Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Walton GRAT: Preserving Family Wealth with an Estate Freeze

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Disclosures  The Voya™ Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature and not comprehensive, the applicable laws may change and the strategies suggested may not be suitable for everyone. You should seek advice from your tax and legal advisors regarding your individual situation.  These materials are not intended to and cannot be used to avoid tax penalties and they were prepared to support the promotion or marketing of the matters addressed in this document. Each taxpayer should seek advice from an independent tax advisor.  Life insurance products are issued by Security Life of Denver Insurance Company (Denver, CO), ReliaStar Life Insurance Company (Minneapolis, MN), and ReliaStar Life Insurance Company of New York (Woodbury, NY). Within the state of New York, only ReliaStar Life Insurance Company of New York is admitted and its products issued. All companies are members of the Voya™ family of companies.  All guarantees are based on the financial strength and claims paying ability of the issuing insurance company who is solely responsible for all obligations under its policies.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Three Questions  Do you have assets whose future growth may create an estate tax problem and which you would like to preserve intact for your children or grandchildren?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Three Questions  Do you have assets whose future growth may create an estate tax problem and which you would like to preserve intact for your children or grandchildren?  Do your insurance needs call for premiums that exceed the available annual exclusions for potential “Crummey” beneficiaries?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Three Questions  Do you have assets whose future growth may create an estate tax problem and which you would like to preserve intact for your children or grandchildren?  Do your insurance needs call for premiums that exceed the available annual exclusions for potential “Crummey” beneficiaries?  Would you like to reduce some of the potential long-term risks associated with premium financing or private split-dollar?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Is there a way to potentially “freeze” the value of my estate so that I don’t pay gift or estate taxes on future asset growth?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Is there a way to potentially pre-fund an insurance trust so I don’t have to worry about keeping premium levels within my annual gift exclusions?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Is there a way to potentially provide my insurance trustee with resources to make an early exit from premium financing, private split-dollar, or other similar strategies?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Yes!

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  What is a Walton GRAT? –It’s a potential estate “freeze” technique where high-growth assets are transferred to an irrevocable grantor trust in exchange for an annuity.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN The Walton GRAT has 5 steps: 1.Client creates a Grantor Trust How Does the Strategy Work?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN The Walton GRAT has 5 steps: 1.Client creates a Grantor Trust 2.Assets transferred to Trust in exchange for Annuity How Does the Strategy Work?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN The Walton GRAT has 5 steps: 1.Client creates a Grantor Trust 2.Assets transferred to Trust in exchange for Annuity 3.Trust makes annuity payments -No income taxes to client since this is a grantor trust How Does the Strategy Work?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN The Walton GRAT has 5 steps: 1.Client creates a Grantor Trust 2.Assets transferred to Trust in exchange for Annuity 3.Trust makes annuity payments -No income taxes to client since this is a grantor trust 4.Grantor pays income taxes for Trust How Does the Strategy Work?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN The Walton GRAT has 5 steps: 1.Client creates a Grantor Trust 2.Assets transferred to Trust in exchange for Annuity 3.Trust makes annuity payments -No income taxes to client since this is a grantor trust 4.Grantor pays income taxes for Trust 5.At the end of the GRAT term, assets pass to the GRAT’s Remainder Beneficiary(ies) tax-free How Does the Strategy Work?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  Estate “Freeze” — Future asset growth may be removed from the grantor’s estate.  No Pre-Funding Required — Unlike an installment sale to a grantor trust, a GRAT does not require the grantor to gift money into the trust prior to the transaction.  Exit Strategy — A Walton GRAT can potentially provide the grantor’s irrevocable life insurance trust (“ILIT”) with funds to get out of premium financing or private split-dollar arrangements. Potential Advantages of the Walton GRAT

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  Estate Inclusion — If the client dies before the GRAT term has finished, all of the assets are brought back into her estate.  Performance Risk — The Walton GRAT technique only works if the asset used grows at a higher rate than the interest required for the annuity. Some Disadvantages of Walton GRAT

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  John & Jane Jones are married, both aged 55, and own $2 million worth of stock in the highly successful Widget Corp.  John & Jane expect shares of Widget Corp. to continue increasing in value at an annual rate of 10%.  They are willing to give up ownership of the stock in exchange for an income stream. They are also willing to use a portion of their lifetime gift exemptions to move future asset growth out of their estates. The Walton GRAT in Action John & Jane Jones* * These hypothetical results are for illustrative purposes only and should not be deemed a representation of past or future results. This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  John & Jane direct their attorney to create a Walton GRAT. John & Jane Jones* * These hypothetical results are for illustrative purposes only and should not be deemed a representation of past or future results. This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  John & Jane direct their attorney to create a Walton GRAT.  John & Jane then transfer $2 million worth of Widget shares into the GRAT in exchange for a 10-year annuity based on a Section 7520 rate of 2.00%.** John & Jane Jones* * These hypothetical results are for illustrative purposes only and should not be deemed a representation of past or future results. This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required. ** This was the § 7520 rate in effect for September, 2013

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  John & Jane direct their attorney to create a Walton GRAT.  John & Jane then transfer $2 million worth of Widget shares into the GRAT in exchange for a 10-year annuity based on a Section 7520 rate of 2.00%.**  The Trust makes annual payments of $223,000 for 10 years. John & Jane Jones* * These hypothetical results are for illustrative purposes only and should not be deemed a representation of past or future results. This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required. ** This was the § 7520 rate in effect for September, 2013

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  Estate Freeze: At the end of 10 years, John & Jane have moved over $1.6 million outside of their estates (assuming at least one of them survives the GRAT term). -No transfer taxes have been paid and the use of a grantor trust makes the sale income-tax neutral because the GRAT is ignored for income tax purposes. What Have We Potentially Accomplished?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  Estate Freeze: At the end of 10 years, John & Jane have moved over $1.6 million outside of their estates (assuming at least one of them survives the GRAT term). -No transfer taxes have been paid and the use of a grantor trust makes the sale income-tax neutral.  Funded Life Insurance Trust: Assets transferred from the GRAT to the ILIT (the remainder beneficiary) can be used to purchase life insurance on John and/or Jane to create a larger inheritance for their family. -Unlike a traditional life insurance trust, annual exclusion gifts may not be needed for the Trust to purchase life insurance. What Have We Potentially Accomplished?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  Estate Freeze: At the end of 10 years, John & Jane have moved over $1.6 million outside of their estates (assuming at least one of them survives the GRAT term). -No transfer taxes have been paid and the use of a grantor trust makes the sale income-tax neutral.  Funded Life Insurance Trust: Assets inside the Trust can be used to purchase life insurance on John and/or Jane to create a larger inheritance for their family. -Unlike a traditional life insurance trust, no annual exclusions will be needed for the Trust to purchase life insurance.  Exit Strategy: John & Jane have supplied the Trustee with assets which can be used to “exit” premium financing or private split-dollar arrangements. What Have We Potentially Accomplished?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN To learn more about Walton GRATs, talk to your Voya representative.