In Exodus 25, "The Lord said to Moses, 'Tell the Israelites to bring me an offering. You are to receive the offering for me from everyone whose heart prompts them to give. . . . Then have them make a sanctuary for me, and I will dwell among them'" (Exodus 25:2 and 25:8, NIV).From the offerings of the people, the Lord built his dwelling place. He didn't need the gifts of the Israelites to create his sanctuary, but the Lord of all the universe gave them the privilege of participating in his work. What an honor!
Just as the Israelites' offering helped build God's kingdom, your gifts are helping to build his kingdom as well. Thank you for your faithfulness in giving.
If you have any questions related to planned giving, please let us know how we can help you facilitate giving to the ministry of your choice. To read about our services, visit www.NazareneFoundation.org.
Blessings,Kenneth R. Roney, J.D.
President
P.S. For more information on how to use your resources to support the future of your favorite ministry, please reply to this e-mail or contact us by phone at 913.577.2983.
PERSONAL PLANNERPassing Unequal Shares in Your Will
Because children look at the inheritance as a representation of their parents' love, most parents leave children equal shares of their estate. However, there are a number of good reasons why a parent might leave unequal shares. These reasons consider the needs of children, the potential large financial success of one child, a benefit previously given to a child that will be balanced in the estate, estrangement from a child or a blended family. You will want to discuss carefully these circumstances with your attorney and other advisors. After thinking through your situation, you may decide that there are good reasons for making an unequal distribution of property to children.
Special Needs Child
Mary is a single mother with three children. Her oldest daughter Jane is age 30 and is a nurse. She is married with two children.
Son Joe is age 27, single and pursuing a career in sales. The third child, Kara, is age 17 and is disabled. She lives at home with Mary.
Mary has been financially careful and is building her estate. She owns her home, has an insurance policy that will be sufficient to pay off the mortgage on the home and provide an additional benefit for her children, and has a good retirement plan.
Because Mary does not have a huge estate, she wants to be certain that Kara has sufficient resources. Both Jane and Joe are successful in their careers and do not need assistance for their present lifestyle. While Mary would like to provide some inheritance for them, her primary concern is to make certain that Kara receives needed care.
Therefore, Mary makes provision for a modest bequest of cash to Jane and Joe in her will. She also leaves a small bequest to a favorite charity. However, the majority of Mary's estate is transferred to a "special needs trust" for the benefit of Kara.
The benefit of the special needs trust is that the trustee may receive the property and use it at his or her discretion for Kara's benefit. If the special needs trust is correctly written, it will not reduce Kara's potential qualification for state or federal benefits.
The special needs trust also permits the trustee to pay for Kara's care as he or she determines appropriate. After Kara passes away, the special needs trust will be divided between the grandchildren of Mary and her favorite charity.
Favored Child
Sue and Tom have raised three children and are now empty nesters. Their oldest child Sam attended a very fine university, followed by an excellent medical school, and is now a surgeon. Their younger children Julie and Linda both graduated from a state university.
Because Sue and Tom provided much greater financial support for Sam that enabled him to complete medical school and become a surgeon, they decided to transfer a larger proportion of their estate to Julie and Linda. While Julie and Linda both are successful and graduated from the state university, Sue and Tom believe that giving them a larger portion of the estate will create balance when compared with the benefits previously received by Sam.
Sue and Tom recognize that it's not possible to be perfectly equal in these circumstances, but hope the larger inheritance for Julie and Linda will make the total distribution as fair as possible.
Great Success Child
Tara and Jim have two children. Their oldest son Harvey has always had strong technical skills. After Harvey completed his engineering degree in college, he began working as a software programmer for a small company. In just a few years, he received shares of stock and the company went public. Harvey now has substantial wealth.
Harvey's sister, Lynn, also completed school and teaches third grade. She lives by herself in an apartment and has many friends at her school. However, Lynn has a very modest lifestyle and earnings in comparison to Harvey.
Tara and Jim thought carefully through the situation and talked to their attorney Harold. He explained that Harvey now has a large estate that could be subject to a significant future estate tax. If Tara and Jim were to transfer more property to Harvey, it simply makes his estate tax problem more difficult.
Because Lynn has comparatively modest resources, Tara and Jim decided that the vast majority of the estate would be transferred to her. However, they do have a family heirloom—a grandfather clock that has been handed down through four generations. While the grandfather clock does not have huge value, it is an important family memento. Tara and Jim decided to transfer the grandfather clock to Harvey and the balance of the estate to Lynn.
Estranged Child
Peter and Janet have raised two children. The oldest is a son named Bill and their daughter is Nancy. While Bill was in his early 20s, he dropped out of college and left without making contact with his parents or his sister Nancy. Bill was gone for 12 years and no one knew his location. After 12 years of wandering and traveling, Bill returned to his hometown community. However, he has not reached out to his parents or his sister. When they have attempted to contact him, Bill has avoided contact with his family.
While this is a difficult situation and brings sadness to Peter and Janet, they feel that Bill has quite deliberately separated himself from the rest of the family. Given Bill's decision to go his separate way, Peter and Janet believe that their inheritance can be used most productively by Nancy.
They are also concerned that if Bill receives an inheritance, he will not use it for good purposes. Therefore, Peter and Janet have decided to leave their estate to daughter Nancy.
Blended Family
Joe was a very successful bachelor entrepreneur and businessman. He invested very well and built a number of commercial buildings.
When Joe met Helen, she was divorced and had two children from her first marriage. Her children William and Lorraine were in their early 20s when Joe and Helen were married. They have had very minimal contact with Joe since the marriage.
Joe and Helen had a son named Steve. Helen's third child is quite diligent and has always been a good student. He completed college and recently passed his CPA exam.
When Joe and Helen were married, Joe was already in possession of a very large estate. His attorney recommended that they create a prenuptial agreement. Under this agreement, Helen would receive a substantial amount in trust for her lifetime. When she passes away, the trust assets will be distributed by the terms of the qualified terminable interest property trust created in Joe's estate plan.
Joe and Helen discussed their situation. Joe would like a larger portion of the estate to be transferred to their son Steve. Because the estate is quite large, there are more than sufficient resources to take care of Helen.
After discussion with their attorney Clara, Joe and Helen decided that if he were to pass away first, one-half of his estate would be transferred to Steve. The other half will be placed in a marital deduction trust to benefit Helen. She will have the income and, if needed for her care, the principal from that trust.
When Helen passes away, that marital trust will be divided with one-third to each of the three children.
While this plan provides a much larger inheritance for Steve, the other two children from Helen's first marriage will still also receive substantial assets.
Discussions with Children
These five plans all show specific reasons why a parent may choose to leave unequal amounts. While the reasons are apparent to the parent, they may not always be as easily understood by the children.
Many parents choose to explain and disclose an "unequal shares" plan during life. A meeting is frequently set up at the office of the family attorney. The entire family is invited. The parents explain the reasons why they have decided to create the estate plan with different amounts. Children have the ability to discuss the plan with the parents and ask questions of the financial advisors.
Later, many parents also will meet individually with children to explain the situation and circumstances. With the exception of the estranged child in the "Peter and Janet" example, most children will understand their parents' reasoning. The children may not always agree with their parents, but it usually is helpful for future family harmony for children to discuss their parents' decisions about inheritance.
Therefore, if you as a parent are thinking about passing an unequal amount to children, it may be wise to discuss a possible family meeting with your attorney, CPA or other financial advisor.
SAVVY LIVING
How to Improve Your Balance as You Age
I’ve always been a walker, but when I fell last month my doctor suggested I start doing some balance exercises. Is this really something I need to practice?Most people don’t think much about practicing their balance, but you should. The same way that you walk to strengthen your heart, lungs and overall health, you should practice keeping your balance.
As we age, our balance declines if it isn’t practiced and this can cause falls. Every year more than one in three people age 65 years or older fall and the risk increases with age. A simple fall can cause a serious fracture of the hip, pelvis, spine, arm, hand or ankle, which can lead to hospital stays, disability, loss of independence and even death.
How Balance Works
Balance is the ability to distribute your weight in a way that enables you to hold a steady position or move at will without falling. It’s determined by a complex combination of muscle strength, visual inputs, the inner ear and the work of specialized receptors in the nerves of your joints, muscles, ligaments and tendons that orient you in relation to other objects.
It’s all sorted out in the sensory cortex of your brain, which takes in the information from those sources to give you balance. Aging dulls our balance senses and causes most seniors to gradually become less stable on their feet over time.
Poor balance can also lead to a vicious cycle of inactivity. You feel a little unsteady, so you curtail certain activities. If you’re inactive, you’re not challenging your balance systems or using your muscles. As a result, both balance and strength suffer. Simple acts like strolling through a grocery store or getting up from a chair become trickier. That shakes your confidence, so you become even less active.
Balance Exercises
If you have a balance problem that is not tied to illness, medication or some other specific cause, simple exercises can help preserve and improve your balance. Some basic exercises you can do anytime include:
One-legged stands: Stand on one foot for 30 seconds, or longer, then switch to the other foot. You can do this while brushing your teeth or waiting around somewhere. In the beginning, you might want to have a wall or chair to hold on to.
Heel rises: While standing, rise up on your toes as far as you can. Then drop back to the starting position and repeat the process 10 to 20 times. You can make this more difficult by holding light hand weights.
Heel-toe walk: Take 20 steps while looking straight ahead. Think of a field sobriety test.
Sit-to-stand: Without using your hands, get up from a straight-backed chair and sit back down 10 to 20 times. This improves balance and leg strength.
For additional balance exercises visit go4life.nia.nih.gov, a resource created by the National Institute on Aging that offers free booklets and a DVD that provides illustrated examples of many appropriate exercises. You can order your free copies online or by calling 800-222-2225.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These 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 Living, P.O. Box 5443, Norman, OK 73070.
YOUR PLAN
The Giving Bone by Mark Lail
Hum with me please! The toe bone's connected to the foot bone, the foot bone's connected to the ankle bone, the ankle bone's connected... Well, as much as I've enjoyed the chorus, the favored tune misses an important anatomical reality; the giving bone is connected to the heart bone. And everyone has a giving bone, whether they have a balance sheet designed for an armored truck or one that might buy lunch, depending on the restaurant. Jesus taught us more than once that the generosity is in the size of the heart, rather than the size of the gift. His illustration of the widow and her little bitty offering (all that she had) teaches us that the joy of giving is not reserved for those with great wealth. Even the poor can experience the joy of blessing the Lord and his people.That giving bone, the one connected to the heart, is susceptible to various diseases; selfishness, control or pride to name a few. For good health, one must exercise the giving bone often. Consistent tithing will keep it strong but even more effectively when combined with frequent additional gifts to the Lord and his people. Stewardship is the Lord's way of raising people, not money. Generous giving is a natural outgrowth of a life devoted to God and his son, Jesus Christ. As stewards, we recognize that God is the owner and giver of everything. We give, we exercise the giving bone, and the exercise makes us stronger. As Christians, we grow.
One of the privileges of being a Christian is the responsible care of his property. After the Lord gives a few decades of life including the privilege of working, earning, saving and giving, most Christians stand at the threshold of a great opportunity, the opportunity to make a life gift to the Kingdom of God. Of course this can happen through ordinary wills or trusts but the opportunities today are so much more diversified. Charitable Gift Annuities, for example, are like feeding vitamins to the giving bone! They offer the donor a current income stream in addition to the joy of legacy giving. Endowments provide the opportunity to exercise the giving bone even after the Christian's promotion to heavenly reward.
Peter encourages the early church to give generously. ?The end of all things is near. Therefore be alert and of sober mind so that you may pray. Above all, love each other deeply, because love covers over a multitude of sins. Offer hospitality to one another without grumbling. Each of you should use whatever gift you have received to serve others, as faithful stewards of God's grace in its various forms. If anyone speaks, they should do so as one who speaks the very words of God. If anyone serves, they should do so with the strength God provides, so that in all things God may be praised through Jesus Christ. To him be the glory and the power for ever and ever.? (1 Peter 4:7-11) That was a very different culture than ours but I doubt that Peter's message would change much if he were speaking directly to us today. We have been recipients of God's richest blessings so the expectation is that we will give richly from what we have received.
The giving bone really is connected to the heart bone. A healthy heart seeks to share rather than to hoard. A healthy heart trusts. A healthy heart gives!
WASHINGTON NEWS
Lame-Duck Focus on Tax Extenders
When Congress returns to Washington on November 17, it will need to address its unfinished business. Over 50 provisions known as “tax extenders” have not yet been enacted for 2014.The House of Representatives has passed 12 provisions in permanent legislation, but has not acted on the other 40 tax extenders. The Senate Finance Committee passed the EXPIRE Act of 2014 and would extend 54 provisions for two years.
Following the election, a major financial firm held a tax conference in Washington. Many of the key House and Senate staffers attended the conference. George Callas, Staff Director of the House Ways and Means Select Revenue Measures Subcommittee, suggested that House Republicans will focus on obtaining permanent status on the six business provisions and six charitable provisions in their legislation.
Cathy Koch, tax advisor for Senate Majority Leader Harry Reid (D-NV), noted that the cost of the permanent extenders will be a factor. In prior years, the tax extenders bills have not had offsetting tax increases. Making the 12 House provisions permanent would substantially increase the cost of the bill.
Staff from both parties did indicate they expect agreement on a tax extenders bill prior to the end of the lame-duck session.
At a meeting of the National Conference of CPA Practitioners in New York, there were many participants who expressed a strong desire that Congress act quickly. The organization's President is CPA Sandra G. Johnson. She stated, “Once again the American public is asked to wait on Congress to pass the Extenders. Small business owners and the average American live on tight budgets. Not knowing which deductions or tax credits they will have, or delaying when they will be able to receive their refund, causes extreme hardships for many. Giving Americans no choice but to sit and wait is unacceptable. We implore Congress to pass these Extenders!”
Editor’s Note: With the election over, there will be negotiations between Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV). The tax provisions are likely to involve House Ways and Means Chair Dave Camp (R-MI) and Senate Finance Committee Chair Ron Wyden (D-OR). All four have stated their commitment to complete a tax extenders bill during the lame-duck session. The final legislation will include the IRA charitable rollover and other provisions, all effective as of January 1, 2014. However, the question remains as to how long it will take the four leaders to come to a compromise on the different House and Senate plans. CPAs and taxpayers hope this process will be prompt.
Bipartisan Tax Reform?
Following the November election, both President Obama and incoming Senate Majority Leader Mitch McConnell (R-KY) indicated that they hope to move forward with tax reform in 2015. President Obama has previously supported the concept of business tax reform. He stated, “There is an opportunity for us to do a tax reform package that is good for business, good for jobs, and can potentially finance infrastructure development here in the United States.”
McConnell also spoke favorably about the potential for tax reform and the need to lower the top corporate tax rate. He responded, “We all know having the highest corporate tax rate in the industrial world is a job exporter.” McConnell hopes that there will be a potential agreement on tax reform with the White House.
The incoming Congress will start with a lively campaign for the chairmanship of the House Ways and Means Committee. Current committee members Paul Ryan (R-WI) and Kevin Brady (R-TX) have stated an intention to run for the position. The winner will replace retiring Chairman Dave Camp (R-MI), who published a 979 page proposal for both individual and corporate tax reform.
Ryan stated this week, “I am ready to do tax reform.” However, he acknowledged that while it is possible to accomplish tax reform with 51 Senate votes, long-term tax reform provisions would require 60 Senate votes. This means that a long-term reform would necessarily be a bipartisan bill.
At a national tax conference following the election, staffers for key Senators and Representatives discussed the prospects for reform. Cathy Koch, the key tax staffer for current Majority Leader Harry Reid (D-NV), noted that it would be difficult to enact corporate tax reform without individual reform. Several other Senate tax staffers agreed with that perspective.
In the new legislative term starting in January, the Chairman of the Senate Finance Committee will be Orrin Hatch (R-UT) and the Ranking Member will be Ron Wyden (D-OR). Hatch tax staffer Mark Prater and Wyden staffer Todd Metcalf both noted that comprehensive reform involving both corporate and individual taxes is the only viable political option.
Editor’s Note: In the forthcoming 1,000 page tax reform bill, there will be many winners and losers. While comprehensive tax reform is always difficult, it may be possible in 2015. Prater and Metcalf are correct that a comprehensive reform bill may have sufficient total benefit to the nation to overcome hundreds of special interests who will oppose specific tax reform provisions.
FINANCESStocks - Disney’s Dream Come True
The Walt Disney Company (DIS), a worldwide entertainment company, reported its fourth quarter and Fiscal 2014 earnings on Thursday, November 6. The company announced record earnings for the year.
Disney reported quarterly revenue of $12.39 billion and annual revenue of $48.81 billion. Quarterly and annual revenue for the previous year were $11.57 billion and $45.04 billion, respectively. The revenue for Fiscal 2014 represents a record for Disney.
“Our results from Fiscal 2014 were the highest in the Company’s history, marking our fourth consecutive year of record performance,” said Robert A. Iger, Chairman and CEO of The Walt Disney Company. “We’re obviously very pleased with this achievement and believe it reflects the extraordinary quality of our content and our unique ability to leverage success across the Company to create significant value, as well as our focus on embracing and adapting to emerging consumer trends and technology.”
The company reported net income of $1.63 billion for the quarter and $8 billion for the year. Both figures represent increases over the previous year. The net income for Fiscal 2014 also represents a record for Disney.
Disney’s record year is the result of its Studio Entertainment and Parks & Resorts segments. Frozen’s 2013 release generated $1.2 billion at the box office. It has continued to be a huge revenue generator as Frozen merchandise is sold internationally. This year, Disney had success with Guardians of the Galaxy, Captain America 2 and Maleficent. Finally, traffic at Disney parks and resorts has been strong. All in all, it has been a good year for Disney.
The Walt Disney Company (DIS) shares ended the week at $90.00 per share, down 1.36% for the week.
Lionsgate’s Revenue Grows
Lionsgate Entertainment Corporation (LGF), an entertainment company, reported its latest quarterly results on Thursday, November 6. The company reported strong revenue growth for the quarter.
Lionsgate reported revenue of $552.88 million for the quarter. This represents an increase of 10.86% from the same period last year when the company reported revenue of $498.73 million.
“We’re pleased that our entire portfolio of businesses contributed to our solid results in the quarter, driven by a particularly strong performance from our television operations,” said Lionsgate CEO Jon Feltheimer. “It was a quarter in which we extended our franchises into new lines of business, continued to assemble a strong pipeline of new properties with great commercial potential and developed online platforms that will enhance our ability to deliver our content directly to the consumer.”
The company reported quarterly net income of $20.78 million. This represents a huge increase from the comparable period last year when the company reported net income of $505,000.
While the latest quarter did not include many notable film releases (Expendables 3) Lionsgate plans to release Hunger Games: Mockingjay, Part 1 on November 21, 2014. Lionsgate has effectively cornered the market on fantasy films aimed at teenage audiences. The company produced the Twilight series and is now producing both the Hunger Games series and the Divergent series. In addition, Lionsgate has over 30 different television shows including Mad Men, Nashville, Orange is the New Black and Anger Management.
Lionsgate Entertainment Corporation (LGF) shares ended the week at $33.46 per share, up 0.63% for the week.
Tesla Looks to the Future
Tesla Motors, Inc. (TSLA), manufacturer and seller of electric vehicles, reported its latest quarterly earnings on Wednesday, November 5. The company reported another loss for the quarter, but continues to plan for the future.
Tesla reported quarterly revenue of $851.80 million. This represents an increase from the same period last year when the company reported revenue of $431.35 million.
“Over the past quarter, despite losing almost a month of production due to factory retooling, we delivered the highest number of Model S vehicles ever, with several new records set in North America and worldwide,” said Tesla Chairman and CEO Elon Musk in a letter to shareholders. “We also substantially broadened the appeal of the Model S introducing Dual Motor all-wheel drive and Autopilot. Based on net orders since that introduction, excluding the extraordinary initial demand peak, we are confident of a 50% increase in both net orders and deliveries for Model S alone in 2015.”
The company reported a net loss of $74.71 million for the quarter. This represents a much larger net loss than reported during the comparable quarter last year when the company reported a loss of $38.50 million.
Tesla’s two largest issues to date are the price of its vehicles and the lack of infrastructure to support electric vehicles in most U.S. cities. On July 15, 2014 Tesla announced that it will be manufacturing a vehicle that will cost only $35,000 called the Model III. This is half the price of the Model S. The Model III is set to debut in 2017. The lower price point of the Model III is only possible because of Tesla’s Gigafactory, a $5 billion battery production facility that Tesla is constructing in Nevada. The factory is so named because Tesla’s goal is to produce batteries with total wattage of 50 Gigawatts annually by 2020. The factory will be powered by renewable energy sources including wind and solar energy. Only time will tell if Tesla’s big gamble will pay off.
Tesla Motors, Inc. (TSLA) shares ended the week at $240.20 per share, down 1.15% for the week.
The Dow started the week of 11/3 at 17,391 and closed at 17,574 on 11/7. The S&P 500 started the week at 2,018 and closed at 2,032. The NASDAQ started the week at 4,634 and closed at 4,633.
Bonds - Treasuries Rise as Payroll Growth is Slow
Treasuries rose and yields fell upon the release of this week’s jobs report by the Department of Labor. The report showed the number of jobs in the U.S. grew less than forecast in October.
The Department of Labor report showed that employers added 214,000 jobs in October. This compares unfavorably to the expectation of a number of economists that 235,000 would be added. In addition, average hourly earnings for all workers increased only 2% as opposed to the 2.1% forecast. One positive is that the increase in employment was broad-based. Factories, construction companies and retailers all added employees.
“The economy is still on a favorable path, but it was not an exceptional report,” said Christopher Sullivan, Chief Investment Officer at United Nations Federal Credit Union. “There is a continuation of the recent trend of improvement in the overall labor market, except without any real rise in wages. With no wage-induced inflationary pressure it caps how high yields can go.”
As a result, the 10-year yield fell seven basis points to 2.31%. The 30-year yield fell six basis points to 3.04%.The drop in the 10-year and 30-year yields represents the largest drop for both in three weeks.
While the Labor Department report was disappointing it is probably not enough to change the Federal Reserve’s timetable for increasing the federal funds rate. “We don’t think this is going to ruffle the Fed’s feathers or change their thinking about the potential lift-off next year,” said William O’Donnell, Head U.S. Government-bond Strategist at Royal Bank of Scotland Group Plc’s RBS Securities Unit.
The 10-year Treasury note yield finished the week of 11/3 at 2.31% while the 30-year Treasury note yield finished the week at 3.05%.
CDs and Mortgages - Interest Rates Increase
Freddie Mac released the result of its latest Primary Mortgage Market Survey (PMMS) on Thursday, November 6. The results show average fixed mortgage rates moving higher for the second consecutive week.
The 15-year fixed rate mortgage averaged 3.21% this week. This represents an increase from last week when it averaged 3.13%. One year ago at this time the 15-year fixed rate mortgage averaged 3.27%.
This week, the 30-year fixed rate mortgage averaged 4.02%. This represents an increase from last week when it averaged 3.98%. A year ago, the 30-year fixed rate mortgage averaged 4.16%.
“Mortgage rates continued to rise this week with the 30-year fixed rate mortgage eclipsing the 4% mark,” said Frank Nothaft, Vice President and Chief Economist at Freddie Mac. “The rate increases coincide with real GDP beating consensus expectations of 3% growth by growing at an annualized rate of 3.5% in the third quarter. The ISM Manufacturing Index also beat expectations registering 59 in October, up from September’s reading of 56.6.”
The money market fund finished the week of 11/3 at 0.4%. The 1-year CD finished at 0.7%.
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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.
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