While planning your giving, you may have questions about your various options. Giving can be done either directly or through a gift model that can provide tax benefits and even income. Some options include bequests, charitable gift annuities, endowments, donor-advised funds, and many more.
To learn more about these or other giving options, visit this page on our website or contact us at (913) 577-2983 or info@nazarenefoundation.org.
Blessings,
Kenneth R. Roney, J.D.
President
PERSONAL PLANNER
Planning for Senior Care
Planning for retirement and senior care is very important. The activities of daily living for a senior person include eating, dressing, bathing and walking or moving. At some point, every senior will likely need assistance in one or more of these areas.
An important consideration will be the cost of providing that care. By retirement, it is helpful for you to own your home, be debt free, and have retirement income and savings. Retirement income will frequently include Social Security, your IRA or 401(k), a pension plan and investment earnings.
Typically, there are four different levels of care utilized by seniors. The first level includes "in-home care" which includes moderate assistance with certain living functions, such as meal delivery. In home care often eventually progresses to "home healthcare", defined as assistance with the activities of daily living by a home healthcare aid or nurse. The next level is a more formal assisted living or independent living facility. In an assisted living facility, there are more staff and a higher level of assistance. Finally, the fourth level is skilled nursing care. This is 24-hour nursing care in a facility that is designed to provide a higher level of medical assistance.
Independent Home Care
Independent home care is popular for several reasons. First, it is the least expensive of the four levels of care. Independent home care, or "home care" typically provides a senior with assistance for one or more life functions that does not include healthcare.
With home care, seniors are able to live independently in their home. Seniors with home care might, for example, benefit from a program that delivers a daily meal to their home. If they are not able to maintain their driver's license, they might also participate in a ride-sharing program once or twice per week so they can go to the store to buy certain essentials.
There are a number of local charities that provide services to assist with home care and outreach services. In addition, friends and family can create a schedule to provide assistance to their senior loved one.
Finally, home care very often includes a home monitoring system that allows seniors to contact the monitoring service if they are injured. This service might also require seniors to check in at the same time every morning when an alert sounds so that the monitoring service can contact a relative who lives nearby if the senior does not respond.
Home Healthcare
The next level of care, home health care, involves a greater degree of assistance to seniors and includes healthcare services that are provided in the senior's home. Home healthcare will vary significantly depending on the level of services provided. However, it frequently will cost from $10,000 to $30,000 per year.
Home healthcare is preferred to assisted living or nursing home care because the senior will be able to maintain his or her independence. While the cost is generally reasonable, there are many organizations and providers who can give you good quality care. A key decision for home healthcare is the person who will be the caregiver. Family is often the first option. If you have a child or other relative who is willing to provide assistance, you may be able to live quite comfortably in a family home or perhaps in an attached apartment.
The next level will frequently be a service provider such as a home healthcare aide. The aides visit on a regular basis and provide assistance. Many individuals are able to manage well by themselves as long as they have a home healthcare aide who makes regular visits.
A third level of home healthcare may involve visits by a practical nurse or registered nurse. The nurse may assist you with various types of care and check to see that you are using your medications or other types of therapy in a beneficial manner.
There are safeguards that should be carefully considered for home healthcare. The organizations that provide home healthcare are generally licensed by each state. You can check into their certification and also their reputation. It's also helpful to have a family member who is in regular contact with the senior person who is receiving home healthcare.
As you age and become more senior, it may be appropriate for you to stop driving and to depend on others for transportation. In addition, the family protector can watch to see that you do not make inappropriate expenditures or become vulnerable to any type of abuse.
Independent or Assisted Living
The next level of care is independent or assisted living which typically has a cost of $40,000 to $65,000 per year.
Many facilities provide both independent and assisted living. Independent living permits the individual to live in a residential facility, but to have a reasonably high level of control of his or her life. With independent living, the person will live in his or her own apartment or small residence and frequently retains a vehicle and the ability to drive. Independent living often offers a meals plan so that the resident can choose to eat in a common dining area.
Assisted living occurs in a more structured residence with a higher level of staff services. The assisted living facility will involve staff who regularly assist residents with the activities of daily living.
Long-term Care
Long-term care includes several levels of care. The two most common levels are skilled nursing and intermediate care. Skilled nursing will provide around-the-clock care from a licensed practical nurse or registered nurse. The cost of skilled nursing care may be $80,000 to $110,000 per year.
Intermediate care facilities also are intended to care for residents that have chronic illnesses or impairments of health. These facilities offer 24-hour staff care. However, they will not always have a registered nurse and may use vocational or practical nurse staff.
It is extremely important with long-term care to examine the facility. Is the facility owned and managed by a for-profit or a nonprofit? What is the affiliation of the organization?
A person may be in a skilled nursing home for several years. Because the costs are very significant, the financial strength of the organization is quite important. If the organization at some point in the future has a financial shortfall, it may find it necessary to reduce services. This could have great impact on the care of a senior person.
Other areas to consider are the facility and the services. What is the location of the facility? You should review the cleanliness of the rooms and the public areas and try to determine the general feelings of current residents toward the facility. Many care facilities offer a number of different types of services. Some of these are social or recreational while others are therapeutic and health related.
Finally, how are the levels of staffing and the food service for the facility? A good facility will have a caring and adequate staff and food service team for the number of residents.
Alzheimer's Care
Alzheimer's is a challenging disease because it leads progressively to very high care requirements. Because of the staff and facility requirements, Alzheimer's care can cost $100,000 or more per year.
There are three general levels of Alzheimer's. Early-stage Alzheimer's involves some short-term memory loss, difficulties with routine tasks and mood swings. Middle-stage Alzheimer's patients may start to show confusion about time and place, loss of memory and wandering. With late-stage Alzheimer's, there is a loss of cognitive function and eventual physical deterioration.
Home care is possible for early-stage Alzheimer's. A family member can provide the level of care needed. It is important that the caregiver understands the risks and takes protective actions to minimize the potential for the senior person to wander off and become lost.
The next level of care is an organized senior residence with a measure of independence. This will provide available 24-hour care, but still enables an early or middle-stage Alzheimer's patient to have some level of control of his or her activities.
Finally, for advanced stages of Alzheimer's, the senior person will need 24-hour residential care. Family members should examine the rooms, consider the staffing levels and review the policies regarding medication for those Alzheimer's patients.
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SAVVY LIVING
SAVVY LIVING
Mobile Safety Products that Can Help Seniors on the Go
Do you know of any medical alert SOS buttons for seniors that work away from the home? I would like to get one for my 80-year-old mother, but would like to find one that's not limited to the house.
There are actually a number of medical alert products on the market today that give seniors the flexibility to call for help both inside and outside the home.
For years, medical alert devices (also known as "personal emergency response systems" or PERS) have been popular home safety products for elderly seniors who live alone. These systems come with a wearable SOS pendent button - usually a necklace or wristband - and a base station that connects to the home phone line.
At the press of a button, your loved one could call and talk to a trained operator through the system's base station receiver, which works like a powerful speakerphone. The operator will find out what's wrong and will notify a family member, a neighbor, friend or emergency services as needed.
But these devices are limited because they only work in and around the house. If you're away from home and need help, you're out of luck. But today there are numerous mobile products that work anywhere. Here are some of the top options.
High-End Device
If you're interested in getting your mom a comprehensive, high-end medical alert device that works everywhere, consider the Philips Lifeline GoSafe system. It provides a necklace pendant button, which works like a two-way communication device, allowing your mom to speak and listen directly through the pendant.
If your mom were to fall or need help at home, she could press the button and the home-base communicator system would be activated to make the call to the response center, who would then dispatch help as needed. But if she fell or needed help away from home, the system's AT&T wireless network would kick in and place the call.
This system also has six sophisticated locating technologies so the response center would know your mom's exact location, even where GPS signals are weak. In addition, it has fall detection sensors built into the pendant that can automatically summon help if a fall is detected and your mom is unable to push the button.
The GoSafe is available at lifelinesys.com (or 855-276-7761) for $149, with monthly services fees that start at $55.
Most Affordable Alert
If the GoSafe is more than your mom needs, an option that's easier on the budget is the GreatCall Splash, which costs only $50, with a $35 activation fee and monthly service fees that start at $20.
This pendant-style waterproof device, which fits in the palm of your hand, works like a cell phone with GPS tracking capabilities. It can be worn on a belt, around the neck or attached to a key chain.
To call for help, your mom would push one button, an operator from the device's emergency monitoring service would be on the line to assist her, and because of the GPS technology, her general location would be known. For even more peace of mind, there's the Splash with fall detection capabilities (this option costs $35 per month and the pendant must be worn around the neck for it to work) that will automatically call for help when a fall is detected.
The Splash can be purchased at GreatCall.com (or 800-918-8543), or at Walmart, Sears, Best Buy and Rite Aid Pharmacy stores.
Other Options
If you want some additional options to shop and compare, there are other good companies that offer moderately priced mobile alerts, including Consumer Cellular (consumercellular.com/ally); Bay Alarm Medical (bayalarmmedical.com); MobileHelp (mobilehelp.com); Medical Alert (medicalalert.com); Life Alert (lifealert.com) and SafeGuardian (safeguardian.com).
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
Tax-Free Sale
Howard and Lynn were age 55 when they purchased some land outside of town. They thought it would be a good investment that they could later sell for a higher price.
Over the years, development from town has moved toward the property and their land is now next to a large commercial store. They now rent the property to the commercial store for overflow parking.
Howard: We have owned this property for over 10 years. It has been a good investment and increased in value. We have received just enough rental income in the last few years to pay the taxes. However, we now would like to sell.
Lynn: It would be nice if we could sell without paying a large tax. Our tax advisor has told us that if we were to sell, there would be a large capital gains tax. We also could use some tax deductions this year.
The good news is that Howard and Lynn were able to create a special trust called a charitable remainder unitrust and receive three very nice benefits.
Bypass capital gain
Increase income
Charitable deduction
Howard: We are delighted with our unitrust. With our unitrust, we saved about $36,000 in capital gains tax and almost $18,000 in income taxes. That is over $54,000 in tax savings!
Lynn: Plus, we increased our income. The land was producing almost no income before. Now, we receive over $12,000 in income each year. This increased income is one of my favorite parts of the plan.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your unitrust benefits may be different, you may want to click here to view a color example of your benefits.
YOUR PLAN
Tax-Free Sale
Howard and Lynn were age 55 when they purchased some land outside of town. They thought it would be a good investment that they could later sell for a higher price.
Over the years, development from town has moved toward the property and their land is now next to a large commercial store. They now rent the property to the commercial store for overflow parking.
Howard: We have owned this property for over 10 years. It has been a good investment and increased in value. We have received just enough rental income in the last few years to pay the taxes. However, we now would like to sell.
Lynn: It would be nice if we could sell without paying a large tax. Our tax advisor has told us that if we were to sell, there would be a large capital gains tax. We also could use some tax deductions this year.
The good news is that Howard and Lynn were able to create a special trust called a charitable remainder unitrust and receive three very nice benefits.
Bypass capital gain
Increase income
Charitable deduction
Howard: We are delighted with our unitrust. With our unitrust, we saved about $36,000 in capital gains tax and almost $18,000 in income taxes. That is over $54,000 in tax savings!
Lynn: Plus, we increased our income. The land was producing almost no income before. Now, we receive over $12,000 in income each year. This increased income is one of my favorite parts of the plan.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your unitrust benefits may be different, you may want to click here to view a color example of your benefits.
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WASHINGTON NEWS
Identity Theft Services Tax-Free
In Announcement 2015-22 the IRS stated that receiving identity theft services will not lead to harmful tax consequences.
Identity theft “occurs when a person wrongfully obtains and uses another person's personal information (for example, name, social security number, or banking or credit account numbers) in a way that involves fraud or deception, typically for economic gain.” Since 2000 the top consumer complaint to the Federal Trade Commission (FTC) has been identity theft. In 2012, the last year with government statistics, there were 16.6 million American victims of identity theft.
While major corporations expend substantial funds to protect data, there still have been data breaches. When there is a breach, the corporation may offer various services to those who have been affected. These identity theft services may involve substantial costs to the organization that suffered the data breach.
The IRS stated, if you have “personal information” that is “compromised in a data breach,” you are not required to “include in gross income the value of the identity protection services provided.” Additionally, the IRS will not assert that a data-breach employer providing identity protection services to employees must include the value of the identity protection services in the employees' gross income and wages.
There is one exception to the tax-free benefit. If there is a cash award to the identity theft victim, that amount is not excluded under this provision.
The Announcement does not apply to benefits received through an insurance company or to identity theft benefits provided as an employee's compensation benefit package.
Editor’s Note: The tax-free treatment of identity theft services is logical. If there is a data breach, the services are intended to restore a person to his or her normal circumstances. In most cases even these benefits will not improve the situation for a victim. At best, he or she will suffer no further damage. Because there is no net benefit, the restorative services should not be taxable.
Cadillac Healthcare Excise Tax May Lead to HSA Plans
In 2018 there will be a 40% excise tax paid by health insurance companies on expensive or “Cadillac” healthcare plans. The tax applies if the plan cost is over $10,200 for individuals or $27,500 for family coverage. Members of both the House and Senate have proposed repealing the 40% excise tax, but no bill has passed.
A recent survey by the National Business Group on Health suggests that most employers are concerned but not yet taking action. Because growth in the cost of medical care exceeds the 2.4% inflation factor for the excise tax floors, many plans may be subject to the tax. When asked if they thought that their company plans would be subject to the excise tax by 2020, 72% of business executives surveyed stated that their healthcare plan would exceed the excise tax limits.
As a result, employers are exploring options to reduce costs. Many will convert to healthcare savings account (HSA) plans. Others may initiate wellness programs or consumer-directed plans.
National Business Executive Brian Marcotte announced the survey results at a Washington meeting. He noted, “Companies are looking to see what's going on in Washington, and they see some energy around possibly repealing the excise tax."
WASHINGTON NEWS
Identity Theft Services Tax-Free
In Announcement 2015-22 the IRS stated that receiving identity theft services will not lead to harmful tax consequences.
Identity theft “occurs when a person wrongfully obtains and uses another person's personal information (for example, name, social security number, or banking or credit account numbers) in a way that involves fraud or deception, typically for economic gain.” Since 2000 the top consumer complaint to the Federal Trade Commission (FTC) has been identity theft. In 2012, the last year with government statistics, there were 16.6 million American victims of identity theft.
While major corporations expend substantial funds to protect data, there still have been data breaches. When there is a breach, the corporation may offer various services to those who have been affected. These identity theft services may involve substantial costs to the organization that suffered the data breach.
The IRS stated, if you have “personal information” that is “compromised in a data breach,” you are not required to “include in gross income the value of the identity protection services provided.” Additionally, the IRS will not assert that a data-breach employer providing identity protection services to employees must include the value of the identity protection services in the employees' gross income and wages.
There is one exception to the tax-free benefit. If there is a cash award to the identity theft victim, that amount is not excluded under this provision.
The Announcement does not apply to benefits received through an insurance company or to identity theft benefits provided as an employee's compensation benefit package.
Editor’s Note: The tax-free treatment of identity theft services is logical. If there is a data breach, the services are intended to restore a person to his or her normal circumstances. In most cases even these benefits will not improve the situation for a victim. At best, he or she will suffer no further damage. Because there is no net benefit, the restorative services should not be taxable.
Cadillac Healthcare Excise Tax May Lead to HSA Plans
In 2018 there will be a 40% excise tax paid by health insurance companies on expensive or “Cadillac” healthcare plans. The tax applies if the plan cost is over $10,200 for individuals or $27,500 for family coverage. Members of both the House and Senate have proposed repealing the 40% excise tax, but no bill has passed.
A recent survey by the National Business Group on Health suggests that most employers are concerned but not yet taking action. Because growth in the cost of medical care exceeds the 2.4% inflation factor for the excise tax floors, many plans may be subject to the tax. When asked if they thought that their company plans would be subject to the excise tax by 2020, 72% of business executives surveyed stated that their healthcare plan would exceed the excise tax limits.
As a result, employers are exploring options to reduce costs. Many will convert to healthcare savings account (HSA) plans. Others may initiate wellness programs or consumer-directed plans.
National Business Executive Brian Marcotte announced the survey results at a Washington meeting. He noted, “Companies are looking to see what's going on in Washington, and they see some energy around possibly repealing the excise tax."
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FINANCES
FINANCES
Stocks - Red Robin Reports Quarterly Results
Red Robin Gourmet Burgers, Inc. (RRGB) released its second quarter results on Thursday, August 13. The restaurant exceeded last year's revenue numbers but failed to meet analyst forecasts.The casual dining establishment reported quarterly revenues of $293 million, missing this quarter's average estimate of $299 million in revenues. However, this quarter's revenue was an increase of 14.6% from the same period last year.
"We continue to be pleased with the progress we are making toward a best in class brand experience. Our guests are choosing to visit us more frequently and they are trading up to our newest burgers and beers," commented Red Robin CEO Steve Carley. "As a result, we have now outperformed the casual dining industry in reported comparable sales for the last four years and outpaced them on traffic by over 200 basis points during the second quarter."
The company reported net income of $11.2 million for the quarter, which was a 13.6% increase from last year's $9.8 million. Earnings per share were $0.78 per share versus $0.68 per share last year, an increase of 14.7%.
Red Robin, known for its wide variety of hamburgers and unlimited French fries, hopes to broaden its consumer base with plans for new restaurant designs, additional menu items and touchscreen tablets at each table. Although it missed its revenue target for the quarter, the company is optimistic that it is on the rise in the world of casual dining.
Red Robin Gourmet Burgers, Inc. (RRGB) shares ended at $83.74, down 6.5% for the week.
Kohl's Posts Losses amid Debt Refinancing
Kohl's Corporation (KSS) announced its most recent quarterly results on Thursday, August 13. The company's numbers fell short of analysts' expectations.
The department store recognized a loss of $131 million in the second quarter, part of an overall loss of $170 million due to refinancing of debt. Comparable store sales grew just 0.1% this quarter. Net sales for the quarter were $4.27 billion, which was up 0.6% but below the $4.31 billion average estimate.
"Our sales results were below our plan as the shift of sales in tax-free states from July into August was larger than anticipated," explained Kohl's CEO Kevin Mansell. "Our expenses were well managed for the season. Our inventory receipts are well-positioned for the back-to-school and fall seasons."
The company's net income was $130 million or $0.66 per share. In the second quarter of 2014 net income was $232 million or $1.13 per share.
Kohl's is in the midst of an effort to reverse its fortunes and return to prominence among mid-level department stores. Over the course of the last year, the department store has emphasized national brands, beauty products and its customer loyalty program. The company hopes to see strong third quarter sales numbers from back-to-school shoppers combined with various states' tax-free weekends.
Kohl's Corporation (KSS) shares ended the week at $55.54, down 7.8% from Monday's opening.
El Pollo Loco Earnings Fall Flat
El Pollo Loco Holdings, Inc. (LOCO) released its second quarter numbers on Thursday, August 13. The southwestern-style fast food chain missed revenue estimates and fell short of sales growth expectations.
The company reported total revenue of $89.5 million, falling short of analyst estimates of $93 million. Comparable restaurant sales grew 1.3% for the quarter, slower than the forecasted rate.
President and CEO Steve Sather emphasized the company's strong points in his statement on Thursday. "Our second quarter results included pro forma net income growth of over 20%, as well as our 16th consecutive quarter of system-wide comparable restaurant sales growth. We remain focused on delivering the core elements of our QSR+ brand promise and are confident in the remainder of the year with the addition of shrimp and the rebalancing of our menu with more value focused products."
The company's net income was $7.2 million, compared to $6.6 million during the same period last year. That works out to $0.18 per share this quarter versus $0.22 per share one year ago.
El Pollo Loco brands itself as a hybrid between quick-service restaurants (QSR) and fast casual dining, a category it calls "QSR+." Analysts pointed to recent changes to the restaurant's value menu along with increased food costs as contributing factors to the weak second-quarter performance. The company has indicated that it will expand into new markets and open additional restaurants in existing markets.
El Pollo Loco Holdings, Inc. (LOCO) shares ended the week at $14.56, down 22% for the week.
The Dow started the week of 8/10 at 17,375 and closed at 17,477 on 8/14. The S&P 500 started the week at 2,081 and closed at 2,092. The NASDAQ started the week at 5,082 and closed at 5,048.
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Bonds - Treasury Yields Rise
Treasury bond yields were up on Friday following the U.S. Labor Department's latest Producer Price Index (PPI). The PPI for final demand prices rose 0.2% in July, compared to June's increase of 0.4% and an increase of 0.3% one year ago.Bonds - Treasury Yields Rise
The rise in producer prices along with increased industrial production further signals that the Federal Reserve may be prepared to raise interest rates by year's end. "We are back to looking at the U.S. economy and it looks healthy and moving quickly to meet the Fed's goals for employment and growth," said Mitsubishi UFJ Securities (USA) Inc. senior Treasury executive Thomas Roth.
During early Friday trading, yields on 10-year Treasury bonds rose to 2.198%. The 30-year bond had dropped to 2.868%.
For the year, the rise and fall of bond yields has closely tracked the likelihood or unlikelihood of the Federal Reserve raising the benchmark interest rate. However, the Fed has been wary of making any hasty decisions.
"There are risks to the recovery of tightening too soon," cautioned Federal Reserve Chairman Janet Yellen in July. "That's an important reason why we have left rates as low as they are for as long as they have been."
For now, analysts and investors are left where they have been all year: speculating as to when the Federal Reserve will raise rates. With September fast approaching, a decision on interest rates is certainly near.
The 10-year Treasury note yield finished the week of 8/10 at 2.18% while the 30-year Treasury note yield finished the week at 2.83%.
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CDs and Mortgages - Interest Rates Halt Slide
Freddie Mac released its weekly Primary Mortgage Market Survey (PMMS) on Thursday, August 13. Rates inched upward for the first time in nearly a month.CDs and Mortgages - Interest Rates Halt Slide
The 30-year fixed rate mortgage averaged 3.94% this week. This represents an increase from last week's average of 3.91%. Last year at this time, the fixed rate mortgage averaged 4.12%.
The 15-year fixed rate mortgage averaged 3.17%. This is an increase from last week when it averaged 3.13%. One year ago, the 15-year fixed rate mortgage averaged 3.24%.
"The jobs report for July showed that the economy added 215,000 jobs, in line with expectations. Wage growth remains modest at 2.1% compared to the same time last year, and another solid if not stellar employment report leaves a potential Fed rate hike on the table for September," said Freddie Mac Chief Economist Sean Becketti. "However, this year's theme of overseas economic turbulence continues with the focus shifting east to China. Over the past few days the Chinese Yuan has fallen sharply. In the midst of these mixed data mortgage rates inched up, increasing 3 basis points to 3.94%. Headed into the fall, we'll likely see continued interest rate tension, with dollar appreciation weighing against possible Fed rate hikes leaving the rate outlook clouded."
The money market fund finished the week of 8/10 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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