OPTIONAL INVESTMENT CHOICES

For Traditional or Roth IRAs & Coverdell Education Savings Accounts (ESA)

PORTFOLIO OPTION 1: Quick Access Fund
PORTFOLIO OPTION 2: Index Mutual Funds
PORTFOLIO OPTION 3: Guaranteed Payment Contract
PORTFOLIO OPTION 4: Hi-Yield Stable Value Fund
PORTFOLIO OPTION 5: 72(T) Early IRA Withdrawal

PORTFOLIO MIX & MATCH FLEXIBILITY

Your investment options with AE-Trust's portfolios are not limited to one portfolio. You may sub-divide your funds according to any percentage you wish to allocate among these portfolio options. Further, you may sub-divide a portion of your IRA, Health Savings (HSA), Educational Savings (ESA), or private trust account into one or more of the AE-Trust portfolio options, then invest the rest of your funds in any other investment choices which either you or your investment advisor may pick.

To do this sub-divide allocation, pick the investment options you wish on your AE-Trust IRA, Health Savings (HSA), Educational Savings (ESA), or private trust account enrollment form, and list by each choice the percentage of your total funds that you want to place in that choice.

PORTFOLIO OPTION 1: QUICK ACCESS FUND ⁽¹⁾

FOR IDLE AND/OR UNINVESTED CASH NEEDING QUICK AVAILABILITY

The Portfolio Option 1 Quick Access Fund is an optional investment for investors who become IRA or trust account clients of American Estate & Trust, LC (AE-Trust, http://www.trusteeamerica.com), and is only available after establishing one of those two types of accounts. The Fund is professionally and actively managed by AE-Trust, which is regulated by the Financial Institutions Division of the State of Nevada.

Free Accounts. There are no annual account fees charged by AE-Trust for accounts which maintain an average Portfolio Option 1 balance of $25,000 or more for the entire preceding year. In other words, your IRA, HSA, ESA or private trust account is free as long as the $25,000 average account balance is maintained over a full twelve months. You still pay the initial set up and first year's account fee when you open an AE-Trust account, but thereafter on each one year anniversary of your account creation date, the annual account fee is waived if your account maintained the $25,000 minimum average balance for the past year.

Default Fund. By default, all client account money received at AE-Trust is automatically placed in this Fund until the account owner directs that some or all the account's funds be invested, paid or moved elsewhere. This Fund pays interest on your money which generally is significantly better than bank and mutual fund money market funds. Maximum safety of and quick access to your principal (three to seven days) are the primary objectives of the Fund, while still paying a rate of income or interest which is above average. Contact AE-Trust at any time for a quote on the current rate of return. See the footnote ⁽¹⁾ for a notice and disclaimer of risk.

AE-Trust's fees for managing the Fund do not come out of your principal nor your stated yield. AE-Trust's management fees come only from earnings which are above the amount needed to pay your stated yield ⁽¹⁾.

Note that it can take from three to seven days to access money in this Fund. If you need overnight access to your money, please notify AE-Trust by phone, fax, e-mail or on your new account application form and we will simply hold your funds in a non-interest bearing bank account.

To Earn Higher Rates of Return from a money market fund, see below for the AE-Trust Portfolio Option 4 Hi-Yield Money Market Fund.

AE-Trust will handle all the paperwork and transactions which are necessary to fully implement the Portfolio Option 1 in your behalf, in any type account opened. Your money will automatically go into this investment option when you enroll in any of: IRA, Health Savings (HSA), Educational Savings (ESA), or private trust account.

Click Here for the AE-Trust Traditional IRA enrollment application form

Click Here for the AE-Trust Roth IRA enrollment application form

(1)Footnote:
An investment in the Portfolio Option 1 Quick Access Fund involves risks. AE-Trust is regulated by the Financial Institutions Division of the State of Nevada. But the Fund is not FDIC insured or guaranteed and is not regulated under Rule 2a-7 of the SEC Investment Company Act of 1940. The safety of principal and the return of interest are guaranteed and backed only by the reserves of the Fund and the quality of the underlying investments of the Fund. To minimize risk, funds are spread across, invested in, a large number of investments so that the poor results of any one investment, if any, should have a limited effect on the Fund. American Estate & Trust, LC assumes no liability for losses in the underlying investments of the Fund, if any, though the company's only means of compensation for on-going management and administration of the Fund is to maximize the safety of principal and the Fund's yield.

PORTFOLIO OPTION 2: INDEX MUTUAL FUNDS

Note: This portfolio option uses no-load or no-commission mutual funds, and no commissions or management fees are paid to or collected by AE-Trust from this investment choice or from your account. Further, the annual management fees charged by Vanguard are among the very lowest charged by any mutual fund.

The Portfolio Option 2 is an investment choice which you can make initially and then forget about it for long term. This Portfolio allows you to participate in the U.S. and international stock markets, plus the bond market, with an allocation among the three funds which tends to reduce market risk and volatility. This investment is best suited for a long term, buy and hold strategy of five years or more. The Portfolio Option 2 consists of three specific Vanguard index mutual funds, with a percentage of your IRA, ESA, HSA or private trust funds allocated to each mutual fund according to the percentages shown below:

• 50% of funds invested in - Vanguard Total Stock Market Index Fund (Investor Shares, VTSMX)


• 20% of funds invested in - Vanguard Total International Stock Index Fund (VGTSX) (This fund charges a 2% fee on shares redeemed within two months of purchase.)


• 30% of funds invested in - Vanguard Total Bond Market Index Fund (Investor Shares, VBMFX)

Portfolio Option 2, using this allocation percentage in each mutual fund, would have yielded the following results over the past time periods. (However, note that past performance is no guarantee of future results.) This analysis is based on data taken from the Vanguard web site on each of these funds, then analyzed as a combined portfolio with the allocations shown.

AE-Trust will handle all the paperwork and transactions which are necessary to fully implement the Portfolio Option 2 Index Mutual Funds in your behalf, in any type account opened. Simply pick this investment option when you enroll in any of: IRA, Health Savings (HSA), Educational Savings (ESA), or private trust account.

Click Here for the AE-Trust Traditional IRA enrollment application form

Click Here for the AE-Trust Roth IRA enrollment application form

Click Here for Vanguard's information on each of these funds

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More Details About The Portfolio Option 2, Index Mutual Funds

An index mutual fund is one which mirrors the performance of some (usually) broad stock market index. For example, the Vanguard Total Stock Market fund mirrors the MSCI U.S. Broad Market Index. This Vanguard fund will, then, closely track the overall performance of this broad index of U.S. stocks.

According to some investing experts, a lot of investors would be better off in creating a "set-it and forget-it" investment mix of three types of index mutual funds. The three fund types are: A broad U.S. stock index fund, a bond index fund, and an international stock index fund. The set-it and forget-it investment concept particularly fits investors who want a simple approach which doesn't require either frequent tweaking or wholesale revamping. These may be either investors who aren't particularly knowledgeable about investing in the markets, or knowledgeable investors who don't have the time for investment planning or to make frequent adjustments.

Another big advantage of almost all index funds is that they do not require expensive fund managers, therefore the funds' management fees are a mere fraction of other types of mutual funds. (Index mutual funds are also among the most tax efficient or least taxed of all mutual funds, due to low portfolio turnover. But that isn't an advantage to an IRA or ESA account.)

According to the Wall Street Journal *, an investment strategy similar to the Portfolio Option 2 "has rivaled U.S. stock returns over one-, three- and five-year spans, and with more stable returns year-to-year than the broad market"...."Almost two-thirds of U.S. stock-fund managers have failed to beat a total market benchmark index over the past five years"...."A $10,000 investment in this allocation in October 2001 would have been worth $15,828 five years later, while the same amount in the Standard & Poor's 500-stock Index...would have grown to only $12,096, according to investment researcher Morningstar, Inc."

With such a broad exposure to stocks of the whole world, tempered by the bond mix in the portfolio, both volatility and risk is reduced, significantly in many cases. The risk from the failure of one company in this broad mix will have little negative effect on the overall performance since so many individual issues are in each fund. And since these indexes represent a very broad diversification of companies and investments, the individual issues tend to not rise and fall altogether, and this can significantly smooth out volatility.

* WSJ Article of 12/2/06, entitled, Limited Menu: Choose Only 3

PORTFOLIO OPTION 3: GUARANTEED PAYMENT CONTRACT

Note: No commissions or management fees are paid to or collected by AE-Trust from this investment choice or your account. The investment (insurance) company which issues the contract earns money, but their earnings are above, and not charged against, the stated rates of returns which you receive from the investment contract. That is, the net amount the contract pays is the same amount that your IRA, Health Savings (HSA), Educational Savings (ESA), or private trust account will receive, with no commissions or fees withheld.

Also note, that this type contract limits how much can be withdrawn in the early years of the contract's life. The limit is in the form of a penalty charge for withdrawing amounts in excess of that which the contract allows. Typically after the first year, withdrawals of up to 10% of the contract's remaining value may be taken penalty free each year. For more details, click on the brochure link below.

If you select Portfolio Option 3, your IRA, Health Savings (HSA), Educational Savings (ESA), or private trust account funds will be invested in a guaranteed payment contract known as an equity indexed annuity. This type annuity is issued by large, wealthy and heavily regulated life insurance companies. Investing with companies of this size, stability and with their large capital reserves assures that your money has outstanding safety. In addition, a good equity index annuity will guarantee to return to the IRA or ESA account 100% of your principal, plus a guaranteed minimum interest return. No amount of market downturns or volatility can cause a loss of your principal. Typically, a good annuity will guarantee a minimum rate of return of approximately 1% to 3%. But in addition, the annuity rate of return is indexed to positive stock market results. So when the stock market has a good year (7 years out of 10 are "up" ⁽¹⁾, your rate of return will be much higher. When the stock market has a losing year, which it inevitably will, the annuity is guaranteed to maintain 100% of your current account balance, plus earn the minimum interest rate during that year. You get to benefit from good years in the stock market without being penalized for the bad. Using the guaranteed equity indexed annuity as the investment, a rate of return of 6% to 7.5% averaged over the life of your IRA would not be unusual.

The guaranteed payment contract in the Portfolio Option 3 is the "Income Select Plus" equity index annuity from American Investors Life ⁽²⁾, offered through their licensee and agent Accuplan Insurance and Financial Services (or whatever other annuity which Accuplan currently is providing for the Portfolio Option 2). Accuplan is the licensed agent which AE-Trust places annuity orders through, American Investors Life is the carrier which issues and backs the annuity.

Five Percent Bonus. According to the "Income Select Plus" brochure, this annuity will credit your account with a 5% bonus. That is, the American Investors Life will increase the value of your investment by 5% on inception. So a $100,000 investment would start its life on day one with a value of $105,000, and all future growth in the annuity would be based on that $105,000. The company's brochure contains a projection of the worst case and best case scenarios for a hypothetical investor who owned the Income Select Plus for the twenty year period ending in 2005.

AE-Trust will handle all the paperwork and transactions which are necessary to fully implement the Portfolio Option 3 Guaranteed Payment Contract in your behalf, in any type account opened. Simply pick this investment option when you enroll in any of: IRA, Health Savings (HSA), Educational Savings (ESA), or private trust account.

Brochure, Click Here for a pdf copy of the Income Select Plus brochure.

Click Here for the AE-Trust Traditional IRA enrollment application form

Click Here for the AE-Trust Roth IRA enrollment application form

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Footnotes:
⁽¹⁾The statistic of 7 up years out of every 10 in the stock market is according to AIM Investments, based on their tabular review of annual returns of the S&P 500 for the years 1926 thru 2006, including reinvestment of dividends and price changes, resulting in 58 up years vs. 23 down.

⁽²⁾American Investors Life, the issuer of the Income Select Plus annuity, is owned by Aviva plc. Based in London, England, Aviva is the world's fifth-largest insurance group and the biggest in the UK. Worldwide, the Aviva group has 58,000 employees serving 35 million customers, and has more than $600 billion in assets under management. As a combined company in the U.S., Aviva has over 1,115,000 customers and 32,850 agents and distributors.

PORTFOLIO OPTION 4: HI-YIELD STABLE VALUE FUND⁽¹⁾

The Hi-Yield Stable Value Fund is an optional investment choice for investors who become IRA or trust account clients of American Estate & Trust, LC (AE-Trust, http://www.trusteeamerica.com), and is only available after establishing one of those two types of accounts. The Fund is professionally and actively managed by AE-Trust, which is regulated by the Financial Institutions Division of the State of Nevada. See the footnote (1) for a notice and disclaimer of risk.

The Fund's goal is to generate yields for investors which are superior to bank CDs and money market funds. The Fund's investment objectives are designed to maintain a stable principal value in order to guarantee⁽¹⁾ the return of each investor's principal, along with a guaranteed⁽¹⁾ interest yield for the investment term chosen by the investor.

All yields are automatically re-invested. Yields from the Fund are classified as interest or ordinary income to the investor (which is tax deferred for Traditional IRAs and non-taxable to Roth IRAs). The minimum required investment is $5,000 and the minimum investment term which is penalty free is six months. Your IRA account is free if you maintain a minimum balance of $50,000 in the Fund.

Current Yield Paid By The AE-Trust Hi-Yield Stable Value Fund.

For full details on how the Fund is governed, see the Disclosure Statement and Terms and Conditions.

AE-Trust will handle all the paperwork and transactions which are necessary to fully implement the Portfolio Option 4 Hi-Yield Stable Value Fund in your behalf, in any type account opened. Simply pick this investment option when you enroll in any of: IRA, Health Savings (HSA), Educational Savings (ESA), or private trust account

Click Here for the AE-Trust Traditional IRA enrollment application form

Click Here for the AE-Trust Roth IRA enrollment application form

⁽¹⁾ Footnote:
An investment in the Portfolio 4 Stable Value Fund involves risks. AE-Trust is regulated by the Financial Institutions Division of the State of Nevada. But the Fund is not FDIC insured or guaranteed and is not regulated under Rule 2a-7 of the SEC Investment Company Act of 1940. The safety of principal and the return of interest are guaranteed and backed only by the reserves of the Fund and the quality of the underlying investments of the Fund. To minimize risk, funds are spread across, invested in, a large number of investments so that the poor results of any one investment, if any, should have a limited effect on the Fund. American Estate & Trust, LC assumes no liability for losses in the underlying investments of the Fund, if any, though the company's only means of compensation for on-going management and administration of the Fund is to maximize the safety of principal and the Fund's yield.

PORTFOLIO OPTION 5: FOR THE 72(t) EARLY IRA WITHDRAWAL, GUARANTEED PAYMENT CONTRACT

The federal tax code and the IRS have long provided a legal, tax advantaged and penalty free way to take a series of monthly cash withdrawals from your IRA. And you don't have to wait until retirement age, you can be any earlier age for this plan. This is all possible under Section 72(t) of the federal tax code and supported by numerous IRS rulings. This is such a mainstream practice that your professional tax advisor will have no problem verifying that this provision will work for you when the rules are followed.

This early cash withdrawal IRA is called "72(t)". With a 72(t) you receive equal monthly payments from your IRA until age 59-1/2 or for five years, whichever comes later. The 72(t) won't drain your IRA, you are only allowed to use a portion of the total amount in the account. But it can still be a significant amount of extra monthly cash to use any way your circumstances call for.

AE-Trust can handle all aspects of setting up and managing a 72(t) payment stream for you, keeping you well within the rules, and the 72(t) plan only costs $49 per year in maintenance fees. A very simple, one-page application gets the process initiated. Simply pick the Portfolio Option 5 investment when you enroll in either a Traditional or Roth IRA.

Move your existing IRA (or old 401(k) money) to an AE-Trust self-directed IRA right now and start receiving the early cash withdrawal benefits.

Click Here for the AE-Trust Traditional IRA enrollment application form

-or-

Click Here for the AE-Trust Roth IRA enrollment application form

-And-

Click Here for the 72(t) supplemental form to accompany either the Traditional or Roth IRA enrollment form you selected above.

Click Here For complete information on how a 72(t) early cash withdrawal IRA works,

Click Here To use our free calculator to illustrate your payments (Note: Allow extra time for download).

For direct help at AE-Trust on the 72(t) process, write info@TrusteeAmerica.com or phone (801) 716-5625

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NOTICE:
American Estate & Trust, LC may in some cases receive compensation from third party suppliers, brokers, banks or other organizations, based on the volume of business placed with those organizations by AE-Trust or due to other factors.