As I read the account of Jesus's birth this year, a part of the passage in which the angel told the shepherds to seek the Savior stood out to me. The angel told them, "You will find a baby wrapped in cloths and lying in a manger" (Luke 2:12b). The shepherds didn't question why the Christ child would be wearing such a simple garment as a cloth or lying in such a humble abode as a manger. They simply took it on faith, and their faith was rewarded when they saw the Savior of the universe.
In contrast, another person mentioned in Luke's gospel did not believe the angel when a miraculous birth was foretold. Zechariah questioned the angel Gabriel regarding the birth of his son, John the Baptist, saying, "How can I be sure of this? I am an old man and my wife is well along in years" (Luke 1:18). Due to his lack of faith, Zechariah was made silent until his son's birth.
What does your faith look like this year? I hope that you will move forward with full confidence in the Savior during this Christmas season and experience all the blessings that God has for you.
Blessings,
Kenneth R. Roney, J.D.
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P.S. If you are interested in planned giving before the end of 2014, please contact the Church of the Nazarene Foundation at 913.577.2983 or info@nazarenefoundation.org. To read more about our services, visit www.NazareneFoundation.org. | |
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How to Fund Your Living Trust
A revocable living trust is one of the principal estate planning methods. While everyone should have a will, there are many benefits of a revocable living trust. For individuals who have moderate or larger estates, the revocable living trust can receive and own your property. For that reason, a revocable living trust is a good centralized method for managing your property.
If you as a senior person are unable or unwilling to manage your assets, the individual you've selected as successor trustee will take over and manage property for you. Not only does this protect you, the property will eventually pass to your heirs and bypass probate. The probate savings could be many tens of thousands of dollars.
A primary benefit of the living trust is that it avoids a conservatorship. If you have only a will, own substantial assets, and become unable to manage your property, it may be necessary to conduct an expensive and lengthy court process to appoint a conservator of your assets.
For example, comedian Groucho Marx had a will. But in his mid-eighties, he no longer was competent to manage his property. There was a major court battle between his family members and a long-time companion over who should be appointed conservator of both him and his property. The court battles consumed large sums of money and led to a very awkward and humiliating spectacle that was bewildering to Groucho Marx.
If Groucho Marx had created a living trust and transferred his property to that trust, then his selected successor trustee could have managed his property during his senior years.
Funded or Unfunded Living Trust?
It is possible to create a living trust that is unfunded during life. Together with the living trust, you would then sign a pour-over will. The assets that you possess at death would go through the probate process. However, the pour-over will may transfer those properties to the living trust. This property is then used according to your trust provisions to benefit your selected heirs.
The disadvantage of the unfunded trust is that you do not avoid probate. Your estate will pay the full probate costs. In addition, you give up the potential protection of a successor trustee during life. It is only if your assets are transferred to the trust that a successor trustee can then manage them for your benefit. The unfunded living trust, therefore, could lead to a conservatorship, as was the case with Groucho Marx.
Funded Living Trust
There are several different types of assets that will be transferred to a living trust. You will need to work with your attorney and other advisors to make certain that your property is correctly placed into the trust.
Title to your property is determined by state law. You will need to comply with the appropriate agreements or documents to make sure that title is held by the trustee. In most cases, you will serve as the initial trustee of the revocable living trust. Therefore, real property and other assets will be transferred from you as an individual to you as trustee of the trust.
Real estate is often the principal asset that is transferred to the trust. This is normally accomplished through a warranty deed or grant deed, depending upon your state. The property is transferred directly from you as an individual to you as trustee. Deeds are notarized and then recorded at the county registrar of deeds.
There are considerations that you should discuss with your attorney before transferring your home or other real property into your trust through a deed. There may be a reassessment or increase in the property tax, or there may be transfer taxes when deeds are recorded. In most states, the popular living trust has been protected from an increase in property taxes. However, you should check with your attorney.
Guidelines for Living Trust Property Transfers
1. Your Home: Even though your home is transferred to a living trust, you still qualify to deduct the mortgage interest paid on the home. If you later sell the home and have made it your principal residence for two of the past five years, you will be able to exclude $250,000 for a single person or $500,000 of capital gain for a married couple. In addition, most states permit you to live in the home and qualify for a homestead exemption reduction in your property tax, even though the home is now titled under the living trust.
2. Securities: Public stocks and bonds can be transferred directly to the trust. You may hold title to the bonds in trust or you may create a trust securities account that holds stocks and bonds.
3. Safe Deposit Box: If you have a safe deposit box, that can be taken out in the name of the trust. However, some institutions that maintain safe deposit boxes require a certified copy of the trust to be kept on file. Another option may be to give your successor trustee signing authority on your safe deposit box.
4. Real Estate: If you own real estate in your home state or other states, it should be transferred to the trust. If you pass away with real estate owned in your individual name in another state, it will require a rather expensive probate proceeding in that state to transfer the real estate. However, if it is transferred to your revocable trust, then you avoid that foreign state probate proceeding and cost.
When your home or other real estate is transferred to the trust, there may be a requirement to send a copy of the trust to your lender. Most title companies and lenders will accept a short "affidavit of trust" that can be prepared by your attorney. This indicates that the trust is a qualified living trust and the trustees have the power to transfer real estate.
5. Tangible Personal Property: A common question is whether tangible personal property should be included in the trust. It is possible to transfer your cars, boats, recreational vehicles or art and other collections to the trust. However, many individuals choose to retain personal ownership of tangible personal property. This is frequently the case because you may periodically buy or sell vehicles or other tangible personal items. By not transferring tangible personal property to the trust, it simplifies lifetime transfer of those items. However, if there is extremely valuable tangible personal property that would be subject to substantial probate cost through your will, then it may be appropriate to transfer that property to the trust.
What if you would like to sell trust property? It is entirely possible to transfer property from the trust to a new person. The trustee may simply deed the property directly to an individual.
In some circumstances, your attorney may think that it is better for title insurance purposes for you to sign two deeds. One deed is from you as trustee to you as an individual. The second deed would be from you as an individual to the new buyer. There may be a modest transfer tax cost for both deeds, but this is an acceptable strategy for simplifying the transfer of real property.
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Shared Housing can Help in Many Ways
What can you tell me about home-sharing programs? Since my father passed away last year, my 70-year-old mother is interested in renting out a room in her house for some extra income and for the companionship. Is this a wise idea?
Renting out a room could be a great idea if your mom has the space and can find the right housemate/renter.
Shared housing has received increased attention lately as people recognize the opportunity to use their home to generate income, receive help with household chores and find companionship.
However, home sharing is not for everyone. Your mom needs to carefully consider the pros and cons of renting out a room in her house and should make a list of what she wants and doesn’t want in a housemate/renter.
The National Shared Housing Resource Center offers a 16-page “Consumers Guide to Home Sharing” that provides a self-questionnaire to those considering renting a room, a list of questions to ask a potential renter and a sample home-sharing lease agreement. This guide costs $10 and can be ordered atnationalsharedhousing.org.
Finding a Renter
After going through the guide, your mom should contact a home-sharing program in her area to find a renter. These programs match adults who are looking for shared housing with older adults who are looking to rent.
These programs handle background checks and consider lifestyle criteria when making matches. They can also help your mom with the leasing agreement that the renter would sign that covers issues like smoking, pets, chores, overnight guests, use of common rooms and more.
Most home-sharing programs are free to use or request a small donation. Others, however, may charge the homeowner and potential renter a fee for this service.
There are dozens of home-sharing programs throughout the U.S. You can find a list of them at the National Shared Housing Resource Center website, nationalsharedhousing.org.
If you don’t find a program that serves your area, you can also search for housemates through national resources like Let’s Share Housing (letssharehousing.com), the Golden Girls Network (goldengirlsnetwork.com) and Roommates 4 Boomers (roommates4boomers.com). All of these programs offer national Web-based matching programs and charge membership fees that run anywhere between $30 and $39.
If you don’t have any luck with the home-sharing programs, call your Area Agency on Aging (call the Eldercare Locator at 800-677-1116 for contact information). They may be able to offer assistance or refer you to local agencies or nonprofit organizations that offer shared housing help.
You can also check with the local senior or community center, church or temple that your mom attends to see if you can post an ad on their bulletin board or in their newsletter. Alternatively, you can advertise in your local newspaper or online at roommates.com or craigslist.org.
If your mom finds someone on her own that she’s interested in renting to, ask the prospective renter to fill out a “rental application” (see rentalleaseagreement.org to download and print one for free), call their references and run a full tenant background check. Background checks can be ordered online through companies like starpointtenantscreening.com and screeningworks.com for a small fee.
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.
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YOUR PLAN
Heroes of generosity don't always have big bank accounts. For years, John Pierson drove a milk route and worked long hours. But he and his wife, Orlene, found time and energy to maintain their church facilities, call on those who were sick and homebound, and make a bold lead pledge in the capital campaign to build a new church facility.
It is as if the spirit of generosity was ingrained in the Piersons. One holiday morning their pastor, after bringing his wife home from the hospital to recuperate after major surgery, found John and Orlene waiting at his home with dinner. What a moving and appropriate gift of love for that clergy family.
John and Orlene were Nazarene Legacy Partners, modern day heroes who made a difference in advancing God's Kingdom. In the later stages of their lives, a member of the Nazarene Foundation staff visited the Piersons in their assisted living facility and was moved to tears as John tenderly cared for his wife who was in the late stages of Alzheimer's disease. Just a few weeks later, Orlene died.
Not long after this at 95 years old, John was playing his violin, sharing beautiful music with other senior adults. As he concluded the last chorus of "To God Be the Glory" where the lyrics state: "O come to the Father, thro" Jesus, the Son," this dear saint slumped over with a heart attack and died. One of his caregivers, who often tried to keep up with John on his afternoon strolls, said, "This was John's good-bye party."
Through the Piersons' Charitable Trust and Charitable Gift Annuities, the Church of the Nazarene Foundation was privileged to make significant distributions to the local church John and Orlene attended as well as to other Nazarene ministries that were near to the hearts of the Piersons.
Faithful people, such as the Piersons, who have modeled generous living and Christlike service, give us cause to offer thanks as Paul did when he wrote his letter to the Romans.
Learn more about the many planned giving services the Foundation offers and how to leave a legacy gift to the ministries you love, contact the Church of the Nazarene Foundation and we will be happy to assist you.
Note: This is one in a series of articles for "Modeling Generosity" a series where Holiness Today partners with the Church of the Nazarene Foundation and other entities. Learn how God's people model generosity in their lives. Help inspire others to leave a lasting legacy by sending your stories, or the story of someone you know who lives generously, to info@nazarenefoundation.org.
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WASHINGTON NEWS
Tax Extenders Signed by President
On December 16 the Senate passed the Tax Increase Prevention Act of 2014 (H.R. 5771). The 76-16 vote showed overwhelming support for a one-year retroactive extension of 55 tax extenders. The bill also included the Achieving a Better Life Experience (ABLE) Act. This bill allows families who have a disabled child to create a tax-favored savings account similar to a 529 plan. The ABLE account may enable the child to receive funds for education, housing, medical and transportation expenses. It will generally not limit other private insurance or Medicaid benefits.
During passage of the tax extenders bill, Senate Finance Committee Chairman Ron Wyden (D-OR) commented, “With this stop-and-go tax extender bill, Congress is turning in its tax homework 11 months late and expecting to earn full credit. This package of incentives – which applies only to 2014 – will last two more weeks before families and business will be thrown back into the dark about what taxes they owe. This tax bill doesn’t have the shelf life of a carton of eggs.”
Majority Leader Harry Reid (D-NV) acknowledged that the temporary tax provisions were not the solution. He commented, “This legislation also provides more incentives for American companies to create jobs by giving them a tax incentive for research and development. I hope that as we move into the 114th Congress, Republicans will join us in making many of these tax cuts permanent.”
President Obama signed the bill on Dec. 19. The major charitable provisions in the bill are the IRA Charitable Rollover for individuals age 70½ and older, an enhanced deduction for gifts of food inventory, expanded deductions for conservation easements and benefits for gifts of appreciated property by Subchapter S corporations.
Editor’s Note: The comment by Majority Leader Reid suggests that there is now bipartisan agreement that many of the tax extender provisions could be made permanent. Sen. John Thune (R-SD) has indicated that in January he may again introduce the bill to make the charitable tax extender provisions permanent.
2015 Tax Reform Principles
In January the Senate Finance Committee Chairman will be Orrin Hatch (R-UT). He spoke on December 16th on the Senate floor and explained his principles for 2015 tax reform. Both he and Ranking Member Ron Wyden (D-OR) have expressed confidence that they will be able to move forward with major tax reform next year.
Sen. Hatch outlined seven principles for tax reform. These are a summary of the “Comprehensive Tax Reform for 2015 and Beyond” report that he recently published.
1. Economic Growth – The high corporate and personal tax rates limit the ability of the economy to increase employment.
2. Fairness – The tax code is “riddled with exclusions, exemptions, deductions and credits.” Hatch would eliminate many of the tax expenditures, broaden the base and lower the rates.
3. Simplicity – With four million words, the tax code has grown extremely complex. The time and expense it takes each year to comply with the tax code could employ three million workers full time at $25 per hour.
4. Permanence – There are over 100 tax provisions that are temporary and will expire in the next decade. Good tax policies should be permanent.
5. Competitiveness – With the highest corporate rate in the industrial world and a system of taxation on worldwide income, U.S. companies are continuing to move their operations overseas. A tax structure with lower rates would keep companies here in America.
6. Savings and Investments – Tax reform needs to be designed to encourage Americans to save and invest. This will lead to economic development and greater employment.
7. Revenue Neutral – A major tax reform bill will not pass if it attempts to raise $1 trillion in new taxes. The changes that are proposed can be accomplished without a net increase in actual tax payments.
Editor’s Note: The efforts by Hatch and Wyden perhaps are encouraging the White House and Department of Treasury to publish an administration bill. A spokesman for the White House suggested that the White House may produce a detailed plan in 2015. While tax reform is a difficult process, it will occur in 2015 only if the House, Senate and White House all seek to move that effort forward.
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FINANCES
Stocks - Nike Shares Fall On Slow Orders
Nike, Inc. (NKE), an international athletic apparel and equipment retailer, reported its latest quarterly results on Thursday, December 18. The company reported increases in both revenue and net income.
Nike reported revenue of $7.38 billion for the quarter. This represents an increase of 16.6% from the same period last year when the company reported revenue of $6.43 billion.
“Our strong second quarter results once again demonstrate NIKE is a growth company,” said Mark Parker, President and CEO of NIKE, Inc. “The power of our portfolio continues to unlock growth, as we keep a laser focus on our biggest opportunities. The breadth and depth of that portfolio has helped us consistently deliver strong results – quarter after quarter, year after year.”
The company reported quarterly net income of $655 million. This represents an increase of 22.7% from the comparable quarter last year when the company reported net income of $534 million. Earnings per share came in at $0.74 per share, compared with $0.59 per share during the same quarter one year ago.
Expectations are high when you are the world’s largest athletic apparel and equipment retailer. These high expectations were demonstrated this week. On Thursday, Nike reported significant year-over-year growth in revenue and net income as well as an 11% increase in third quarter sales orders. However, Nike’s stock slumped after the earnings announcement since the 11% increase in third quarter sales orders was the slowest growth pace in four quarters.
Nike, Inc. (NKE) shares ended the week at $94.84, down 1.65% for the week.
BlackBerry in Recovery Mode
BlackBerry Limited (BBRY), a mobile communications company, reported its latest quarterly earnings on Friday, December 19. The company may be on the road to recovery as long as it drives revenue growth by selling more mobile phones in the coming year.
BlackBerry announced revenue of $793 million for the latest quarter. This represents a decrease of 33.5% from the same period last year when the company reported quarterly revenue of $1.19 billion.
“We achieved a key milestone in our eight quarter plan with positive cash flow,” said Chairman and CEO John Chen. “We also attained another important milestone in the release of our new enterprise software products and devices. Our focus now turns to expanding our distribution and driving revenue growth.”
The company reported a net loss of $148 million. This represents a substantial improvement over the net loss of $4.4 billion reported during the comparable period last year. Net loss per share came in at $0.28, compared to $8.37 reported in the quarter one year ago.
The numbers show that while BlackBerry is recovering by cutting costs and focusing on its core competencies, it is struggling to generate revenue. The company decided not to try to compete with Apple and Samsung in the highly competitive consumer smartphone market. Instead it focused its energies on selling mobile devices and security software to the health-care, government and professional sectors. In furtherance of this strategy, BlackBerry announced on December 19 that it closed the acquisition of Germany’s Secusmart, an encryption technology developer.
BlackBerry Limited (BBRY) shares ended the week at $9.99, up 0.81% for the week.
FedEx Reports Strong Earnings
FedEx Corporation (FDX), a provider of transportation e-commerce and business services, reported its latest quarterly results on Wednesday, December 17. The company announced strong earnings.
The company reported revenue of $11.9 billion for the quarter. This represents an increase of 5% from the $11.4 billion reported during the comparable quarter last year.
“FedEx posted strong results and a higher operating margin in the second quarter, with continued growth in volumes and base yields in each of our transportation segments,” said Frederick W. Smith, FedEx Chairman, President and CEO. “We are in the final stages of this year’s peak shipping season, and I’d like to thank the more than 300,000 dedicated team members around the world for once again delivering outstanding service to our customers during the holidays.”
FedEx reported net income of $616 million. This represents an increase of 23% from the same period last year when the company reported net income of $500 million. Earnings per share came in at $2.14 per share, compared with $1.57 per share for the quarter one year ago.
FedEx has been attempting to expand its e-commerce solutions. On December 15 and 16 the company announced the acquisition of GENCO and Bongo International, respectively. GENCO is a third-party logistics provider with a comprehensive portfolio of supply chain services. Bongo is leader in providing end-to-end solutions that help retailers grow by reaching international consumers through the Internet.
FedEx Corporation (FDX) shares ended the week at $174.22, down $1.47% for the week.
The Dow started the week of 12/15 at 17,286 and closed at 17,805 on 12/19. The S&P 500 started the week at 2,005 and closed at 2,071. The NASDAQ started the week at 4,680 and closed at 4,765.
Bonds - Bonds Rise with Fed Guidance
Bond yields fell and prices rose on December 19 after a significant rise in yields earlier in the week. This drop in yield came after the Federal Open Market Committee (FOMC) released a statement following their December meeting.
The FOMC met on December 16 and 17 to discuss Federal Reserve policy. Following the meeting the FOMC released a statement. Investors were wondering whether the FOMC would release more specific guidance as to when they might raise the federal funds rate. In past statements the FOMC stated that the rate would stay at its current level, between 0% and 0.25%, for a “considerable time.” In the statement released after the December meeting the FOMC said that it will “be patient in beginning to normalize the stance of monetary policy.” This led to speculation by investors everywhere about what “patience” means.
Some investors were cautious in interpreting the Fed’s statement. “Patience probably means the same thing as ‘considerable time’,” said Ray Remy, Head of Fixed-Income at Daiwa Capital Markets America, Inc. “Rate hikes are subject to the economy. We’re data dependent.” Other investors guessed at a specific time frame. “The Fed confirmed they are very determined to move in the summer time, or maybe as early as April,” said Scott Mather, Manager at Pimco Total Return Fund.
While the Federal Reserve has not given a specific time frame for the rate hike they have confirmed that the rates will increase at some point in the relatively near future. As a result the 10-year Treasury yield fell two basis points to 2.19%. This is after the yield had increased 17 basis points during the previous two days.
The 10-year Treasury note yield finished the week of 12/15 at 2.18% while the 30-year Treasury note yield finished the week at 2.77%.
CDs and Mortgages - Interest Rates Hit Lowest Level of 2014
Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS) on Thursday, December 18. The results showed average fixed mortgage rates falling to their lowest levels in 2014.
The 30-year fixed rate mortgage averaged 3.80% this week. This represents a decrease from last week when it averaged 3.93%. One year ago at this time the 30-year fixed rate mortgage averaged 4.47%.
This week, the 15-year fixed rate mortgage averaged 3.09%. This represents a decrease from last week when it averaged 3.20%. Last year at this time the 15-year fixed rate mortgage averaged 3.52%.
“The 30-year fixed mortgage rate dropped to its lowest point of 2014 this week,” said Frank Nothaft, Vice President and Chief Economist at Freddie Mac. “Mortgage rates fell along with 10-year Treasury yields, which closed at their lowest level since May 2013. November housing starts came in at a seasonally adjusted annual rate of 1.028 million starts, down 1.6% from an upwardly-revised October value. Housing starts for the calendar year will likely come in around 1 million, above the 2013 pace but lower than forecasters had expected at the start of 2014. Consumer prices declined more than expected in November, with CPI contracting 0.3%.”
The money market fund finished the week of 12/15 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. |
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