identify and explain the recommended charitable gift planning technique, including a description of how the client would implement the technique (e.g., what documents might be needed) and what the income, gift or estate tax consequences of the technique may be to the client; identify and explain how the charitable gift planning technique accomplishes the stated goals of the client, and if applicable, whether any stated goals of the client are not accomplished by the technique; and identify and explain any potential disadvantages to the client from implementing the recommended charitable gift planning technique.

Case Facts:

Last week, I met with a new client, Olda Mohney. She has asked us to recommend a charitable gift plan for her. The following description summarizes my conversation with her. PERSONAL DATA Olda Mohney was born to Bill and Melinda Greenbacks in New York, 70 years ago. Bill Greenbacks is the founder of Greenbacks Computer Enterprises, Inc., a publicly-traded company worth over $500 million. Both of Olda's parents are still living and in good health, although Bill is now retired from the company. Bill is 93 years old and Melinda is 90 years old. Olda has one sibling, Spencer Greenbacks, age 55. Spencer married his high school sweetheart and lives in Utah. They have 5 children together, ages 10 through 30. Spencer currently serves as president of his father's company. Olda married Newt Mohney 45 years ago in Fort Worth, Texas and has resided in Fort Worth ever since. Newt died 10 years ago after losing his battle with colon cancer. Olda and Newt have three children: Sam, age 43, Heidi, age 40, and Faust, age 35.

BUSINESS ENDEAVORS After Newt's death, Olda decided to get back into the work force. She shares her father's knack for entrepreneurialism and started a company, Touchright, Inc., approximately 10 years ago with $500,000. Touchright produces an alternative keyboard to be used with the nationally marketed personal computers produced by her father's company, Greenbacks Computer Enterprises, Inc. The alternative keyboard is immensely popular. Touchright's revenues are approximately $4 million per year. Olda currently owns all of the outstanding stock in Touchright, Inc. A recent appraisal values Olda's shares in Touchright at approximately $12 million. Olda plans to retire from managing Touchright at the end of this year and her son Sam will take over as President of the Touchright. Upon her retirement, Olda will cash out her deferred compensation plan of $2 million.

FINANCIAL ACCOUNTS Olda has a checking account and a savings account at Accumulation National Bank. The checking account has a balance of $50,000 and the savings account has a balance of $250,000. Olda also has a brokerage account at Manage-Your-Money Brokerage Firm. The account is professionally managed and has a current value of $1,200,000. The account consists of publicly-traded securities.

REAL ESTATE Olda's primary residence is located at 48 Old Prestige Court in Fort Worth, Texas. Olda and Newt acquired the home 25 years ago for $175,000 and have since paid off the mortgage on the home. The present fair market value of the home is $975,000. Olda also owns a vacation home located at 753 Mountain Top Road, Valley Springs, Colorado. She acquired the home 5 years ago for $450,000. The home is located 30 miles north of a rapidly developing luxury ski community in Colorado. The present market value of the home is $1,250,000.

LIFE INSURANCE POLICY Olda has one life insurance policy in force. It is a whole life policy for $750,000. Olda's three children are the designated beneficiaries. Olda took out a loan on the policy of $50,000 many years ago to help pay for her children's college education. $10,000 of the policy loan is still outstanding.

RETIREMENT PLAN Upon Newt's death, Olda received Newt's 401(k) retirement plan. Newt had been a dedicated saver and has always contributed the maximum amount that he could to his 401(k) plan. Upon the advice of her financial advisor, Olda rolled over Newt's 401(k) plan into her own IRA account after Newt's death. Her

IRA balance is currently $1,300,000. FAMILY FOUNDATION Olda's parents helped Olda and her brother with their education, and gave each of them a $500,000 graduation gift. Olda's parents have always told their children not to expect any inheritance, and Olda's parents plan to bequeath all of their assets to the Greenbacks Foundation, a private charity founded by Bill and Melinda Greenbacks, upon their deaths. The Greenbacks Foundation is located in Portland, Oregon and is exempt from federal income tax as a charitable organization described in Section 501(c)(3) of the Internal Revenue Code.

CLIENT'S GOALS 1. Olda follows in her parents' philanthropic footsteps. She would like for a substantial portion of her wealth to be donated for charitable purposes. However, she does not want her children to feel slighted, and would like to make sure that her children receive at least $5 million of her accumulated wealth. 2. Olda has been serving on the Board of Directors of the Greenbacks Foundation for many years and makes annual contributions to the foundation each year. She would like to continue to support the Greenbacks Foundation, but with no more than 5% of her total assets. 3. Olda would like a substantial portion of her wealth to be donated for research for the cure and treatment of colon cancer. Olda does not have a pre-established relationship with any cancer-research charity and is uncertain about which charities would best utilize their resources. She would like some flexibility to make donations to alternate cancer research charities. 4. Olda believes technology is the path to success in the future and is a firm believer in providing access to quality education to youth from disadvantaged backgrounds. Olda would like to establish a fund to provide scholarships to these youth for education in science, technology, engineering and mathematics (STEM). Olda is an alumnus of the Texas A&M University College of Engineering and has provided funds in the past to the Texas A&M Foundation for its annual fund. 5. Olda is concerned about her financial security. She understands that wealth can come and go quickly, and with her upcoming retirement, she will lose her regular source of income. While she is philanthropically focused, she wants to make sure than any charitable gift plan we recommend does not deplete her assets to the extent that she would not have sufficient financial resources for her living expenses.