Model Generosity – Leave a Lasting Legacy through Planned Giving
– Global Church of the Nazarene Foundation – Saturday, 28 December 2013
We reread, retell, and re-enact the story of Christmas every
year—but sometimes we forget to react. God’s Greatest Gift was delivered to us,
so that He could be delivered for us as payment for our sins. What is your
response to that life-saving news? On that first Christmas, the lowly shepherds
were some of the first to witness Christ’s coming into the world. They
responded by “glorifying and praising God” (Luke 2:20). Some time later, the
Magi were led to the infant King and they “bowed down and worshipped him…and
presented him with gifts” (Matt. 2:11).
Whether your reaction to God’s Saving Gift is one of worship or
of giving, we at the Foundation are blessed by your witness and encouraged by
your heart-response.
Thank you for your commitment this year to furthering His
kingdom. You are truly a godly example of the Father's faithfulness to His
children. As 2013 comes to an end, please know that The Foundation is here to
assist you with any end-of-year giving. You may contact us by replying to this
email or by calling our office at (913) 577- 2983.
Blessings,
Kenneth R. Roney, J.D.
President
The Church of the Nazarene Foundation office will be closed
December 24-26.
If you would like to make a donation for 2013, please be sure
the envelope is postmarked by December 31, 2013.
PERSONAL PLANNER
Income for Surviving Spouse
Elliot and Alexis were concerned about planning for the future.
They had built a substantial estate of $1,200,000. When Elliot was 70, he
rolled over his $400,000 qualified retirement plan into an IRA. Because he is
now over age 70½, Elliot is taking distributions.
Alexis also has an IRA. They jointly own their home, which is
debt free, and have savings accounts, stocks and bonds.
If Elliot were to pass away first, Alexis would like to avoid
paying additional tax. In addition to the IRA, Alexis already receives income
from their investments.
Alexis said, "We seem to be paying a lot of income tax.
When Elliot takes distributions from his IRA, that just pushes our income up
higher and we pay more and more tax. Is there a way that I could reduce my
income tax if Elliot passed away?"
A Solution for Alexis
Elliot could name Alexis as the designated beneficiary of his
IRA. After Elliot passes away, Alexis may roll the IRA over. Alexis is age 70,
and will soon be required to start distributions from the IRA. The added income
would significantly increase Alexis' taxes.
A solution that gives Alexis protection and good flexibility is
for Elliot to transfer his IRA to a special trust for when he passes away.
Under the design of this trust, Alexis could receive a 5% income payout or
could encourage the trustee to invest for growth.
If Alexis decides to let the income grow inside the trust, it
will grow tax free until more income is desired. At a future date, Alexis may
decide that the balance of the estate is not producing as much income as desired,
and could encourage the trustee to start making the payments. By that time, it
is quite possible that the $400,000 would have grown and the trust payouts
could be significantly greater.
How to Create the Trust
The trust has a special name. It is called a net income plus
makeup charitable remainder unitrust. Elliot and Alexis talked to their
attorney, George. He prepared a trust document that Elliot and Alexis signed.
Under their state law, this trust document is valid even though
it is not yet funded. Elliot then selected the trust as the designated
beneficiary for his IRA and Alexis consented in writing to that designation.
When Elliot Passes Away
If Elliot passes away first, Alexis will own the family home
outright and will inherit their other assets, except the IRA. Elliot's IRA will
be transferred directly to the unitrust. Because it is a net plus makeup
unitrust, the trustee may discuss her goals with Alexis and then invest the
$400,000.
Alexis' Options
Alexis may choose to allow the trust to grow for a period of
time, if there is sufficient income from the IRA, Social Security and pension.
However, if Alexis prefers to receive income from the $400,000 unitrust, then
the trustee can invest to produce at least the 5% income and pay that amount to
Alexis.
Alexis may decide to allow the trust to grow because there are
modest expenses, no debt and sufficient income to enjoy annual traveling. At a
future date Alexis could request the trustee change the investments from growth
to income. For now, Alexis is comfortable with the trust investments in growth
securities.
Saving Income Taxes
Because the growth of the trust is tax free and Alexis is not
receiving substantial income from the trust, the income will be lower and there
will be substantial tax savings. Alexis shared with their attorney, George,
"I have more than enough and I could always spend a portion of my CDs if
needed. It is a relief not to have the extra income and have to pay those high
income taxes. Plus, I know that the trust is growing and I could receive a
larger income in the future if needed."
Benefits for Family and Charity
If necessary in the future, Alexis will receive the income from
the unitrust. However, Alexis may choose to allow the trust to grow and live on
other income. When Alexis passes away, the trust principal plus growth will go
to three favorite charities of Elliot and Alexis.
In addition, the children of Elliot and Alexis will also receive
a substantial inheritance. The balance of the estate, including their home,
CDs, stocks and bonds, will be divided between their two children.
Alexis is very pleased that income taxes will be reduced, and
the estate total will be larger. Over time, the trust could grow quite
substantially. The combination of security for Alexis, trust growth for charity
and the benefits to family from the inheritance of the balance of the estate
create a very good plan for Elliot and Alexis.
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SAVVY LIVING
How Medicare Covers Alzheimer's Disease
What does Medicare cover when it comes to Alzheimer's disease?
My wife was recently diagnosed with early stage Alzheimer's and I would like to
find out what is covered and what is not.
Most medical costs to treat individuals with Alzheimer's disease
are covered by Medicare except for long-term custodial care costs. Here is a
breakdown of the services Medicare does and does not cover when it comes to
Alzheimer's disease and a few tips that might help you plan ahead.
Medical Care: For the most part, ongoing medical care to
diagnose and treat Alzheimer's disease is covered by Medicare Part B. This
includes visits to primary care doctors and specialists, lab tests, speech and
occupational therapy, home health care and outpatient counseling services.
Medicare pays 80% of these costs and the patient will be responsible for the
remaining 20% after meeting the annual $147 Part B deductible.
Inpatient hospital care is covered under Medicare Part A with a
$1,216 deductible and coinsurance. As part of healthcare reform, Medicare also
covers 100% of annual wellness visits, including tests for cognitive
impairment.
Medications: Most Alzheimer's medications are covered under
Medicare's Part D prescription drug plans, but copayments vary depending on
your situation. If you have a Part D plan, use the Medicare Plan Finder tool at
medicare.gov/find-a-plan to compare your plan's total drug costs against other
plans to be sure you're getting the best coverage. The Alzheimer's Association
offers a chart on coverage for common Alzheimer's drugs. To view the chart, go
to alz.org and type "drug chart" in the search field to find it.
Long-Term Custodial Care: Many seniors are surprised to learn
that Medicare does not cover long-term custodial care. This includes nursing
home care as well as the costs of assisted living facilities and adult day
care. Medicare does, however, pay for some shorter-term nursing home care. For
example, Medicare will cover up to 100 days of nursing home care following a
three-day inpatient hospital stay.
Hiring home help for bathing, toileting and dressing (custodial
care) is not covered by Medicare. This is true unless the patient is also
receiving skilled-nursing care or physical or occupational therapy to help with
the recovery from an illness or injury.
To help with these costs, you may want to consider a long-term
care insurance policy. If your income and assets are very limited, you may
qualify for Medicaid. See longtermcare.gov for a breakdown of long-term care
planning options.
Hospice: In the final stages of the disease, Medicare Part A
covers nearly all aspects of hospice care. This includes doctor services,
nursing care, drugs, medical equipment and supplies, physical and occupational
therapy, homemaker services, counseling and respite care. To qualify, a doctor
must certify that a patient has six months or less to live.
Other Insurance
Also, you should consider a Medigap (Medicare supplemental
insurance) policy if you do not already have one. A Medigap plan will help pay
for things that are not covered by Medicare such as copayments, coinsurance and
deductibles. To search for plans in your area, visit medicare.gov and click on
"Supplements & Other Insurance" or call Medicare at 800-633-4227
and ask them to mail you a free copy of the "Choosing a Medigap
Policy" publication 02110.
If you are enrolled in a Medicare Advantage plan (like an HMO or
PPO), your plan must give you at least the same coverage as original Medicare
does. However, make sure your doctors are in your insurer's network to avoid
excess costs. Also, find out whether you need a referral or prior authorization
before getting care.
Financial Assistance
If you can't afford your Medicare out-of-pocket costs, or need
help with medication expenses, there are government programs that can help. Go
to benefitscheckup.org to search or contact your Eldercare Locator
(800-677-1116) who can refer you to local services to assist you.
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
A God-Honoring Estate Plan
Like so many others, my wife and I found ourselves without a
current and viable estate plan in place. Although we had drawn up a pair of
wills years before, it was a shock to see how out-dated and inadequate they had
become. Our circumstances, finances, and interests had changed; but our wills
had not. A last will and testament is supposed to provide instructions to family
and friends about who and what was important to the will-maker in life. With
time, our estate plan no longer reflected those values. And to just discard our
old wills would leave us without a viable estate plan, causing state laws to
take over and leaving our assets to be distributed to distant or unintended
relatives, or possibly to the state itself. Neither result was what we wanted
to leave behind.
So began our journey to develop a God-honoring estate plan that
would include our family and the local church, as well as national and
international ministries, after we are gone.
In 1985, my wife and I purchased a small family business from my
parents. Over the years, the Lord blessed our hard work and commitment to
quality products and services. After operating the business for a number of
years, we began to realize that we had many employees who depended on us as
well as a great deal of corporate responsibilities. It became obvious we needed
an estate plan that would deal with the business issues as well as our personal
goals.
About that time, we were invited to our first World Challenge in
Tacoma, Washington. The effectiveness of the JESUS Film was very impressive. We
appreciated how the JESUS Film Harvest Partners teams work with indigenous
peoples to identify pastoral and lay leadership, and how they help establish
preaching points and organize local churches to disciple new believers. As a
result of that invitation to the Tacoma World Challenge, we included the JESUS
Film Harvest Partners ministry in our new estate plan.
Some time later, in a more recent World Challenge, my wife and I
were struck with the urgency of getting JESUS Film teams and equipment out to
the field. We realized we didn't want to wait until we were dead and gone to
support this ministry in a more meaningful way. We wanted to be a part of the
ministry during our lifetime. So, we decided to make an immediate and
significant pledge.
In order to implement this pledge, we engaged the services of
the Foundation. With their help, we were able to establish an endowment fund,
which will be funded over a five-year period. Each year, 95 percent of the
endowment earnings will go the JESUS Film Harvest Partners ministry and the
remaining 5 percent will be plowed back into the endowment to help grow the
fund.
After we are gone, our estate will be distributed to various
ministries through the Foundation in a God-honoring way. We are so impressed
with the Foundation and thankful that we can have the joy of giving now and
seeing the results because of our endowments. We are confident the ministries
that are important to us will keep on receiving income in perpetuity.
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WASHINGTON NEWS
Commissioner Koskinen's Message to the IRS
Following his confirmation on December 20 as the new
Commissioner of the Internal Revenue Service, John Koskinen sent greetings to all
IRS employees. He stated that he "took the oath of office this morning and
a top priority is to reach out immediately to IRS employees; to greet you and
to share my enthusiasm about joining you at this important time."
Koskinen indicated that he plans to travel extensively in 2014
and visit "as many IRS offices as possible." He notes that the IRS
will soon be entering the very busy filing season for 2013 tax returns. His
highest priority is to ensure the filing season goes "as smoothly as
possible."
Treasury Secretary Jacob Lew welcomed Koskinen to his new
position. Lew noted, "John shares my ironclad commitment to continuing to
rebuild the public's trust in the IRS. The work of the IRS, which is carried
out by dedicated public servants, touches virtually every American, and we need
someone at the helm who brings both a strong commitment to high quality
customer service and the practical abilities to strengthen the agency."
Lew stated that he believes a primary focus for Koskinen will be to rebuild the
credibility of the IRS.
The White House echoed this statement by Sec. Lew on rebuilding
trust. It published a press release and noted that Koskinen "has always
acted with the absolute integrity Americans demand from those in public
service, and his strong leadership and unquestioned expertise make him the
right person to lead the IRS."
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FINANCES
Stocks - Scholastic Reports Strong Results
Scholastic Corporation (SCHL), a children's book publishing
company, announced its latest quarterly earnings on Thursday, December 19. The
company reported strong earnings despite increased expenses for the quarter.
Scholastic announced quarterly revenue of $623.2 million. This
represents an increase of 1.6% over the same period last year when the company
reported revenue of $613.5 million. However, overall revenue had to increase
19% on the year to offset a $13.4 million impairment charge accounted for this
quarter. The charge is related to an acquisition made 10 years ago.
The company reported net income of $58.3 million. This is a
slight decrease from last year when the company reported net income of $61.8
million. Scholastic reported earnings per share of $1.80.
Richard Robinson, President and CEO of Scholastic commented on
the company's quarterly results. "Scholastic had a very strong second
quarter, driven by profit improvement in each part of our children's book
business and excellent educational technology program sales. Scholastic
continues to be a critical source for books that support children's independent
reading in school and at home. Our new collaborative marketing efforts in
children's book clubs and fairs enable us to provide books to teachers, parents
and children through our school channels in a more streamlined, profitable
manner."
Scholastic is the publisher behind such recent successes as the
Harry Potter series and the Hunger Games trilogy. They also publish favorites
such as the Magic School Bus and Goosebumps series. The company has been
working to increase digital readership this year. Scholastic finalized an
agreement with Apple to provide Scholastic titles as eBooks, including the
Hunger Games trilogy.
Scholastic Corporation (SCHL) shares ended the week at $33.76,
up 6.97% for the week.
Pier 1 Imports' Earnings Impress
Pier 1 Imports, Inc. (PIR), a home furnishings retailer,
reported its quarterly earnings on Thursday, December 19. The company reported
strong sales and net income for the quarter.
Pier 1 announced quarterly revenue of $465.46 million. This
represents an increase of 9.6% over the same period last year when the company
reported revenue of $424.53 million.
The company reported net income of $26.76 million for the
quarter. This represents an increase of 11.5% over the comparable quarter last
year when the company reported net income of $23.69 million. Pier 1 announced
earnings per share of $0.26.
"We're pleased to deliver solid third quarter financial
results," said Alex W. Smith, President and CEO of Pier 1 Imports.
"Our unique and special merchandise assortments created a well-positioned
value offer that resonated with our customers. Our more overtly promotional
marketing stance drove strong traffic, and our store and e-commerce teams
delivered on conversion. In fact, this year marked a new, all-time sales record
for both Black Friday and the full post-Thanksgiving weekend."
Pier 1 Imports survived the recession by focusing on making its
merchandise unique. CEO Alex Smith hired more buyers to focus on finding
distinct pieces for its retail locations. As a result, not all Pier 1 locations
have the same merchandise. This has allowed Pier 1 to avoid competing with
giants like Amazon and carve out a niche market. Consequently, Pier 1's stock
price has increased over 6,000% since its near bankruptcy in late 2008.
Pier 1 Imports (PIR) shares ended the week at $23.11, up 1.94%
for the week.
Walgreen Co. Reports Solid Earnings
Walgreen Co. (WAG), operator of a chain of drugstores, reported
its quarterly earnings on Friday, December 20. The company announced impressive
revenue and net income figures despite a difficult consumer spending
environment.
Walgreen reported quarterly revenue of $18.33 billion. This
represents an increase of 5.9% over the same period last year when the company
reported revenue of $17.12 billion.
The company reported net income of $695 million or $0.72 per
share. This represents an increase of 68.3% from the comparable quarter last
year when the company reported net income of $413 million.
"Given the continued soft economy, we were generally
satisfied with our top-line growth where we increased both traffic and sales
for the quarter as well as our pharmacy market share," said Walgreen
President and CEO Greg Wasson. "We will continue our sharp focus on
expense management as we address the challenging environment, and we expect to
realize the synergies from our strategic partnership consistent with our
previously stated goal."
On December 9, Walgreen announced that it is now offering daily
testing for cholesterol, blood glucose and body composition at more than 60
stores in Maryland. The tests are administered to those over 18 without an
appointment. A person can have their cholesterol, blood glucose, body
composition and blood pressure tested for $65. "Providing convenient,
affordable access to health testing services is an important part of our
commitment to disease prevention and chronic care management," said Jon Reitz,
Market Pharmacy Director at Walgreen Co.
Walgreen Co. (WAG) shares ended the week at $57.43, down 3.15%
for the week.
The Dow started the week of 12/23 at 16,225 and closed at 16,478
on 12/27. The S&P 500 started the week at 1,823 and closed at 1,841. The
NASDAQ started the week at 4,136 and closed at 4,157.
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Bonds - Treasury Yields Rise on Economic Data
Treasury yields rose and prices fell this week as the market
reacted to the economic news of the past two weeks. The 10-year Treasury yield
rose to its highest level in over three months.
On December 18, the Fed announced that it will reduce its bond
purchases to $75 billion next month. In addition, the U.S. Department of Labor
announced that initial claims for jobless benefits declined 42,000 to 338,000
during the week ending December 21. Analysts' expected a decline of 35,000.
This economic data caused the 10-year Treasury yield to rise to
2.998%, its highest level since September 6, in early trading on Thursday,
December 26. On September 6, the 10-year Treasury yield reached 3.005%, the
highest level since July 2011.
One question for investors is how quickly the Federal Reserve
will diminish its bond purchases over the next few months. Jim Vogel, Head of
Agency-Debt Research at FTN Financial commented, "They are going to do the
first couple of tapers and then see what happens. The data dependency will come
probably starting at the April meeting. That's when they will have enough time
to gauge reaction to tapering."
Another issue is how long the Federal Reserve will continue to
keep the federal funds rate at its current level of between zero and 0.25%. At
last week's meeting, the Federal Open Market Committee ("the
Committee") stated that it will likely be appropriate to maintain the
current range well past its initial 6.5% unemployment rate target. However, the
Committee failed to give further guidance.
"They'll try to keep rates anchored as much as they can,
but it will be difficult if data continues to come in strong," said Thomas
Roth, Senior Treasury Trader at Mitsubishi UFJ Securities USA, Inc. "The risk
is if the economy speeds up faster than people expect, the Fed won't want to,
and won't be able to, keep rates where they are."
The 10-year Treasury note yield finished the week of 12/23 at
3.01% while the 30-year Treasury note yield finished the week at 3.94%.
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CDs and Mortgages - Interest Rates Remain Largely Unchanged
Freddie Mac released the results of its weekly Primary Mortgage
Market Survey (PMMS) on Thursday, December 26. The results show average fixed
mortgage rates remaining largely unchanged to end the year.
The 30-year fixed rate mortgage averaged 4.48% this week. This
represents a slight increase from last week when it averaged 4.47%. One year
ago at this time, the 30-year fixed rate mortgage averaged 3.35%.
This week, the 15-year fixed rate mortgage averaged 3.52%.This
represents a slight increase from last week when it averaged 3.51%. Last year
at this time, the 15-year fixed rate mortgage averaged 2.65%.
"Mortgage rates were little changed this week following
mixed economic reports," said Frank Nothaft, Vice President and Chief
Economist at Freddie Mac. "Real GDP was revised upwards to 4.1% growth in
the third quarter of this year. However, existing-home sales dropped 4.3% to a
seasonally adjusted annual rate of 4,900,000 in November. Also, new home sales
fell 2.1% to a seasonally adjusted annual rate of 464,000."
The money market fund finished the week of 12/23 at 0.4%. The
1-year CD finished at 0.7%.
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Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, KS 66220 United States
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