remaining exemption will be fully consumed in approximately eight to nine years (approximately by 2031–2032), after which additional premium contributions may require the payment of gift tax unless the exemption amount is increased in the interim.
4.  Exemption Sunset Monitoring: The currently elevated lifetime gift tax exemption of $12,920,000 (2023) is scheduled to sunset after December 31, 2025, reverting to approximately $5,000,000 (adjusted for inflation). If the sunset occurs, the annual premium contributions of $136,500 will consume remaining exemption at an accelerated pace relative to what would be available under a reduced exemption. We recommend monitoring legislative developments and considering adjustments to the ILIT premium funding strategy as appropriate.
5.4 Gift Tax Return Filing
The 2023 Federal Gift Tax Return (IRS Form 709) for Jonathan R. Caldwell must be filed by April 15, 2024 (or by October 15, 2024, if an automatic extension of time to file is obtained by filing IRS Form 4868 or Form 8892). The draft Form 709 and all supporting schedules and valuation summaries were transmitted to Strathmore Corporation & Greaves LLP (Martin J. Prescott, CPA) on August 1, 2023 for review, finalization, and filing on your behalf.
The 2023 Form 709 will report the following gifts and allocations:
The qualified appraisal reports prepared by Ashford Valuation Group LLC (Dr. Leonard K. Whitfield, ASA), which were received on June 15, 2023 and reviewed by Calderwood & Harkness in the C&H Review Memorandum (Document 70), should be attached to the Form 709 as supporting documentation for the valuation discounts applied to the Stonecrest membership interests and the Caldwell Ridgeline Capital LP interests and carried interest positions.
Eleanor V. Caldwell's Form 709: Eleanor will also need to file a 2023 Form 709 to report her $5,000,000 share of the Foundation contribution. This filing should be coordinated with Strathmore Corporation & Greaves LLP to ensure consistency in reporting and to allocate any applicable GST exemption as appropriate.
5.5 GST Exemption Allocation
The generation-skipping transfer tax is a separate tax imposed in addition to the estate and gift taxes, and is designed to prevent the avoidance of transfer taxes through transfers to grandchildren and more remote descendants. Proper allocation of your GST exemption is essential to ensure that the Dynasty Trust and other structures achieve the intended tax benefits.
•  Initial Dynasty Trust Funding: $5,000,000 of your GST exemption has been allocated to the initial funding of the Dynasty Trust. This allocation will be reported on your 2023 Form 709 and will result in an inclusion ratio of zero for the trust with respect to the initial corpus.
•  GRAT Remainder Interests — ETIP Rules: Under the estate tax inclusion period ("ETIP") rules of IRC § 2642(f), no allocation of GST exemption may be made to the remainder interest in a GRAT during the annuity term, because the GRAT assets remain includible in your gross estate under Section 2036 during that period. Accordingly, GST exemption cannot be allocated to the GRAT remainder interests until each GRAT terminates and the remainder passes to the Dynasty Trust.
•  Post-Termination Allocation: Upon the termination of each GRAT (GRAT A in 2025; GRATs B and C in 2026), the remainder amounts passing to the Dynasty Trust will need to be reported on the Form 709 for the year of termination, and GST exemption should be allocated to those amounts at that time. The amount of GST exemption required will depend on the fair market value of the remainder assets at the time of termination. This is a critical planning step, and we recommend that you coordinate the timing and allocation with Sylvia Hartwell at Calderwood & Harkness and Martin J. Prescott at Strathmore Corporation & Greaves well in advance of the Form 709 filing deadlines for the applicable years.
5.6 Revocable Trust and Will Administration
The Amended and Restated Caldwell Revocable Trust and the new Pour-Over Will form the core of your testamentary plan. To ensure that these documents function as intended, the following ongoing administrative steps should be taken:
•  Beneficiary Designation Review: Review and, as necessary, update the beneficiary designations on all retirement accounts (including IRAs, 401(k) plans, and any other qualified or nonqualified deferred compensation arrangements), brokerage accounts, bank accounts, and other financial accounts to ensure that they are coordinated with the Revocable Trust and the overall estate plan. Assets with beneficiary designations pass outside of probate and outside of the pour-over will, so proper coordination is essential.
•  Retitling of Assets: Ensure that all assets intended to be held in the Revocable Trust are properly titled in the name of the trust or its trustee. Any assets held in your individual name at death will be subject to probate before passing to the trust through the pour-over will, which may result in delay and additional administrative expense.
•  Portability Election: In the event of the death of either you or Eleanor, the surviving spouse should consider filing a federal estate tax return (Form 706) for the deceased spouse's estate, even if no estate tax is due, in order to make the "portability election" under IRC § 2010(c)(5). This election preserves the deceased spouse's unused estate tax exemption for use by the surviving spouse, effectively providing the surviving spouse with a combined exemption equal to the sum of both spouses' individual exemptions. The decision to make a portability election should be made in consultation with Sylvia Hartwell and Martin J. Prescott at the appropriate time.
5.7 Dynasty Trust Administration
The Dynasty Trust is a long-term, perpetual trust that will require ongoing administration for the benefit of multiple generations of Caldwell family members. The key administrative responsibilities are as follows:
•  Co-Trustee Coordination: Northgate Trust Company of Delaware (institutional trustee) and Thomas R. Caldwell (family trustee) serve as co-trustees with shared responsibility for trust administration. The co-trustees should maintain regular communication and coordinate their activities in accordance with the terms of the Trust Agreement and the applicable provisions of Delaware law.
•  Investment Management: The investment of the Dynasty Trust's assets should be guided by the Investment Policy Statement (Document 38) and coordinated with Havensbrook Wealth Advisors LLC (Diana R. Linden, CFP®). The Investment Policy Statement establishes asset allocation targets, risk parameters, diversification requirements, and performance benchmarks. The co-trustees should review the trust's investment portfolio at least quarterly and should conduct a comprehensive review of the Investment Policy Statement at least annually.
•  Distribution Committee Operations: The Distribution Committee, consisting of Thomas R. Caldwell, Katherine C. Hartfield, and Olivia G. Caldwell, is responsible for approving discretionary distributions exceeding $100,000 per beneficiary per calendar year. The Committee should follow the Operating Procedures (Document 39), which require written requests, unanimous approval, and documentation of the basis for each distribution decision. Distributions within the HEMS standard and below the $100,000 threshold may be made by the co-trustees without Distribution Committee approval.
•  Tax Reporting: The Dynasty Trust will be required to file an annual federal income tax return (Form 1041) or, during any period in which the trust is treated as a grantor trust, to provide a grantor trust information letter to the grantor. The determination of whether the Dynasty Trust is a grantor trust or a non-grantor trust will depend on the specific provisions of the Trust Agreement and the identity of the grantor at any given time. Tax return preparation should be coordinated with Strathmore Corporation & Greaves LLP.
•  Delaware Situs Maintenance: The trust's situs in Delaware provides significant legal and tax advantages, as described in the Dynasty Trust Situs Analysis (Document 13). The co-trustees should monitor developments in Delaware trust law and ensure that all statutory requirements for maintaining Delaware situs are satisfied, including the maintenance of an institutional trustee with a principal place of business in Delaware.
6. Recommendations for Future Review
An estate plan of this complexity and magnitude should not be viewed as a static document or a one-time exercise. Rather, it should be treated as a living framework that is periodically reviewed and updated to reflect changes in law, family circumstances, and asset composition. We offer the following recommendations for future review.
6.1 Annual Review
We recommend that you conduct an annual review of the estate plan, ideally in coordination with Calderwood & Harkness LLP, Havensbrook Wealth Advisors LLC (Diana R. Linden), and Strathmore Corporation & Greaves LLP (Martin J. Prescott). The annual review should encompass the following topics:
•  Performance of GRAT assets relative to the 5.0% Section 7520 hurdle rate, with an assessment of whether the GRATs are on track to produce the projected excess appreciation;
•  Review of the Foundation's grant-making activity and compliance with minimum distribution requirements and other regulatory obligations;
•  Assessment of overall plan effectiveness in light of current asset values, tax projections, and family circumstances;
•  Coordination with Strathmore Corporation & Greaves for tax return preparation and compliance monitoring, including the timely filing of Forms 709, 1041, and 990-PF; and
•  Identification of any additional planning opportunities that may have arisen since the prior review.
6.2 Changes in Law
The federal estate, gift, and GST tax regime is subject to ongoing legislative and regulatory change, and such changes can have a profound impact on the effectiveness and design of your estate plan. We recommend monitoring the following areas in particular:
•  Exemption Sunset: The currently elevated lifetime gift and estate tax exemption amount ($12,920,000 for 2023) was enacted as part of the Tax Cuts and Jobs Act of 2017 and is scheduled to sunset after December 31, 2025, reverting to the pre-2018 level of approximately $5,000,000 (as adjusted for inflation, estimated at approximately $6,800,000 to $7,000,000 for 2026). This sunset would significantly reduce the amount that can be transferred free of gift and estate tax, and could affect future planning opportunities. The IRS has issued proposed regulations (REG-106706-18) confirming a "no clawback" rule, which provides that gifts made during the period of the elevated exemption will not be subject to additional estate tax if the exemption is subsequently reduced. This is an important protection for the gifts already made under this plan.
•  GRAT Reform Proposals: Various legislative proposals have been introduced in Congress in recent years that would, if enacted, impose a minimum term for GRATs (e.g., 10 or 15 years), require a minimum taxable gift (e.g., 25% of the value of assets transferred to the GRAT), or otherwise restrict the use of zeroed-out GRATs as a wealth transfer technique. While no such legislation has been enacted as of the date of this letter, these proposals remain active areas of legislative discussion and could affect the viability of successive GRAT planning in the future.
•  State Tax Law Changes: Changes in the tax laws of Delaware, New York, Connecticut, and New Jersey could affect the situs of the Dynasty Trust, the income tax treatment of trust income, and the property tax obligations associated with the Stonecrest real estate portfolio. In particular, any changes to Delaware's favorable trust income tax provisions or perpetual trust statute should be monitored, as they could affect the tax efficiency of the Dynasty Trust's Delaware situs.
6.3 Changes in Family Circumstances
Significant changes in the personal or family circumstances of the beneficiaries should prompt a review of the trust terms, beneficiary designations, and distribution provisions. Examples of triggering events include:
•  Births and Deaths: Any births or deaths among the beneficiaries or their issue will affect the per stirpes distribution scheme and may warrant amendments to beneficiary designation schedules or adjustments to trust provisions.
•  Marriages and Divorces: The marriage or divorce of a beneficiary may have implications for the trust's distribution provisions, particularly the limitation on HEMS-only distributions to spouses of beneficiaries. Any premarital or postmarital agreements involving trust beneficiaries should be reviewed for consistency with the trust terms.
•  Changes in Residence: A change in the domicile or residence of a beneficiary to a state with different income tax or estate tax rules could affect the tax efficiency of distributions from the Dynasty Trust or other planning structures.
•  Olivia G. Caldwell: Olivia is currently unmarried with no children. Any change in her family circumstances — including marriage, the birth of children, or a change in residence — may warrant adjustments to trust provisions, beneficiary designations, or Distribution Committee procedures.
•  Grandchildren: Your current grandchildren — James (age 8), Charlotte (age 5), Lucas (age 3), and Nora (age 1) — are beneficiaries of the Dynasty Trust. As they reach various milestones (e.g., school age, college, adulthood), you may wish to consider additional planning opportunities such as education trusts, custodial accounts (UTMA/UGMA), or Section 529 plans. The Dynasty Trust's HEMS distribution standard already permits distributions for education, but supplemental vehicles may provide additional flexibility or tax benefits.
6.4 Asset Changes
Material changes in the composition or value of your assets should be evaluated for their impact on the estate plan, including the following:
•  Stonecrest Realty Holdings LLC: Significant changes in the value of the Stonecrest properties — whether through appreciation, depreciation, property sales, or acquisitions — should be monitored for their impact on GRAT B's performance relative to the Section 7520 hurdle rate, the ability to satisfy GRAT B annuity payments, and the overall composition of the Dynasty Trust upon GRAT termination. Any disposition of properties by Stonecrest should be coordinated with the GRAT B annuity payment obligations and may trigger valuation and tax reporting considerations.
•  Caldwell Ridgeline Capital LLC: Changes in the performance of Funds IV, V, and VI — including fund exits, capital calls, distributions, and changes in net asset value — should be monitored for their impact on GRAT C's annuity payment obligations and remainder value.
•  Art and Collectibles: Your art and collectibles collection, valued at approximately $9,000,000, remains in your taxable estate and has not been the subject of any transfer-tax planning under this engagement. You may wish to consider future charitable contributions of artwork to the Foundation or to public museums (which may generate income tax deductions at fair market value for long-term capital gain property donated to qualifying organizations), or additional estate planning techniques such as a qualified personal residence trust or a fractional interest gift program.
•  Other Asset Acquisitions or Dispositions: Any significant acquisition or disposition of assets — including the purchase or sale of real property, business interests, or investment positions — should be reviewed for its impact on the overall estate plan and may warrant amendments to trust schedules, beneficiary designations, or the Revocable Trust.
6.5 Insurance Review
The $15,000,000 second-to-die policy held in the ILIT should be reviewed periodically to ensure that the coverage amount remains adequate relative to the projected estate tax liability. As the estate plan matures and assets are transferred to the Dynasty Trust through the GRAT remainders, the projected estate tax liability will change, and the appropriate level of coverage should be reassessed.
•  Coverage Adequacy: If the estate grows significantly or if legislative changes result in higher estate tax rates or lower exemption amounts, the $15,000,000 policy may be insufficient to cover the projected estate tax liability. Conversely, if the GRATs perform as projected and significant wealth is successfully transferred to the Dynasty Trust, the residual taxable estate may be smaller than currently projected, and the existing coverage may be more than adequate.
•  Policy Performance: The Beacon Life universal life policy is a cash-value policy whose performance depends on crediting rates and the insurer's financial strength. We recommend periodic review of the policy's cash value accumulation, crediting rates, and cost-of-insurance charges with Nathan C. Freed at Glenmore Insurance Brokerage LLC to ensure that the policy remains on track to provide the death benefit as projected without requiring increased premium payments.
6.6 Successive GRAT Planning
Upon the termination of the current GRATs (GRAT A in April 2025; GRATs B and C in May and June 2026, respectively), you should consider implementing successive (rolling) GRATs to continue transferring appreciation to the Dynasty Trust. Rolling GRATs involve reinvesting the annuity payments received from the terminating GRATs into new GRATs, thereby "restarting the clock" and capturing additional appreciation above the then-current Section 7520 rate in each successive GRAT.
The effectiveness of successive GRATs will depend on the Section 7520 rate at the time of each new GRAT's establishment, the expected rate of return on the contributed assets, and the legislative environment (including whether any GRAT reform proposals have been enacted). We recommend that you discuss the opportunity for successive GRAT planning with Calderwood & Harkness at the time each current GRAT approaches its termination date.
7. Engagement Conclusion
We hereby confirm that all work contemplated under the Engagement Letter dated February 15, 2023, as supplemented by the Engagement Scope Addendum — Tax Advisory Services (Document 6), has been completed in full. The original engagement fee estimate was $1,850,000, with an agreed-upon fee cap of $2,100,000. A final billing summary reflecting all fees and disbursements incurred in connection with the engagement is available from Howard Quinn, Billing Partner, upon request.
The matter (No. 1034-00004; Billing Code 78412-JRC) is hereby closed as completed effective September 29, 2023.
We wish to express our sincere appreciation for the trust and confidence you have placed in Calderwood & Harkness LLP by entrusting us with this important engagement. It has been a privilege to work with you and Eleanor, and with your extended advisory team, to design and implement an estate plan that we believe will serve the Caldwell family well for generations to come.
Please do not hesitate to contact us at any time if you have questions regarding the implemented structures, the ongoing obligations described in this letter, or any other aspect of your estate plan. We would welcome the opportunity to assist you with fu