© 2008 Northern Trust Corporation northerntrust.com Doug Regan, EVP President The Wealth Management Group Nancy Felton-Elkins, SVP Director of Fiduciary.

© 2008 Northern Trust Corporation northerntrust.com

Doug Regan, EVP President The Wealth Management Group

Nancy Felton-Elkins, SVPDirector of Fiduciary ServicesThe Wealth Management Group

Serving The Complex Needs of Ultra-Affluent Families and Family Offices

The Northern Trust Experience

The Northern Trust Experience

What Will We Do Today?

What is The Wealth Management Group?

How are we serving the Ultra High-Net-Worth client?

What may be changing?

The Northern Trust Experience

The Wealth Management Group

Founded in 1982

285 highly trained professionals on staff Our relationship managers have 18 years average industry experience

Wealth Management staff in Chicago, New York, Los Angeles and London

$194 billion in assets under administration

$30 billion in assets under management

64% of Wealth Management Group clients utilize a single family office which represent 85% of AUA

We serve 22% of the Forbes 400 families

Average client relationship size is $475 million

Over 35 client relationships with $1 billion or more in Assets under Administration

410 family relationships, with clients located in 48 states and 15 countries

Services offered: Global Asset Servicing and Reporting

Investment Management

Investment Consulting

Performance Measurement and Risk Assessment

Fiduciary

Private Banking

The Northern Trust Experience

Education

Family Financial Forum For Families and their Family Office Executives

Pre-conference for Family Office Executives

Inspiring Human Capital Exclusively for Family Members

Learning and networking

Defining values and passing them on to future generations

Global Wealth Alliance Education for our largest clients’ Family Office Executives

Client Advisory Board For the heads of Family Offices to network with each other and

to aid in improving the overall quality of services we provide to our mutual clients ― the Family

Financial Executives Group Networking Group for Family Office Financial Executives

The Northern Trust Experience

Wealth Passport

Data ConversionDownloads

Assets Held by Northern Trust Custody Trust Deposit Investment Management Brokerage Foundation Lending Mutual Funds

Hedge Funds Private Equity Investment Partnerships Family Partnerships Mutual Funds Real Estate & Property Operating Business Other (Art, Collectibles, Vehicles, etc.)

Assets Held Outside Northern Trust Custody Trust Deposit Investment Management Brokerage Foundation Lending Mutual Funds

Risk and Compliance Monitoring Transaction Initiation Performance Assessment Net Worth Summary General Ledger Asset Allocation Summary File Cabinet

Asset & Liability Reporting Partnership Reporting Standardized Financial

Statements Calendar Alerts Foundation Management

Wealth Passport

General Ledger Portfolio Management Performance Measurement

Third-Party Software

Client-Initiated or Automated Data Integration

Data

Data ConversionDownloads

Assets Held by Northern Trust Custody Trust Deposit Investment Management Brokerage Foundation Lending Mutual Funds

Hedge Funds Private Equity Investment Partnerships Family Partnerships Mutual Funds Real Estate & Property Operating Business Other (Art, Collectibles, Vehicles, etc.)

Assets Held Outside Northern Trust Custody Trust Deposit Investment Management Brokerage Foundation Lending Mutual Funds

Risk and Compliance Monitoring Transaction Initiation Performance Assessment Net Worth Summary General Ledger Asset Allocation Summary File Cabinet

Asset & Liability Reporting Partnership Reporting Standardized Financial

Statements Calendar Alerts Foundation Management

Wealth Passport

General Ledger Portfolio Management Performance Measurement

Third-Party Software

Client-Initiated or Automated Data Integration

Data

With a quarter-century of experience working with Family Offices,

Northern Trust understands their complex structures and can deliver comprehensive, customized solutions.

Wealth Passport’s secure environment empowers wealth owners and family offices to conduct business more efficiently, make strategic decisions and focus less time on administrative functions.

The Northern Trust Experience

Acquirors vs. Inheritors

Acquired Transition in socio-economic class

Identity is established partially or wholly prior to acquiring the wealth

Acquiror’s Quandary

Incorporating wealth into personal identity How much do I assimilate?

Inherited Maintenance of socio-economic class

Identity is tied up with wealth

Inheritor’s Quandary

Growing an identity out of a wealth environment

The Northern Trust Experience

What is Making My Phone Ring?

What shall I tell my children about our wealth? How can I educate them about wealth? How can I stop them from feeling entitled to it?

Is the client an acquiror or an inheritor?

Acquiror: Concern that the next generation will have too much money

Inheritor: Concern that the next generation will not have enough money-needs to work; entitlement

The Northern Trust Experience

What is Making My Phone Ring?

Why would I NOT want Dynasty Trusts?

Family Offices becoming investment companies or multifamily offices

Family Offices becoming Private Trust Companies

Aggressive tax strategies

Investment performance requests for complex portfolios to review managers and consultants

Partnerships or LLC’s to pool assets in smaller trusts

The Northern Trust Experience

What is Making My Phone Ring?

Can I put my plane, yacht, ranch, art, etc. in a trust? Estates with staffs

The ocean is coming over my seawall.

Art

Can I put the museum in a trust?

Jewelry

Timber

Natural gas wells

Yachts with crews

This is the monthly for only ONE boat in Monaco?

Airplanes

Is this the gas bill?

The Northern Trust Experience

What is Making My Phone Ring?

How many trees did you kill to produce this report?

Challenges of Information Wealth Passport encourages

customization and aggregation

Some folks want it simple

Electronic reporting, CD’s, or paper?

Fear of computers

Partnership accounting

“I’ve been elected. What should I do?” Blind trusts

The Northern Trust Experience

Where In the World Do I Go?

What states don’t have state “death” taxes?

Should I avoid moving to a Community Property state?

What does de-coupling mean? Will I pay more death taxes in the state I call home?

What states don’t have state taxes?

Where can I have a Dynasty Trust with no Rule Against Perpetuities?

Should I have an Asset Protection Trust in Delaware? In Guernsey?

I know some states have better laws for Special Needs Trusts. Which ones?

If Northern Trust in Chicago is co-trustee with my attorney in California, will my Irrevocable Trust be taxed in California if I am not a California resident?

Where is it best to establish a Private Trust Company (PTC)?

We have a PTC but want Northern Trust for:

Asset Servicing/Information Delivery / Global Assets

Co-Trustee with powers limited to making discretionary distributions

Consultant on investments, discretionary decisions, being a trustee

Can I reform this trust in Illinois? Ohio? California? Delaware?

Can I repatriate my Bahamian trust and what will it cost in taxes?

The Northern Trust Experience

The Yale Syndrome

Asset Allocation Challenges with Alternative Asset Classes

The Northern Trust Experience

The Yale Syndrome

Percentage recommendations of consultants and investment committees range from 25-80%

Passive versus Active Investments

Knowing the Trust and family objectives, goals for advisors, and risk tolerance: family meetings

Need for pooling assets, LLC’s, layered entities, schematics

Flight to safety in turbulent markets

The Northern Trust Experience

The Yale Syndrome

Lack of sophistication, need for education

The Northern Trust Experience

What In the World Are You Doing?

Facilitating family meetings

Working with multiple attorneys from several firms

Reforming, remodeling or decanting trusts

Clients willing to pay for strong attorneys and accountants

Engagement letters

Pooling assets

Filing tax returns for the underlying interests

Seeking discounts for pooled asset gifting

The Northern Trust Experience

What In the World Are You Doing?

Retainers or pay as you go and expenses

Bias to big law firms with global capabilities

Global capabilities for international legal, trust and estate planning

You wear many hats

The Northern Trust Experience

What May Be Changing?

EVERYTHING!

Investment security

The tax law

Strategies to unbundle fees

New President and Congress in 2009

Global Issues

AML for every country

Next generation Issues

Succession planning

Philanthropy

© 2008 Northern Trust Corporation northerntrust.com

Thank You

Serving The Complex Needs of Ultra-Affluent Families and Family Offices