Today I'd like to tell you about an excellent way for you to support your ministry of choice: to make a bequest in your will, living trust,or with a codicil.
There are several different types of bequests.
Specific Bequest. A specific bequest involves making a gift of a specific asset such as real estate, a car, other property or a gift for a specific dollar amount. For example, you may wish to leave your home or $10,000 to your chosen ministry.
Percentage Bequest. Another kind of specific bequest involves leaving a specific percentage of your overall estate to charity. For example, you may wish to leave 10% of your estate to your chosen ministry.
Residual Bequest. A residual bequest is made from the balance of an estate after the will or trust has given away each of the specific bequests. A common residual bequest involves leaving a percentage of the residue of the estate to charity. For example, you may wish to leave 30% of the residue of your estate to your chosen ministry.
Contingent Bequest. A contingent bequest is made to charity only if the purpose of the primary bequest cannot be met. For example, you could leave specific property, such as a vacation home, to a relative, but the bequest language could provide that if the relative is not alive at the time of your death, the vacation home will go to your chosen ministry.
Please contact us if you have any questions about how to make a bequest to your chosen ministry or to request any additional information that might be helpful to you and your attorney as you consider your estate planning options. You can reach us at 913.577.2983or info@nazarenefoundation.org. To learn more about the Church of the Nazarene Foundation, visit our website, www.NazareneFoundation.org.
Blessings,
Kenneth R. Roney, J.D.
President
Personal Planner
Helping Children Today
When children are in their 30s and 40s, they frequently are starting a new career or beginning a family. Many are still paying off school debts. For these reasons they could benefit from some additional help.
If parents have appreciated property, a special trust that helps children could be very beneficial. The parents will receive substantial tax savings, while the children can benefit from 20 years of income from the trust.
Kris and Jill have raised three children. When the children were young, Kris and Jill did what many parents do in their mid-40s—they bought a new home. However, rather than selling their old home, they turned it into a rental unit.
After renting that home for 20 years, Kris and Jill are now 65. Their three children have all moved out and are starting families. Kris and Jill own their current home, have recently sold their business and enjoy good retirement income.
Their oldest child is a daughter with two children. The middle son is married with three children and their younger son has two children. Kris and Jill especially enjoy visiting their seven grandchildren.
As they considered their situation, Kris and Jill decided they would like to help their children. However, they are seeking a solution that will also save taxes. The rental home was initially purchased for $200,000. Their CPA has taken depreciation during the time they have owned it. In today's real estate market, it is worth about $400,000.
Kris and Jill are now ready to sell and move on with life. Therefore, they sat down to discuss options with their CPA, Sam.
Kris: "Sam, you know that we bought the new house when we were both 45 and we kept this as a rental. Now after 20 years, we are tired of tenants and ready to move on. Jill wants to spend our time visiting the grandchildren and doing some traveling. But I know that this home is now worth much more today, so there would be a big tax if we were to sell. Is there a way we can help the children without paying tax?"
Sam: "I understand that it's now time to consider moving on. Your retirement income is good, you own your home and have no debt. You are well positioned to do something to help your children. It would also be great if we could reduce your income taxes for the next five years. That would provide additional ability for you to save and invest more for the future."
Jill: "Yes, we are in good shape but our children are now trying to start families. They need some extra help. With the cost of education, clothes and other items for our grandchildren, we would like to give them some assistance."
Sam: "You could set up a special trust that allows you to sell this property tax free. That would leave the full value available to earn income for your children. I could run an illustration that shows how we could set that trust up for 20 years and sell without tax. In addition, you receive a charitable deduction of approximately $150,000. We probably would spread that over about five years. Each year you could reduce your personal income taxes by over a third with that deduction."
Kris: "That's the ticket—helping children and saving taxes at the same time. How much income would we transfer to the children?"
Sam: "It looks like that trust would pay over $500,000 to the children over the 20 years. That's quite a bit of education and clothes!"
Jill: "And after the 20 years of payments to children, can we then pick the charities that will receive the trust property?"
Sam: "Yes. You can select one or more charities that will receive a very nice gift."
Kris: "But who will manage the property? We're going to start traveling and we don't want to have management responsibilities."
Sam: "We can talk to a charity or a trust company to serve as trustee. A trustee will invest the proceeds after the property is sold and pay the income to your three children. If you would like, I will make contact with a trustee and we can get the process started."
Jill: "I think it is time to move forward, so let's go ahead and set up this plan."
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Savvy Living
Simplified Cellphones for Seniors with Hearing Problems
Can you recommend some basic simplified cellphones for seniors with hearing loss? My 82-year-old father needs to get a new cellphone for occasional calls or emergencies, but he needs something that's easy to use and with which he can hear.
There are several simplified cellphones on the market today that are specifically designed for seniors - including those with hearing loss. These are basic cellphones that come with big buttons, easy-to-navigate menus, SOS emergency buttons, enhanced sound and hearing aid compatibility. Here are some top options.
Senior-Friendly Phones
If your dad isn't locked into a cellphone contract, there are three senior-friendly options to consider, all from no-contract cellphone companies.
A popular option is GreatCall's Jitterbug5 (greatcall.com, 800-918-8543). This custom designed Samsung flip-phone offers a backlit keypad with big buttons, large text on a brightly colored screen, and "YES" and "NO" buttons to access the phone's menu of options instead of confusing icons.
It also offers voice dialing, a powerful speakerphone, a built-in camera and a variety of optional health and safety features like the "5Star" medical alert button. This button allows your dad to call for help and speak to a certified agent 24/7 who can identify his location and dispatch help as needed. Other great features include "Urgent Care" which provides access to registered nurses and doctors for advice and diagnoses and "GreatCall Link" which keeps family members informed through your dad's phone activities.
The Jitterbug5 sells for $99 with a one-time $35 activation fee, no contract and calling plans that start at $15 per month.
If you're looking for something a little less expensive, the Doro PhoneEasy 626 sold throughConsumer Cellular (consumercellular.com, 888-345-5509) is an excellent option.
This flip-phone offers a backlit, separated keypad that can speak the numbers as you push them, which is a nice feature for seniors with vision problems. It also has a big easy-to-read color display screen that offers large text with different color themes.
Other handy features include two speed dial buttons, shortcut buttons to texting and the camera, a powerful two-way speakerphone and an ICE (in case of emergency) button on the back of the phone that will automatically dial one preprogramed number.
The Doro 626 sells for $50 with service plans starting at $10 per month and no long-term contract. They even offer discounts to AARP members.
Another budget-friendly cellphone is the Snapfon ezTWO for seniors (snapfon.com, 800-937-1532) that costs under $20 with a $35 activation fee, no contract and monthly service plans that start at $10. If you don't want the Snapfon service plan (you can go through AT&T or T-Mobile), the phone is $80.
This is a bar-style phone that provides big buttons, a color screen, enhanced volume with a speaker phone, a speaking keypad and an SOS emergency alert button on the back of the phone that can sound an alert when pushed and held down for five seconds. It then sends a text message to as many as fiveemergency contacts and calls those contacts in order until the call is answered. For an additional $15 per month you can subscribe to their SOS monitoring service that will dispatch help as needed.
Shared Plan Options
If you want to get your dad a simple cellphone through your cellphone provider, most carriers - like AT&T, Verizon, Sprint and T-Mobile - still offer a few basic cellphones that are inexpensive and hearing aid compatible.
AT&T offers customers the "LG A380." For Verizon users, there's the "Samsung Gusto 3" and "LG Revere 3." If you're a Sprint customer there's the "Kyocera Kona" and "Alcatel OneTouch Retro." And for T-Mobile users there's the "LG 450."
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
Deferred Gift Annuity
Several years ago Larry and Allison invested $30,000 in what they believed to be an attractive stock. It turned out to be a very wise decision, because the value of the stock increased to $100,000 a few years later. Though they were not in need of additional income at the time, the couple decided to cash in on this growth and began considering selling the stock.
Allison: We had had a good year and were looking for ways to maximize deductions and reduce what we owed in taxes. At the same time, we had been exploring the best way to make a gift to our favorite charity.
Larry: Allison and I were both age 50 at the time, in good health and still working. And though we didn't really need extra current income, we were planning to retire at age 65 so we were always interested in smart retirement planning. Our goal was to be able to live comfortably and travel in our motorhome to visit friends and family.
Allison: I remember when we met with a gift planner. He explained the benefits of setting up a deferred gift annuity. Instead of selling, we could give our stock to our favorite charity and receive an immediate charitable tax deduction. Plus, when we turn 65, the deferred gift annuity would make annualretirement income payments to us for our lifetime.
Larry: We decided to set up the deferred gift annuity. And we experienced first hand each of the benefits Allison mentioned: we received a charitable tax deduction and tax savings immediately. And now that we're retired, we receive income each year that helps make our retirement travel possible. On top of all of this, the deferred gift annuity makes a portion of the income payments we receive tax free.
*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 gift annuity benefits may be different, you may want to click here to view a color example of your benefits. Washington News
Will Congress Fix the Tax Code?
As Americans are enjoying the 4th of July holiday, the House Ways and Means Committee staff published a summary of efforts to improve the tax code. These efforts highlight the potential changes in three areas of taxation.
1. Permanent Tax Extenders - There are 55 tax provisions that are extended for one or two years at a time. Unfortunately, the extension in 2014 occurred in mid-December. It is very difficult for people to plan or use provisions such as the IRA charitable rollover when the bills are passed so late in the year. Therefore, Ways and Means Committee staff believe that several of the tax extenders should be made permanent. The committee has passed bills to make permanent the charitable IRA rollover, enhanced deductions for gifts of food to relief organizations, state sales tax deductions and business deductions that create jobs. These bills await Senate action.
2. Highways - America needs better roads, safe bridges, airport improvements and municipal facilities.Select Revenue Measures Subcommittee Chairman Dave Reichert (R-WA) has been seeking "permanent, sustainable funding sources" for the Highway Bill. After 33 short-term extensions of the Highway Bill, Reichert desires to find a permanent solution to fund the much needed infrastructure.
3. Comprehensive Tax Reform - Members of both parties agree that the tax-code is antiquated and needs to be reformed. Most tax reform proposals involve a combination of lower tax rates and a broader tax base with fewer deductions. Committee staff suggest "the goal of tax reform should be to create a fairer, flatter code that makes America more competitive, creating new growth and jobs."
Editor's Note: Both the House and Senate tax-writing committees will continue hearings on tax reform this year and in 2016. The probable legislation for tax reform will be deferred until 2017. It is likely that a comprehensive tax reform bill will be 1000 or more pages. The last major reform in 1986 was the product of two years of detailed effort. To write this comprehensive tax change will require extensive work and negotiation between the House, Senate and White House.
FINANCES
Stocks - General Mills Continues to Struggle
General Mills Continues to StruggleGeneral Mills, Inc. (GIS) announced its fourth quarter and annual results on Wednesday, July 1. The results showed that changing consumer preferences continue to plague the company.
The company reported that quarterly revenue was $4.3 billion while annual revenue declined 2% to $17.6 billion. Quarterly revenue was relatively unchanged from the same period last year but fell below estimates expecting $4.52 billion.
"General Mills fiscal 2015 operating performance was mixed," said General Mills Chairman and CEO Ken Powell. "We returned our U.S. yogurt business to growth, and our brands gained share in categories representing 65% of our U.S. Retail measured sales volume, but overall sales trends reflected the impact of changing consumer food preferences."
Earnings during the quarter fell to $186.8 million or $0.30 per share. During the same period last year earnings were $404.6 million or $0.65 per share. For the year earnings were $1.2 billion or $1.97 per share.
For the past few years General Mills' tale has been the same. Consumers increasingly prefer gluten free and high protein diets, hurting sales of cereals and other packaged foods. General Mills is looking for a way to find its footing in a changing marketplace. This past quarter underscored General Mills' challenges as revenue and earnings came in below expectations. Despite its recent struggles, the company's share price has risen 4.5% since the start of the year.
General Mills, Inc. (GIS) shares ended the week at $57.05, up 1% for the week.
Family Dollar Reports Earnings
Family Dollar Stores, Inc. (FDO) announced its third quarter results on Wednesday, July 1. The company reported mixed results in what may be its final earnings release before its merger with Dollar Tree.
The company reported that net sales during the quarter increased 2.6% to $2.73 billion. Comparable store sales for the quarter showed a smaller 0.7% increase.
Because of its pending merger with Dollar Tree, Family Dollar did not provide a press statement with its earning release. The company also did not hold a conference call to discuss its quarterly performance.
Family Dollar reported that net income for the quarter fell 1.5% to $79.9 million or $0.70 per share. Net income was impacted by a $4.7 million expense related to the company's upcoming merger.
Since the merger of Family Dollar with Dollar Tree was announced last year, the value of the deal has grown from $8.5 billion to $10 billion. Following the merger the companies will together operate over 13,000 stores generating $19 billion in annual sales. On the day of Family Dollar's earnings announcement, the merger was still awaiting FTC approval. The long wait ended on Thursday, July 2 when the FTC finally announced its approval of the deal.
Family Dollar, Inc. (FDO) shares ended the week at $79.35, relatively unchanged for the week.
ConAgra Foods Reports Quarterly Results
ConAgra Foods, Inc. (CAG), a packaged foods company of such brands as Hunt's and Orville Redenbacher, announced its fourth quarter results on Tuesday, June 30. The company's results were largely in line with expectations.
The company reported that revenue increased 3.7% during the quarter to $4.1 billion. This was only slightly below expectations that revenue would be $4.14 billion.
"With fiscal year 2015 now behind us, we are now pursuing a different plan to maximize value for our shareholders," said ConAgra Foods CEO Sean Connolly. "Our new plan will center on a more aggressive approach to driving margin improvement through SG&A reductions, supply chain efficiencies and other projects."
For the quarter ConAgra reported a profit of $209.2 million or $0.48 per share. This was significantly better than the $324.2 million loss the company reported during the comparable period last year.
As ConAgra CEO Sean Connolly mentioned, the company is looking to improve its margins. In one of its first steps in that direction the company announced plans to sell its Ralcorp private-label business. Since acquiring Ralcorp the company has taken more than $2 billion in write-downs. ConAgra plans to use the sale to help it better focus on its consumer brands.
ConAgra Foods, Inc. (CAG) shares ended the week at $44.56, up 3% for the week.
The Dow started the week of 6/29 at 17,937 and closed at 17,730 on 7/2. The S&P 500 started the week at 2,099 and closed at 2,077. The NASDAQ started the week at 5,021 and closed at 5,009.
Bonds - Jobs Report Drives Treasury Yields Down
Jobs Report Drives Treasury Yields DownTreasury prices rose on Thursday, July 2 following the release of the June jobs report. The report reversed yield gains Treasuries had amassed the day before when factory and construction data provided a more optimistic picture of the U.S. economy.
The U.S. economy added 223,000 jobs during June, which was below estimates that 230,000 jobs would be added. The jobs gains for the prior two months were revised downward by 60,000 jobs. Jobless claims for the last week of June showed the number of people applying for unemployment benefits reached a 5-week high.
July's jobs report helped Treasuries maintain their up-and-down pattern for the year. Investors continue to monitor the health of the U.S. economy to get an idea of when the Federal Reserve will raise the benchmark interest rate.
"The [jobs] number keeps rate-hike expectations roughly balanced between September and December," said James Ong, a portfolio manager at Invesco. "The headline jobs number is good, but the flat wage growth indicates that the Fed's 2% inflation target is not likely to materialize anytime soon."
On Wednesday the 10-year Treasury yield rose 7 basis points after the release of upbeat factory and construction data. Some of those yield gains were wiped away on Thursday as the 10-year yield fell 3 basis points to 2.39%.
The 10-year Treasury note yield finished the week of 6/29 at 2.39% while the 30-year Treasury note yield finished the week at 3.19%.
CDs and Mortgages - Interest Rates Reach 2015 Highs
Interest Rates Reach 2015 HighsFreddie Mac released the results of its latest Primary Mortgage Market Survey (PMMS) on Thursday, July 2. Interest rates rose this week heading into the July 4th holiday weekend.
The 30-year fixed rate mortgage averaged 4.08% this week. This was up from last week when it averaged 4.02%.
This week, the 15-year fixed rate mortgage averaged 3.24%. This number was up from last week when it averaged 3.21%.
"Overseas events are generating significant day-to-day volatility in interest rates," said Sean Becketti, Chief Economist at Freddie Mac. "Nonetheless, the week-to-week impact on most rates was modest -- the 30-year mortgage rate increased just 6 bps, to 4.08%. The MBA composite index of mortgage applications fell 4.7% in response to what is now three consecutive weeks of mortgage rates over 4%. Other measures, however, confirmed continued strength in housing -- pending home sales rose 0.9%, exceeding expectations, and the Case-Shiller house price index recorded another solid increase."
The money market fund finished the week of 6/29 at 0.3%. The 1-year CD finished at 0.6%.
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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.
The Global Church of the Nazarene Foundation
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.
The Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220 United States
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