Midway through life, Mary and Dan found themselves without a viable plan for their estate after their death. They had written wills many years before, but those wills no longer accurately reflected what their financial and life situations looked like. Not only were their personal lives drastically different from when they were first married, but they also now owned a successful small business as well. If they were to die, what they would leave behind would not at all reflect the impact that they wanted to have. In fact, most of their assets would probably go to distant relatives or the state because neither of them had the right provisions in their wills.
Sound familiar? Mary and Dan's story is not unique. Chances are, you or someone you know is in this exact same position. You want the assets that you leave behind to make a difference, but you don't have a plan in place to make sure that it happens.
Thankfully, that can change. Mary and Dan rewrote their wills. But not only that, they made sure that, this time around, they included in their wills what was most important to them. They partnered with the Church of the Nazarene Foundation and made sure that part of their money was going where the Lord wanted it to go, in this case to a ministry that was close to their heart.
So I would encourage you--Don't wait. If your will does not reflect the legacy that you want to leave behind, contact your lawyer and make those changes today. Create an estate plan that will benefit others for years to come.
To read Mary and Dan's full story, click here. If you have questions about including charitable gifts in your will, feel free to reach out to us at (913) 577-2983 orinfo@nazarenefoundation.org.
Blessings,
Kenneth R. Roney, J.D.
President
PERSONAL PLANNER
Chronic Illness - Care of Your Property
If you have a chronic illness, you will need to care both for your person and for your property. This article will explain some of the specific preparations that are important to care for your property. With a chronic illness, you may have a higher probability that you will not be able to manage your property and will need assistance during your lifetime. In addition, there will be a need to make sure that your testamentary transfers are upheld if a relative questions your ability or your capacity to make those decisions.
Power of Attorney
There are several types of powers of attorney for managing your property. With a chronic illness, you may not have the physical or mental capability to manage your property. A designated person can be of great assistance to you in making sure that your property is managed and used for your best care.
A general power of attorney will permit your selected representatives to have complete control over all of your financial affairs. It is quite powerful, but must also be granted carefully so that the person uses that broad power appropriately. You must have a high level of trust in the person to give him or her general power of attorney.
A special power of attorney is a grant of limited rights. For example, a person may have the right to lease or sell your principal residence. If you are transferred to a care facility and will no longer be able to return home, it may be good to give a person the legal right to sell your residence.
A "springing" power of attorney can be particularly useful if you have a chronic illness. In the event that you are incapacitated or unable to function effectively, then your selected agent may assume the rights under your power of attorney. With a springing power, there can be difficulty in determining whether the lower level of incapacity is sufficient to trigger the power. For this reason, some states have specific requirements and restrictions on springing powers.
If your designated agent for the power of attorney has fairly broad power, you may wish to include the ability for that person to make gifts to family or gifts to charity. Typically, the right to make gifts enables your agent to continue your current pattern of gifts to family or to charity. Your agent will decide if the resources in your estate allow both the making of gifts and providing for your care.
Capacity to Make a Will
With a chronic illness, your basic estate planning document is still a will. While you may also have a revocable living trust, a will is needed to distribute any property not owned by the trust when you pass away.
Many of your assets will pass to beneficiaries outside the probate process and will not be owned inside your trust. These include your qualified IRA and other retirement plans, life insurance policies that are transferred by beneficiary designation and any real property owned as joint tenants with right of survivorship. That real property will be transferred under property law to the surviving person.
However, if your designated beneficiary under a qualified retirement plan or a life insurance policy passes away before you, or the other joint tenant with a real property asset passes away prior to your demise, the assets could be distributed to your estate and be subject to your will. Therefore, it is essential to have a proper will.
With some types of chronic illness, you may have a loss of either physical or mental abilities. In this case, an heir could claim that you did not have proper capacity to sign the will and could contest it. Therefore, it may be helpful to emphasize to your witnesses that you clearly understand the process and have a good understanding both of your property and of the general provisions of the will. In addition, some individuals obtain records from their physicians that explain the various types of treatment. Your doctor may also discuss your ability to have control of your mental facilities during the estate planning process.
Revocable Living Trust
A revocable living trust is strongly recommended if you have a chronic illness. It is much more flexible than a durable power of attorney.
If you suffer from a disability or become incapacitated, upon the recommendation of one or two physicians your successor trustee will be empowered to manage your assets.
With no revocable living trust, a family member may instead be required to obtain permission from the probate court to create a conservatorship. This will require expensive and repeated visits to the court for approval of expenditures, sale of most real property and other actions. It will greatly increase the expense and the difficulties for the person who is acting as your conservator.
A successor trustee under a revocable living trust is far more flexible and less expensive. Compared with a conservatorship, the cost of creating the revocable living trust may be recovered in the first few months of the time when you need someone else to manage your property.
Revocable living trusts are a legal agreement. You specify the management powers of the trustee, the general provisions for distribution of income and principal and select your successor trustee. Ordinarily, you will serve as the initial trustee. If you are incapacitated, the successor trustee will take over and manage the property. Your property will be legally transferred with a deed for real property and by creating trust accounts for mutual funds, securities and cash. It is essential to make sure that title to the selected property is properly transferred under state law rules to you as trustee of the living trust.
Assemble Your Records
Even if you have a power of attorney to help manage your property, have signed a valid will and have created a revocable living trust, it will help your advisors if you have an organized system for your records.
The first set of records should include all of the above planning documents. In addition, the documents for the care of your person, such as a durable power of attorney for healthcare, a HIPAA release, a living will or an advance directive should be included.
The second set of documents will be all of your financial records. Many people with a chronic disease have placed their records on computer. Through a combination of online banking and records from your brokerage and securities accounts, all of your financial data can be accessible in one location.
The third category of record is your family information and personal history. This could include marriage certificates, insurance records and other various types of medical reports.
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SAVVY LIVING
Understanding the Responsibilities of an Executor
An old family friend recently asked me to be the executor of his will when he dies. I feel flattered that he asked, but I'm not sure what exactly the job entails. What can you tell me?
Serving as the executor of your friend's estate may seem like an honor, but it can also be a huge chore. Here's what you should know to help you prepare.
Rules and Responsibilities
As the executor of your friend's will, you're essentially responsible for winding up his affairs after he dies. While this may sound simple enough, you need to be aware that the job can be tedious, time consuming and difficult depending on the complexity of his financial and family situation. Some of the duties required include:
Filing court papers to start the probate process (this is generally required by law to determine the will's validity).
Taking an inventory of everything in his estate.
Using his estate's funds to pay bills, including taxes, funeral costs, etc.
Handling details like terminating his credit cards, and notifying banks and government agencies like Social Security and the post office of his death.
Preparing and filing his final income tax returns.
Distributing assets to the beneficiaries named in his will.Be aware that each state has specific laws and timetables on an executor's responsibilities. Your state or local bar association may have an online law library that details the rules and requirements. The American Bar Association website also offers guidance on how to settle an estate. Go to americanbar.org and type in "guidelines for individual executors and trustees" to find it.
Get Organized
If you agree to take on the responsibility as executor of your friend's estate, your first step is to make sure he has an updated will, and find out where all his important documents and financial information are located. Being able to quickly put your hands on deeds, brokerage statements and insurance policies after he dies will save you a lot of time and hassle.
If he has a complex estate, you may want to hire an attorney or tax accountant to guide you through the process, with the estate picking up the cost. If you need help locating a pro, the National Association of Estate Planners and Councils (naepc.org) and the National Academy of Elder Law Attorneys (naela.org) are great resources that provide directories on their websites to help you find someone.
Avoid Conflicts
Find out if there are any conflicts between the beneficiaries of your friend's estate. If there are some potential problems, you can make your job as executor much easier if everyone knows in advance who's getting what, and why. So ask your friend to tell his beneficiaries what they can expect. This includes the personal items too, because wills often leave it up to the executor to dole out heirlooms. If there's no distribution plan for personal property, suggest he make one and put it in writing.
Executor Fees
As the executor, you're entitled to a fee paid by the estate. In most states executors are entitled to take a percentage of the estate's value, which usually ranges anywhere from 1 to 5 percent depending on the size of the estate. But, if you're a beneficiary, it may make sense for you to forgo the fee. That's because fees are taxable, but Uncle Sam in most states doesn't tax inheritances.
For more information on the duties of an executor, get a copy of the book "The Executor's Guide: Settling A Loved One's Estate or Trust" for $32 at nolo.com or call 800-728-3555.
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.
SAVVY LIVING
Understanding the Responsibilities of an Executor
An old family friend recently asked me to be the executor of his will when he dies. I feel flattered that he asked, but I'm not sure what exactly the job entails. What can you tell me?
Serving as the executor of your friend's estate may seem like an honor, but it can also be a huge chore. Here's what you should know to help you prepare.
Rules and Responsibilities
As the executor of your friend's will, you're essentially responsible for winding up his affairs after he dies. While this may sound simple enough, you need to be aware that the job can be tedious, time consuming and difficult depending on the complexity of his financial and family situation. Some of the duties required include:
Filing court papers to start the probate process (this is generally required by law to determine the will's validity).
Taking an inventory of everything in his estate.
Using his estate's funds to pay bills, including taxes, funeral costs, etc.
Handling details like terminating his credit cards, and notifying banks and government agencies like Social Security and the post office of his death.
Preparing and filing his final income tax returns.
Distributing assets to the beneficiaries named in his will.Be aware that each state has specific laws and timetables on an executor's responsibilities. Your state or local bar association may have an online law library that details the rules and requirements. The American Bar Association website also offers guidance on how to settle an estate. Go to americanbar.org and type in "guidelines for individual executors and trustees" to find it.
Get Organized
If you agree to take on the responsibility as executor of your friend's estate, your first step is to make sure he has an updated will, and find out where all his important documents and financial information are located. Being able to quickly put your hands on deeds, brokerage statements and insurance policies after he dies will save you a lot of time and hassle.
If he has a complex estate, you may want to hire an attorney or tax accountant to guide you through the process, with the estate picking up the cost. If you need help locating a pro, the National Association of Estate Planners and Councils (naepc.org) and the National Academy of Elder Law Attorneys (naela.org) are great resources that provide directories on their websites to help you find someone.
Avoid Conflicts
Find out if there are any conflicts between the beneficiaries of your friend's estate. If there are some potential problems, you can make your job as executor much easier if everyone knows in advance who's getting what, and why. So ask your friend to tell his beneficiaries what they can expect. This includes the personal items too, because wills often leave it up to the executor to dole out heirlooms. If there's no distribution plan for personal property, suggest he make one and put it in writing.
Executor Fees
As the executor, you're entitled to a fee paid by the estate. In most states executors are entitled to take a percentage of the estate's value, which usually ranges anywhere from 1 to 5 percent depending on the size of the estate. But, if you're a beneficiary, it may make sense for you to forgo the fee. That's because fees are taxable, but Uncle Sam in most states doesn't tax inheritances.
For more information on the duties of an executor, get a copy of the book "The Executor's Guide: Settling A Loved One's Estate or Trust" for $32 at nolo.com or call 800-728-3555.
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
Blessed to Be a Blessing
F. Irwin Harris and his wife Arlita experienced God's blessing in many ways; one of which was their introduction at Friendship Church of the Nazarene in Stuart, Oklahoma. Arlita tells the story with fond remembrance. "The Pastor (Rev. Dan Mappus) was a long-time friend of mine; Irwin was greeter and said that God told him 'There goes your wife' as I walked away to go to Sunday school." As it turned out, Rev. Mappus performed their wedding on June 1, 2005.
From pastoring to working as a businessman and rancher, Irwin was blessed with many successes in his professional life. He pastored for seventeen years, worked as a sales manager for thirteen years, and worked as a rancher for fifteen years. He also served for five years as Director of Endowment at Bethany Nazarene College (now Southern Nazarene University). Irwin displayed his commitment to Nazarene higher education through the establishment of the F. Irwin Harris Ministerial Scholarship Endowment at Southern Nazarene University. This endowment provides tuition scholarships to students who are preparing for full-time ministry in the Church of the Nazarene.
Irwin also established the Rev. O. O. Mills Memorial Scholarship to honor his father-in-law, and Arlita established the A. M. Hills Library Development Restricted Fund Scholarship for Southern Nazarene University students, staff, faculty, and alumni desiring to obtain a Master's Degree in Library Science from an ALA-Accredited Library School.
Arlita commented, "When Irwin and I married in 2005, a gas well was being dug on his ranch. He felt like the gas was put there by God—that he hadn't done anything to earn it, so in 2006 we gave the royalties to the Church of the Nazarene Foundation. He received a monthly check which he used to help college students go on mission trips and get their educations. When he died, the remainder went to Southern Nazarene University to help theology students with financial needs. I know Irwin was smiling, knowing that his wish was fulfilled."
Arlita also notes, "It was important to Irwin to 'pay it forward.' He was especially grateful to B. M. Hall, who was Business Manager to Bethany Peniel (now Southern Nazarene University) when Irwin was a student. The Hall family invited Irwin to lunch on Sundays; B.M. helped him find jobs so he could pay his college bills." Hall is being honored by Irwin (posthumously) at the 2015 SNU Homecoming Recognition of the Hall of Witnesses.
Arlita considers Irwin's legacy to be "helping others in ministry and missions so they can accomplish what God wants them to be and do." Arlita has enjoyed a successful career as a librarian and in teaching library science. She considers her legacy to be making a difference in the lives of others, especially those she can mentor.
Throughout their lives, this couple has exemplified the saying "blessed to be a blessing.".
YOUR PLAN
Blessed to Be a Blessing
F. Irwin Harris and his wife Arlita experienced God's blessing in many ways; one of which was their introduction at Friendship Church of the Nazarene in Stuart, Oklahoma. Arlita tells the story with fond remembrance. "The Pastor (Rev. Dan Mappus) was a long-time friend of mine; Irwin was greeter and said that God told him 'There goes your wife' as I walked away to go to Sunday school." As it turned out, Rev. Mappus performed their wedding on June 1, 2005.
From pastoring to working as a businessman and rancher, Irwin was blessed with many successes in his professional life. He pastored for seventeen years, worked as a sales manager for thirteen years, and worked as a rancher for fifteen years. He also served for five years as Director of Endowment at Bethany Nazarene College (now Southern Nazarene University). Irwin displayed his commitment to Nazarene higher education through the establishment of the F. Irwin Harris Ministerial Scholarship Endowment at Southern Nazarene University. This endowment provides tuition scholarships to students who are preparing for full-time ministry in the Church of the Nazarene.
Irwin also established the Rev. O. O. Mills Memorial Scholarship to honor his father-in-law, and Arlita established the A. M. Hills Library Development Restricted Fund Scholarship for Southern Nazarene University students, staff, faculty, and alumni desiring to obtain a Master's Degree in Library Science from an ALA-Accredited Library School.
Arlita commented, "When Irwin and I married in 2005, a gas well was being dug on his ranch. He felt like the gas was put there by God—that he hadn't done anything to earn it, so in 2006 we gave the royalties to the Church of the Nazarene Foundation. He received a monthly check which he used to help college students go on mission trips and get their educations. When he died, the remainder went to Southern Nazarene University to help theology students with financial needs. I know Irwin was smiling, knowing that his wish was fulfilled."
Arlita also notes, "It was important to Irwin to 'pay it forward.' He was especially grateful to B. M. Hall, who was Business Manager to Bethany Peniel (now Southern Nazarene University) when Irwin was a student. The Hall family invited Irwin to lunch on Sundays; B.M. helped him find jobs so he could pay his college bills." Hall is being honored by Irwin (posthumously) at the 2015 SNU Homecoming Recognition of the Hall of Witnesses.
Arlita considers Irwin's legacy to be "helping others in ministry and missions so they can accomplish what God wants them to be and do." Arlita has enjoyed a successful career as a librarian and in teaching library science. She considers her legacy to be making a difference in the lives of others, especially those she can mentor.
Throughout their lives, this couple has exemplified the saying "blessed to be a blessing.".
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WASHINGTON NEWS
IRS Increases Efforts to Reduce Identity Theft
On August 26, Sen. Kelly Ayotte (R-NH) held a hearing of the Senate Budget Committee in Manchester, New Hampshire. Sen. Ayotte expressed concern about the growth of tax-related identity theft.
She stated, “Tax-related identity theft is a serious problem that is growing at epidemic proportions. According to the Treasury Inspector General for Tax Administration, about 2.4 million taxpayers’ names or Social Security numbers were used to file fraudulent tax returns in 2013. That is nearly a tenfold increase since 2010.”
IRS Commissioner John Koskinen agreed that from 2010 to 2012 there was a substantial increase in identity theft. He noted that identity theft, “for a time overwhelmed law enforcement and the IRS.”
However, Koskinen reported progress for 2013. During that year the IRS prevented $24.3 billion in identity theft refund fraud. Nevertheless, an estimated $5 billion in fraudulent refunds was paid during 2014.
The first witness at the Senate Budget Committee hearing was a New Hampshire mother whose daughter Maddi lost her life in a tragic car accident. Maddi’s Social Security number was stolen and three tax returns were filed claiming refunds. When the New Hampshire mother contacted the IRS, they refused to disclose the fraudulent returns to her.
As a result, Sen. Ayotte and other Senators from both parties responded by introducing the Social Security Identity Defense Act of 2015. The bill requires the IRS to notify individuals if a Social Security number has been stolen. In addition, the Social Security Administration must notify employers of any stolen Social Security numbers.
Attorney Christopher Lee of the Taxpayer Advocate Service (TAS) described federal government efforts to assist taxpayers. TAS Case Advocates work with taxpayers and the IRS to resolve identity theft cases.
Lee explained the two types of identity theft. First, a thief may obtain a Social Security number and file early in January or February to claim a refund. When the victim files, his or her refund will be delayed by two to six months to resolve the identity issue.
Second, some individuals will use the Social Security number of another person to obtain employment. They often will have low or no withholding. At the end of the year, the employer will issue a W-2 with the Social Security number of the victim. The identity thief has received the income and pays no income tax. When the victim files his or her tax return, the IRS will catch the underreporting and demand payment for additional taxes from the victim.
The Taxpayer Advocate Service is working with the IRS to improve administration of identity theft cases. TAS claims that a more centralized approach will result in better taxpayer service and quicker resolution of identity theft cases.
WASHINGTON NEWS
IRS Increases Efforts to Reduce Identity Theft
On August 26, Sen. Kelly Ayotte (R-NH) held a hearing of the Senate Budget Committee in Manchester, New Hampshire. Sen. Ayotte expressed concern about the growth of tax-related identity theft.
She stated, “Tax-related identity theft is a serious problem that is growing at epidemic proportions. According to the Treasury Inspector General for Tax Administration, about 2.4 million taxpayers’ names or Social Security numbers were used to file fraudulent tax returns in 2013. That is nearly a tenfold increase since 2010.”
IRS Commissioner John Koskinen agreed that from 2010 to 2012 there was a substantial increase in identity theft. He noted that identity theft, “for a time overwhelmed law enforcement and the IRS.”
However, Koskinen reported progress for 2013. During that year the IRS prevented $24.3 billion in identity theft refund fraud. Nevertheless, an estimated $5 billion in fraudulent refunds was paid during 2014.
The first witness at the Senate Budget Committee hearing was a New Hampshire mother whose daughter Maddi lost her life in a tragic car accident. Maddi’s Social Security number was stolen and three tax returns were filed claiming refunds. When the New Hampshire mother contacted the IRS, they refused to disclose the fraudulent returns to her.
As a result, Sen. Ayotte and other Senators from both parties responded by introducing the Social Security Identity Defense Act of 2015. The bill requires the IRS to notify individuals if a Social Security number has been stolen. In addition, the Social Security Administration must notify employers of any stolen Social Security numbers.
Attorney Christopher Lee of the Taxpayer Advocate Service (TAS) described federal government efforts to assist taxpayers. TAS Case Advocates work with taxpayers and the IRS to resolve identity theft cases.
Lee explained the two types of identity theft. First, a thief may obtain a Social Security number and file early in January or February to claim a refund. When the victim files, his or her refund will be delayed by two to six months to resolve the identity issue.
Second, some individuals will use the Social Security number of another person to obtain employment. They often will have low or no withholding. At the end of the year, the employer will issue a W-2 with the Social Security number of the victim. The identity thief has received the income and pays no income tax. When the victim files his or her tax return, the IRS will catch the underreporting and demand payment for additional taxes from the victim.
The Taxpayer Advocate Service is working with the IRS to improve administration of identity theft cases. TAS claims that a more centralized approach will result in better taxpayer service and quicker resolution of identity theft cases.
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FINANCES
FINANCES
Stocks - Williams-Sonoma Reports Quarterly Earnings
Williams-Sonoma, Inc. (WSM) announced its second quarter results on Wednesday, August 26. The company's strong revenue and earnings were not enough to overcome disappointing third quarter guidance.The company reported that revenue grew 8.5% during the quarter to $1.127 billion. Significantly, comparable brand revenue grew 6.3% compared to the same period last year.
"We are pleased to have delivered another quarter of solid performance, once again demonstrating the competitive advantage from our multi-brand, multi-channel, business model," said Williams-Sonoma President and CEO Laura Alber. "As anticipated, during the quarter, we incurred incremental supply chain costs primarily associated with the west coast port disruption to restore our in-stock inventory levels, allowing us to provide superior long-term customer service. We are focused on disciplined execution against our strategic growth initiatives."
Williams-Sonoma reported earnings per share during the quarter of $0.58. This number was in line with expectations.
Williams-Sonoma's earnings have been quite strong over the past few years, a trend that for the most part has held true this year. Indeed, the company's stock price reached a peak of $89.38 earlier this month. However, analysts found reasons for concern in this latest report, pointing out that operating margins and third quarter fiscal guidance both were below expectations. Not surprisingly, the company's stock price fell 6.3% after the earnings release.
Williams-Sonoma, Inc. (WSM) shares ended the week at $75.81, relatively unchanged for the week.
Best Buy's Outlook Brighter
Best Buy Co., Inc. (BBY) announced its second quarter results on Tuesday, August 25. The company reported strong earnings driven by improved sales in mobile phones and appliances.
The company reported that revenue during the quarter was $8.53 billion. This was a small 1% increase from $8.46 billion during the same period last year.
"In the Domestic business, our comparable sales increased 2.7%, excluding the impact of installment billing, driven by continued strong performance in major appliances, large screen televisions and mobile phones," said Best Buy Chairman and CEO Hubert Joly. "As we look forward, while we are cognizant of the recent financial market turbulence, we believe the combination of an opportunity-rich environment and the strength of our competitive advantages leads us to have a positive outlook about our future prospects, starting with the important back-to-school third quarter."
Best Buy reported earnings per share of $0.49. This was a 17% jump compared to earnings per share of $0.42 during the same period last year.
It was not too long ago that analysts were wondering whether Best Buy's brick-and-mortar operation could survive in a world increasingly dominated by e-retailers like Amazon. For Best Buy, the answer to its survival could hinge on a shift in product focus. This past quarter Best Buy experienced strong gains in sales of mobile phones and appliances. Comparable store sales for appliances increased 20.7%. Strong mobile phone and appliance sales also helped Best Buy gain market share. Investors hope this is a sign that the company's earnings will continue to grow and solidify into the future. Best Buy also announced that it will begin issuing a regular quarterly dividend of $0.23 per common share.
Best Buy Co., Inc. (BBY) shares ended the week at $35.97, up 25% for the week.
Burlington Stores Announces Earnings
Burlington Stores, Inc. (BURL), an off-price apparel retailer, announced its second quarter results on Thursday, August 27. The company's earnings beat analyst estimates for revenue and earnings.
The company reported that sales increased 9.6% during the quarter to $1.144 billion, about $30 million higher than pre-release estimates. Comparable store sales increased 5.6%.
"We are extremely pleased with our second quarter performance highlighted by a 5.6% increase in comparable store sales on top of last year's 4.7% increase," said Burlington President and CEO Tom Kingsbury. "We believe we are well positioned for the fall season and remain focused on delivering great value, highly desirable brands, an improved store experience, and fresh product to our customers every day."
Net income for the quarter was $14.9 million or $0.19 per share compared to a $900,000 loss during the same period last year. Analysts had expected earnings per share to be lower at $0.12.
On nearly every basis the second quarter was a significant improvement for Burlington compared to the first quarter of this year. During the first quarter comparable store sales rose only 0.8%, so a 5.6% increase this quarter was welcome. Investors have to be especially pleased with Burlington's earnings report as the company increased wages for employees during the month of July.
Burlington Stores, Inc. (BURL) shares ended the week at $53.50, up 9.3% for the week.
The Dow started the week of 8/24 at 16,460 and closed at 16,643 on 8/28. The S&P 500 started the week at 1,965 and closed at 1,989. The NASDAQ started the week at 4,352 and closed at 4,282.
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Bonds - Treasuries Rise as Rate Decision Looms
Bonds - Treasuries Rise as Rate Decision Looms
Treasury prices rose on Friday, August 28 amid ongoing speculation about whether the Federal Reserve will soon raise the benchmark interest rate. Treasuries were volatile all week in response to lingering weakness and uncertainty in the stock market.
Interviews this week with several members of the Federal Reserve produced divergent answers on whether the benchmark interest will be raised in September. St. Louis Fed President James Bullard and Cleveland Fed Chief Loretta Mester both said that an interest rate hike could be in order despite the health of stocks or the wider economy. Their opinion was not shared, however, by Fed Vice Chairman Stanley Fischer who believes that it is too early to tell if a rate hike should happen in September.The difference of opinion even among Federal Reserve members means that investors will remain anxious regarding a pending rate hike. "We're in that volatile stage where the market is going to be pretty nervous going into the August jobs report next Friday, because I think that's going to be the key decider of whether the Fed ultimately decides to move off of zero or not," said Dan Heckman, Senior Fixed Income Strategist U.S. Bank Wealth Management.
If the U.S. economy is going to provide motivation for the Federal Reserve to raise interest rates, then a pair of economic reports released last week do not bode well for those expecting a rate hike. Personal income in the U.S. rose 0.4% in July, which was lower than expected. In addition, the revised Michigan consumer sentiment index was 91.9, less than the expected 93 rating economists were expecting. This was also below July's rating of 93.1
The 10-year Treasury note yield finished the week of 8/24 at 2.19% while the 30-year Treasury note yield finished the week at 2.91%.
CDs and Mortgages - Stock Market Volatility Drives Rates Down
Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, August 27. The report showed interest rates falling this week as ongoing market volatility in China and the U.S. persisted.The 30-year fixed rate mortgage averaged 3.84% this week. This represents a decrease from last week when it averaged 3.93%. Last year at this time, the fixed rate mortgage averaged 4.10%.
This week, the 15-year fixed rate mortgage averaged 3.06%. This is down from last week when it averaged 3.15%. The 15-year fixed rate mortgage averaged 3.25% one year ago.
"Given the recent volatility, mortgage rates could change up or down significantly by the time this report is released," said Sean Becketti, Chief Economist at Freddie Mac. "There are indications though that the unsettled state of global markets will make the Fed think twice before taking any action on short-term interest rates in September. If that's the case, the 30-year mortgage rate may remain subdued in the short-to-medium term, providing support for continued strength in the housing sector. Just this week, new home sales were reported to be up 26% year over year."
The money market fund finished the week of 8/24 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
The Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220 United States
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