Tuesday, April 18, 2017

Planning for Incapacity

By: Laurie Valentine

Estate planning is part of our Christian stewardship responsibilities. Being a good steward requires you not only plan how your assets will be distributed at death, but also how personal and financial matters will be handled in the event you become incapacitated as the result of a stroke, accident or illness such as dementia.

“Incapacity planning” must be done while you have the mental capacity to understand what you are doing. It requires careful consideration of your particular situation to best assure that the documents used and the powers granted would enable the person you are empowering to do all that needs to be done on your behalf.

A key incapacity planning document is the durable power of attorney (“DPOA”). A power of attorney is “durable” if it states: “this power of attorney shall not be affected by the disability of the principal” or words to that effect. If those words are not in the power of attorney document it cannot be used if you become incapacitated.

Both financial management powers and personal decision-making authority can be granted under a DPOA. Certain powers must be specifically granted for the person you are empowering (your “attorney-in-fact”) to have the authority to take the designated action.

Including healthcare decision-making powers makes the DPOA a “full service” incapacity planning document.

Without prior incapacity planning an expensive and time-consuming court-monitored guardianship may be the only way someone can gain authority to manage your affairs and make decisions for you if you become incapacitated.

Be a good steward and plan for your potential future incapacity now!

Laurie Valentine is COO and Trust Counsel for the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; (502) 489-3533 or 1-866-489-3533 (Toll-free, Kentucky Only); KYBaptistFoundation.org.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, April 4, 2017

Four Reasons An Estate Plan Is Beneficial For Everyone

It is common for people to consider how they will eventually like their assets distributed among loved ones and ministry organizations. But perhaps you have not developed a comprehensive estate plan because you think that is necessary only for the extremely wealthy. In actuality, the need for estate planning applies to everyone. A smaller estate requires even more care to avoid unnecessary expenses and retain the maximum resources for fulfilling your personal, financial, and charitable goals. Here are four key reasons why you should establish an estate plan:

1. Defining Care For Yourself – A healthcare proxy, power of attorney, and living will define how you wish to be cared for should you ever experience a period of incapacity.

2. Creating Financial Security – A will allows you to direct how you want your assets distributed and to whom, regardless of the amount. If you don’t have a personal will, state laws will determine who receives your assets.

3. Naming Guardians – If you have minor children, it’s important to make written arrangements for their care. A will is the only legally recognized way to name a person you would like to entrust with the care of your children.

4. Naming Beneficiaries – Your estate plan includes filling out beneficiary forms for assets such as insurance policies and retirement accounts. You should review your designated beneficiaries after major life events. You can also name a charitable organization as a primary beneficiary or contingent beneficiary within your plan.

A well-crafted estate plan benefits you, your loved ones, and the ministry causes you care about. Everyone needs to complete the four steps described above. Because no two situations are alike, the best course of action is to have your financial advisor and estate planning attorney review the details with you and help craft your estate plan. To make intentional plans to care for your family and the ministries God is inspiring you to support, call upon the Kentucky Baptist Foundation as a helpful partner. If you have questions, please contact the Kentucky Baptist Foundation’s trust counsel, Laurie Valentine or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, March 21, 2017

Flexible Perpetual Support

By: Laurie Valentine

Is there a particular program or ministry at your church, or at a KBC- or SBC-related agency or institution, you would like to support on an on-going basis? One way to do that is to create a perpetual support (endowment) fund, the earnings of which will be used for support of the program or ministry.

The problem with that plan is you may not be able to make a single gift large enough to produce the earnings needed to start or continue the operations of the program or ministry.

The solution…a “flexible endowment fund; an arrangement under which you agree to establish an endowment fund that will, once fully funded, generate sufficient earnings to support the program or ministry in perpetuity. The total principal gift amount will depend on the financial support needed to run the program or ministry and how much of that support you wish to provide through the endowment fund. A timetable for completing the funding of the principal is agreed upon, but there is no actual schedule of payments---when you make the principal gifts during the funding period is up to you.

In addition to your agreement to make principal gifts, you also agree to provide annual “spendable” gifts to the program or ministry so that it will have the funds to operate while you complete the principal funding. The amount of your spendable gift each year is the difference between the earnings generated by the partially-funded endowment and the portion of the annual cost of the program or ministry you have agreed to support.

Flexible endowment funds---a way to provide both immediate and perpetual support for a program or ministry important to you.

Laurie Valentine is COO and Trust Counsel for the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; (502) 489-3533 or 1-866-489-3533 (Toll-free, Kentucky Only); KYBaptistFoundation.org.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, March 7, 2017

Your Estate-Planning Team

By: Richard Carnes

Because estate planning is a comprehensive matter that involves all areas of your financial life it is unlikely that any one person or resource will meet all of your estate-planning needs. It is more likely that you will want a team of advisors to guide and assist you with various aspects of your planning and will want to consider the following “members” for your team:

Attorney: A lawyer skilled in estate planning is essential. Your attorney will help you create the primary building blocks for your estate plan, such as a will or trust, to fulfill your objectives.

Accountant: Along with your attorney, your accountant will pinpoint important tax issues and help develop plans to deal effectively with them.

Investment Advisor: A good investment advisor can be invaluable as you work to build and preserve your asset base. Your investment advisor can be most effective when he or she knows and understands your overall goals and objectives and works with the other team members to achieve them.

Charitable Gift Planner: Professionals with experience in gift planning, such as Laurie Valentine, trust counsel for the Kentucky Baptist Foundation, can suggest ways to meet your charitable goals that work with and enhance your personal and family goals.

Bank/Trust Officer: You may need management assistance to carry out your plan. A good relationship with a banker or trust officer can be a great advantage in making your plan work.

Insurance Professional: Protection is a crucial aspect of any plan. Competent insurance professionals can make sure all your risks are adequately addressed.

Estate planning is a lifelong process that continues through the accumulation, preservation, and distribution phases of your financial life. You have the opportunity, as a faithful steward of resources God has entrusted to you, to provide for your family members, and Christian ministry causes important to you through thoughtful planning. The staff of the Kentucky Baptist Foundation would be honored to be a part of your estate-planning team. If you have questions, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, P O Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Wednesday, February 22, 2017

Gift Plans that Benefit Family & Charity

By: Laurie Valentine

Charitable gift planning not only provides a variety of ways for you to provide valuable support to causes that are important to you, it can also help you solve certain personal financial challenges.

One such giving plan is a charitable remainder unitrust (“CRUT”). A CRUT is an irrevocable trust that pays a designated income stream to the giver and/or others for life or a term of years and the remainder to one or more charitable organizations.

A CRUT can provide beneficial ways to solve a variety of financial challenges such as:

Providing Funds for College: Your grandson is starting college this fall and you would like to help with his expenses. A gift of $100,000 to a CRUT that will pay him 15% of the value of the trust assets for 5 years will provide the following benefits: a $45,000 charitable income tax deduction for you; payments averaging $12,400 each year to your grandson; and, at the end of the 5-year trust term, approximately $61,000 (assuming a 6.2% average annual return) left to distribute to the charities you named in the trust agreement.

Financial Assistance for Family Members: You have been providing $500 per month ($6,000 per year) to your 85-year-old father for the past few years. While, at age 65, you have no current health problems, you want to make sure that support would continue for your father, no matter what your future circumstances. A gift of $100,000 to a CRUT paying your father for his lifetime and then you, if you survive him, 6% of the value of the trust assets, as revalued annually, establishes a plan that will provide a gradually growing stream of income to your father, and then you. It also entitles you to an income tax deduction of approximately $36,845 and provides you the opportunity to set up a gift that will provide significant future support to ministries that are important to you.

Laurie Valentine is COO and Trust Counsel for the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; (502) 489-3533 or 1-866-489-3533 (Toll-free, Kentucky Only); KYBaptistFoundation.org

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Thursday, February 9, 2017

A Gift of Love

By: Richard Carnes
February is filled with reminders to express our love and affection to those close to us. We may express this affection through romantic greeting cards, bouquets of red roses, abundant chocolate, and candle lite dinners. All of these gestures can be memorable but they are temporary in nature.

A lasting way to say “I love you” is by making provision to care for your loved ones, yourself and charities important to you through creating a written estate plan. Knowing where to begin, what to look for, and what you might expect can help turn this task into an effective plan. A great place to start the process of creating an estate plan that reflects your goals and values is through the Kentucky Baptist Foundation’s Estate Plan Organizer, located on our website, KYBaptistFoundation.org. The Estate Plan Organizer will take you through the estate planning process easily and at your own pace. The whole process can be completed in as few as 30 minutes and you can save your work at any time and return to the Organizer at your convenience.

When you have completed the Organizer, you will have a well thought out design for your estate that reflects your priorities. You will then be well prepared to work with your attorney and financial advisors, who will assist you in structuring an estate and financial plan that best achieves your goals.

An estate plan may not be a glamorous gift, but it is a valuable gift… a gift of love.

The Kentucky Baptist Foundation is honored to work with individuals seeking how best to organize their estate planning goals to achieve their personal and charitable objectives, to support their families, their church and other Baptist causes. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, January 24, 2017

Time For Some Estate Plan Changes?

By: Laurie Valentine

Keeping up with the details of life and changes in our lives takes more time than most of us give it. For many of us, we are so busy watching and planning around the changes occurring at work or school we don’t take time to consider changes that may be occurring in our day-to-day lives and the impact of those changes on planning we have done.

Estate planning is one area of personal planning that doesn’t get a lot of “revisiting”. Your estate plan---your will, power of attorney, health care advanced directives, and beneficiary designations---should be reviewed on a regular basis to make sure it continues to accomplish your planning objectives. Your plan should also be revisited when there are changes in your life and/or that of your family---marriages, births, deaths, divorces, change in state residence, changes in financial status.

Focus on the following as your review your plan:

Fiduciaries. Are the persons you’ve named to serve as executor under your will or successor trustee of your living trust still willing and able to serve? Are you and your spouse still comfortable with the persons you have named to serve as guardians for your children? Is the person named to act under your power of attorney still willing and able to do that?

Beneficiaries. Have there been deaths or births not considered when you had your will or living trust prepared? Have you or one of your beneficiaries married or divorced since then? Do you have an ultimate beneficiary(s) named to receive your estate if all of your family dies before you?

Death Benefits. Are beneficiary designations of life insurance, retirement or IRA benefits coordinated with the plan of distribution under your will or trust?

Assets. Has the value of your estate changed?

Laurie Valentine is COO and Trust Counsel for the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; (502) 489-3533 or 1-866-489-3533 (Toll-free, Kentucky Only); KYBaptistFoundation.org

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.