Model Generosity – Leave a Lasting Legacy through Planned Giving
– Global Church of the Nazarene Foundation – Saturday, 11 January 2014
Jeremiah 29:11 says, "'For I know the plans I have for
you', declares the Lord, 'plans to prosper you and not to harm you, plans to
give you a hope and a future.'"
A prayer from Dr. Stan Toler and Steve Weber's The Little Book
of Offering Prayers and Verses:
"Lord, we give our gifts freely today as part of Your plan
for our lives. In return, You have promised to give us a 'hope and a future'
and that we may rest easy in Your care. Thank You for Your wonderful protection
as a loving Father. Help us to be faithful so that Your Kingdom will grown and
lives will be changed forever."
As we start the new year let us focus on God's faithfulness and
the hope and future we have in Him. If you have any questions on how you can be
a part of your favorite ministry's "hope and future" please contact
us by replying to this email or by calling our office at (913) 577- 2983.
Blessings,
Kenneth R. Roney, J.D.
President
PERSONAL PLANNER
Trusts to Protect Children
Trusts are an excellent way to provide for the support and care
of children while protecting them. Two important reasons to create a trust are
to care for minor children or for a special needs child. In both circumstances,
trusts can be an essential part of making plans to provide the best possible
care.
How Trusts Work
How Trusts Work
There are several people and terms that you should know about to
understand how trusts work. Let's examine the different people or terms that
will be useful in setting up and operating a trust for children.
Trustee: A trustee will be charged with managing the property under the terms of a trust document. The three choices for trustee are a bank or trust company, a private trustee or a charitable trustee for a trust that benefits charity.
A trustee has a particular name—a fiduciary. This means that the trustee is required under state law to provide appropriate management of the trust. Based on the trust document that you sign as the trust grantor, the trustee will do his or her best to follow your intent.
Property: The trust exists to hold and manage property. While in many states a trust is legally in existence after you sign the trust document, it doesn't actually have any purpose until it receives property. Your trustee refers to this as the "funding" of the trust. The trustee will manage the property according to the terms of your trust document.
Investments: Under state law, your trustee is required to follow the standards of a prudent investor. In most cases, the trustee will invest in a portfolio of stocks and bonds. Approximately 50% to 60% of the typical trust portfolio is invested in a diversified group of stocks, with the balance invested in bonds.
Under the prudent investor rules, the trustee is obligated to diversify. Through diversification the risk of loss will be reduced and the probability that the trust will function as you intend is greater.
Income: Income is defined under the law as either ordinary income or capital gain. The interest from bonds and mortgage
notes
is ordinary income. Historically, trusts have paid out their ordinary income.
However, because many trustees now have more than half of the trust property
invested in stocks, trusts now may pay out a portion of recognized capital gain
as income.
Capital Gain: Capital gain is the other type of earnings of a trust. While a portion of the capital gain represents principal and will be retained in the trust to benefit the remainder recipient, part of the gain under modern investment strategies is typically allocated to income. The trustee will look at the trust document to determine who will receive the income. Normally, the trustee will pay out on a quarterly basis the ordinary income and part of the recognized capital gains.
Remainder: Under the trust document, the trust will pay income for a period of time, such as a life of a person or a term of years. After all of the income payments have been completed,
the trust principal or remainder is usually transferred to the beneficiaries.
For example, a trust was funded with $300,000 and paid income
to children Billy, Susie and Linda until they were age 30. At that time, the
trust remainder value of $300,000 was divided between the three children.
Because each received one-third of the remainder, the inheritance amount for
each child was $100,000.
Trusts for Minor Children
Trustee: A trustee will be charged with managing the property under the terms of a trust document. The three choices for trustee are a bank or trust company, a private trustee or a charitable trustee for a trust that benefits charity.
A trustee has a particular name—a fiduciary. This means that the trustee is required under state law to provide appropriate management of the trust. Based on the trust document that you sign as the trust grantor, the trustee will do his or her best to follow your intent.
Property: The trust exists to hold and manage property. While in many states a trust is legally in existence after you sign the trust document, it doesn't actually have any purpose until it receives property. Your trustee refers to this as the "funding" of the trust. The trustee will manage the property according to the terms of your trust document.
Investments: Under state law, your trustee is required to follow the standards of a prudent investor. In most cases, the trustee will invest in a portfolio of stocks and bonds. Approximately 50% to 60% of the typical trust portfolio is invested in a diversified group of stocks, with the balance invested in bonds.
Under the prudent investor rules, the trustee is obligated to diversify. Through diversification the risk of loss will be reduced and the probability that the trust will function as you intend is greater.
Income: Income is defined under the law as either ordinary income or capital gain. The interest from bonds and mortgage
notes
is ordinary income. Historically, trusts have paid out their ordinary income.
However, because many trustees now have more than half of the trust property
invested in stocks, trusts now may pay out a portion of recognized capital gain
as income.Capital Gain: Capital gain is the other type of earnings of a trust. While a portion of the capital gain represents principal and will be retained in the trust to benefit the remainder recipient, part of the gain under modern investment strategies is typically allocated to income. The trustee will look at the trust document to determine who will receive the income. Normally, the trustee will pay out on a quarterly basis the ordinary income and part of the recognized capital gains.
Remainder: Under the trust document, the trust will pay income for a period of time, such as a life of a person or a term of years. After all of the income payments have been completed
,
the trust principal or remainder is usually transferred to the beneficiaries.For example, a trust was funded with $300,000 and paid
income
to children Billy, Susie and Linda until they were age 30. At that time, the
trust remainder value of $300,000 was divided between the three children.
Because each received one-third of the remainder, the inheritance amount for
each child was $100,000.Trusts for Minor Children
Parents correctly understand that a minor child is not ready to
receive a substantial inheritance. Therefore, it is very common for parents to
create in their will or living
trust aplan
to set up a trust for minor children.
The trust for minor children frequently permits the trustee broad latitude to pay income and principal to the children or spend it for their healthcare or other needs. Because of this flexibility, the trustee of the trust for minor children is frequently a family member or professional advisor for the family. After all of the children reach a particular age, the trust is then usually distributed in equal shares to the then-living children.
Trust for Children Billy and Mary
plan
to set up a trust for minor children.The trust for minor children frequently permits the trustee broad latitude to pay income and principal to the children or spend it for their healthcare or other needs. Because of this flexibility, the trustee of the trust for minor children is frequently a family member or professional advisor for the family. After all of the children reach a particular age, the trust is then usually distributed in equal shares to the then-living children.
Trust for Children Billy and Mary
Bill and Clara Jones are 36 and 34. They have two children—Billy
(age four) and Mary (age one).
After visiting with their attorney, Bill and Clara signed their first will. If one of them should pass away, estate property and guardianship of the children will pass to the survivor. However, if they both pass away, then they have selected Clara's brother, Harold, and his wife as the guardians for the children. They also have selected Bill's sister, Susan, who is a CPA, as the trustee of their family trust for Billy and Mary.
CPA Susan has discretion under the trust instrument to make distributions of income or principal to Billy and Mary or to pay providers for their support or medical care. In order to provide maximum protection for Mary, the entire trust principal is retained until Mary is age 30. By that time, Bill and Clara believe that Mary will have completed her
education and be well established in life. Even though Billy will be 33 and
Mary will be 30, the trust principal will be divided equally between the two of
them at that time.
With a family trust for minor children, the assets of the family are typically not large. Most trusts for minor children are funded primarily by term life insurance on
the lives of Bill and Clara. Therefore, it is very common for the trust to
continue in existence until the youngest child reaches the desired age. While
this means that older children may have to wait longer for their inheritance,
that is a secondary goal to making sure that the youngest children are all
taken care of until they reach the selected age.
Special Needs Trust
After visiting with their attorney, Bill and Clara signed their first will. If one of them should pass away, estate property and guardianship of the children will pass to the survivor. However, if they both pass away, then they have selected Clara's brother, Harold, and his wife as the guardians for the children. They also have selected Bill's sister, Susan, who is a CPA, as the trustee of their family trust for Billy and Mary.
CPA Susan has discretion under the trust instrument to make distributions of income or principal to Billy and Mary or to pay providers for their support or medical care. In order to provide maximum protection for Mary, the entire trust principal is retained until Mary is age 30. By that time, Bill and Clara believe that Mary will have completed
her
education and be well established in life. Even though Billy will be 33 and
Mary will be 30, the trust principal will be divided equally between the two of
them at that time.With a family trust for minor children, the assets of the family are typically not large. Most trusts for minor children are funded primarily by term life insurance
on
the lives of Bill and Clara. Therefore, it is very common for the trust to
continue in existence until the youngest child reaches the desired age. While
this means that older children may have to wait longer for their inheritance,
that is a secondary goal to making sure that the youngest children are all
taken care of until they reach the selected age.Special Needs Trust
A child with a disability or special need will require both a caregiver and
financial resources.
During the lives of the parents, they are often able to provide the required care for a special needs child. However, after they pass away, there may need to be a more structured option that involves a special facility for that child.
To plan for the case when both parents pass away, arrangements for the care facility and financial requirements of a special needs child should be made in advance. A special needs child often has no major assets and therefore is qualified for the Social Security SSI
Program or for Medicaid.
However, if the parents were to give the child an inheritance outright or a vested income stream,
then those funds will all be expended before the child could receive federal
benefits. As a result, the special needs trust was designed to allow parents to
provide help for children, even though the child may be receiving federal or
state benefits.
The key to the special needs trust is
that the trustee has complete discretion
over principal and income. He or she may add the income back to the trust
corpus, or may make distributions to the child or for the benefit of the child.
Because the special needs trust depends
on federal and state laws that regularly change, an attorney who specializes in
these trusts is often used to draft the specific provisions. However, there
generally are several items the trustee can provide the special needs child and
still maintain his or her qualification for federal and state benefits. These
include a vehicle, a home, home furnishings, property for self-support, medical
care and educational expenses.
The special needs trust also should have an intention to preserve the trust for a remainder beneficiary. Even though the special needs child may receive income and principal that actually does exhaust the trust, the hope that another entity or person would benefit from the remainder is quite helpful.
and
financial resources.During the lives of the parents, they are often able to provide the required care for a special needs child. However, after they pass away, there may need to be a more structured option that involves a special facility for that child.
To plan for the case when both parents pass away, arrangements for the care facility and financial requirements of a special needs child should be made in advance. A special needs child often has no major assets and therefore is qualified for the Social Security
SSI
Program or for Medicaid.However, if the parents were to give the child an inheritance outright or a vested income stream
,
then those funds will all be expended before the child could receive federal
benefits. As a result, the special needs trust was designed to allow parents to
provide help for children, even though the child may be receiving federal or
state benefits.The key to the special needs trust
is
that the trustee has complete discretion
over principal and income. He or she may add the income back to the trust
corpus, or may make distributions to the child or for the benefit of the child.Because the special needs trust
depends
on federal and state laws that regularly change, an attorney who specializes in
these trusts is often used to draft the specific provisions. However, there
generally are several items the trustee can provide the special needs child and
still maintain his or her qualification for federal and state benefits. These
include a vehicle, a home, home furnishings, property for self-support, medical
care and educational expenses.The special needs trust also should have an intention to preserve the trust for a remainder beneficiary. Even though the special needs child may receive income and principal that actually does exhaust the trust, the hope that another entity or person would benefit from the remainder is quite helpful.
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SAVVY LIVING
What You Should Know About Your Parents' Finances
An advisor recently suggested that I speak with my parents about
their financial situation and end-of-life plans so I can be better prepared
when something happens to them. What
is the best way tohandle
this and what do I need to find out?
Most adult children know very little about the financial situation and end-of-life plans of their parents. However, it is important that children learn all they can about their parents' finances, insurance policies, long-term care plans and the like. Children may have the responsibility of helping parents with financial decisions later in life or making decisions about end of life care or execution of an estate plan. These jobs become
much more difficult when children are left without the proper information.
Have the Talk
handle
this and what do I need to find out?Most adult children know very little about the financial situation and end-of-life plans of their parents. However, it is important that children learn all they can about their parents' finances, insurance policies, long-term care plans and the like. Children may have the responsibility of helping parents with financial decisions later in life or making decisions about end of life care or execution of an estate plan. These jobs
become
much more difficult when children are left without the proper information.Have the Talk
You may be uncomfortable starting a conversation about finances
and end-of-life care. If this is the case, see TheConversationProject.org for
several helpful tips. If possible, include in the conversation your siblings
and other family members that might have some of the responsibilities outlined
above. This has the benefit of preventing hard feelings and letting your
parents know that everyone views this conversation as an important one.
When you meet with your parents, you'll need to sit down and create several lists of important information. Find out where they keep key documents and how they want certain things handled when they pass away or if they become incapacitated. Below is a checklist of some key information that you should gather.
Personal Information
When you meet with your parents, you'll need to sit down and create several lists of important information. Find out where they keep key documents and how they want certain things handled when they pass away or if they become incapacitated. Below is a checklist of some key information that you should gather.
Personal Information
Contacts: List the names and phone numbers of close friends,
clergy, doctors, their lawyer, their accountant, their broker, their insurance
agent,
etc.
Personal documents: Find out where they keep their Social Security cards,
marriage license, military discharge papers and other important personal
documents.
Secured places: Make a list of places they keep under lock and key or protected by password. This includes online account passwords, safe deposit box keys, safe combinations, security alarm
codes and the like.
Service providers: Make a list of the companies or people who provide services to them regularly such as utility companies, lawn service, etc.
Medical information: Make a copy of their medical history. Make sure you are aware of any drug allergies, past surgeries etc. Also, list all medications they take.
Pets: If they have a pet, what are their instructions for the animal's care if they pass away or are incapacitated?
End of life: What are their wishes for organ or body donation and their funeral instructions? If they've made pre-arrangements with a funeral home obtain a copy of the agreement.
Legal Documents
,
etc.Personal documents: Find out where they keep their Social Security cards
,
marriage license, military discharge papers and other important personal
documents.Secured places: Make a list of places they keep under lock and key or protected by password. This includes online account passwords, safe deposit box keys, safe combinations, security
alarm
codes and the like.Service providers: Make a list of the companies or people who provide services to them regularly such as utility companies, lawn service, etc.
Medical information: Make a copy of their medical history. Make sure you are aware of any drug allergies, past surgeries etc. Also, list all medications they take.
Pets: If they have a pet, what are their instructions for the animal's care if they pass away or are incapacitated?
End of life: What are their wishes for organ or body donation and their funeral instructions? If they've made pre-arrangements with a funeral home obtain a copy of the agreement.
Legal Documents
Will: Do they have an updated will or trust and where is it
located?
Power of attorney:
Do they have a power of attorney document that names someone to handle their
financial matters if they become incapacitated?
Advance directives: Do they have a living will and a medical power of attorney that
spells out their wishes regarding their end-of-life medical treatment?
Financial Records
Power of attorney
:
Do they have a power of attorney document that names someone to handle their
financial matters if they become incapacitated?Advance directives: Do they have a living will and a medical power of attorney
that
spells out their wishes regarding their end-of-life medical treatment?Financial Records
Income and debt: List their sources of income including
pensions, Social Security, IRAs, 401Ks, investments, etc. Do the same for any
debt they may have such as a mortgage, credit card debt, medical bills, etc.
Financial accounts: List the banks and brokerage accounts they use along with their contact information. Look for checking accounts,
savings accounts, stocks, bonds, mutual funds, IRAs, etc.
Company benefits: List any retirement plans, pensions or former employer benefits along with the contact information of the benefits administrator.
Insurance: List the policy numbers of all insurance policies they have such as life, long-term care, home, auto and Medicare.
Property: List all real estate, vehicles and other property they own along with the location of the deeds or titles.
Credit cards: List all credit cards they use, including the card numbers and the contact information for the credit card company.
Taxes: Find out where they keep copies of past years' tax returns.
For more information, call the Eldercare Locator at
800-677-1116 and ask them to mail you a free copy of their publication
"Let's Talk: Starting the Conversation about Health, Legal, Financial and
End-of-Life Issues" or you can read it online at eldercare.gov.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Showand 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.
Financial accounts: List the banks and brokerage accounts they use along with their contact information. Look for checking accounts
,
savings accounts, stocks, bonds, mutual funds, IRAs, etc.Company benefits: List any retirement plans, pensions or former employer benefits along with the contact information of the benefits administrator.
Insurance: List the policy numbers of all insurance policies they have such as life, long-term care, home, auto and Medicare.
Property: List all real estate, vehicles and other property they own along with the location of the deeds or titles.
Credit cards: List all credit cards they use, including the card numbers and the contact information for the credit card company.
Taxes: Find out where they keep copies of past years' tax returns.
For more information, call the Eldercare Locator
at
800-677-1116 and ask them to mail you a free copy of their publication
"Let's Talk: Starting the Conversation about Health, Legal, Financial and
End-of-Life Issues" or you can read it online at eldercare.gov.Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Showand 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.
-------
YOUR PLAN
Part Gift and Part Sale
Susan and Kevin bought a vacant lot along Lake Michigan many
years ago. They had planned to build a second home so that their children could
spend their summers along the lake. However, as time went on, Kevin's job kept him in town and the children grew
up before Susan and Kevin had the financial resources to build on the land.
Kevin: Over the years, that lot increased in value. It now is worth much more than what we paid for it. We paid about $40,000 for the lakeside property and it is now worth almost $200,000.
Susan: The lot has gone up greatly in value, and with the children out of the house we were thinking of selling the property. We wanted to sell, but we also wanted to avoid paying so much in tax on the sale. We were thinking of making a gift of 25% of the property to our favorite charity.
Kevin: I happened to be talking to a CPA at a community luncheon. He mentioned that we could probably give about twice as much with almost the same cost if we gave 25% of the property (prior to the sale) rather than writing a check after the sale.
After talking to our tax advisor, we discovered that if we gave a 25% interest in the property to charity, we would receive two benefits. We would get an income tax deduction for the value of our gift plus save on capital gains tax on the 25% interest given away.
Susan: That is what we decided to do. By giving charity a 25% interest in the property prior to the sale we saved the capital gains tax on that part. The deduction on that
part offset a large portion of the tax on the $150,000 we received when the
property actually sold. We are very pleased with the "double benefit"
from giving the property, and our favorite charity received $50,000, a very
nice gift.
*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.
kept him in town and the children grew
up before Susan and Kevin had the financial resources to build on the land.Kevin: Over the years, that lot increased in value. It now is worth much more than what we paid for it. We paid about $40,000 for the lakeside property and it is now worth almost $200,000.
Susan: The lot has gone up greatly in value, and with the children out of the house we were thinking of selling the property. We wanted to sell, but we also wanted to avoid paying so much in tax on the sale. We were thinking of making a gift of 25% of the property to our favorite charity.
Kevin: I happened to be talking to a CPA at a community luncheon. He mentioned that we could probably give about twice as much with almost the same cost if we gave 25% of the property (prior to the sale) rather than writing a check after the sale.
After talking to our tax advisor, we discovered that if we gave a 25% interest in the property to charity, we would receive two benefits. We would get an income tax deduction for the value of our gift plus save on capital gains tax
on the 25% interest given away.Susan: That is what we decided to do. By giving charity a 25% interest in the property prior to the sale we saved the capital gains tax
on that part. The deduction on that
part offset a large portion of the tax on the $150,000 we received when the
property actually sold. We are very pleased with the "double benefit"
from giving the property, and our favorite charity received $50,000, a very
nice gift.*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
Obama and Paul Support Economic Zones
At a January 9 White House meeting attended by Sen. Rand Paul
(R-KY), President Obama announced five "Promise Zones." In the 2013
State of the Union Address, the President promoted the concept of economic
empowerment zones. The concept had been initially made popular by Rep. Jack
Kemp (R-NY) when he was a member of Congress. Both the Clinton and Bush
Administrations employed versions of the idea.
Sen. Paul introduced the "Economic Freedom Act" last month and has suggested that major tax reductions in the economic zones would increase employment.
The President announced the first five Promise Zones. They are San Antonio, Philadelphia, Los Angeles, Southeastern Kentucky and the Choctaw Nation of Oklahoma. Each entity submitted a list of specific strategies that would be involved in the program.
1. San Antonio – There would be a partnership with St. Philip's College to encourage job creation and training. Children would be enrolled in Pre-K programs and local schools would focus on STEM (Science, Technology, Engineering and Math).
2. Los Angeles – A major effort would be made to partner with housing developers to provideaffordable housing.
The Full Service Community Schools model would be expanded from seven schools
to 45 Promise Zone schools by 2019. The city will partner with the Los Angeles
Community School District to facilitate technology training.
3. Philadelphia – A new adult education,
small business and entrepreneurial education program would be developed
together with Drexel University and the William Penn Foundation. Efforts would
be continued to prevent and reduce crime.
4. Southeastern Kentucky – The Kentucky Highlands Investment core strategies would be implemented to produce sustained economic development. There would be a Promise Zone Loan Fund and educational initiatives in partnership with the University of Kentucky, Berea College and Eastern Kentucky State University.
5. Choctaw Nation – There will be a partnership involving Oklahoma State University, Eastern Oklahoma State University and the Kiamichi Technology Center to provide technical education. The infrastructure development and economic diversification will also produce significant employment.
There are specific requirements for each Promise Zone.
1. Accountability – There will be clear goals for jobs and
economic activity that will be measured and publicly reported.
2. Federal Partnership – The federal government will provide staff and funding to supplement the local efforts.
3. National Service – Five AmeriCorps VISTA staff members will be assigned to each zone to manage volunteers and facilitate the actions involved.
4. Tax Reduction – Businesses in the zones will receive favorable federal and state tax rates.
Sen. Paul supported the concept of the zones. He stated, "I am supportive of the President's ideas. What he said was uplifting and encouraging. We need to do something more dramatic" than the current Promise Zones. Paul has proposed very substantial tax reductions for the city of Detroit and other locations as part of his plan.
IRS 2014 Identity Theft Tips
Sen. Paul introduced the "Economic Freedom Act" last month and has suggested that major tax reductions in the economic zones would increase employment.
The President announced the first five Promise Zones. They are San Antonio, Philadelphia, Los Angeles, Southeastern Kentucky and the Choctaw Nation of Oklahoma. Each entity submitted a list of specific strategies that would be involved in the program.
1. San Antonio – There would be a partnership with St. Philip's College to encourage job creation and training. Children would be enrolled in Pre-K programs and local schools would focus on STEM (Science, Technology, Engineering and Math).
2. Los Angeles – A major effort would be made to partner with housing developers to provideaffordable housing
.
The Full Service Community Schools model would be expanded from seven schools
to 45 Promise Zone schools by 2019. The city will partner with the Los Angeles
Community School District to facilitate technology training.3. Philadelphia – A new adult education
,
small business and entrepreneurial education program would be developed
together with Drexel University and the William Penn Foundation. Efforts would
be continued to prevent and reduce crime.4. Southeastern Kentucky – The Kentucky Highlands Investment core strategies would be implemented to produce sustained economic development. There would be a Promise Zone Loan Fund and educational initiatives in partnership with the University of Kentucky, Berea College and Eastern Kentucky State University.
5. Choctaw Nation – There will be a partnership involving Oklahoma State University, Eastern Oklahoma State University and the Kiamichi Technology Center to provide technical education. The infrastructure development and economic diversification will also produce significant employment.
There are specific requirements for each Promise Zone.
1. Accountability – There will be clear goals for jobs
and
economic activity that will be measured and publicly reported.2. Federal Partnership – The federal government will provide staff and funding to supplement the local efforts.
3. National Service – Five AmeriCorps VISTA staff members will be assigned to each zone to manage volunteers and facilitate the actions involved.
4. Tax Reduction – Businesses in the zones will receive favorable federal and state tax rates.
Sen. Paul supported the concept of the zones. He stated, "I am supportive of the President's ideas. What he said was uplifting and encouraging. We need to do something more dramatic" than the current Promise Zones. Paul has proposed very substantial tax reductions for the city of Detroit and other locations as part of his plan.
IRS 2014 Identity Theft Tips
On January 7, the IRS launched a 2014 campaign to reduce
identity theft and tax refund fraud. There is a three part IRS program
involved. The IRS has published tips for taxpayers, increased internal staffing to
uncover fraud and is proceeding with criminal prosecution of offenders.
The IRS published specific "taxpayer tips to avoid identity theft."
1. Social Security Cards –
Do not carry them with you or give out your Social Securitynumber
to businesses or individuals unless it is required.
2. Credit Reports –
Check the major credit sources each year to see whether or not there are
unusual actions that suggest your identity has been stolen.
3. Personal Information –
Store in a safe place in your home. Shred old bills and financial information.
4. Personal Computer – Make use of an anti-virus software program that is updated over the internet.
5. Phone Contacts – Be cautious in giving out personal information unless you are certain of the identification of the person you are speaking with.
6. Tax Returns – Monitor your returns and refunds. Watch for more than one return filed or an unexpected large refund. If there is a major change in state or federal benefits due to a reported large change in your income, investigate the reason.
If you think you are a victim of identity theft, then you should report the theft to the Federal Trade Commission at 877-438-4338. You also may report the theft to local police and contact the fraud departments of Equifax, Experian and TransUnion.
You should also contact your bank and close any affected accounts.
Information is available on www.irs.gov. Search for "identity theft" and the key information and phone numbers will be available.
The IRS has created a specific organization to handle identity theft. You can also contact theIdentity Protection Specialized
Unit at 800-908-4490.
The third part of the IRS effort is an increase in prosecutions. Indictments for identity theft increased from 165 in 2011 to 1,050 in 2013. Those individuals who are sentenced for identity theft increased from 80 in 2011 to 438 in 2013.
to
uncover fraud and is proceeding with criminal prosecution of offenders.The IRS published specific "taxpayer tips to avoid identity theft
."1. Social Security Cards
–
Do not carry them with you or give out your Social Securitynumber
to businesses or individuals unless it is required.2. Credit Reports
–
Check the major credit sources each year to see whether or not there are
unusual actions that suggest your identity has been stolen.3. Personal Information
–
Store in a safe place in your home. Shred old bills and financial information.4. Personal Computer – Make use of an anti-virus software program that is updated over the internet.
5. Phone Contacts – Be cautious in giving out personal information unless you are certain of the identification of the person you are speaking with.
6. Tax Returns – Monitor your returns and refunds. Watch for more than one return filed or an unexpected large refund. If there is a major change in state or federal benefits due to a reported large change in your income, investigate the reason.
If you think you are a victim of identity theft, then you should report the theft to the Federal Trade Commission at 877-438-4338. You also may report the theft to local police and contact the fraud departments of Equifax, Experian and TransUnion
.
You should also contact your bank and close any affected accounts.Information is available on www.irs.gov. Search for "identity theft" and the key information and phone numbers will be available.
The IRS has created a specific organization to handle identity theft. You can also contact theIdentity Protection
Specialized
Unit at 800-908-4490.The third part of the IRS effort is an increase in prosecutions. Indictments for identity theft increased from 165 in 2011 to 1,050 in 2013. Those individuals who are sentenced for identity theft increased from 80 in 2011 to 438 in 2013.
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FINANCES
Stocks - Family Dollar Reports Quarterly Earnings
Family Dollar Stores, Inc. (FDO), a discount retail store,
reported its quarterly earnings on January 9, 2014. Although the retailer's
sales and net income were in line with previous quarters, investors worry about
the company moving forward.
Family Dollar reported net sales of $2.5 billion for the quarter. This represents a slight increase from the comparable quarter last year when the company reported net sales of $2.42 billion.
The company reported quarterly net income of $78 million or $0.68 per share. This represents a decrease of 2.8% from the same period last year when the company reported net income of $80.28 million or $0.69 per share.
"Today, we reported sales and earnings for the first quarter of fiscal 2014 that were in-line with our previously provided guidance," said Howard R. Levine, Chairman and CEO of Family Dollar Stores. "While the top line was pressured, we expanded gross margin and managed inventory levels well. In addition, we continued to make progress in our longer-term initiatives. We opened 126 new stores and renovated, relocated or expanded 179 stores."
While sales and net income have remained relatively stable for Family Dollar, analysts and investors are somewhat concerned moving forward. The company lowered guidance for fiscal year 2014 and prepared investors for lower margins and comparable store sales. The discount retailer has a number of headwinds in 2014 that may make the year a difficult one.
Family Dollar Stores, Inc. (FDO) shares ended the week at $67.48, up 1.76% for the week.
Bed, Bath & Beyond Reports Earnings
Family Dollar reported net sales of $2.5 billion for the quarter. This represents a slight increase from the comparable quarter last year when the company reported net sales of $2.42 billion.
The company reported quarterly net income of $78 million or $0.68 per share. This represents a decrease of 2.8% from the same period last year when the company reported net income of $80.28 million or $0.69 per share.
"Today, we reported sales and earnings for the first quarter of fiscal 2014 that were in-line with our previously provided guidance," said Howard R. Levine, Chairman and CEO of Family Dollar Stores. "While the top line was pressured, we expanded gross margin and managed inventory levels well. In addition, we continued to make progress in our longer-term initiatives. We opened 126 new stores and renovated, relocated or expanded 179 stores."
While sales and net income have remained relatively stable for Family Dollar, analysts and investors are somewhat concerned moving forward. The company lowered guidance for fiscal year 2014 and prepared investors for lower margins and comparable store sales. The discount retailer has a number of headwinds in 2014 that may make the year a difficult one.
Family Dollar Stores, Inc. (FDO) shares ended the week at $67.48, up 1.76% for the week.
Bed, Bath & Beyond Reports Earnings
Bed, Bath & Beyond, Inc. (BBBY), a home goods retailer,
reported its quarterly earnings on January 8, 2014. The company reported
increased earnings, but analysts were disappointed in the company's performance
when compared to other home goods retailers.
Bed, Bath & Beyond reported net sales of $2.86 billion for the quarter. This represents an increase from last year at this time when the company reported net sales of $2.70 billion.
The company reported net income of $237.20 million or $1.12 per share. This represents an increase from the comparable quarter last year when the company reported net income of $232.75 million or $1.03 per share.
After its earnings report, Bed, Bath & Beyond's stock price declined almost 13% during trading on January 9. Analysts had expected a larger increase in sales and net income for the quarter. The slower-than-expected growth concerned investors since increased sales of home improvement products caused companies like Williams-Sonoma and Home Depot to surge last year. In 2013, the share prices for Williams-Sonoma and Home Depot increased 27% and 29%, respectively. During the same period, Bed Bath & Beyond's share price increased only 22%.
Bed, Bath & Beyond (BBBY) shares ended the week at $69.94, down 12.8% for the week.
WD-40 Reports Quarterly Earnings
Bed, Bath & Beyond reported net sales of $2.86 billion for the quarter. This represents an increase from last year at this time when the company reported net sales of $2.70 billion.
The company reported net income of $237.20 million or $1.12 per share. This represents an increase from the comparable quarter last year when the company reported net income of $232.75 million or $1.03 per share.
After its earnings report, Bed, Bath & Beyond's stock price declined almost 13% during trading on January 9. Analysts had expected a larger increase in sales and net income for the quarter. The slower-than-expected growth concerned investors since increased sales of home improvement products caused companies like Williams-Sonoma and Home Depot to surge last year. In 2013, the share prices for Williams-Sonoma and Home Depot increased 27% and 29%, respectively. During the same period, Bed Bath & Beyond's share price increased only 22%.
Bed, Bath & Beyond (BBBY) shares ended the week at $69.94, down 12.8% for the week.
WD-40 Reports Quarterly Earnings
WD-40 Company (WDFC), a company that sells multi-purpose
maintenance products, reported its quarterly earnings on January 8, 2014. The
company had a record level of sales this quarter and is expanding into new
geographic areas.
The company reported quarterly net sales of $95.54 million. This represents an increase from the comparable period last year when the company reported net sales of $95.26 million.
WD-40 Company announced net income of $11.48 million or $0.74 per share for the quarter. This represents an increase from last year when the company reported net income of $10.94 million or $0.69 per share.
"We are pleased with our results in the quarter coming off a great fiscal year 2013," said Garry Ridge, WD-40 Company President and CEO. "While we only had a small increase in sales across the globe due to the timing of promotional activities, the first quarter was the largest sales quarter in our history. We remain confident that the base business we have established along with the continued focus on our revised strategic initiatives will produce solid results for the year."
WD-40 Company has been growing. They launched their WD-40 Specialist product line in eight new countries in the first quarter of fiscal 2014 including Australia and Turkey. The WD-40 brand's global reach now includes 188 countries.
WD-40 Company (WDFC) shares ended the week at $73.24, down 4.09% for the week.
The Dow started the week of 1/6 at 16,474 and closed at 16,437 on 1/10. The S&P 500 started the week at 1,832 and closed at 1,842. The NASDAQ started the week at 4,137 and closed at 4,175.
The company reported quarterly net sales of $95.54 million. This represents an increase from the comparable period last year when the company reported net sales of $95.26 million.
WD-40 Company announced net income of $11.48 million or $0.74 per share for the quarter. This represents an increase from last year when the company reported net income of $10.94 million or $0.69 per share.
"We are pleased with our results in the quarter coming off a great fiscal year 2013," said Garry Ridge, WD-40 Company President and CEO. "While we only had a small increase in sales across the globe due to the timing of promotional activities, the first quarter was the largest sales quarter in our history. We remain confident that the base business we have established along with the continued focus on our revised strategic initiatives will produce solid results for the year."
WD-40 Company has been growing. They launched their WD-40 Specialist product line in eight new countries in the first quarter of fiscal 2014 including Australia and Turkey. The WD-40 brand's global reach now includes 188 countries.
WD-40 Company (WDFC) shares ended the week at $73.24, down 4.09% for the week.
The Dow started the week of 1/6 at 16,474 and closed at 16,437 on 1/10. The S&P 500 started the week at 1,832 and closed at 1,842. The NASDAQ started the week at 4,137 and closed at 4,175.
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Bonds - Treasuries Rise on Slow Jobs Growth
On January 10, the U.S. Department of Labor reported that the
economy added fewer jobsthan
expected for the month of December. As a result, treasury prices rose and
yields fell to their lowest level in two weeks.
The Department of Labor announced that the U.S. economy only added 74,000 jobs inDecember.
This number was well below the average forecast by economists that 194,000 jobs
would be added. In 2013, job growth has averaged 182,000 jobs per month.
The unemployment rate decreased from 7% in November to 6.7% in December. However, this was likely due to individuals leaving the labor force. The labor participation rate dropped slightly to 62.8%, the lowest level in three decades. "This has been a two steps forward and one step back recovery," said Mark Hamrick, Washington Bureau Chief at Bankrate.com.
The bond market responded with lower yields. The 10-year Treasury yield fell from 2.97% to 2.88% in early trading on Friday, January 10. The 30-year bond yield fell from 3.88% to 3.82%. "I don't think yields will break out of the 2.8% to 3% range," said Ira Jersey, an Interest-Rate Strategist at CreditSuisse
Group. "A lot of shorts have to be covered particularly going into the
weekend." A short position is a bet that an asset will decline in value.
Given the recent employment figures, many investors and analysts wonder if the Federal Reserve will reconsider their current course. The Fed has decided to begin reducing its bond purchases by $10 billion dollars per month starting this month. In addition, the unemployment rate is reaching the 6.5% trigger set by the Fed for increasing the Federal Funds rate. However, with the U.S. recovery proving to be so fragile it will be interesting to see whether new Fed Chair Janet Yellen will encourage a change in the direction of Fed policy.
The 10-year Treasury note yield finished the week of 1/6 at 2.86% while the 30-year Treasury note yield finished the week at 3.80%.
than
expected for the month of December. As a result, treasury prices rose and
yields fell to their lowest level in two weeks.The Department of Labor announced that the U.S. economy only added 74,000 jobs in
December.
This number was well below the average forecast by economists that 194,000 jobs
would be added. In 2013, job growth has averaged 182,000 jobs per month.The unemployment rate decreased from 7% in November to 6.7% in December. However, this was likely due to individuals leaving the labor force. The labor participation rate dropped slightly to 62.8%, the lowest level in three decades. "This has been a two steps forward and one step back recovery," said Mark Hamrick, Washington Bureau Chief at Bankrate.com.
The bond market responded with lower yields. The 10-year Treasury yield fell from 2.97% to 2.88% in early trading on Friday, January 10. The 30-year bond yield fell from 3.88% to 3.82%. "I don't think yields will break out of the 2.8% to 3% range," said Ira Jersey, an Interest-Rate Strategist at Credit
Suisse
Group. "A lot of shorts have to be covered particularly going into the
weekend." A short position is a bet that an asset will decline in value.Given the recent employment figures, many investors and analysts wonder if the Federal Reserve will reconsider their current course. The Fed has decided to begin reducing its bond purchases by $10 billion dollars per month starting this month. In addition, the unemployment rate is reaching the 6.5% trigger set by the Fed for increasing the Federal Funds rate. However, with the U.S. recovery proving to be so fragile it will be interesting to see whether new Fed Chair Janet Yellen will encourage a change in the direction of Fed policy.
The 10-year Treasury note yield finished the week of 1/6 at 2.86% while the 30-year Treasury note yield finished the week at 3.80%.
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CDs and Mortgages - Interest Rates Remain Largely Unchanged
Freddie Mac released the results of its latest Primary Mortgage
Market Survey (PMMS) on Thursday, January 9. The results show average fixed
mortgage rates staying largely stagnant for the week.
The 15-year fixed rate mortgage averaged 3.56% this week. This is a
slight increase from last week when it averaged 3.55%. One year ago at this
time, the 15-year fixed rate mortgage averaged 2.66%.
This week, the 30-year fixed rate mortgage averaged 4.51%. This is a slight
decrease from last week when it averaged 4.53%. Last year at this time, the
30-year fixed rate mortgage averaged 3.4%.
"Mortgage rates were little changed amid a week of light economic reports," said Frank Nothaft, Vice President and Chief Economist at Freddie Mac. "Of the few releases, the private sector added an estimated 238,000 jobs in December, which exceeded the market consensus and followed an upward revision of 14,000 jobs in November, according to the ADP Research Institute. Also, the Institute for Supply Management reported a greater slowing in growth in the non-manufacturing industry in December than the market forecast."
The money market fund finished the week of 1/6 at 0.4%. The
1-year CD finished at 0.7%.
The 15-year fixed rate mortgage
averaged 3.56% this week. This is a
slight increase from last week when it averaged 3.55%. One year ago at this
time, the 15-year fixed rate mortgage averaged 2.66%.This week, the 30-year fixed rate mortgage
averaged 4.51%. This is a slight
decrease from last week when it averaged 4.53%. Last year at this time, the
30-year fixed rate mortgage averaged 3.4%."Mortgage rates were little changed amid a week of light economic reports," said Frank Nothaft, Vice President and Chief Economist at Freddie Mac. "Of the few releases, the private sector added an estimated 238,000 jobs in December, which exceeded the market consensus and followed an upward revision of 14,000 jobs in November, according to the ADP Research Institute. Also, the Institute for Supply Management reported a greater slowing in growth in the non-manufacturing industry in December than the market forecast."
The money market fund
finished the week of 1/6 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
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