Global Church of the Nazarene Foundation ~ Sunday, 20 October 2013 John 15:12 -13 says, "My command is this: Love each other as I have loved you. Greater love has no one than this, that he lay down his life for his friends."

Global Church of the Nazarene Foundation ~ Sunday, 20 October 2013

John 15:12 -13 says, "My command is this: Love each other as I have loved you. Greater love has no one than this, that he lay down his life for his friends."

Through this verse we find that when we remain in Christ, we can love as Christ loves. This love often radically expresses itself in many ways, including through financial generosity - something I have personally seen while working with the Foundation.

I feel privileged that our team at the Nazarene Foundation is able to assist you with your God-honoring planned giving. If you have any questions, please don't hesitate to reply to this email or call our office at (913) 577- 2983.

Blessings,

Kenneth R. Roney, J.D.

President

PERSONAL PLANNER

Wills - Perils of Probate

"I am an heir of the decedent and here is his will."(Potential Heir)

Business Owner passed away on April 5, 1976, with an estate of $2.5 billion. Many people appeared claiming, "I am Business Owner's heir" and submitted wills with themselves as beneficiaries. The court finally determined seven years later that none of the wills were valid and split the estate among 22 of the decedent's cousins. The costs and fees to lawyers during administration of Business Owner's estate were in the millions of dollars.

Probate Process

When a person passes away, it is important to have an organized process to transfer his or her property. The probate process is an organized method to gather all of the property of the individual, pay all of his or her bills, determine the appropriate beneficiaries to receive the property and make the actual transfer.

The probate process can be quite easy and rapid for small estates or can last for many years with larger or more complicated estates. Most people do not spend much time thinking about probate unless they are potential beneficiaries, then probate is a topic of great interest. To the 22 cousins who received multimillion-dollar inheritances, Business Owner's probate process was very interesting.

Probate Players

There are at least four general categories of probate players. First, an executor or personal representative is the manager of the estate. Second, an estate attorney is involved to advise the executor or personal representative on all probate and legal matters.

Third, a probate judge will rule on the validity of any will, review many of the actions of the executor, and approve the final distributions. Finally, heirs will be the beneficiaries of the estate.

Probate Process

The probate process involves eight separate steps to ensure an orderly transfer of all of the property to the right individuals. Let's assume that Ed Executor and Ellen Attorney are probating the estate of Business Owner.

1. Accept the Will: Ed or Ellen will normally submit the will to the court for probate. Usually, there is one final will that is accepted. However, there are many cases in which individuals wrote their own wills or there was a question about the validity of a given will, resulting in a wills contest. Eventually, the court will determine the validity and meaning of the will. However, for Business Owner's estate, none of the wills were valid and state law determined who received the $2.5 billion.

2. Locate Heirs: Because Business Owner did not have a valid will, Ed Executor needed to locate all of the heirs. But, the 22 cousins still needed to be approved by the court. Under state law, Business Owner's estate was transferred to his relatives. With $2.5 billion at stake, all of them had attorneys to ensure that each cousin received the proper share. Even if Business Owner had signed a valid will, it would have been essential to locate all the heirs. In some cases, the selected recipients had passed away and property was distributed to their children or other relatives.

3. Determine the Estate Assets and Values: Ed Executor is responsible for finding all of Business Owner's estate assets. The assets included real estate, bank accounts, securities accounts and other property. Because Business Owner's estate was taxable, all property was valued so that federal taxes could be paid. Finally, the balance of the estate was distributed to the 22 cousins.

4. Pay Executor and Attorney: Not surprisingly, Ed Executor and Ellen Attorney were paid a large fee from Business Owner's estate. The costs for the probate process may be quite substantial and the executor and attorney are always paid. Costs may be as low as 2% of the estate value or may range up to 7% or 8% of estate value. However, if there is an estate contest, costs can consume a large portion of the entire estate.

5. Make Debt Payments: After determining the nature of the property and the approximate value of Business Owner's estate, Ed Executor will also advertise for any claims by creditors. The state probate law determines the period of time and the type of public notice to be given. If creditors do not file claims against the estate, they risk losing their ability to collect their debts. All debts and taxes are paid before the final distribution.

6. Resolve Controversies: Seven years of controversies in Business Owner's estate required continuous attention from Ed Executor and Ellen Attorney. Most of the controversies centered around the submitted wills. If there are any controversies, such as a claim that the final will is invalid due to undue influence of a party who obtained the will, then the court must determine the rights of all parties under the will and applicable state law. After seven years, the court decided that none of the wills in Business Owner's estate were valid.

7. File Income and Estate tax Returns: Because Business Owner's estate was $2.5 billion and produced income each year, Ed Executor had to file the final income tax return for Business Owner and annual returns for the estate. After the final valuation by the court, Ed and Ellen also filed the estate tax return and paid the estate tax to the IRS.

8. Distribute Assets to Heirs: After seven years of court proceedings, payment of estate taxes, court costs, executor fees, and attorney fees, the probate judge approved the final distribution order and the 22 cousins of Business Owner received their inheritance.

Probate problems

There are several negative results for which probate has a deservedly bad reputation. First, the process is public. Anyone can obtain the will of Jacqueline Kennedy Onassis and read her provisions for children John Jr. and Caroline.

As was true for Business Owner's estate, the probate process may be both lengthy and expensive. Both time and money can be easily wasted in the bureaucracy of the process.

Probate is also as good and as bad as the judge who is involved. Judges are people, with the good and bad characteristics of humanity. Some are very dedicated and capable and some are primarily interested in an early exit to the golf course in the afternoon. Depending upon the quality of the judge, the probate process can be easy or quite challenging for the executor and estate attorney.

Finally, the existence of a substantial estate (such as that of Business Owner) invites relatives to submit claims and is fertile ground for developing probate controversies. If there is any question about the validity of the will, or there are conflicting methods of transfer of the same property (joint tenancy with one person and attempting to transfer the same property through a will to a second person), a will contest and probate battle may occur.

Avoiding probate

There are multiple methods that are used to avoid probate. These can be quite successful, but all methods must be coordinated carefully to be certain that the overall plan works correctly.

1. Joint Tenancy with Right of Survivorship: Under property law, the surviving joint tenant owns the real estate.

2. Designated Beneficiary: An insurance policy, an IRA, a 401(k) or other qualified plan is transferred to the designated beneficiary. There is a contract with the insurance company or the retirement plan custodian and that person agrees to make the transfer to the individual or organization selected by the owner. Typical forms permit the selection of a primary beneficiary and also a contingent beneficiary.

3. Pay-on-Death (POD) Accounts: Most states that follow the Uniform Probate Code may allow a "POD" account. Most savings accounts, checking accounts and certificates of deposit are under state law permitted to be transferred to the "payable-on-death" recipient.

4. Revocable Living Trust: Perhaps the most popular method for avoiding probate is a revocable living trust. The grantor is taxable on the assets of the trust, but frequently will transfer a personal residence, securities accounts and other major assets into the trust. The assets in the trust avoid the probate process.

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SAVVY LIVING

RV Travel Tips for Beginners

Can you write a column on RV travel for beginners? My husband and I will be retiring in a few years and have always thought it would be fun to spend some of our time traveling around the country in an RV. What should we know?

The affordability, comfort, convenience and personal freedom of recreational vehicle (RV) travel has made it immensely popular among retirees over the past decade.

According to the Recreational Vehicle Industry Association, there are approximately 35 million RV enthusiasts in the U.S. These enthusiasts include a growing number of baby boomers as they enter retirement.

One reason RVing has become so popular is because of the freedom and flexibility it offers to come and go as you please. If you like where you're at, you can stay put. If you get the itch to move on, you can pack up and go.

Another reason is that it allows retirees to follow the milder seasons. Snowbirds, for example, like to travel south for the winter, while southerners migrate north during the hot summer months.

Finally, RVing is affordable. Even considering ownership or rental costs, RV travel may be cheaper than traveling by car, plane or train when you factor in lodging and restaurant costs.

RV Options

When most people think of RVs, they think of huge motorhomes. However, RVs come in all shapes and sizes. Your choices include everything from folding camping trailers and truck campers to travel trailers and large motorized RVs.

Cost ranges from as little as $4,000 for pop-up campers to $1.5 million for luxurious motorhomes. Go to gorving.com to learn more about RV options. This is a resource created by the RV travel industry that breaks down all the different types of RVs available today, along with various videos and other RV information.

If you are uncertain about whether you will like RV travel, the best way to find out is to rent an RV and try it. Renting can also help you determine which type of RV best suits your needs. Rental costs will vary greatly depending on what you choose, but you can expect to pay anywhere from $30 to $300 per day. To locate one of the 500 or so RV rental outlets around the country, check your yellow pages under "Recreation Vehicle" or search The National RV Dealers Association website at rvda.org.

Camping Options

With around 14,600 public and privately owned RV parks or campgrounds across the country (see gocampingamerica.com and trailerlifedirectory.com), RVers can roam coast-to-coast with no shortage of places to stop.

Most RV parks are open to all comers and rent spaces on a nightly or weekly basis, much like a motel or hotel. Rates typically range from $15 to $50 per night, although rates in some city or country parks may be $10 or less.

RV parks can range from rustic facilities with limited or no utility hookups – often the case in state and national parks – to luxury resorts with amenities that rival fine hotels.

To research RV campgrounds, get a copy of the "Good Sam RV Travel Guide & Campground Directory" for $10 at goodsamclub.com/publications or call 866-205-7451. This guide breaks down campsite offerings, policies, costs and provides a rating system. Also, see rvbookstore.com for dozens of books and DVDs about RVs and the RV lifestyle.

Additionally, there are a number of RV clubs you can join that will offer various benefits for their members. For example, the Good Sam Club (goodsamclub.com) provides member discounts on parks and campgrounds, travel guides, fuel and propane, roadside assistance and more. Passport America (passportamerica.com) is another popular club that gives 50% discounts on more than 1,800 campsites across the U.S., Canada and Mexico.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Senior" book. The articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070.

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YOUR PLAN

The Retirement Unitrust

Mary grew up on a farm. When her parents passed away, she inherited the farm.
When Mary was growing up, the farm was out in the country. Now that the city has grown, the farm is within the city limits. Several developers would like to build homes on the farmland.
Mary: We have received modest payments from the farm over the years. I allowed a neighboring farmer to graze his cows on the farm until recently. Since I inherited the farm from my parents several years ago, the value of the farm has greatly increased.
Bill: We checked with our tax advisor and the farm could be sold, but there would be a very large tax to pay. Since it is a good time to sell the land, we would like to sell. And then it would be good to let the sale proceeds grow for about 10 years until we plan to retire. In fact, we are hopeful that we can sell tax free and then allow the proceeds to grow tax free.
Mary: I was excited to learn from our tax advisor that there is a plan that does provide for our retirement. She explained that we could transfer the land into a special trust. Once inside this trust, the farm could be sold tax free and the cash invested for growth. The proceeds would grow tax free inside the trust until we retire. At that time, the payouts would be taxable, but we could have as much as $900,000 in the trust.
Bill: We will enjoy a very nice retirement. We already have an IRA and are planning to use that for retirement. With the extra income from this retirement trust, we will be able to travel and really enjoy our golden years.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your unitrust benefits may be different, you may want to click here to view a color example of your benefits.

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WASHINGTON NEWS

Individual Mandate Effective March 31

With the highly publicized problems of the Affordable Care Act and the website healthcare.gov, the White House has been under pressure to change the deadline for the individual mandate to purchase health insurance.

White House Press Secretary Jay Carney indicated that the White House will be publishing a new deadline of March 31, 2014 for the requirement to purchase health insurance. This is intended to enable all individuals to purchase insurance after the healthcare exchanges have been upgraded with functional software.

Sen. Jeanne Shaheen (D-NH) sent a letter to President Obama and requested an additional delay for the mandate. She stated, "Given the existing problems with the website, I urge you to consider extending open enrollment beyond the current end date of March 31, 2014. Allowing extra time for consumers is critically important so they have the opportunity to become familiar with the website, survey their options and enroll."

Sen. Joe Manchin III, (D-WV) also supported a delay. On a national media appearance, Machin stated, "It should be a transition year, for one year. There should be no fines, and let's work through the problems." He recommended deferring the individual mandate until January 1, 2015.

Sen. Charles Grassley (R-IA) and Sen. Orrin Hatch (R-UT) are the former and current ranking members of the Senate Finance Committee. They requested information from four large health insurance companies about the enrollment process.

Grassley stated, "News reports show extensive frustration signing up online for healthcare. Now we are seeing reports of bad data going to insurance companies when people do manage to register themselves. Is the bad data the reason the administration is being so vague about how many people have signed up?" Grassley and Hatch are attempting to understand the number of individuals who have had problems with the healthcare.gov website.

Editor's Note: At a hearing in Washington, representatives of the companies building the websites expressed hope that the healthcare.gov software upgrades would be completed before the end of this year.

Tax Reform Expectations

Both the House Ways and Means Committee and the Senate Finance Committee have been involved in a two year process that is expected to lead to proposed tax reform bills.

House Ways and Means Chair Dave Camp (R-MI) continues to work with his staff on drafts of a proposed bill. Chairman Camp has repeatedly stated he hopes to introduce a bill for "markup" before the end of this year.

Sen. Max Baucus (D-MT) faces a more substantial challenge. While Chairman Camp controls his committee and is expected to produce a revenue-neutral bill, Sen. Baucus is attempting to resolve a major difference in perspective. The Democratic leadership seeks a tax reform bill that would include approximately $1 trillion in new revenue. The Republican members of the Senate Finance Committee agree with their House colleagues that the bill should be revenue-neutral.

Sen. Baucus now indicates that there will be discussion drafts by the end of the year. His spokesman Shawn Neary stated that Baucus "hopes to release discussion drafts of tax code revisions" this year.

A prediction of the likelihood of a House or Senate tax bill this year was made by the Tax Reform Business Barometer Survey issued jointly by The Tax Council and Ernst & Young LLP. They surveyed business and tax professionals and asked whether or not they expected to see actual legislation from the committees.

The survey indicated that there is a 70% probability that Chairman Camp and the Ways and Means Committee will produce a detailed plan.

However, the likelihood that the Senate Finance Committee will produce a bill is only 35%. Lynda Walker, Executive Director of the Tax Council, stated, "Most business tax professionals think there is a strong likelihood of progress toward tax reform even with the significant uncertainty about the federal budget." She also suggested that prospects for completing tax reform by the end of 2014 were a relatively low 20%.

Editor's Note: America is still quite a long distance from tax reform. Majority Leader Harry Reid indicated in a Nevada radio program that the conflict between the $1 trillion Democratic goal and the revenue-neutral Republican goal is not likely to be resolved in the next year. However, if actual language is released, it is likely to reflect a reduction in rates and specific changes to itemized deductions. This bill language could easily be incorporated in an eventual tax reform act within the next two or three years. Therefore, it still is of great importance to philanthropy to focus on the potential for changes that affect charitable gift deductions.

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FINANCES

Stocks - Netflix Continues Meteoric Rise

Netflix, Inc. (NFLX), a video streaming company, reported its quarterly earnings on Monday, October 21. Netflix stock has more than tripled in value during 2013. On October 22, the price of Netflix stock rose to an all-time high of $389.16 before dropping back down to close at $322.52.

Netflix reported quarterly revenue of $1.11 billion. This is an increase of 22.2% from the same period last year when the company reported revenue of $905.1 million. The company's revenue for the period was in line with analysts' estimates of $1.1 billion.

Netflix reported net income of $31.82 million. This is an increase of 315% from the same period last year when the company reported net income of $7.68 million. The company reported earnings per share of $0.52, beating analysts' estimates of $0.49.

Netflix CEO, Reed Hastings, and CFO, David Wells, released a shareholder letter along with third quarter earnings. The letting included this statement: "We are very pleased to have over 40 million members, up from less than 30 million just one year ago. The Netflix original series Orange is the New Black is a critical and popular success, and our earlier series House of Cards is the first Internet TV series to win a Primetime Emmy Award. We launched [in] our 41st country and the Dutch seem to like Netflix."

Netflix stock did fall earlier this week when billionaire investor, Carl Ichan, decided to reduce his 9% stake in the company to 4.5%. He sold a total of 2.99 million shares and by some reports pocketed over $800 million in gain. Mr. Ichan still owns about 2.7 million shares in the company. When asked to comment on the sale, he said, "As a hardened veteran of seven bear markets I have learned that when you are lucky or smart enough to have made a total return of 457% in only 14 months it is time to take some of the chips off the table. I want to thank Reed Hastings, Ted Sarandos and the rest of the Netflix team for a job well done. And last but not least, I wish to thank Kevin Spacey."

Netflix, Inc. (NFLX) shares ended the week at $328.03, down 4.3% for the week.

Boeing is Flying High

The Boeing Company (BA), an aerospace company that builds commercial jetliners, reported its quarterly earnings on October 23. The company's commercial airplane segment is benefiting from strong demand for Boeing's new long-range and fuel efficient 787 commercial airliners.

Boeing reported quarterly revenue of $22.13 billion. This represents an increase of 11% from the same period last year when the company reported revenue of $20.01 billion.

The company reported net income of $1.16 billion, representing an increase of 12% from the same period last year when the company reported net income of $1.03 billion. Earnings per share increased from $1.35 during the same quarter a year ago to $1.51 in the most recent quarter.

"Consistently strong operating performance is driving higher earnings, revenue and cash flow as we deliver on our record backlog and return increased value to shareholders," said Boeing CEO Jim McNerney. Boeing received $27 billion in orders during the latest quarter and has a record backlog of orders worth $415 billion.

Boeing launched its 787 Dreamliner line of planes in 2004. The new 787-10 Dreamliner, released in June 2013, carries 300-330 passengers and can travel up to 7,000 nautical miles before stopping for fuel. The price tag for a 787-10 Dreamliner is about $289 million according to Boeing's website. Boeing has sold 131 of these planes this year and has a total of 890 orders it has yet to fill.

The Boeing Company (BA) shares ended the week at $131.20, up 6.9% for the week.

Microsoft's Earnings Beat Expectations

Microsoft Corporation (MSFT), a well-known technology company, reported its quarterly earnings on October 24. The company reported strong earnings and net income upon increased sales of its Surface tablet.

Microsoft reported gross revenue of $18.53 billion for the quarter, beating predictions that revenue would be $17.79 billion. This quarter's revenue represents an increase from the same period last year when the company reported revenue of $16.01 billion.

The company reported quarterly net income of $5.24 billion, representing an increase of 17.4% from the same period last year when the company reported net income of $4.47 billion. Earnings per share increase from $0.53 per share to $0.62 per share, beating analysts' expectations of $0.54 per share.

"Our devices and services transformation is progressing and we are launching a wide range of compelling products and experiences this fall for both business and consumers," said Steve Ballmer, CEO at Microsoft. "Our new commercial services will help us continue to outgrow the enterprise market, and we are seeing lots of consumer excitement for Xbox One, Surface 2 and Surface Pro 2, and the full spectrum of Windows 8.1 and Windows Phone devices."

Many analysts and investors have been disappointed in Microsoft's ability to keep up with rivals such as Apple and Google in the mobile phone and tablet markets. They still generate a large portion of their revenue by selling PCs and software to businesses. As a result, they have received sharp criticism. However, their latest earnings report shows sale's revenue of Microsoft's Surface tablet grew to $400 million. This represents healthy growth in revenue and the number of tablets sold over the prior quarter. There may be hope for Microsoft yet.

Microsoft Corporation (MSFT) shares ended the week at $35.73, up 2.1% for the week.

The Dow started the week at 15,401 and closed at 15,570. The S&P 500 started the week at 1,745 and closed at 1,760. The NASDAQ started the week at 3,923 and closed at 3,943.

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Bonds - Bond Prices Rise on Weak Employment Data

The U.S. Labor Department released the September employment statistics on October 22. The statistics are usually reported earlier in the month, but the government shutdown delayed their release.

The data was largely unchanged from August and depicts an economy that continues to struggle to gain momentum. The unemployment rate fell slightly from 7.3% in August to 7.2% in September. The participation rate was unchanged in September at 63.2%. This shows that the slight drop in the unemployment rate was not due to discouraged jobseekers leaving the job market.

Total employment increased by 148,000 jobs in September. This figure was substantially less than the 180,000 jobs expected by many economists and the 185,000 jobs added on average each month over the past year.

In addition to the employment data, consumer confidence has dropped to the lowest level since January 2013. "We've seen an overall slowdown, a little bit of softness in our traffic," said David Lenhardt, CEO of PetSmart, Inc. "We do think it's an uncertain consumer environment. I think whether it be the shutdown, whether it be payroll tax, whether it be sequester, the customer is more uncertain these days."

In light of the employment and consumer confidence data, many analysts believe that the Federal Reserve will continue its bond purchasing program at least through March of 2014. "I don't see any real strength in the economy," said Ray Remy, head of fixed income at Daiwa Capital Markets America, Inc. "The earliest we'll see tapering is in March. It wouldn't surprise me if that's pushed out further because the economy is going to go through a rough patch here."

Speculation that the Federal Reserve will continue its current monetary policy caused Treasury prices to rise last week. The price of the 2.5% 10-Year Treasury note due August 2023 rose $1.25 per $1,000 face amount. The 10-year Treasury note yield fell three basis points to 2.5% in early Friday morning trading. Yields move inversely to prices. In total, the yield on the 10-year Treasury fell seven basis points last week.

The 10-year Treasury note yield finished the week at 2.5% while the 30-year Treasury note yield finished the week at 3.59%.

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CDs and Mortgages - Interest Rates Fall to Four Month Low

Freddie Mac released the results of its Primary Mortgage Market Survey on October 24. The results show average fixed mortgage rates dropping to a four month low.

The 30-year fixed rate mortgage averaged 4.13% this week. This is a decrease from last week when it averaged 4.28%. One year ago, the 30-year fixed rate mortgage averaged 3.41%.

The 15-year fixed rate mortgage averaged 3.24%, representing a decrease from last week when it averaged 3.33%. Last year at this time, the 15-year fixed rate mortgage averaged 2.72%.

"Mortgage rates slid this week as the partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year," said Frank Nothaft, Vice President and Chief Economist at Freddie Mac. "The weak employment report for September added to this expectation. The economy added just 148,000 jobs, which was below the market consensus forecast and less than the 193,000 jobs increase in August."

The money market fund finished this week at 0.4%. The 1-year CD finished at 0.7%.

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Are you a Nazarene Legacy Partner (NLP)?  The answer is “YES” if you have designated any gift to a Nazarene ministry in your will, bequest, or estate plan. This could be a tithe on your estate, an insurance beneficiary designation to your local church, college, global mission, or any other Nazarene ministry you support.

Send us your name and contact information by reply email and indicate “I am a Nazarene Legacy Partner” and we will add your name to our NLP honor roll. To model generosity inspires others to do the same. Thank you for your interest in gift planning. To access any of this updated financial and gift planning information, please select our website.

Church of the Nazarene Foundation

17001 Prairie Star Parkway, Suite 200

Lenexa, KS 66220 United States

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