1. For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Basic Trust Planning From Nationwide ® Advanced Sales: The Specialists

2. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Some things you need to know This presentation was not intended by the author to be used, by anybody for the purpose of avoiding any penalties that may be imposed on you pursuant to the Internal Revenue Code. The information contained herein was prepared to support the promotion, marketing and/or sale of life insurance contracts, annuity contracts and/or other products and services provided by Nationwide Life Insurance Company. Federal tax laws are complex and subject to change. Neither the company nor its representatives give legal or tax advice. Please talk with your attorney or tax advisor for answers to your specific questions.

3. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Some things you need to know Life insurance is issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio, member of Nationwide Financial®. © 2010, Nationwide Financial Services, Inc. All rights reserved. Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value

4. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Agenda Uses of Trusts Types of Trusts Advanced Trust Planning Summary and Conclusion * Please consult with a licensed estate planning attorney for further information on estate planning.

5. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Misconceptions of Trusts Complicated Expensive Confusing Only for the Ultra-wealthy Time Consuming

6. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Uses of Trusts Transfer Wealth Pay Estate Taxes Manage Estate Control Distributions Protect Heirs from Creditors Avoid Probate Provide for Charity Provide for Future Generations

7. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Common Terms Trustee –Fiduciary that manages trust assets for another’s benefit Corpus/Trust Assets –Property and income managed for another Real Estate Negotiable Instruments/Cash Life Insurance/Annuities Intellectual Property Grantor/Settlor –Person(s) that establishes/creates trust

8. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Basic Types of Trusts Revocable –May be modified or cancelled by Grantor at any time prior to death Irrevocable –Generally may not be changed or cancelled after established –May provide for future changes in tax law

9. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Revocable Trusts Uses in Estate Planning –Avoidance of Probate Usually passes by will provisions General assets are gathered and distributed Includes all property wherever situated Complicated estates could be costly to settle –Requires re-titling of assets to be effective –May avoid public disclosure of assets

10. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Revocable Trusts Does not alter estate tax liability Generally non-contestable Trust may be changed or revoked during life Becomes irrevocable at death Efficient tool for property transfer

11. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Irrevocable Trusts May not be changed or cancelled after established Assets transferred cannot be retrieved by grantor Generally, assets bypass probate and estate taxation –Life insurance exception

12. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Irrevocable Trusts Life Insurance Trusts –If policy owned by trust at inception, no lookback rule for estate tax inclusion –If existing policy transferred to trust, three year lookback for estate tax purposes Entire death benefit of policy included –Possible gift tax consequence to premium payments

13. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Life Insurance Trusts Gift tax considerations –Present interest gift exclusion –Reduction of applicable exclusion amount “Crummey” beneficiaries and rights of withdrawal I.R.S. Form 709 –Gifts of future interests Premium payment made by trustee to life insurance company

14. For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Estate Tax Exclusions Tax Year Applicable Exclusion Amount Highest Rate 2009$3,500,00045% 2010REPEAL: UnlimitedREPEAL: NA 2011-12$5,000,00035% 2013$1,000,00055%

15. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Tax Qualified Proceeds Qualified plan or IRA proceeds generally pay to named beneficiary –Will be included in taxable estate –May be included in probate estate Trust can be beneficiary May look through trust for distributions over beneficiary’s life expectancy

16. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Non-qualified Annuities Already avoid probate, but trust may be used to limit receipt by beneficiaries No I.R.S. authority to look through trust for lifetime payouts Proceeds must be paid out of annuity within five years –Trust may provide longer payout period

17. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Alternative Estate Planning Tools Credit Shelter Trusts Personal Residence Trusts GRAT’S and GRIT’S Charitable Trusts Domestic Relations Trusts

18. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Trusts Don’t Have To Be Complicated Expensive Confusing Only for the Ultra-wealthy Time Consuming

19. For broker dealer use only. Not for distribution to the general public NFM-1234A0 (03/10) For Insurance Professional use only. Not for distribution to the general public NFM-5506AO.3 (09/11) Agenda Review Uses of Trusts Types of Trusts Advanced Trust Planning

20. Questions? Independent Dealer:1-800-321-6064 Financial Institutions:1-800-893-5399 Wirehouse/Regionals:1-800-720-1511 Nationwide Agents:1-888-333-4202 Nationwide Financial Network:1-877-223-0795 BGA:1-888-767-7373