The Global Church of the Nazarene Foundation in Lenexa, Kansas, United States eNewsletter for Friday, November 7, 2015On October 1st, the Rev. Jon Twitchell officially joined the Nazarene Foundation as Vice President of Gift Planning. Jon recently relocated to Southern California from Maine in order to serve as a regional representative in the Southwest. His role will be to equip individuals to make God-honoring decisions with their assets and estate plans and to partner with churches in resourcing the work they are doing for God's Kingdom.
If you are connected to a church in California, Arizona, New Mexico, or the lower portions of Nevada and Utah, then Jon is your new Foundation representative. Over the next few months, he will be making connections with pastors and district leaders in order to find out how he can best serve those on his region.
Your church will hear from Jon within the next few weeks, but he is also available to be contacted directly at any time. He can be reached via email atjtwitchell@nazarenefoundation.org or by phone at 207-318-3515.
The Foundation is looking forward to the work that this new partnership will make possible!
“We… must tell a future generation the praises of the Lord.” – Psalm 78:4 (HCSB)
PERSONAL PLANNER
Passing Unequal Shares in Your Will
Because children look at the inheritance as a representation of their parents' love, most parents leave children equal shares of their estate. However, there are a number of good reasons why a parent might leave unequal shares. These reasons consider the needs of children, the potential large financial success of one child, a benefit previously given to a child that will be balanced in the estate, estrangement from a child or a blended family.
You will want to discuss carefully these circumstances with your attorney and other advisors. After thinking through your situation, you may decide that there are good reasons for making an unequal distribution of property to children.
Special Needs Child
Mary is a single mother with three children. Her oldest daughter Jane is age 30 and is a nurse. She is married with two children.
Son Joe is age 27, single and pursuing a career in sales. The third child, Kara, is age 17 and is disabled. She lives at home with Mary.
Mary has been financially careful and is building her estate. She owns her home, has an insurance policy that will be sufficient to pay off the mortgage on the home and provide an additional benefit for her children, and has a good retirement plan.
Because Mary does not have a huge estate, she wants to be certain that Kara has sufficient resources. Both Jane and Joe are successful in their careers and do not need assistance for their present lifestyle. While Mary would like to provide some inheritance for them, her primary concern is to make certain that Kara receives needed care.
Therefore, Mary makes provision for a modest bequest of cash to Jane and Joe in her will. She also leaves a small bequest to a favorite charity. However, the majority of Mary's estate is transferred to a "special needs trust" for the benefit of Kara.
The benefit of the special needs trust is that the trustee may receive the property and use it at his or her discretion for Kara's benefit. If the special needs trust is correctly written, it will not reduce Kara's potential qualification for state or federal benefits.
The special needs trust also permits the trustee to pay for Kara's care as he or she determines appropriate. After Kara passes away, the special needs trust will be divided between the grandchildren of Mary and her favorite charity.
Favored Child
Sue and Tom have raised three children and are now empty nesters. Their oldest child Sam attended a very fine university, followed by an excellent medical school, and is now a surgeon. Their younger children Julie and Linda both graduated from a state university.
Because Sue and Tom provided much greater financial support for Sam that enabled him to complete medical school and become a surgeon, they decided to transfer a larger proportion of their estate to Julie and Linda. While Julie and Linda both are successful and graduated from the state university, Sue and Tom believe that giving them a larger portion of the estate will create balance when compared with the benefits previously received by Sam.
Sue and Tom recognize that it's not possible to be perfectly equal in these circumstances, but hope the larger inheritance for Julie and Linda will make the total distribution as fair as possible.
Great Success Child
Tara and Jim have two children. Their oldest son Harvey has always had strong technical skills. After Harvey completed his engineering degree in college, he began working as a software programmer for a small company. In just a few years, he received shares of stock and the company went public. Harvey now has substantial wealth.
Harvey's sister, Lynn, also completed school and teaches third grade. She lives by herself in an apartment and has many friends at her school. However, Lynn has a very modest lifestyle and earnings in comparison to Harvey.
Tara and Jim thought carefully through the situation and talked to their attorney Harold. He explained that Harvey now has a large estate that could be subject to a significant future estate tax. If Tara and Jim were to transfer more property to Harvey, it simply makes his estate tax problem more difficult.
Because Lynn has comparatively modest resources, Tara and Jim decided that the vast majority of the estate would be transferred to her. However, they do have a family heirloom—a grandfather clock that has been handed down through four generations. While the grandfather clock does not have huge value, it is an important family memento. Tara and Jim decided to transfer the grandfather clock to Harvey and the balance of the estate to Lynn.
Estranged Child
Peter and Janet have raised two children. The oldest is a son named Bill and their daughter is Nancy. While Bill was in his early 20s, he dropped out of college and left without making contact with his parents or his sister Nancy. Bill was gone for 12 years and no one knew his location. After 12 years of wandering and traveling, Bill returned to his hometown community. However, he has not reached out to his parents or his sister. When they have attempted to contact him, Bill has avoided contact with his family.
While this is a difficult situation and brings sadness to Peter and Janet, they feel that Bill has quite deliberately separated himself from the rest of the family. Given Bill's decision to go his separate way, Peter and Janet believe that their inheritance can be used most productively by Nancy.
They are also concerned that if Bill receives an inheritance, he will not use it for good purposes. Therefore, Peter and Janet have decided to leave their estate to daughter Nancy.
Blended Family
Joe was a very successful bachelor entrepreneur and businessman. He invested very well and built a number of commercial buildings.
When Joe met Helen, she was divorced and had two children from her first marriage. Her children William and Lorraine were in their early 20s when Joe and Helen were married. They have had very minimal contact with Joe since the marriage.
Joe and Helen had a son named Steve. Helen's third child is quite diligent and has always been a good student. He completed college and recently passed his CPA exam.
When Joe and Helen were married, Joe was already in possession of a very large estate. His attorney recommended that they create a prenuptial agreement. Under this agreement, Helen would receive a substantial amount in trust for her lifetime. When she passes away, the trust assets will be distributed by the terms of the qualified terminable interest property trust created in Joe's estate plan.
Joe and Helen discussed their situation. Joe would like a larger portion of the estate to be transferred to their son Steve. Because the estate is quite large, there are more than sufficient resources to take care of Helen.
After discussion with their attorney Clara, Joe and Helen decided that if he were to pass away first, one-half of his estate would be transferred to Steve. The other half will be placed in a marital deduction trust to benefit Helen. She will have the income and, if needed for her care, the principal from that trust.
When Helen passes away, that marital trust will be divided with one-third to each of the three children.
While this plan provides a much larger inheritance for Steve, the other two children from Helen's first marriage will still also receive substantial assets.
Discussions with Children
These five plans all show specific reasons why a parent may choose to leave unequal amounts. While the reasons are apparent to the parent, they may not always be as easily understood by the children.
Many parents choose to explain and disclose an "unequal shares" plan during life. A meeting is frequently set up at the office of the family attorney. The entire family is invited. The parents explain the reasons why they have decided to create the estate plan with different amounts. Children have the ability to discuss the plan with the parents and ask questions of the financial advisors.
Later, many parents also will meet individually with children to explain the situation and circumstances. With the exception of the estranged child in the "Peter and Janet" example, most children will understand their parents' reasoning. The children may not always agree with their parents, but it usually is helpful for future family harmony for children to discuss their parents' decisions about inheritance.
Therefore, if you as a parent are thinking about passing an unequal amount to children, it may be wise to discuss a possible family meeting with your attorney, CPA or other financial advisor.
Read More
How to Choose a Good Nursing Home
Can you give me some tips on picking a good nursing home for my mother who has Alzheimer's disease? I've been taking care of her at home, but she's at a point where she's too much for me to handle.
Choosing a good nursing home for a loved one with Alzheimer's disease is a very important decision that requires careful evaluation and some homework. Here are some steps that can help you find a good facility and avoid a bad one.
Make a List: Ask your Area Agency on Aging (call 800-677-1116 for contact information), your mom's doctor, a nearby hospital discharge planner, friends, family or neighbors to refer you to a quality nursing home in your area. Ideally, the nursing homes should be close to family members and friends who can visit often, because residents with frequent visitors usually get better care.
Compare Nursing Homes: To research and compare the nursing homes on your list, use Medicare's nursing home compare tool at medicare.gov/nursinghomecompare. This tool provides a 5-star rating system on recent health inspections, staffing, quality of care and overall rating.
You should also contact your local long-term care ombudsman. This is a government official who investigates nursing home complaints and can tell you which ones have had problems in the past. To find your local ombudsman, call your Area Agency on Aging or see ltcombudsman.org.
Contact the Facilities: Once you've narrowed your search, call the nursing homes you're interested in to verify that they have a dementia unit that can facilitate your mom's needs. Also, find out if they have any vacancies, what they charge and if they accept Medicaid.
Tour Your Top Choices: During your nursing home visit, notice the cleanness and smell of the facility. Is it homey and inviting? Does the staff seem responsive and kind to its residents? Also be sure to taste the food and talk to the residents and their family members, if available. It's also a good idea to visit several times at different times of the day and different days of the week to get a broader perspective.
Also, find out about their staff screening (do they do background checks) and training procedures, staff-to-patient ratio, and the staff turnover rate.
To help you rate your visit, Medicare offers a helpful checklist of questions to ask at medicare.gov/nursinghomecompare/checklist.pdf, as does the Alzheimer's Association at alz.org/visitinganursinghome.pdf. Print these lists from your computer and take them with you on your visit.
Paying for Care: With nursing home costs now averaging $250 per day nationally for a private room, paying for care is another area you may have questions about or need assistance with. Medicare only helps pay up to 100 days of rehabilitative nursing home care, which must occur after a hospital stay.
Most nursing home residents pay for care from either personal savings, a long-term care insurance policy, or through Medicaid once their savings are depleted.
The National Clearinghouse for Long-Term Care Information website (longtermcare.gov) is a good resource that can help you understand and research your financial options. You can also get help from your State Health Insurance Assistance Program (SHIP), which provides free counseling on all Medicare and Medicaid issues. To find a local SHIP counselor visit shiptacenter.org or call 800-677-1116.
For more information, see Medicare's online booklet "Your Guide to Choosing a Nursing Home" at medicare.gov/publications/pubs/pdf/02174.pdf.
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.
Read MoreTax-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. Read More
WASHINGTON NEWS
Ten Tips on Tax-preparers
In IR-2015-124 the IRS urged taxpayers to plan ahead for the 2016 filing season. One major decision is to select the individual who will prepare your taxes. In this letter, the IRS offers “Ten Tips” for selecting your tax preparer.
1. Ethical – You are going to trust your preparer with your Social Security Number, income, investment and deduction records. You must have confidence that he or she is an ethical person.
2. Fees – A tax-preparer should not charge a percentage of the refund. A fixed or flat fee based on service is preferred. Your refund should not be sent to the tax-preparer, but directly to you.
3. Preparer Tax Identification Number (PTIN) – Each qualified tax preparer will have a PTIN. He or she should disclose that number. You also may wish to ask about the education or professional qualification of your preparer.
4. History – Some preparers are attorneys, CPAs or enrolled agents. The enrolled agents are listed in the IRS Office of Enrollment. Attorneys and CPAs are qualified by their respective state boards.
5. E-File – All preparers who send in over ten returns must use the IRS e-filing system. This e-file system is likely to result in a quicker tax refund payment.
6. Tax Records – A qualified preparer will ask for comprehensive records. He or she must base the tax return on your IRS Form W-2, not just a paystub for the year.
7. Available After April 15th – There may be further questions about your tax return. You should ask your preparer whether he or she will be available for follow-up support.
8. Review Returns – Each person should review the basic information on a tax return. This includes your income, deductions and tax amounts. After reviewing and understanding the basic parts of the return, sign and date the return.
9. Blank Returns – Do not sign a blank tax return. Your preparer could complete the return and direct the refund to his or her personal bank account.
10. Preparer Signature – Each person who prepares a tax return is required to sign and include his or her PTIN. The preparer must also give a copy of the return to the taxpayer.
Representative rights are available for many preparers. Attorneys, CPAs and enrolled agents have unlimited rights to represent you before the IRS. They can represent you during audits, the appeal process or the collection process.
Other preparers have more limited rights. The IRS recognizes Annual Filing Season Program preparers and others who hold a PTIN. These preparers are granted limited representation rights. They can represent you only with respect to the returns they have prepared and before an IRS revenue agent. They are not permitted to handle appeals or collections.
While it is still early, the IRS recommends that you make plans today for preparing and filing your tax return for this year. These “Ten Tips” will help to ensure that you are working with a qualified tax preparer.
Read More
Stocks - Investors Like Facebook's Latest Numbers
Facebook (FB) released its quarterly earnings report on Tuesday, November 3. The social media company reported strong increases in both revenue and profits.
The world's largest social media site reported revenue of $4.5 billion, up 41% from the same quarter last year. The company was expected to post revenue of $4.4 billion for the quarter.
"We had a good quarter and got a lot done," said Facebook founder and CEO Mark Zuckerburg. "We're focused on innovating and investing for the long term to serve our community and connect the entire world."
The company reported net income of $896 million, or $0.32 per share. This is up from $806 million, or $0.30 per share during the same period last year.
Facebook also reported on Tuesday that it currently has 1.55 billion monthly active users. The company's continued success may be attributable to its willingness to change, despite the fact that many of the changes made to the company's flagship product have a tendency to ruffle users' feathers. Among the most recent changes for Facebook has been the introduction of video advertisements. The company is hoping that the additional advertising revenue will strengthen its already firm standing in the world of social media.
Facebook (FB) shares ended the week at $107.10, up 4.5% for the week.
Disney Posts Mixed Results
Walt Disney Co. (DIS) reported its earnings for the most recent quarter on Thursday November 5. The company reported higher than expected profits but missed revenue expectations.
The entertainment company posted revenue of $13.51 billion, up 9% from the fourth quarter last year. Analysts projected revenue of $13.52 billion for the quarter.
"We had a strong quarter, with adjusted EPS up 35%, completing our fifth consecutive year of record performance," said Disney CEO Robert Iger. "In Fiscal 2015 we delivered the highest revenue, net income and adjusted EPS in the Company's history, reflecting the power of our great brands and franchises, the quality of our creative content, and our relentless innovation to maximize value from emerging technologies."
Disney reported profit of $1.61 billion, or $0.95 per share. During the same quarter one year ago, net income was $1.5 billion, or $0.86 per share.
Walt Disney Co., which operates major media outlets ABC and ESPN along with its signature theme parks and film studios, is set to release the latest installment of the Star Wars series of films. Star Wars Episode VII: The Force Awakens will be released in mid-December, yet ticket sales have already begun. Movie-related merchandise has hit store shelves in anticipation of the film's release. Although just one facet of Disney's ventures, the Star Wars series has potential to be a solid financial addition to the Disney brand.
Walt Disney Co., (DIS) shares ended the week at $115.67, up 1% for the week.
Fitbit Outruns Earnings Forecast
Fitbit, Inc. (FIT) reported its quarterly earnings on Monday, November 2. The company reported higher than expected sales for the quarter.
The maker of wearable fitness tracking technology reported revenue of $409 million. Analysts had projected that the company would bring in revenue of $359 million for the quarter.
"Fitbit's third quarter results demonstrated the continued rapid growth of the Fitbit platform and our team's ability to execute on the tremendous opportunity we see globally, as we help people reach their health and fitness goals," said Fitbit CEO James Park.
Net income for the quarter was $46 million or $0.19 per share. This was down from $69 million, or $0.34 per share, during the same quarter last year.
Fitbit sold 4.8 million devices during the third quarter. Despite its successful quarter, the company's stock fell on Tuesday following a revelation that the company plans to offer an additional 7 million shares to the public.
Fitbit, Inc. (FIT) shares ended the week at $37.92, down 8.6% for the week.
The Dow started the week of 11/2 at 17,673 and closed at 17,910 on 11/6. The S&P 500 started the week at 2,081 and closed at 2,099. The NASDAQ started the week at 5,054 and closed at 5,147.Read More
Bonds - Jobs Report Boosts Treasury Yields
Treasury yields rose on Friday following a better-than-expected jobs report. The Labor Department released its most recent jobs report on Friday, November 6.
Last month the economy added 271,000 jobs, far more than the projected 183,000. The report also showed a slight drop in unemployment, from 5.1% to 5%.
"It was pretty much everything you could ask for in a jobs report," said Bank of America Merrill Lynch Deputy Head of U.S. Economics, Michelle Meyer. "Not only was the headline number strong, but there were upward revisions for prior months, the unemployment rate fell and wage growth accelerated."
Speculation continues as to when exactly the Federal Reserve will begin to raise interest rates for the first time in nearly a decade. The encouraging jobs report has many investors optimistic that the Federal Reserve will pull the trigger on a rate hike at its December meeting. Slow economic growth was one of the factors the Fed cited when it decided not to raise rates in September. With the latest jobs news, many investors have decided to sell now before rates rise.
The 10-year Treasury note yield finished the week of 11/2 at 2.33%. The 30-year Treasury note yield finished the week at 3.09%.Read More
CDs and Mortgages - Interest Rates Remain Low
Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, November 5. Interest rates rose this week, which was in line with rising Treasury yields.
The 30-year fixed rate mortgage averaged 3.87% this week. This represents an increase from last week when it averaged 3.76%. Last year at this time, the 30-year fixed rate mortgage averaged 4.02%.
This week, the 15-year fixed rate mortgage averaged 3.09%. This is up from last week when it averaged 2.98%. The 15-year fixed rate mortgage averaged 3.21% one year ago.
"Treasury yields climbed nearly 20 basis points over the past week, capturing the market movement following last week's FOMC meeting. In response, the 30-year mortgage rate experienced its largest increase since June, up 11 basis points to 3.87%," said Sean Becketti, Chief Economist at Freddie Mac. "Recent commentary suggests interest rates may rise in the near future."
The money market fund finished the week of 11/02 at 0.3%. The 1-year CD finished at 0.6%.Read More
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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, a college or university, 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 updated financial and gift planning information, please visit 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, a college or university, 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 updated financial and gift planning information, please visit our website.
The Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220 United States
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