Lenexa, Kansas, United States - Model Generosity: Leaving a Lasting Legacy Through Planned Giving from The Global Church of the Nazarene Foundation for Saturday, 25 October 2014

Lenexa, Kansas, United States - Model Generosity: Leaving a Lasting Legacy Through Planned Giving from The Global Church of the Nazarene Foundation for Saturday, 25 October 2014

One of the most beautiful expressions of community in the Bible is the fellowship of the believers as recorded in Acts 2: “They sold property and possessions to give to anyone who had need . . . . They broke bread in their homes and ate together with glad and sincere hearts, praising God and enjoying the favor of all the people. And the Lord added to their number daily those who were being saved” (Acts 2:45-47 NIV).

It strikes me that while these believers may or may not have had money to give, they sold what they had to help those in need. It doesn't matter if giving money isn't an option; God can use whatever we have to offer as long as we are willing to give it back to him.

As you consider your giving choices, I'd like to tell you about a variety of ways that you can give to the ministry of your choice.

Stocks and Bonds
A gift of your securities, including your stocks or bonds, is an easy way for you to make a gift. By making a gift of your appreciated securities, you can avoid paying capital gains tax that would otherwise be due if you sold these assets.

Real Estate
A gift of your real property (such as your home, vacation property, vacant land, farmland or ranch or commercial property) can make a great gift. If you own appreciated real property, you can avoid paying capital gains tax by making a gift to us.

Retirement Assets
A gift of your retirement assets, such as a gift from your IRA, 401k, 403b, pension or other tax deferred plan, is an excellent way to make a gift.

Cash
A gift of cash is an easy way for you to make a gift. You will receive a charitable tax deduction that will provide you with savings on this year's tax return.

Insurance
If your life insurance policy is no longer needed or will no longer benefit your survivors consider making a gift and help further our mission.

Thank you for your faithful giving to God's kingdom. Please let us know if we can help you facilitate giving to the ministry of your choice.

Blessings, Kenneth R. Roney, J.D. President

P.S. For more information on how to use your resources to support the future of your favorite ministry, please reply to this e-mail or contact us by phone at 913.577.2983.

Bonds - Ebola Concerns Affect MarketsCDs and Mortgages - Interest Rates Drop PERSONAL PLANNER Wills - Perils of Probate "I am an heir of the decedent and here is his will." Potential Heir Business Owner passed away on April 5, 1976, with an estate of $2.5 billion. Many people appeared claiming, "I am Business Owner's heir" and submitted wills with themselves as beneficiaries. The court finally determined seven years later that none of the wills were valid and split the estate among 22 of the decedent's cousins. The costs and fees to lawyers during administration of Business Owner's estate were in the millions of dollars. Probate Process When a person passes away, it is important to have an organized process to transfer his or her property. The probate process is an organized method to gather all of the property of the individual, pay all of his or her bills, determine the appropriate beneficiaries to receive the property and make the actual transfer. The probate process can be quite easy and rapid for small estates or can last for many years with larger or more complicated estates. Most people do not spend much time thinking about probate unless they are potential beneficiaries, then probate is a topic of great interest. To the 22 cousins who received multimillion-dollar inheritances, Business Owner's probate process was very interesting. Probate Players There are at least four general categories of probate players. First, an executor or personal representative is the manager of the estate. Second, an estate attorney is involved to advise the executor or personal representative on all probate and legal matters. Third, a probate judge will rule on the validity of any will, review many of the actions of the executor, and approve the final distributions. Finally, heirs will be the beneficiaries of the estate. Probate Process The probate process involves eight separate steps to ensure an orderly transfer of all of the property to the right individuals. Let's assume that Ed Executor and Ellen Attorney are probating the estate of Business Owner. 1. Accept the Will: Ed or Ellen will normally submit the will to the court for probate. Usually, there is one final will that is accepted. However, there are many cases in which individuals wrote their own wills or there was a question about the validity of a given will, resulting in a wills contest. Eventually, the court will determine the validity and meaning of the will. However, for Business Owner's estate, none of the wills were valid and state law determined who received the $2.5 billion. 2. Locate Heirs: Because Business Owner did not have a valid will, Ed Executor needed to locate all of the heirs. But, the 22 cousins still needed to be approved by the court. Under state law, Business Owner's estate was transferred to his relatives. With $2.5 billion at stake, all of them had attorneys to ensure that each cousin received the proper share. Even if Business Owner had signed a valid will, it would have been essential to locate all the heirs. In some cases, the selected recipients had passed away and property was distributed to their children or other relatives. 3. Determine the Estate Assets and Values: Ed Executor is responsible for finding all of Business Owner's estate assets. The assets included real estate, bank accounts, securities accounts and other property. Because Business Owner's estate was taxable, all property was valued so that federal taxes could be paid. Finally, the balance of the estate was distributed to the 22 cousins. 4. Pay Executor and Attorney: Not surprisingly, Ed Executor and Ellen Attorney were paid a large fee from Business Owner's estate. The costs for the probate process may be quite substantial and the executor and attorney are always paid. Costs may be as low as 2% of the estate value or may range up to 7% or 8% of estate value. However, if there is an estate contest, costs can consume a large portion of the entire estate. 5. Make Debt Payments: After determining the nature of the property and the approximate value of Business Owner's estate, Ed Executor will also advertise for any claims by creditors. The state probate law determines the period of time and the type of public notice to be given. If creditors do not file claims against the estate, they risk losing their ability to collect their debts. All debts and taxes are paid before the final distribution. 6. Resolve Controversies: Seven years of controversies in Business Owner's estate required continuous attention from Ed Executor and Ellen Attorney. Most of the controversies centered around the submitted wills. If there are any controversies, such as a claim that the final will is invalid due to undue influence of a party who obtained the will, then the court must determine the rights of all parties under the will and applicable state law. After seven years, the court decided that none of the wills in Business Owner's estate were valid. 7. File Income and Estate tax Returns: Because Business Owner's estate was $2.5 billion and produced income each year, Ed Executor had to file the final income tax return for Business Owner and annual returns for the estate. After the final valuation by the court, Ed and Ellen also filed the estate tax return and paid the estate tax to the IRS. 8. Distribute Assets to Heirs: After seven years of court proceedings, payment of estate taxes, court costs, executor fees, and attorney fees, the probate judge approved the final distribution order and the 22 cousins of Business Owner received their inheritance. Probate problems There are several negative results for which probate has a deservedly bad reputation. First, the process is public. Anyone can obtain the will of Jacqueline Kennedy Onassis and read her provisions for children John Jr. and Caroline. As was true for Business Owner's estate, the probate process may be both lengthy and expensive. Both time and money can be easily wasted in the bureaucracy of the process. Probate is also as good and as bad as the judge who is involved. Judges are people, with the good and bad characteristics of humanity. Some are very dedicated and capable and some are primarily interested in an early exit to the golf course in the afternoon. Depending upon the quality of the judge, the probate process can be easy or quite challenging for the executor and estate attorney. Finally, the existence of a substantial estate (such as that of Business Owner) invites relatives to submit claims and is fertile ground for developing probate controversies. If there is any question about the validity of the will, or there are conflicting methods of transfer of the same property (joint tenancy with one person and attempting to transfer the same property through a will to a second person), a will contest and probate battle may occur. Avoiding probate There are multiple methods that are used to avoid probate. These can be quite successful, but all methods must be coordinated carefully to be certain that the overall plan works correctly. 1. Joint Tenancy with Right of Survivorship: Under property law, the surviving joint tenant owns the real estate. 2. Designated Beneficiary: An insurance policy, an IRA, a 401(k) or other qualified plan is transferred to the designated beneficiary. There is a contract with the insurance company or the retirement plan custodian and that person agrees to make the transfer to the individual or organization selected by the owner. Typical forms permit the selection of a primary beneficiary and also a contingent beneficiary. 3. Pay-on-Death (POD) Accounts: Most states that follow the Uniform Probate Code may allow a "POD" account. Most savings accounts, checking accounts and certificates of deposit are under state law permitted to be transferred to the "payable-on-death" recipient. 4. Revocable Living Trust: Perhaps the most popular method for avoiding probate is a revocable living trust. The grantor is taxable on the assets of the trust, but frequently will transfer a personal residence, securities accounts and other major assets into the trust. The assets in the trust avoid the probate process.   SAVVY LIVING How Medicare Covers Outpatient Mental Health Services Does Medicare cover outpatient counseling or therapy sessions for seniors? My husband has really struggled with depression since retiring and needs help. What can you tell us? Yes, Medicare recently upgraded its coverage of outpatient mental health services to help beneficiaries with depression and other needs. Here’s how it works. Once you have met your $147 Part B deductible, original Medicare Part B will pay 80% of the cost of certain outpatient counseling and therapy services such as group therapy and family counseling. Part B also covers services for treatment of beneficiaries who struggle with inappropriate alcohol and drug use. The remaining 20% coinsurance will be paid by you or your supplemental insurance. Medicare also gives your husband the option of getting treatment through a variety of mental health professionals such as psychiatrists, psychologists, clinical social workers and clinical nurse specialists. It’s also important to understand that if your husband decides to see a non-medical doctor (such as psychologists or a clinical social worker), you’ll need to make sure that he or she is Medicare-certified and takes assignment. A doctor that takes assignment means they accept Medicare’s approved amount as full payment. If they don’t, Medicare will not pay for the services. Medicare will pay for the services of Medicare-certified medical doctors (such as psychiatrists) who do not take assignment. However, these doctors can charge you up to 15% above Medicare’s approved amount in addition to the 20% coinsurance for which you will be responsible. To locate a mental health care professional in your area that accepts Medicare assignment, use Medicare’s online Physician Compare tool. Just go to medicare.gov/physiciancompare and type in your zip code or city and state, then enter the type of profession you want to locate in the “What are you searching for?” box. You can also get this information by calling Medicare at 800-633-4227. Medicare Advantage If you and your husband get your Medicare benefits through a private Medicare Advantage plan, it must cover the same services as original Medicare but the plan will likely require him to see an in-network provider. You’ll need to contact your plan directly for the details. Additional Coverage In addition to outpatient mental health services, you should also know that Medicare covers yearly depression screenings. The screenings must be done in a primary care doctor’s office or primary care clinic that can assure appropriate diagnosis, treatment and follow-up. Annual depression screenings are entirely covered. Medicare will also cover almost all medications used to treat mental health conditions under the Part D prescription drug program. If your husband is prescribed an antidepressant or some other medication for his condition and he has a Part D plan, you should call his plan to confirm coverage. You can also search the plans formulary (the list of medications they cover) on their website. For more detailed information, call Medicare at 800-633-4227 and request a copy of publication #10184, “Medicare & Your Mental Health Benefits,” or you can read it online at medicare.gov/publications/pubs/pdf/10184.pdf. Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.   YOUR PLAN Deferred Gift Annuity Several years ago Larry and Allison invested $30,000 in what they believed to be an attractive stock. It turned out to be a very wise decision, because the value of the stock increased to $100,000 a few years later. Though they were not in need of additional income at the time, the couple decided to cash in on this growth and began considering selling the stock. Allison: We had had a good year and were looking for ways to maximize deductions and reduce what we owed in taxes. At the same time, we had been exploring the best way to make a gift to our favorite charity. Larry: Allison and I were both age 50 at the time, in good health and still working. And though we didn't really need extra current income, we were planning to retire at age 65 so we were always interested in smart retirement planning. Our goal was to be able to live comfortably and travel in our motorhome to visit friends and family. Allison: I remember when we met with a gift planner. He explained the benefits of setting up a deferred gift annuity. Instead of selling, we could give our stock to our favorite charity and receive an immediate charitable tax deduction. Plus, when we turn 65, the deferred gift annuity would make annual retirement income payments to us for our lifetime. Larry: We decided to set up the deferred gift annuity. And we experienced first hand each of the benefits Allison mentioned: we received a charitable tax deduction and tax savings immediately. And now that we're retired, we receive income each year that helps make our retirement travel possible. On top of all of this, the deferred gift annuity makes a portion of the income payments we receive tax free. *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 gift annuity benefits may be different, you may want to click here to view a color example of your benefits.   WASHINGTON NEWS 401K Limit Increased to $18,000 for 2015 Each October the IRS publishes the increased limits for retirement plans for the following year. In IR-2014-99, the Service increased 401(k) and 403(b) contribution limits from $17,500 this year to $18,000 for 2015. Employees who are age 50 or older may also benefit from an additional “catch-up” contribution. The limit for 2015 has been increased from $5,500 to $6,000. The total employee contribution for those age 50+ could be $24,000 next year. Because many employers have 401k matching programs, the total contribution could be substantially higher. For example, with a $1 employer match for each $2 of employee contribution, an employee over age 50 may benefit from up to $36,000 of total contribution in 2015. The regular IRA contribution of $5,500 is unchanged. Similarly, for an IRA the $1,000 “catch-up” amount for persons over age 50 is also the same next year. Many other retirement fund limits also have increased. 1. IRA Phaseouts – If an employee is covered by a workplace plan, the single person phaseout is from $61,000 to $71,000. The married couple phaseout is from $98,000 to $118,000. 2. Roth IRA Phaseouts – The option to use a Roth IRA phaseout for a single person is at $116,000 to $131,000. The married person Roth phaseout is $183,000 to $193,000. 3. Retirement Savings Tax Credit – The benefit for low and moderate income persons has a single person limit of $30,500 and a married couple limit of $61,000. Editor’s Note: There are increases in many of the other retirement plan provisions. These include total compensation considered, employee stock option plan limits, SIMPLE retirement plan limits and other various retirement-related amounts.   FINANCES Stocks -  A Sweet Quarter for Apple Apple, Inc. (AAPL), a technology company famous for its computers, tablets and smartphones, reported its fourth quarter and annual earnings on Monday, October 20. The company reported record fourth quarter sales on the heels of releasing the iPhone 6 and iPad Air 2. Apple reported fourth quarter sales of $42.1 billion and annual sales of $182.8 billion. Both figures represent increases from the same periods last year when fourth quarter sales totaled $37.5 billion and annual sales totaled $170.9 billion. “Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus,” said Apple’s CEO Tim Cook. “With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015.” The company reported net income of $8.5 billion for the quarter and $39.5 billion for the year. Net income for the same periods last year totaled $7.5 billion for the quarter and $37.0 billion for the year. Earnings per share also increased year-over-year from $5.68 to $6.45 per share. Apple’s big quarter shows that the company can still create hype for product releases. It is continuing to come up with new products like its Apple Watch and Apple Pay. However, despite all this good news Apple is still struggling to gain a foothold in China. Currently Apple is the sixth largest company in China’s smartphone market. Tim Cook said Apple plans to open twenty-five more stores in greater China by 2016, bringing Apple’s total number of Chinese retail stores to forty. While increasing the number of stores may help, data security is still an issue in the country. On October 20, Apple received word that Chinese government-backed hackers hacked into China’s iCloud. As a result, Tim Cook went to China this week to discuss data privacy with China’s Vice-Premier. It is essential for Apple’s future in the country to come to an agreement with the government over data security. Apple, Inc. (AAPL) shares ended the week at $105.22, up 7.02% for the week. Microsoft Embraces the Cloud Microsoft Corporation (MSFT), a global technology company, reported its latest quarterly earnings on Thursday, October 23. Microsoft reported revenue of $23.2 billion for the quarter. This represents a healthy increase from the same period last year when the company reported revenue of $18.5 billion. “We delivered a strong start to the year, with continued cloud momentum and meaningful progress across our device business,” said Amy Hood, Executive Vice President and CFO of Microsoft. “We will continue to invest in high-growth opportunities and drive efficiencies across the organization to deliver long-term shareholder value.” The company reported quarterly net income of $4.5 billion. This represents a decrease from the $5.2 billion in net income reported during the comparable period last year. Earnings per share dropped from $0.62 per share last year to $0.54 this year. Former Microsoft CEO Steve Ballmer stepped down from his post as CEO in February of this year. He was replaced by current CEO Satya Nadella. Mr. Nadella is Microsoft’s third CEO. Bill Gates turned over the company reins to Steve Ballmer in 2000. Mr. Ballmer was instrumental in instituting Microsoft’s cloud offerings during his tenure as CEO. Mr. Nadella has put a priority on pushing those services during his short tenure and persistence is paying off. Microsoft’s revenue from cloud-based services more than doubled in the latest quarter. As a result, share prices increased nearly 4% after the earnings were released. Microsoft Corporation (MSFT) shares ended the week at $46.13, up 7.13% for the week. Loss in the Amazon Income Statement Amazon.com, Inc. (AMZN), a massive online retailer, reported its latest quarterly earnings on Thursday, October 23. The company’s large investments in new services including Amazon Dash, Amazon Kindle Unlimited and the Amazon Fire set-top box and smartphone caused the company to report a loss for the quarter. The company reported net sales of $16.0 billion for the quarter. This represents an increase from the same period last year when the company reported net sales of $13.8 billion. “As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever,” said Jeff Bezos, Founder and CEO of Amazon.com. “In addition to our already low prices, we will offer more than 15,000 Lightning Deals with early access to select deals for Prime members, hundreds of millions of products across dozes of categories, curated gift lists like Holiday Toy List and Electronics Holiday Gift Guide, new features like #AmazonWishList, and a great new lineup of products like Kindle Voyage and Fire HD Kids Edition. And if you order your gifts on AmazonSmile, we’ll donate a percentage of your purchase price to your favorite charity.” The company reported a quarterly net loss of $437 million. This represents a larger net loss than the $41 million net loss the company reported last year. Loss per share rose from $0.09 per share to $0.95 per share. As part of the earnings announcement on Thursday, Amazon reported it will take a charge of $170 million for unsold Amazon Fire smartphones. The phones, which were introduced this summer, have not been selling well. The price of the phone was introduced at $200 with a 2-year annual contract from AT&T. However, the price was slashed to $0.99 plus a 2-year contract in September. This proves just how cutthroat the smartphone market is and how tough it is to break in, even for a large company with ample resources. Amazon.com, Inc. (AMZN) share ended the week at $287.06, down 5.25% for the week. The Dow started the week of 10/20 at 16,373 and closed at 16,805 on 10/24. The S&P 500 started the week at 1,886 and closed at 1,965. The NASDAQ started the week at 4,254 and closed at 4,484. Treasuries rose and yields fell this week as it was reported that a doctor in New York City tested positive for Ebola. Investors around the world are anticipating that the spread of the virus may affect world markets. Ebola patients are now being treated in hospitals in Dallas and New York. “Ebola came back and took the market’s focus off the fundamentals, which is where it belongs,” said Adrian Miller, Director of Fixed Income Strategies at GMP Securities LLC. “Ebola today is just creating some distraction from the bigger Fed story next week.” Today, the yield on the 10-year note fell two basis points to 2.25% in early morning trading. This drop is most likely in anticipation of the Federal Reserve meeting next week during which the Fed is expected to end its bond buying program or quantitative easing (QE). However, the 10-year yield is up five basis points for the week and 1.4% during the month of October. In this relatively uncertain economic environment investors are flocking to the safety of U.S. Government bonds. Many believe that U.S. Treasury yields are on the rise for the remainder of the year. “The bias is generally for higher yields because of the end of the Fed’s QE and because data and earnings that show the economy continues to move forward,” said Adrian Miller. “The 10-year yield will end the year in a range of 2.35% to 2.5%,” said Jim Vogel, Head of Agency-Debt Research at FTN Financial. The 10-year Treasury note yield finished the week of 10/20 at 2.27% while the 30-year Treasury note yield finished the week at 3.05%. Freddie Mac released the results of its latest Primary Mortgage Market Survey (PMMS) on Thursday, October 23. The results show average fixed mortgage rates dropping to their lowest levels since 2013. The 30-year fixed rate mortgage averaged 3.92% this week. This represents a decrease from last week when it averaged 3.97%. One year ago, the 30-year fixed rate mortgage averaged 4.13%. The 15-year fixed rate mortgage averaged 3.08% this week. This represents a decrease from last week when it averaged 3.18%. Last year at this time the 15-year fixed rate mortgage averaged 3.24%. “Fixed mortgage rates continued to fall this week after the yield on 10-year Treasuries dropped to their lowest point of the year,” said Frank Nothaft, Vice President and Chief Economist at Freddie Mac. “Existing home sales beat expectations in September clocking in at an annual rate of 5.17 million units, up 2.4% from August. Housing starts were up 6.3% in September adding a seasonally adjusted annual rate of 1.017 million units. Building permits rose 1.5% to a seasonally adjusted annual rate of 1.018 million units in September.” The money market fund finished the week of 10/20 at 0.4%. The 1-year CD finished at 0.7%. 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