Tutorial Overview

1. ExecPlan 5.0Comprehensive FinancialPlanning SoftwareSample Case TutorialUSE PAGE DOWN/UP OR ARROW KEYS TO MOVE TO NEXT/PREVIOUS SCREEN.If you are running ExecPlan while viewing this tutorial, press Alt-Tab to switch between programs.

2. Tutorial Overview • ExecPlan was designed to be able to model the most complex cases from the start. This enables ExecPlan to handle basic tasks with ease, while providing the power and flexibility to model more complex situations. • The premise of ExecPlan is that to do accurate planning, you first must have accurate cash-flow, and you can not have accurate cash-flow, unless you have accurate taxation. And you can not have accurate tax calculation if your software makes assumptions. ExecPlan does not make assumptions, but rather gives the user the flexibility to decide how much detail is needed. • For those who are using ExecPlan in trial mode you will be able to view most of the reports, but will not be able to print or save these reports. • Words in “ “ represent fields and values. Words in BOLD represent an entry. • The slides with the Title Heading in blue indicate that this set is for licensed users and will serve no purpose for trial version users. • The slides with the Title Heading in red indicate more advanced features that are not necessary to understand for the operation of ExecPlan. • NOTE this case will model only a fraction of what ExecPlan can do. If you have a specific question, you may contact us at 1(800)850-8444 • Lets get started…Open your ExecPlan.

3. Welcome Screen • The welcome screen provides five options. New Plan, Edit a Plan and Cancel are self explanatory • The System Setup is used to inform ExecPlan which word processor you use and where it is located, we will come back to this later. • The Funding Utilities are sub-programs within ExecPlan that are used to do basic calculations. We will not explore these in this tutorial since they are simple and easy to learn on your own. • Please click “Start a New Plan”. ExecPlan Tutorial Presentation 2/11/2002 by Robert Fourman

4. Starting a New Plan • Enter the starting year of the plan. • Then enter the # of years for the client’s projected illustration, i.e. the client is 41 and you want the client to live until 90, enter 50. • If you plan to have an initial case and a with recommendation case, then enter 2 for # of cases. • Please click OK.

5. Main Data Screen • You are now in the Main Data screen. • Data entry in ExecPlan is organized in a simple folder/file system. • On your left you will see 10 main folders, next to the folder is the name of the folder and a number. This number represents how many entries are in this folder. • On the right hand side you will note the sub folders or sets under the main folder that your are in for both cases (Initial and Revised). • At this time please choose Options then System Setup.

6. System Setup • Now click your Options Tab at the top of your screen, then choose System Setup. • Next choose the Word Processor Tab. Then choose your word processor. You may also go to the Primary Text File Name field and choose which word report you would like for your text report. • Finally choose the Tax Computation Tab. This page will allow you to sunset all or any part of the 2001 Tax Reconciliation and Relief Act. • Please click OK.

7. Overview-Cases • Note the three boxes at the bottom of your screen. • These boxes illustrate which case and what scenario you are entering data in. • Currently data is being entered into both Initial and Revised cases in the Common Data Scenario. • ExecPlan creates these 2 cases so you can have a “before and after” or look at two possible planning alternatives, with each case generating their own reports. • If you click on the “Data Input” button at the bottom of your screen, you will have the option to enter data into either or both cases at the same time. Initially you should enter data into both cases at the same time, with the intent of later making your alterations all at once..

8. Overview-Scenarios • If you click the scenario box you will note you are in Common Data Scenario. • Common Data Scenario is data shared for all scenarios. • Data is entered into Common Data Scenario for the client’s current situation, assuming that the client never dies, becomes disabled or retires. • Each scenario will then take the data from the Common Data Scenario and apply the appropriate changes for that event; i.e. in the At Client’s Death Scenario, ExecPlan will automatically stop the clients income, pays off insurance, etc. • You may then go to any scenario and edit or add data for that particular scenario only; i.e., in the At Client’s Disability Scenario and only for that scenario you could have the spouse go to work. Then for all other scenarios the spouse will not work. • At this point lets begin entering data in your Common Data Scenario, we will later edit specific scenarios..

9. Begin Data Entry • To begin entering data, click the Pencil Button three times. • The first click will show you the data under General Identification folder. • The second click will show you the files under Identification. • The third click will open the date entry set, so as to enter the data for that folder.

10. Type in Client’s information • This information enter here,will appear on the headings of your reports • Click “OK” after you have completed the appropriate data entry information.

11. Title Headings • If you choose the input box at the bottom of your screen, then choose input “Enter Initial or Revised case” you may then reopen identification and change the title to Recommendation. • This will allow the headings of the reports for your two cases to have different titles, one with initial and one with recommendations. • Remember, if you do this you have to go back to entering data into both cases.

12. Tax & Technical Data • To add data to “Tax & Technical Data” click the “+” next to Tax & Technical folder. • The right side of the screen is also known as the Summary Screen. • Then either click your pencil or double click the blue colored Tax Filing Status bar on the left side of the screen. • A data entry screen will appear.

13. ExecPlan - Help • ExecPlan provides an extensive array of help options. • The bottom of your screen will display in yellow over a green background; a brief description for the specific field that you are currently entering data in.

14. Continued…. • By clicking the pull down tab next to the right of the entry box, you will see a choice of your options for this field. • Please click Joint and then hit return. • If you need more information about this field, press your F9 key and you will obtain more detailed info about this entry. • If you need more information about the overall set that you are in; i.e., when you are entering data into Mutual Funds and you want more information on this set, press the F1 key.

15. Data Input Screen • Notice your choice for Tax Filing Status was automatically entered into both cases for all years. • Also notice the box in the upper left hand corner, this allows the user to leave “notes” about any data entry they make.

16. Deleting Data • If you choose the “Undo” button, the data you have just entered will be removed. • The “Del/Mod” option allows you to delete previously entered information • You can choose to remove a single entry, a subset, the information for a single case, or from both cases.

17. Tax Filing Status • For the tax status that you have just made, note Joint has carried through all proceeding years. • If you want to change the value at some point in the future, just click the year that you want to change, then enter the new value. • Note that once you have entered a value a GREEN CHECK appears next to that entry. This represents that a value has been enter in that set. • This filing status will automatically adjust itself in the appropriate scenario; i.e., in the Client Death Scenario the filing status will change to Single (Qualified Widow if there are dependents) automatically.

18. Total Dependents • Total dependents represents the number of personal exemptions that will be claimed for the client’s federal taxes. • The software will automatically default to 2 dependents for Joint status and 1 for Single. • You must adjust this number on your own; i.e., we will not assume the children move out at 18 or 21). • For this sample case, there will be 2 children, so please put 4 for the first entry, then 3 in the year 2011 and 2 in 2012.

19. Specific Percentage • This field is a more advanced field, and is not necessary to understand or enter for this tutorial. • If you choose to, for this case enter 10 in set 15 specific percentage • This field is used to globally change the rate of growth for either assets or expenses. • All sets have a number, note Specific Percentage is set 15. These set numbers let ExecPlan tie the value from one set onto another by using a formula.

20. Continued…. • Example; if we had one asset with 8%, one with 11% and one with 14% and we would like to be able to globally change their rates of return, we would enter a formula for their rates of returns as ?15*.8 ?15*1.1 and ?15*1.4 correspondingly. • The “?” tells the software take the current year value in set 15 (specific percentage, which in this case the value is currently 10), then the “ * ” tells the software to multiply this number, and the .8, the 1.1 or the 1.4 tells what number to multiply by. • This will leave rates of growth of 8, 11 and 14 for the three different assets. If now we want to see what happens if the rates of returns on my three assets double, instead of changing the rates of return on the three assets, all we would do is change the value for Specific Percentage from 10 to 20. In turn our rates of returns will change from 8, 11 ,14 to 16, 22, and 28.

21. Inflation Rate • This value is NOT used to inflate the client’s income, assets or expenses. • It is used to inflate future government related values, such as tax tables, limits to 401k contributions, personal exception allowance, AMT limits, social security benefits, etc. • For this case, please enter 3 starting in (Rate in 2002), make sure it is carried down through all the years. • There is no need to enter a value for “Rate since 1999” . Only enter this value if you want to index you tables higher than the included rates for your current version.

22. Annual Fed Tax% • This field and the corresponding field, Annual State Tax% will not be used in this demonstration. • You need not use this field for most cases. ExecPlan defaults to paying 100% of taxes each year. Use this set only if you need to illustrate the following: • These fields allows the user to “defer” for cash flow purposes a % of the clients income tax paid in that year. If this value is greater than 100, then there will be a refund due next year. If this value is less than 100, then there will be a “prior year tax paid” next year. A value with a “-”; i.e., –25,000, will pay $25,000 of the client’s current year taxes, and a “refund” or “prior year tax paid” will occur in the following year.

23. State Tax Code • For State Tax Code, click the pull down menu to choose your state, for this case choose 41 New Jersey.

24. State Tax Formula, Local Tax Formula and Past Inc.Tax Due • These sets will not be used for this case, but are used to allow the planner to create their own custom state and and local tax calculations. • By Pressing your F1 key, while in this set, you will obtained detailed help for this entry. • The Past Inc Tax Due set is used to illustrate a past due income tax being paid in the first year of the plan.

25. Specific Text • The Objective, Recommendation and Action text are optional in the ExecPlan text and will only be inserted if you enter yes in these fields. • The Table of Contents, Estate and Main text files will automatically be compiled in the text report.. • You can supplement these chapters as well as the above optional chapters with your own word files. To do so, just create the file as a word document and save it into the ExecPlan folder. Then enter the file name in the field with the text you want this file to append.

26. Long Range Planning Info • Enter birth month and year of client and spouse (7/1953 and 2/1956). • Then enter the retirement ages (62 and 59). If no entry is made here the system will default to age 65. • For life expectancy of client and spouse enter 90, the system will use an actuary table if no value is entered. • For the “alternate death” and “disability” of the client and spouse, we will leave these entries alone, ExecPlan will default these events to occur the second year of the plan. Otherwise, you may enter a value if you desire a different year. • Now “click” the Close

27. Warning Messages • ExecPlan Will display a warning message if you failed to enter data that ExecPlan thinks is important information. • This message will describe what the data is and what value we will use if you choose not to enter a value. • These warning messages will also appear if you enter illogical entries that result in a calculation to large for ExecPlan to calculate. Such an example might be entering 1,000,000 shares of stock at $1 a share then accidentally entering $50,000 per year in dividends per share. This would result in $50 billion in ordinary income and a warning will come up and tell you that you have exceeded our AGI limitation. • To activate this feature, you must go to Options then System Setup, then choose “on” for Input Warning.

28. Data Entry Continued.… • Please click the “minus” signs next to the yellow folders to close that branch of the folder tree. Do it often to keep things organized.

29. Social Security Information • Click on the “+” next to the Family & Social Security folder. Then double click the Soc Sec Information folder.

30. Continued…. • ExecPlan calculates the client’s SS benefits based on their income that you will be providing later on. • To get a more accurate calculation as well as providing survival benefits, we will need some information on the clients past history. Again it is not necessary, but would provide more accurate projections. • For ”Age Work Began” in this case enter 21 for both client and spouse.

31. Continued…. • For “% Wage Base” for the client and spouse for this case enter 100 • The “wage base” is what Social Security uses to determine the client’s benefits. Currently the wage base is approximately $70,000. So, for example, if the client has averaged an income of $70,000 or more they would be entitled to 100% of benefits, if they have averaged $35,000 in income they would be entitled to 50% of benefits. • For “Age Benefit In Client” and “Age Benefit In Spouse” enter 62, this is the year in which the client and/or spouse will begin receiving benefits from Social Security. • If you want to enter your own values for benefits, type “0” into each entry. Then later we will show you where you can enter your own values • Once entered, click closed.

32. Child’s Information • Double click on the “Each Child Information” folder to open it. • For this case please enter two children by typing in a name such as Matthew, in the title field in the upper left hand corner. Then enter a birth year of 1990. • Next click the “New” button on the left hand side, and repeat this task, but with a child named Randi and a birth year of 1989. • These sets are not necessary unless you are concerned about Social Security survival benefits, the education IRA, Hope credit, the child care tax credit or the earned income tax credit. • Once all entered, click “close”

33. Assets • Again at this time, close the groups on the folder tree by clicking all the minus signs. • Next click open the Assets folder. • Then click open your Idle cash on hand.

34. Idle Cash on Hand • For this case “Idle Cash on Hand” will represent the client’s checking account. • Please change the title field to Checking by placing your pointer in the “Title” box and deleting average idle cash and entering Checking. • Enter 1000 in the “Beginning 2002 Balance”. • You can skip characteristics, and just click the close button.

35. Time Deposits • There are three types of Time deposits. For this case we will review only one, though all three are very similar in nature for data entry. • Please open a Savings/Now account.

36. Savings/Now, CDs and Money Market accounts • Please enter 50000 as “Beginning 2002 Total” Now enter a 2 for ”2002 Interest Rate %”. • In this case we will be making no “Cash Deposits” and we will be making no “Withdrawals” at this time. • If you wanted to, you can just click on either field and then type in the amount desired. For “Withdrawals”, you can only withdraw what is available; i.e., if you type in 90000 to withdraw and there is only 50000, then you will only get 50000. • By pressing F1 key at anytime, you will be able to obtain detailed information about this or any set • Please click “characteristics” now.

37. Asset “Characteristics” field • All assets have characteristics. It is up to you to define as many characteristics as you choose. Obviously, the more information you provide the more accurate your results. • ExecPlan will assess the type of asset and provide defaults so entry is not usually necessary. • It is not necessary to fill in all or any of these fields, it is just recommended. • The next few slides will go over each characteristic’s field, its possible entries and the default. • After you review the characteristics fields, please click “Close’ to proceed to the next data entry.

38. Ownership Code • The Default for the ownership code is client. This means that if no entry is made here ExecPlan will ownership of the asset to the client. • How to change the defaults, will be explained at the end of this tutorial. • For this case choose 2 – Joint. • Please note the Trust/Client and Trust/Spouse options. These options are used to represent an irrevocable trust. As such, this asset will show in the estate reports as ‘passing on’ to Trust and Heirs exempt from estate tax calculations. This option is useful in modeling a CRT for example.

39. Cash Code • The “Cash Code” lets ExecPlan know how you want to treat the interest or dividend income from this asset. • If you read the bottom of your screen you will note that leaving the entry as is will mean that interest income will flow into the clients everyday cash-flow, while choosing a 1 will reinvest the interest in that asset. Please enter 1 for this case.

40. % to Spouse • This field is ONLYneeded if you are using. or plan to use a “Present Will”. A ‘Present Will’ allows you to dictate how much of this asset will pass onto the surviving spouse. • With an Optimum, Simple, or UTC credit shelter will, this field is not necessary.

41. Sale Order • The “Sale Order” field allows the user to choose which assets are liquidated first to meet cash shortfalls. If in any given year the client has a cash shortfall, ExecPlan will look for the asset with the lowest number, and begin liquidating enough of this asset to meet the shortfall. If there is still a shortfall the software will proceed to the next lowest numbered asset. • TIP--- You can “space out” the number order i.e. 2 then 6 then 11 and 15 and 23 etc. This will allow you more flexibility in rearranging the sale order or for adding additional assets in your sale order stream • For this case enter 3.

42. Asset Type and Risk Factor • These fields are not necessary to enter, since ExecPlan will fill these entries in automatically based on the type of asset. • If you would like to override the defaults, just follow the instructions at the bottom of the screen.

43. % Nonresident • This field is used to divert a percentage of the assets income for state tax calculations.

44. Miscellaneous# • This field is used ONLY for IRAs, Company Retirement Plans, Municipal Bonds, Inv/Tax Shelters, Stock Options, Sole Proprietorships, Partnerships, Small Business Corps and S Corporations. • For IRA’s and Company Retirement Plans this entry allows the user to define what type of plan this is for taxable limitations; i.e., Is it a ROTH IRA or Educational IRA? Is it a 401k or 457b?, etc. • For Municipal Bonds, a “1” in this field will tax the interest at the state level. • For all of the business interests, the value in here will determine what % of the asset and its income will survive the owners death.

45. Investment Type, Disposition Year and Group# • This entry is not necessary for most assets. • The investment type field is used to indicate the asset’s treatment under the post-1986 investment interest and passive loss rules. • The Disposition Year field will have no effect unless the activity is passive and losses are incurred in the activity. • The Group# is used to identify passive activities when the activities are entered in several input screens • Press the F9 key for additional info.

46. Data Entry Continued.. • Notice next to “General Identification” you will have the number 17 and next to “Assets” you have the # 2. These numbers represent how many entries you have for that folder. • Note on the aqua colored bar on the right hand side of the screen illustrates the asset, its current value and its computed future values. • Also note the DSI number. Every time you put in an entry, that entry is assigned a DSI #, at this point your Savings/NOW Should be DSI 1. • The DSI # allows the user to use a formula to tie the value from one set to another. We will review this later. • Please now open Money Market Account.

47. Continued… • Please go to the title field and name this “Bank ABC MM”/ • Then enter 250000 for the “Beginning 2002 Total”. • Then enter 4.5 for “2002 Interest Rate %”. Note that the entered amount will flow to all the years. • Click on “Characteristics” and pick Joint for “Ownership Code” and enter a 1 for the “Cash Code”to reinvest the interest income. • Also pick 5 for “Sale Order#”. This will make our sale orders so far a 3 and a 5. Since this asset is the 5 this would be the second asset to be liquidated to meet cash shortfalls. • Then click close.

48. Saving Your Work • Please go to the upper left hand corner and click menu item File. Click the Save the Current Plan As button. • Then save it as ‘sample case’. • Once you have saved the plan, you can periodically save your changes by clicking on the little disk button on the upper left hand tool bar, next to the pencil. • ExecPlan does periodically create a Temp backup file as well as a BAK file. These files are available in case of a system lock up or premature shutdown, but we strongly recommend that you continuously save your work.

49. Stocks and Mutual Funds • Though we provide separate data entry sets for stocks and mutual funds, you can model stocks under mutual funds. In fact, in this example we will enter a stock in the Mutual Fund set. • Please double click on Mutual funds to open.

50. Continued…. • Please change the title from Mutual funds to Ford Motor Co. Stock. • Then enter 4000 for the “Shares Held”. • Then enter 52 for the “Current Value per Share”. • Then enter 33 for ‘Original Basis per Share’. Note, if this field is left empty, ExecPlan will assume the Cost Basis is the Current value, not zero. • Now Click “Growth in Market Value”.