Global Church of the Nazarene Foundation ~ “Model Generosity” ~ Saturday, 2 November 2013

Global Church of the Nazarene Foundation ~ “Model Generosity” ~ Saturday, 2 November 2013

John 15:12 -13 says, "My command is this: Love each other as I have loved you. Greater love has no one than this, that he lay down his life for his friends."

Through this verse we find that when we remain in Christ, we can love as Christ loves. This love often radically expresses itself in many ways, including through financial generosity - something I have personally seen while working with the Foundation.

I feel privileged that our team at the Nazarene Foundation is able to assist you with your God-honoring planned giving. If you have any questions, please don't hesitate to reply to this email or call our office at (913) 577- 2983.

Blessings,

Kenneth R. Roney, J.D.

President

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PERSONAL PLANNER

Wills - Good and Bad

Where is the Missing Will?

More than 40 wills were submitted to the probate court, with a multitude of potential heirs each claiming to be the true recipient of a wealthy business owner who passed away in 1976. With a $2.5 billion estate at stake, there was intense interest in the decision of the court.

After extensive review of the 40 documents, the court finally determined that none of the 40 wills were valid. Because there was no valid will, the court divided the $2.5 billion estate among 22 relatives. Court costs, attorney costs and estate taxes were enormous, but the 22 heirs still each received millions of dollars.

Why is a Will Important?

There are at least seven reasons for creating a will. A "peace of mind" estate plan starts with your will. The will passes your property to family, friends and favored organizations, could direct distribution of a recent inheritance, may fix errors in living trust funding, allows you to select a guardian, enables you to disinherit a child or other relative, permits you to select your executor and may help with a simplified probate.

1. Transfer of Property: There are some types of property that are best transferred by will. Many types of personal assets are difficult to transfer through a living trust or are not appropriate for a "pay on death" transfer. Because vehicles and other personal assets are likely to be bought and sold, it is much easier to keep vehicles, furniture, collections and other items in the probate estate and transfer them by will.

2. Potential Inheritance: You might be planning to receive an inheritance from a parent or other relative, but the inheritance could be delayed by the probate process, potential estate issues or other reasons. Therefore, when you finally receive title to the property, there may not be a convenient time or opportunity to transfer the assets into a revocable living trust. As a result, the inheritance will form part of your estate.

There also have been cases in which a person passes away in a tragic accident. The estate may receive an insurance settlement or a claim under a wrongful death action. These assets would become part of the probate estate and are transferred under the residuary clause of your will.

3. Living Trust Errors: A living trust is a very appropriate way of avoiding the probate process. However, in too many cases a person has a valid living trust but has not properly transferred the real estate, securities accounts or other assets to the trust. As a result, the property that has not been legally transferred to the trust will be part of the probate estate covered by your will.

4. Guardian for Minors: The selection of a guardian for minor children is done through your will. Most states do not permit you to use a living trust (there are a few exceptions) for this purpose, so it is very important to designate the guardian in your will. When you create the will and designate the guardian of the person, it is also quite common to establish a family trust for the minor children and appoint the trustee.

5. Disinherit Someone: It is possible to disinherit a child or other heir. The appropriate place to explain that disinheritance or explain why the inheritance is a nominal amount (such as $1.00) is in your will.

6. Select the Executor: Your executor is a key person for a successful estate property transition. The executor will inventory your estate, advertise for creditors, pay bills and taxes, submit your will to the probate court and obtain the court's approval for the final distribution. Your will is the document in which you will name your executor. Even if you have a revocable living trust with a trustee and a successor, it is essential to select an executor who will manage your probate property.

7. Simplify Probate: In many states it is possible for people who pass away with modest to moderate resources to have a simplified or summary probate. This permits your executor to manage your property and make distribution of it with very minimal contact with the probate courts. For example, California allows many estates with assets valued under $150,000 to use a simplified probate process. The executor will follow the directions in your will and distribute your property accordingly. In most cases, this will simplify administration and reduce your estate costs.

Good and Bad Wills

As was the case in the estate of Business Owner, there are many submitted wills that are not deemed valid or legal. In order to have a valid or legal will, you need to comply with the state law requirements for wills. While there is some variation between the states, most states will follow several guidelines.

1. Legal Age: In most states you must be 18 years old to sign a will.

2. Sound Mind: As we become more senior, we do not have as clear a mind as we had back in our youth. Most states permit you to create a will if you have "lucid intervals" and understand the nature of your property and the fact that the will is going to direct the transfer of that property to your selected recipients.

3. Typed or Printed: A will normally is either typed or printed. While some states permit handwritten or other types of wills, the vast majority of wills will be typed or printed and will contain at least one substantive transfer of property.

4. Date and Sign: Your will must be dated and signed. The date is essential in order to make certain that this is your final will. Many individuals might write and sign two or more wills during a lifetime. Only your final will is going to be used by the probate court to distribute your property.

5. Witnesses: Under your state law, you will need to sign your will in the presence and hearing of two witnesses. Your witnesses must be adults who are of sound mind and should not be beneficiaries under the will. They need to be told that this is a will, but you do not need to disclose the contents of your will to the witnesses.

6. Self-Proving Will: In some states, it is permissible to have a notary or an affidavit witness form in which the will is either notarized or the person pledges under perjury that this is a valid will. If the will is "self-proved," it will simplify the probate process. Ordinarily, the witness is not required to testify in the probate court with a self-proved will.

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SAVVY LIVING

Reassessment Time for Medicare Part D Beneficiaries

I have been enrolled in the same Medicare prescription drug plan for three years, but my pharmacist told me I should look for a new plan that would fit my needs a little better during the open enrollment period. What's the easiest way to do this?

Since all Medicare prescription drug plans can change their coverage and costs each calendar year, the only way to ensure you're getting the best coverage at the lowest cost is to compare your Part D plan against the competition during Medicare's open enrollment period (Oct. 15 - Dec. 7). Here are some tips and resources that can help you compare drug plans and select one that better fits your needs.

Important: Don't confuse Medicare open enrollment with the new health insurance marketplaces that have just opened under the Affordable Care Act. They serve two totally different populations. The health insurance marketplaces are for people under age 65 who don't have health insurance, while Medicare open enrollment is for Medicare beneficiaries who wish to review their current Medicare policies and make changes.

Open Enrollment Website

If you're comfortable using a computer, you can easily compare Medicare's drug plans online. Just go to Medicare's Plan Finder Tool (medicare.gov/find-a-plan), type in your zip code or your personal information, enter in how you currently receive your Medicare coverage, select the drugs you take and their dosages and choose the pharmacies you use. You'll get a cost comparison breakdown for every plan available in your area so you can compare it to your current plan.

This tool also provides a five-star rating system that evaluates each plan based on past customer service records and suggests generics or older brand name drugs that can reduce your costs.

Also, when you're comparing drug plans, don't judge a plan strictly by its monthly premium cost. Low-premium plans are often associated with higher prescription co-payments and may end up being more expensive. Look at the "estimated annual drug costs" that shows how much you can expect to pay over a year in total out-of-pocket costs – including premiums, deductibles and co-pays.

In addition, be sure the plan you're considering covers all of the drugs you take with no restrictions. Some plans may require you to get permission or try a number of cheaper drugs before they will cover certain prescriptions.

Need Help?

If you need some help with this or if you don't have Internet access to compare the plans yourself, you can call Medicare at 800-633-4227 and a customer service representative will do it for you over the phone for free.

Another resource that you can call on for help is your State Health Insurance Assistance Program (SHIP), which provides free one-on-one Medicare counseling in person or over the phone. They also conduct seminars during the open enrollment period at various locations throughout each state. To find the contact information for your local SHIP visit shiptalk.org, or call the eldercare locator at 800-677-1116.

Shrinking Donut Hole

Last, you need to know that Medicare's "donut-hole" – the coverage gap in which you must pay out-of-pocket for your drugs – continues to shrink. In 2013 and 2014, you will get a 52.5% discount on brand-name drugs and the federal subsidy for generic medications will rise from 21% to 28% in 2014.

The 2013 coverage gap begins when your total drug cost exceeds $2,850 (that includes your share and the insurer's share of the costs) and ends when combined spending is $6,455. After that, your Part D plan usually covers around 95% of your remaining drug costs for the year.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Senior" book. The 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 Senior, P.O. Box 5443, Norman, OK 73070.

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YOUR PLAN

Current Gifts

As is the case with many families, there are times each year when Jim and Sharon focus their attention on gift giving. For years, they have created a gift list that includes family members, friends and loved ones. Last year Jim and Sharon made an addition to their list and began including their favorite charity in their giving plan.
Sharon: Years ago, I inherited stock from my grandmother. We held the stock for several years, but decided to sell a portion of it this year. The stock had gone way up in value, and our CPA informed us that we had a capital gain of nearly $120,000. We had always planned on making a charitable gift and the CPA reminded us that if we were to make a gift of this stock before the end of the calendar year, we would receive a charitable deduction on the gifted shares. This deduction will help offset the capital gains tax on the stock we sold.
Jim: We contacted our favorite charity to discuss the best way to make a gift. The gift planner noted some of the most common gifts - a gift by check or by transfer of bonds or real estate, to name a few. However, he also mentioned that it might be especially beneficial for us to think about giving some of our remaining appreciated stock.
Sharon: We were still holding $80,000 in the same highly appreciated stock and did not intend to sell, primarily because of the substantial capital gains tax we already faced. To sell any more would only increase our tax. The gift planner recommended that we consider an end-of-year gift that would help lower our taxes. He called this a Gift and Sale plan. It meant that part of our stock would be sold and the proceeds would come to us, and part would be gifted to our favorite charity.
Jim: That is what we decided to do. By giving the $80,000 in stock, we received two benefits. First, we avoided a large capital gains tax on that stock. And then, we received a charitable deduction. The deduction even offset the capital gains for our prior stock sale of $120,000. We are very pleased with the double benefits of our gift. And, we're delighted that we've been able to make a nice charitable contribution.
*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 benefits may be different, you may want to click here to view a color example of your benefits.

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WASHINGTON NEWS

Budget Committee Cordial But Direct

On October 31 the official first meeting occurred for the House and Senate Budget Conference Committee. The 29 members of the committee were each given five minutes to make opening statements.

The key statements of the four Republican and Democratic leaders of the two committees outlined their initial positions.

Sen. Patty Murray (D-WA) is Chair of the Senate Budget Committee. She expressed willingness to compromise but emphasized a need for fairness. Murray stated, "I am going into this budget conference ready to agree to some tough spending cuts that, unlike the sequester caps that disappear in 2022, would be permanently locked into law. I know there are many Republicans who would be very interested in swapping some of the inefficient and damaging sequester cuts with structural changes to programs that would save many multiples of the cuts they replace over the coming decades. I am ready to listen to their ideas and, as long as they are fair for seniors and families -- I'm ready to make some tough concessions to get a deal."

Paul Ryan (R-WI) is the Chairman of the House Budget Committee. He also expressed a hope for agreement, but emphasized his perspective on the need to control spending. Ryan noted, "From my perspective, taking more from hard working families just isn't the answer. I know my Republican colleagues feel the same way. So I want to say this from the get-go: If this conference becomes an argument about taxes, we're not going to get anywhere. The way to raise revenue is to grow the economy. We need to write a tax code that encourages economic growth."

Sen. Jeff Sessions (R-AL) is the ranking member of the Senate Budget Committee. He focused on the importance of maintaining the sequestration budget limits. Sessions continued, "The budget control act reduced the growth in federal spending by $2.1 trillion. This is an important first step. That bipartisan agreement is in law and must be maintained. Congress and the White House must keep their promises to the American people."

Finally, Rep. Chris Van Hollen (D-MD) is the Ranking Member of the House Budget Committee. He noted that an agreement will be difficult. Hollen stated, "The House Republican and Senate Democratic budgets before us today represent dramatically different visions for America. We will not bridge all the differences, but I hope we can make some progress. That will require some tough compromises."

Editor's Note: The four leaders of the House and Senate Budget Committees were very frank in explaining their differences, yet the exchange was reasonably cordial, even though it recognized quite different values. All four leaders expressed a desire to find a budget solution. The deadline for Congress to act to avoid another government shutdown is January 15, 2014.

FSA Flexibility

Many businesses provide a flexible spending account (FSA) plan for their employees. The employee or the business is permitted to set aside tax-free up to $2,500 per year. Most FSA accounts are used as health reimbursement plans. The pre-tax dollars may be allocated for qualified healthcare expenses.

Under previous rules, the amount that the employee voluntarily set aside into the FSA must be used each year. Any remaining balance at the end of the year is returned to the ownership of the employer. Because there is a "use it or lose it" rule, many employees with FSA accounts were spending sums on various medical treatments in December each year.

In order to provide more flexibility for the accounts, the Department of Treasury determined that an employee would be able to carry forward up to $500 to the next year. Treasury Secretary Jacob Lew stated, "Across the administration, we are always looking for ways to provide added flexibility and common sense solutions to how people pay for their healthcare. Today's announcement is a step forward for hardworking Americans who wisely plan for healthcare expenses for the coming year."

Sen. Orrin Hatch (R-UT) is ranking member of the Senate Finance Committee. He expressed approval of the decision. Hatch noted, "Allowing Americans who have one of these accounts to roll $500 over to the following year just makes sense and will give people more help to pay for out-of-pocket healthcare costs."

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FINANCES

Stocks - Apple Reports Record iPhone Sales

Apple, Inc. (AAPL) announced its fourth quarter results on Monday, October 28. The company had a strong quarter bolstered by a 26% growth in iPhone sales.

Apple reported quarterly revenue of $37.5 billion and quarterly net profit of $7.5 billion. While Apple's revenue was slightly higher compared to the same period last year, net profit was lower than the $8.2 billion reported last year.

The company announced it sold 33.8 million iPhones, the most it has ever sold during the fourth quarter. The company sold 26.9 million iPhones during the same period last year. Apple also reported it sold 14.1 million iPads during the quarter compared to 14 million during the comparable period last year.

Tim Cook, Apple's CEO, had this to say about the quarterly results, "We're pleased to report a strong finish to an amazing year with record fourth quarter revenue, including sales of almost 34 million iPhones. We're excited to go into the holidays with our new iPhone 5c and iPhone 5s, iOS 7, the new iPad mini with Retina Display and the incredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next generation iWork and iLife apps for OS X and iOS."

Apple's stock has fallen this year amid investor concerns that the company's product innovation is stagnant. Many analysts complain that the company is simply improving existing products instead of innovating new ones, like it did with the original iPhone and iPad. Recently, the company announced the newest incarnation of the popular iPad, the iPad Air. Reviews of the iPad Air indicate that while the product is not revolutionary, it does represent a significant improvement to an already great product.

Apple, Inc. (AAPL) shares ended the week at $520.03.

Despite Success, Facebook Is Losing Teens

Facebook, Inc. (FB) reported its third quarter results on Wednesday, October 30. The company reported significant revenue and net income gains compared to the same quarter last year.

Facebook reported revenue of $2.02 billion for the quarter, higher than analysts' estimate of $1.91 billion. This represented a 60% increase over the $1.26 billion reported during the comparable period last year.

The company's third quarter net income was $621 million, double the $311 million reported during the same period last year. On average, analysts had expected net income to be around $470 million.

Facebook CEO Mark Zuckerberg said this about the results, "For nearly ten years, Facebook has been on a mission to connect the world. The strong results we achieved this quarter show that we're prepared for the next phase of our company, as we work to bring the next five billion people online and into the knowledge economy."

Although Facebook exhibited a hugely successful quarter, the stock price has fluctuated up and down since the news. After the results, the stock price rose to $57.98 before falling down to $48.44. On Thursday, October 31, the stock price fluctuated between $41.50 and $51.40. This fluctuation was the result of a statement by Facebook Finance Chief David Ebersman that younger teenagers decreased their daily use of the site during the quarter. This raised concerns that the site could be beginning to see the signs of slower growth, or perhaps even decline, in its user base as younger teens look for other ways to satisfy their social media itch.

Facebook (FB) shares ended the week at $49.75.

3D Systems Revises Earnings Forecast

3D Systems Corp. (DDD), the largest maker of 3D printers, announced its third quarter results on Tuesday, October 29. Although the company had a better-than-expected quarter, it slashed its earnings forecast for the rest of the year.

3D Systems reported revenue of $135.7 million for the quarter. The company's 50% increase in revenue compared to the same period last year beat estimates that revenue would be $132 million.

The company reported net income during the quarter of $17.7 million, or $0.17 per share, better than the $13.5 million, or $0.16 per share, reported during the same period last year. However, analysts had estimated net income would be higher this quarter at $0.26 per share.

Avi Reichental, 3D Systems' President and CEO, said, "We are very pleased to report another record revenue quarter on unprecedented printer units demand that more than tripled last year's unit sales. Stronger materials sales, increased advanced manufacturing activities and meaningful consumer products revenue contribution fueled our growth."

3D Systems' strong quarter was somewhat overshadowed by the company's announcement that it was cutting its earnings forecast for 2013 as it increases spending on research and development and marketing. The company actually increased its revenue forecast from $500 million to $530 million, however. 3D Systems' share price is up 60% for the year, though, especially after the company entered into a retail agreement with retailer Staples in May.

3D Systems, Inc. (DDD) shares ended the week at $63.01.

The Dow started the week of 10/28 at 15,569 and closed at 15,616 on 11/1. The S&P 500 started the week at 1,759 and closed at 1,762. The NASDAQ started the week at 3,956 and closed at 3,922.

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Bonds - Treasury Yields Rise on Economic Reports

Treasury yields rose on Friday, November 1 after a barometer of U.S. manufacturing revealed expansion happened at a faster pace than expected. Statements from Fed policy makers indicate they are gaining confidence in the strength of the U.S. economy, perhaps spelling the eventual slowdown of quantitative easing.

The Institute for Supply Management revealed on Friday that its factory index for October rose to 56.4, the highest since April 2011, signaling expansion in the manufacturing sector. The reading for September was 56.2 and economists had expected October's reading to be 55.

Yields also rose on Thursday, October 31, when a key business barometer, the MNI Chicago Report, rose to 65.9 in October, much higher than the 55.7 reported in September. This reading indicated the fastest business expansion since March 2011.

Since October 25, yields on the benchmark 10-year note have climbed nine basis points, although it had dropped 18 basis points during the prior two weeks. As of early Friday, November 1, the yield on the 10-year note had climbed four basis points to 2.60%.

Earlier in the day on November 1, Fed Bank of St. Louis President James Bullard said the strengthening labor market could soon lead to a tapering of the Fed's bond purchasing program. "Two key labor market indicators have shown clear improvement over the last year: Unemployment and nonfarm payroll employment," said Bullard. "This provides the most powerful part of the case for tapering."

Bullard's comments followed Fed policy makers announcement on Wednesday, October 30, that the economy displayed signs of "underlying strength." As a result, experts are beginning to forecast that the tapering of bond purchases will begin in March of next year. For that to happen, however, the Fed will need to continue to see the U.S. economy show signs of "underlying strength," if not more.

The 10-year Treasury note yield finished the week of 10/28 at 2.62% while the 30-year Treasury note yield finished the week at 3.70%.

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CDs and Mortgages - Interest Rates Continue Descent

Freddie Mac released the results of its weekly Primary Mortgage Market Survey (PMMS) on Thursday, October 31. The results showed that mortgage rates continue to decline as the housing market shows signs of slowing down.

The 15-year fixed rate mortgage averaged 3.20% this week, down from last week's average of 3.24%. Last year at this time, the 15-year fixed rate mortgage averaged 2.70%.

The 30-year fixed rate mortgage averaged 4.10% this week. This represents a decrease from last week when it averaged 4.13%. One year ago at this time, the 30-year fixed rate mortgage averaged 3.39%.

Frank Nothaft, Vice President and Chief Economist at Freddie Mac, commented on this week's rates, "Fixed mortgage rates eased further leading up to the Federal Reserve's (Fed) October 30th monetary policy announcement. The Fed saw improvement in economic activity and labor market conditions since it began its asset purchase program, but noted the recovery in the housing market slowed somewhat in recent months and unemployment remains elevated. As a result, there was no policy change which should help sustain low mortgage rates in the near future."

The money market fund finished the week of 10/28 at 0.4%. The 1-year CD finished at 0.7%.

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Are you a Nazarene Legacy Partner (NLP)?  The answer is “YES” if you have designated any gift to a Nazarene ministry in your will, bequest, or estate plan. This could be a tithe on your estate, an insurance beneficiary designation to your local church, college, global mission, or any other Nazarene ministry you support.

Send us your name and contact information by reply email and indicate “I am a Nazarene Legacy Partner” and we will add your name to our NLP honor roll. To model generosity inspires others to do the same. Thank you for your interest in gift planning. To access any of this updated financial and gift planning information, please select our website.

Church of the Nazarene Foundation

17001 Prairie Star Parkway, Suite 200

Lenexa, KS 66220 United States

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