Dear Friend,
What is "planned giving"?
Here at the Church of the Nazarene Foundation, that's a term that we use a lot, along with "legacy giving," to refer to specific gift types that can be received by charitable, Christian organizations. Planned gifts include Bequests, Endowments, Charitable Remainder Trusts, and many, many more. They can be gifted to ministries like Heart to Heart International, organizations within the Nazarene church like Global Mission or Nazarene Compassionate Ministries, or even your local church's new building project.
Planned giving is when you determine that you are going to continue to bless God's Kingdom work even after you have gone to heaven. Depending on the gift type that you choose, your planned gift could leave an impact on the world for years to come--or even indefinitely.
Our mission is to help you learn about planned giving and decide if it is something that you would like to participate in. We're here to walk with you as you navigate the often-difficult road of taxes, estate planning, and charitable giving.
To see a full video on planned giving, click here. If you have questions, feel free to reach out to us at (913) 577-2983 or info@nazarenefoundation.org.
Blessings,
Kenneth R. Roney, J.D.
President
Personal Planner
Married Couples and Property
Mary was a surviving spouse. She and her first spouse, Ryan owned a lovely home and placed it into joint tenancy with right of survivorship. After Ryan passed away, Mary met Read More
Personal Planner
Married Couples and Property
Accidental Disinheritance
Mary was a surviving spouse. She and her first spouse, Ryan owned a lovely home and placed it into joint tenancy with right of survivorship. After Ryan passed away, Mary met Logan and they were married. Because she had the house in joint tenancy before, Mary changed the title to joint tenancy with right of survivorship, with Logan as the other joint tenant.
Unfortunately, Mary passed away two years later. Her will gave all of her property to the children of her first marriage. However, their children, Sam and Susan, did not receive the largest asset in her estate—Mary's home. Logan was the surviving tenant and under state law he owned the home outright. He later passed on the valuable home to children from his first marriage.
Joint tenancy for married couples is very simple and quite common. However, it is not always the best plan, especially if there is a second marriage or blended family.
For first marriages, joint tenancy with right of survivorship is a very convenient way to own a home, bank account, stocks or mutual funds. However, couples should understand that there are some potential risks in holding property as joint tenants with right of survivorship. If the couple is planning to fund trusts or the estate increases to a level that it is important to create a special tax-saving trust called the bypass trust, then joint tenancy can conflict with the will or living trust provisions. Joint tenancy may also disinherit a beneficiary under the will. While joint tenancy is very simple and common, it should be used with caution.
Joint or Separate Property
Joint property is typical for any assets acquired during marriage. However, property that is inherited or brought into a marriage is usually separate property. Separate property in most states may be transferred to persons other than the surviving spouse. If a spouse inherits separate property and plans to keep it separate for inheritance purposes, it's also important to avoid commingling the separate property with other assets. If the separate property is commingled with joint property or treated as joint property by paying the taxes and other costs out of a joint checking account, then the separate property may be converted to jointly held property. This could significantly change the estate plan result.
Community Property
Several states allow a married couple to own property as community property. Property acquired during a marriage in Alaska (with a written agreement), California, Idaho, Washington, Nevada, New Mexico, Texas or Wisconsin will be owned equally by husband and wife.
In Alaska, Arizona, California, Nevada, Texas and Wisconsin, the community property may be held with right of survivorship. In other states, the property is owned in joint tenancy with right of survivorship, but there is a separate agreement that states the property is community property. In both cases, when the first spouse passes away, the second spouse is now the owner without a probate process.
Saving Capital Gains Tax
There is a very important capital gains tax benefit for the surviving spouse if it is possible to hold the property as community property. When property that has been acquired appreciates in value, there is a capital gains tax due upon sale. For example, if stock were purchased for $25 and increased in value over several years to $100, upon sale the $75 of appreciation would be taxed as long-term capital gain.
If stock or land passes through an estate, then the person receiving the property may benefit from a step-up in basis. For example, if a share of stock bought for $25 and worth $100 now is transferred through an estate, then the cost basis to the beneficiary is also $100. He or she may sell the stock for that amount with no capital gains tax.
Tax-free Sale
With community property, a married couple could jointly purchase 100 shares of stock for $50. The 100 shares then appreciate to $200. If one spouse passes away and the 50 shares are given to the surviving spouse, he or she receives a step-up in basis on both portions and now may sell the stock for $200 with no tax.
However, in a state that does not follow the community property rules, with joint tenancy only the 50% of the stock owned by the deceased spouse gets a stepped-up basis. In effect, the stock is divided in half and the cost basis is $25 on that share with a fair market value of $100. When that stock passes through the estate, the basis is stepped up to $100 and it may be sold with no tax. But when the surviving spouse also sells the stock for $100, he or she still has $25 of cost basis and $75 of taxable gain on the stock.
Therefore, if community property status is available and a surviving spouse might desire to sell assets without paying any capital gains tax, it's important to be sure that the community property title is created.
Savvy Living
Roadside Assistance Services for Drivers
I would like to get my wife and I set up with some type of roadside assistance service in case we get a flat tire or our battery conks out. Can you recommend some good and affordable services for retirees on a budget? Read More
Savvy Living
Roadside Assistance Services for Drivers
I would like to get my wife and I set up with some type of roadside assistance service in case we get a flat tire or our battery conks out. Can you recommend some good and affordable services for retirees on a budget?
Getting set up with a roadside assistance service you can call on day or night if your vehicle breaks down is a smart idea and can provide you and your wife with some real peace of mind. Here are some different options to look into that can help you find a plan.
Already Covered?
For years, auto clubs like AAA were the only option drivers had when it came to roadside assistance, but today you have lots of choices. Most roadside assistance plans provide services like towing, flat-tire changes, jump-starting a battery, lost-key or lockout services, fuel delivery and help with stuck vehicles.
Before you start shopping for a roadside assistance plan, you first need to find out if you already have coverage or have access to inexpensive coverage of which you're not aware.
For example, if you drive a vehicle that is still under warranty, there's a good chance you're already covered. Most auto manufacturers now include comprehensive roadside assistance coverage for free when you buy a new or certified used car. This typically lasts as long as the basic warranty, but not always. Be sure to check.
Also check your auto insurance provider, your credit card issuers and cell phone service providers. Many of these services provide different variations of roadside assistance as add-on plans that cost only a few dollars per year, or they're free.
Be aware that many of these services are limited in what they cover. When investigating these options, find out the benefit details including: Who's covered (individuals and vehicles); how many roadside-assistance calls are allowed each year (three or four is typical); the average response time per service call; and the towing rules on where they will tow (to the nearest repair shop or one that you choose) and how far (about 5 miles for a basic plan is common, although some plans might cap the amount they pay for a tow at $100 or less).
Auto Clubs
If you find that you aren't covered, or you want a better roadside plan than what's currently available to you, you'll want to check out auto/motor clubs. Most of these clubs offer two or more levels of membership depending on how much roadside assistance you want and are willing to pay for, and they often provide a variety of discounts on things like hotels, rental cars and other services.
One of the best known and longest running clubs, AAA (aaa.com) offers comprehensive services and has an extensive network of more than 40,000 roadside assistance providers, which usually means fast response times. Costs vary widely from $48 to $162 per year depending on where you live and the plan you choose, plus an additional fee for adding a family member.
Some other clubs to consider that may be a little less expensive include Allstate Motor Club (allstatemotorclub.com); AARP Roadside Assistance (aarproadside.com) for AARP members only; Better World Club (betterworldclub.com); BP Motor Club (www.bpmotorclub.com); Good Sam (goodsamroadside.com); and GM Motor Club (gmmotorclub.com).
On-Demand Assistance
Another new money saving option to consider is pay-on-demand roadside assistance services like Urgently (urgent.ly) and Honk (honkforhelp.com). If you use a smartphone and live in their service area, these non-membership app-based services will let you call for help via smartphone and will only charge you for the assistance you need at a low price.
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
Peace of Mind Gift Annuity
Fred and Grace Bertolet retired after years of successful ministry as evangelistic workers in... Read More
Peace of Mind Gift Annuity
When Fred and Grace Bertolet retired after years in the ministry, they wanted to continue to support the Church. At the same time, they wanted to be faithful with what God had given them for their retirement.
After much research, they decided on a Charitable Gift Annuity.
This gift option allowed the Bertolets to:
enjoy the security of regular, guaranteed income, even if interest rates drop;
reduce their taxes;
provide for the ministry of the Church after their death. Fred and Grace were so pleased with the results of their first Charitable Gift Annuity that they established 10 more, with payout rates ranging from 7.7% to 11.0%. Even though Grace has since passed away, Fred will continue to receive income for the remainder of his life. With each annuity they were able to designate the ministries to receive funding after their deaths.
Charitable gift annuities have been a blessing to Fred and Grace Bertolet. They can be a blessing to you, too.
Washington News
Ways and Means Committee Passes Five Permanent Extenders
Ways and Means Committee Chairman Paul Ryan (R-WI) continued his effort to pass permanent tax extender bills. On September 17, the Committee passed permanent bills affecting teachers and businesses. Read More
Washington News
Ways and Means Committee Passes Five Permanent Extenders
Ways and Means Committee Chairman Paul Ryan (R-WI) continued his effort to pass permanent tax extender bills. On September 17, the Committee passed permanent bills affecting teachers and businesses.
1. Bonus Depreciation – The bill permits a 50% deduction for qualified property. The new equipment that businesses acquire is expected to increase manufacturing jobs in the nation.
2. Active Financing Income – This bill creates an exemption for this income under Subpart F. It is intended to assist U.S. companies in their overseas expansion. Rep. Patrick Tiberi (R-OH) states the bill will “level the playing field for U.S. companies to compete against foreign competitors that are not subject to an onerous worldwide tax system.”
3. Controlled Foreign Corporations (CFCs) – This bill facilitates payments between related CFCs. It also will assist U.S. companies in expanding overseas markets.
4. Teachers’ Expense Deduction – A qualified teacher is permitted to deduct $250 per year for appropriate classroom materials.
5. Restaurants – There is a 15-year depreciation schedule for restaurant property. Bill sponsor Mike Kelly (R-PA) stated, “The 15-year depreciation schedule more closely reflects the economic realities for most American retailers and restaurants.”
The five bills will now move to the House floor. Previous permanent extender bills have been voted on within approximately two weeks after passage by the Ways and Means Committee.
Editor’s Note: Chairman Ryan continues to seek to build support for permanent tax extenders. The White House has opposed permanent passage unless the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) are also permanently extended. The Senate still has not scheduled a vote on its proposed two-year extension of 50 provisions. Chairman Ryan and Senate Finance Committee Chairman Orrin Hatch (R-UT) are negotiating over a final bill. The IRA Charitable Rollover and other tax extenders still are awaiting final passage. If there is an agreement with the White House, there may be a combination of some permanent and some two-year extenders. Otherwise, the House may eventually accept the Senate plan to extend all 50 provisions for 2015-2016.
Finances
Stocks - Cracker Barrel Reports Earnings Read More
Cracker Barrel Old Country Store, Inc. (CBRL) announced its fourth quarter results on Wednesday, September 16. The company's quarterly profit exceeded expectations while revenue grew but fell short of analyst predictions.
The company reported revenue of $719.2 million for the fourth quarter, up 4% from last year. Analysts had expected revenue of $724 million.
"I am very pleased with our strong fiscal 2015 performance which reflects the strength of the differentiated Cracker Barrel brand and our ability to execute against our strategic initiatives to drive significant increases in comparable store sales and a 120 basis point improvement in operating income," said Cracker Barrel President and CEO Sandra B. Cochran.
Cracker Barrel reported net income of $47.4 million or $1.97 per share. This is an increase from the same period last year when net income was $39.2 million or $1.63 per share.
Cracker Barrel Old Country Stores has locations near major thoroughfares in 42 states. Its locations are known for their unique combination of old general store and home-style southern restaurant. The company benefitted in the latest quarter from an increase in menu prices as well as an uptick in traffic. Wednesday's report showed an increase in comparable store restaurant sales of 3.8%, though comparable store retail sales only increased 0.6%.
Cracker Barrel Old Country Store, Inc. (CBRL) shares ended the week at $145.96, down 4% for the week.
Oracle Reports Earnings Decline
Oracle Corporation (ORCL) released its first quarter results on Wednesday, September 16. The software company reported decreases in net income and revenue from the same quarter last year.
The company reported revenue of $8.45 billion, missing analyst expectations of $8.53 billion. Revenue is down 2% from last year's $8.6 billion.
"Our traditional on-premise software business plus our new cloud business grew at a combined rate of 6% in constant currency," said Oracle CEO, Safra Catz. "This growth is being driven by new SaaS and PaaS annual recurring cloud subscription contracts which almost tripled in the quarter. As our cloud business scales-up, we plan to double our SaaS and PaaS cloud margins over the next two years — starting from 40% this just completed Q1, to approximately 60% this coming Q4, and then on up to 80% two years from now. Rapidly growing cloud revenue combined with a doubling of cloud margins will have a huge impact on EPS growth going forward."
Oracle reported net income of $1.75 billion or .40 per share. This is a decrease of 20% from $2.18 billion or .48 per share during the same period last year.
Oracle is relying on a transition to cloud-based services to boost growth. The transition is in the early stages and the company is hoping investors remain patient while the new services gain traction. Oracle emphasized in its report that the growth of software as a service (SaaS) and platform as a service (PaaS) increased sales 34% during the quarter.
Oracle Corporation (ORCL) shares finished the week at $36.38, down 4% for the week.
FedEx Earnings Off-Target
FedEx Corp. (FDX) released its latest financial results on Wednesday, September 16. The global shipping company's profits missed analyst expectations.
The company reported revenue of $12.3 billion, hitting the target set by experts. This is an increase from the company's $11.7 billion in the first quarter of last year.
"FedEx Corp. is performing solidly given weaker-than-expected economic conditions, especially in manufacturing and global trade," said FedEx CEO Frederick W. Smith. "Our profit improvement program is on track and delivering impressive results, and I am very confident FedEx is well positioned to deliver value for shareowners, customers and team members in fiscal 2016 and beyond."
The company's net income for the quarter was $692 million or $2.42 per share. This is an increase of 6% from the same quarter last year when net income was $653 million or $2.26 per share.
The current instability in the global economy has companies with sizeable international operations feeling the heat. FedEx, which does much of its business outside of the United States, is among those companies. The current strength of the U.S. Dollar, China's economic slowdown and low oil prices all played a role in the company's less-than-stellar quarter. Given these factors, FedEx revised its earnings outlook for the year down to $10.40 to $10.90 per share from the previous estimate of $10.60 to $11.10.
FedEx Corp. (FDX) shares finished the week at $145.30, down 4% for the week.
The Dow started the week of 9/14 at 16,451 and closed at 16,385 on 9/18. The S&P 500 started the week at 1,963 and closed at 1,958. The NASDAQ started the week at 4,831 and closed at 4,827.
Bonds - Treasury Yields Down Following Fed Decision Read More
Treasury yields dropped this week in reaction to the Federal Reserve's decision on Thursday, September 17 to keep interest rates near zero. The central bank's board of governors voted 9-1 to put off any changes in monetary policy.
The Federal Reserve ended months of speculation on Thursday when it voted to refrain from raising short-term interest rates. Until recently, many experts had expected the Fed to raise rates at its September meeting. However, China's recent decision to devalue its currency appears to have kicked off concerns over the strength of the global economy. Accordingly, expectations of a rate hike quickly waned in the lead-up to September's Federal Open Market Committee meeting.
During her news conference on Thursday, Federal Reserve Chairwoman Janet Yellen indicated that it was a close call, but, ultimately, the members of the Federal Reserve Board were not yet ready to move. "We recognize that there has been a great deal of focus on today's policy decision. The recovery from the Great Recession has advanced sufficiently far, and domestic spending appears sufficiently robust, that an argument can be made for a rise in interest rates at this time," she said. "However, in light of the heightened uncertainties abroad and the slightly softer expected path for inflation, the committee judged it appropriate to wait for more evidence."
Thursday's announcement caused concern among investors, as evidenced by a dip in the markets. Treasury bond prices rallied in response, which caused yields to drop. The yield on the 10-year Treasury note opened at 2.29% on Thursday and then dropped to 2.19% following the Fed's announcement. The 2-year Treasury note started Thursday at 0.82% and plummeted to 0.68% at the end of the day.
To end the week of 9/14, the 10-year Treasury bond yield fell to 2.13% on Friday, down from 2.22% on Thursday. The 30-year bond yield fell to 2.93% from 3.03% on Thursday.
CDs and Mortgages - Interest Rates Virtually Unmoved Read More
Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, September 17. The report shows rates remaining mostly unchanged from last week.
The 30-year fixed rate mortgage averaged 3.91% this week, up slightly from 3.90% last week. One year ago the 30-year fixed rate mortgage averaged 4.23%.
The 15-year fixed rate mortgage averaged 3.11% this week, up from last week's average of 3.10%. The 15-year fixed rate mortgage averaged 3.37% one year ago.
"The Treasury market was relatively quiet this week, and as a result the 30-year mortgage rate barely budged," said Freddie Mac Chief Economist Sean Becketti. "Inflation fell shy of expectations in August, up 0.2% over the past year, but core consumer prices increased 1.8% year-over-year. Low mortgage rates help to support housing markets, which continue to bring good news. The National Association of Home Builders' HMI came in above expectations at 62, which is a ten year high."
The money market fund finished the week of 9/14 at 0.3%. The 1-year CD finished at 0.6%.
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Are you a Nazarene Legacy Partner (NLP)? The answer is “YES” if you have designated any gift to a Nazarene ministry in your will, bequest, or estate plan. This could be a tithe on your estate, an insurance beneficiary designation to your local church, college, global mission, or any other Nazarene ministry you support.
Send us your name and contact information by reply email and indicate “I am a Nazarene Legacy Partner” and we will add your name to our NLP honor roll. To model generosity inspires others to do the same. Thank you for your interest in gift planning. To access any of this updated financial and gift planning information, please select our website.
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The Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220 United States
Phone: (913) 577-2983
Fax: (913) 577-0898
Toll free: 866-273-2549
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