Morgan Stanley · NYSE:MS
Morgan Stanley — Investor Presentation (December 2022)
46 slides from Morgan Stanley's investor presentation, December 2022
Slide 1: Wealth Management Perspectives
Wealth Management Perspectives
Slide 2: Basic and Advanced Income and Estate Tax Planning
INCOME AND ESTATE PLANNING TOOLKIT Basi c an d A d v an c e d In c ome an d Est at e Tax P l an n i n g Basic and Advanced Income and Estate Tax Planning Basic Estate Planning Advanced Estate Planning Income Tax Planning Gifting Early Irrevocable Credit Shelter Grantor Sale/Loan to Qualified Charita
Slide 3: Techniques by Wealth Level
INCOME AND ESTATE PLANNING TOOLKIT Techniques by Wealth Level INCOME TAX AND ESTATE INCOME TAX PLANNING ESTATE PLANNING PLANNING INCOME TAX PLANNING SPLIT INTEREST GIFTS PHILANTHROPY WEALTH TRANSFER All Wealth Levels • Long-Term Capital Gains • Donor Advised Fund • Wills / Revocable Trusts • Qualifi
Slide 4: Overview of Current Laws
INCOME AND ESTATE PLANNING TOOLKIT Overview of Current Laws 2022 2023 GIFT (LIFETIME) AND ESTATE TAX EXEMPTION • $12.06MM • $12.92MM GENERATION SKIPPING TRANSFER TAX EXEMPTION • $12.06MM • $12.92MM • Transfer Tax 40% • Transfer Tax 40% TOP GIFT, ESTATE, GST AND INCOME TAX RATES • Income Tax 37% • In
Slide 5: Basic Estate Planning
INCOME AND ESTATE PLANNING TOOLKIT Basic Estate Planning Basic and Advanced Income and Estate Tax Planning Basic Estate Planning Advanced Estate Planning Income Tax Planning Gifting Early Irrevocable Credit Shelter Grantor Sale/Loan to Qualified Charitable Charitable Charitable Life Insurance Trust
Slide 6: Gifting Early
INCOME AND ESTATE PLANNING TOOLKIT Gifting Early Gift and Estate Tax • Generally, gratuitous transfers a donor makes (except to charity or a U.S. citizen spouse) during his/her lifetime and/or at death are subject to the unified gift and estate tax. A donor may make $17,000 “annual exclusion” gifts
Slide 7: Gifting Early
H Y P O T H E T I C A L I L L U S T R AT I O N INCOME AND ESTATE PLANNING TOOLKIT Gifting Early Donor makes gifts to the beneficiary. Potential future appreciation Donor Beneficiary of the gift is removed from the estate. Gifting with valuation discounts (i.e. liquidity Valuation Discount discount,
Slide 8: Irrevocable Life Insurance Trust (ILIT)
INCOME AND ESTATE PLANNING TOOLKIT I r r e v o c a b l e L i f e I n s u r a n c e Tr u s t ( I L I T ) • Objective: To pass life insurance proceeds to family members free of federal estate tax. • Description: The ILIT is an irrevocable trust that an individual (grantor) creates during life for the
Slide 9: Irrevocable Life Insurance Trust (ILIT)
H Y P O T H E T I C A L I L L U S T R AT I O N INCOME AND ESTATE PLANNING TOOLKIT I r r e v o c a b l e L i f e I n s u r a n c e Tr u s t ( I L I T ) Insurance Premium Insured Gifts ILIT Insurance Company Death Benefit Proceeds are generally not subject to income or estate taxes. Beneficiary NOTE:
Slide 10: Credit Shelter Trust (CST)
INCOME AND ESTATE PLANNING TOOLKIT C r e d i t S h e l t e r Tr u s t (C S T ) • Objective: To maximize the amount that can pass free of estate tax to family members at the death of a married couple. • Description: The Credit Shelter Trust generally comes into effect under the Will or Revocable Trus
Slide 11: Credit Shelter Trust (CST)
H Y P O T H E T I C A L I L L U S T R AT I O N INCOME AND ESTATE PLANNING TOOLKIT Cr ed i t S h el t er Tr us t (CS T ) Use of exemption during life or at death. Total Estate Remaining assets to surviving spouse at death. No estate tax due at the time of first spouse’s death. Credit Shelter Trust Su
Slide 12: Qualified Terminable Interest Property (QTIP) Trust
INCOME AND ESTATE PLANNING TOOLKIT Q u a l i f i e d Te r m i n a l I n t e r e s t P r o p e r t y (Q T I P ) Tr u s t • Objective: To provide for one’s spouse, potentially defer the payment of federal estate or gift tax until the surviving spouse’s death, and control the ultimate disposition of tr
Slide 13: Advanced Estate Planning
INCOME AND ESTATE PLANNING TOOLKIT Advanced Estate Planning Basic and Advanced Income and Estate Tax Planning Basic Estate Planning Advanced Estate Planning Income Tax Planning Gifting Early Irrevocable Credit Shelter Grantor Sale/Loan to Qualified Charitable Charitable Charitable Life Insurance Tru
Slide 14: Grantor Retained Annuity Trust (GRAT)
INCOME AND ESTATE PLANNING TOOLKIT Grantor Retained Annuity Trust (GRAT) • Objective: To transfer potential asset appreciation to younger family members at a reduced federal gift tax cost. • Description: The GRAT is an irrevocable trust to which an individual (grantor) transfers assets and takes bac
Slide 15: Grantor Retained Annuity Trust (GRAT)
H Y P O T H E T I C A L I L L U S T R AT I O N INCOME AND ESTATE PLANNING TOOLKIT Grantor Retained Annuity Trust (GRAT) Donor funds the trust with assets. Donor pays taxes incurred Donor GRAT by the trust. Donor receives annuity payment each year for the annuity term. Remainder At end of term, asset
Slide 16: Sale/Loan to Intentionally Defective Irrevocable Grantor Trust
INCOME AND ESTATE PLANNING TOOLKIT S A L E / LO A N TO I N T E N T I O N A L LY D E F E C T I V E I R R E VO C A B L E G R A N TO R T R U S T • Objective: To transfer potential asset appreciation to younger family members at a reduced federal gift tax cost. • Description: The IDGT is any irrevocable
Slide 17: Sale/Loan To Irrevocable Grantor Trust
H Y P O T H E T I C A L I L L U S T R AT I O N INCOME AND ESTATE PLANNING TOOLKIT Sale/Loan To Irrevocable Grantor Trust Donor sells assets to Irrevocable Grantor Trust for note. Donor pays Irrevocable Grantor taxes incurred Donor Trust by the trust. Installment Note Trust assets, net of installment
Slide 18: Qualified Personal Residence Trust (QPRT)
INCOME AND ESTATE PLANNING TOOLKIT Q u a l i f i e d Pe r s o n a l R e s i d e n c e Tr u s t (Q P R T ) • Objective: To transfer a primary residence or vacation home to younger family members at a reduced federal gift tax cost. • Description: The QPRT is an irrevocable trust to which an individual
Slide 19: Qualified Personal Residence Trust (QPRT)
H Y P O T H E T I C A L I L L U S T R AT I O N INCOME AND ESTATE PLANNING TOOLKIT Q u a l i f i e d Pe r s o n a l R e s i d e n c e Tr u s t (Q P R T ) Donor transfers residence to trust and retains use of residence for the term of the trust. Donor QPRT The difference between the property value at
Slide 20: Income Tax Planning
INCOME AND ESTATE PLANNING TOOLKIT In c ome Tax P l an n i n g Basic and Advanced Income and Estate Tax Planning Basic Estate Planning Advanced Estate Planning Income Tax Planning Gifting Early Irrevocable Credit Shelter Grantor Sale/Loan to Qualified Charitable Charitable Charitable Life Insurance
Slide 21: Charitable Lead Trust (CLT)
INCOME AND ESTATE PLANNING TOOLKIT C h a r i t a b l e L e a d T r u s t ( C LT ) • Objective: To transfer potential asset appreciation to younger family members at a reduced federal gift tax cost by creating a trust that provides a fixed payment stream to charity over a specified term and then dist
Slide 22: Charitable Lead Trust (CLT)
H Y P O T H E T I C A L I L L U S T R AT I O N INCOME AND ESTATE PLANNING TOOLKIT C h a r i t a b l e L e a d T r u s t ( C LT ) Grantor Trust: Donor receives an upfront income tax deduction. Non-Grantor Trust: Trust receives an income deduction for the annuity paid. Charitable Deduction Donor makes
Slide 23: Charitable Remainder Trust (CRT)
INCOME AND ESTATE PLANNING TOOLKIT Charitable Remainder Trust (CRT) • Objective: To diversify asset holdings, potentially defer capital gains tax and benefit charity by creating a trust that provides a fixed payment stream to family members over a specified term and then distributes the remaining tr
Slide 24: Charitable Remainder Trust (CRT)
H Y P O T H E T I C A L I L L U S T R AT I O N INCOME AND ESTATE PLANNING TOOLKIT Charitable Remainder Trust (CRT) Donor funds a CRT with appreciated assets. Donor CRT Donor receives distributions each year for the term of the trust and pays taxes on the income and gains embedded in the distribution
Slide 25: Wealth Replacement Trust
INCOME AND ESTATE PLANNING TOOLKIT Wealth Replacement Trust • Objective: To replace for family members some or all of the assets passing to charity from a Charitable Remainder Trust. • Description: The Wealth Replacement Trust is part of a strategy that includes another estate planning technique, th
Slide 26: Charitable Tax Deduction
INCOME AND ESTATE PLANNING TOOLKIT C h a r i t a b l e Ta x D e d u c t i o n A person may make gifts to certain charitable organizations and receive income, gift and/or estate tax charitable deductions. The organization may be a public charity, private foundation created by a private individual (in
Slide 27: Appendix & Disclosure
INCOME AND ESTATE PLANNING TOOLKIT Appendix & Disclosure This presentation was designed to illustrate the financial impact of a particular planning decision. The slides herein do not constitute a recommendation. Caution: many estate techniques share the common risk of the loss of control of the asse
Slide 28: Morgan Stanley Wealth Management trade name disclosure
Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker-dealer in the United States. The sole purpose of this material is to inform, and it in no way is intended to be an ofer or solicitation to purchase or sell any security, other investment or ser
Slide 29: Manager due diligence and Value Score disclosures
manager due diligence process are equally important factors for investors when considering managers for use through an investment advisory program. Factors including, but not limited to, manager turnover and changes to investment process can partially or fully negate a positive Adverse Active Alpha
Slide 30: Conflicts of interest disclosures
Management or its afliates receive compensation from, or otherwise related to, those investment managers or mutual funds. For example, a Financial Advisor may suggest that GIMA evaluates an investment manager or fund in which a portion of his or her clients’ assets are already invested. While such a
Slide 31: Nontraditional investment and fund risks
Nontraditional investment options and strategies are often employed by a portfolio manager to further a fund’s investment objective and to help ofset market risks . However, these features may be complex, making it more difcult to understand the fund’s essential characteristics and risks, and how it
Slide 32: Structured and alternative investment risks
Structured Investments are complex and not appropriate for all investors. An investment in Structures Investments involve risks. These risks can include but are not limited to: (1) Fluctuations in the price, level or yield of underlying instruments, interest rates, currency values and credit quality
Slide 33: Hedge fund index biases
It should be noted that the majority of hedge fund indexes are comprised of hedge fund manager returns. This is in contrast to traditional indexes, which are comprised of individual securities in the various market segments they represent and ofer complete transparency as to membership and construct
Slide 34: Virtual Currency Products (Cryptocurrencies)
Virtual Currency Products (Cryptocurrencies) Buying, selling, and transacting in Bitcoin, Ethereum or other digital assets (“Digital Assets”), and related funds and products, is highly speculative and may result in a loss of the entire investment. Risks and considerations include but are not limited
Slide 35: Digital asset risks
like other investors have, you can lose some or all of your holdings of Digital Assets. - Unlike US banks and credit unions that provide certain guarantees of safety to depositors, there are no such safeguards provided to Digital Assets held in digital wallets by their providers or by regulators. -
Slide 36: ERISA and fiduciary disclosures
independent decision. This material is not a fnancial plan and does not create an investment advisory relationship between you and your Morgan Stanley Financial Advisor. We are not your fduciary either under the Employee Retirement Income Security Act of 1974 (ERISA) or the Internal Revenue Code of
Slide 37: ESG investing disclosures
disclosures and/or marketing material to learn more about how it incorporates ESG factors into its investment strategy. ESG investments may also be referred to as sustainable investments, impact aware investments, socially responsible investments or diversity, equity, and inclusion ("DEI") investmen
Slide 38: Insurance and donor advised fund disclosures
through Morgan Stanley Smith Barney LLC’s licensed insurance agency afliates. Since life and long-term care insurance are medically underwritten, you should not cancel your current policy until your new policy is in force. A change to your current policy may incur charges, fees and costs. A new poli
Slide 39: Trust services disclosures
Morgan Stanley Smith Barney LLC does not accept appointments nor will it act as a trustee but it will provide access to trust services through an appropriate third -party corporate trustee. The trust services referenced herein are provided by the third parties listed who are not afliated with Morgan
Slide 40: Securities based lending risks
applicable. Borrowing against securities may not be appropriate for everyone. Clients must be aware that there are risks associated with a securities based loan, including possible maintenance calls on short notice, and that market conditions can magnify any potential for loss. For details please se
Slide 41: Mortgage and home equity disclosures
National Association is an Equal Housing Lender and Member FDIC that is primarily regulated by the Ofce of the Comptroller of the Currency. Nationwide Mortgage Licensing System Unique Identifer #663185. The proceeds from a residential mortgage loan (including draws and advances from a home equity li
Slide 42: Credit card disclosures
The Morgan Stanley Blue Cash Preferred® Card is only available for clients who have an Eligible Account with Morgan Stanley Smith Barney LLC or its eligible afliates, including but not limited to E*TRADE from Morgan Stanley. An “Eligible Account” is a brokerage account (i) held in your name, (ii) he
Slide 43: Savings and FDIC insurance disclosures
Savings are eligible for FDIC insurance up to $250,000 (including principal and interest) per depositor, per each bank selected by the client for all deposits held in the same insurable capacity (the Maximum Applicable Deposit Insurance Amount), provided that certain conditions are satisfed. All dep
Slide 44: Cash management and lending disclosures
apply. Subject to device connectivity. Cash management and lending products and services are provided by Morgan Stanley Smith Barney LLC, Morgan Stanley Private Bank, National Association or Morgan Stanley Bank, N.A, as applicable. The information provided herein is not intended to address any parti
Slide 45: Analytics and liquidity calculation disclosures
applicable to brokerage relationships, it has been applied to the analysis, which may result in hypothetical returns that are slightly lower than what would have been achieved by a brokerage account. The actual fee may be less than this amount and will generally be charged monthly and not daily. How
Slide 46: Awards and rankings disclosures
The American Financial Technology Award’s Best Risk Management Initiative was awarded in 2022. This ranking was determined based on an evaluation process conducted by Waters Technology during the period from 02/09/2022 – 04/11/22. Neither Morgan Stanley Smith Barney LLC nor its Financial Advisors or
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