Sunday, April 29, 2012

E-Devotional- Week 12

INCAPACITY PLANNING – PART II
By: Laurie Valentine- COO & Trust Counsel 
Estate planning is an important part of every Christian’s stewardship responsibilities. A Christian estate plan is one that you develop by determining God’s will for (1) how your assets should be distributed at your death and (2) how your affairs would be managed in the event you become incapacitated during your lifetime.

This lesson focuses on what you need to do to assure: (a) you have set down in writing your wishes regarding “life prolonging medical treatment” and (b) someone of your choosing is properly authorized and empowered to make healthcare decisions for you if you are unable to do that for yourself.

Scripture References: II Kings 20:1b; Proverbs 13:10, 15:22; I Timothy 5:8.

Please read these passages in your Bible now.

What is a living will directive?

A living will directive is a document you can use to state, in writing, your wishes regarding the provision of life-prolonging medical treatment if your doctor and one other document agree that:

-You are permanently unconscious; or

-You have a condition that cannot be cured, you won’t get better, and you are expected
  to die within a relatively short time, and treatment will only artificially prolong the
  dying process

You can include one or more of the following directions in a living will directive:

-Directions that life-prolonging treatment not be provided, or once started will be
  stopped if either of the above diagnoses is made;

-Directions that food and water not be provided through artificial means such as tubes,
  or once started will be stopped if either of the above diagnoses is made;

-A choice of one or more persons to act as your surrogate to speak/act for you if you
  cannot; and/or

-Directions about donation of all or parts of your body

You may also state that you do not authorize the withholding or removal of life support devices, artificially-provided food and water or the donation of body parts.

“Life-prolonging medical procedures” are any type of medical care that is used to keep a vital body function going after it fails because of illness or injury, if the use of it only artificially prolongs the dying process. Life prolonging medical procedures or treatments include ventilators, dialysis, cardiac assist machines and tubes through which you may be fed.

What is a healthcare surrogate designation?
A healthcare surrogate designation is a provision in a living will directive or durable power of attorney or a separate document by which you can authorize one or more persons of your choosing to make medical decisions for you if you cannot make them for yourself.

The person you appoint to make medical decisions for you is a “healthcare surrogate”. You can name anyone to serve as your healthcare surrogate.

Consideration should be given to naming a first choice and an alternate that could act under the designation if your first choice is deceased or incapacitated at the time a healthcare decision needs to be made for you.

Your healthcare surrogate can make a wide variety of medical decisions. They must honor any specific directions you include in the designation document and must consider the advice of your doctor.

What happens if I haven’t done any incapacity planning and I become incapacitated?
If you become incapacitated and haven’t previously made a durable power of attorney, living will directive and/or healthcare surrogate designation, your family may have no alternative other than to petition the court for a determination that you are disabled and for the appointment of a guardian/conservator.

The determination as to whether a person is legally disabled is a court proceeding involving the county attorney, the alleged disabled person, an attorney appointed for/representing that person, an interdisciplinary team made up of a physician, psychologist and a social worker, and a 6 person jury. If the jury determines that the person is fully disabled (unable to care for personal needs and unable to manage financial affairs) then a guardian/conservator is appointed by the court to handle the personal and financial affairs of the disabled person.

Not planning for incapacity is costly----both in a financial sense and an emotional one for those that must take that action.

Prayer Focus: Ask for God to guide you in making decisions regarding the provision of life prolonging medical treatment and in the selection of a healthcare surrogate. 

Next Week: Taxes Payable at Your Death

For more information, please call us at (502) 489-3533 or toll free in KY at 1-(866) 489-3533

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.




Sunday, April 22, 2012

E-Devotional- Week 11

INCAPACITY PLANNING – Part I

By: Laurie Valentine- COO & Trust Counsel 


Estate planning is an important part of every Christian’s stewardship responsibilities. A Christian estate plan is one that you develop by determining God’s will for (1) how your assets should be distributed at your death and (2) how your affairs would be managed in the event you become incapacitated during your lifetime.

This lesson focuses on what you need to do to assure that someone of your choosing is properly authorized and empowered to manage your affairs if you can no longer do that for yourself.

Scripture References: II Kings 20:1b; Proverbs 13:10, 15:22; I Timothy 5:8.

Please read these passages in your Bible now.

What is “incapacity planning”?

Incapacity planning is planning that assures your affairs would be managed and decisions could be made for you if you became incapacitated and unable to do those things for yourself by someone of your choosing. It allows you to plan now for the possibility that some future physical or mental incapacity may render you unable to manage your own affairs.

This type of planning allows you to decide who will manage your finances and make decisions for you, how that person (or persons) will be empowered to act for you and what kinds of decisions should be made for you, if you cannot speak for yourself.

Documents used to accomplish incapacity planning include: durable powers of attorney, living will directives, healthcare surrogate designations and revocable living trusts.

What is a durable power of attorney?

A durable power of attorney is a document through which you can authorize and empower someone of your choosing to manage your financial affairs and make personal decisions for you if you become incapacitated. It is a “durable” power of attorney if the document states “this power of attorney shall not be affected by the disability of the principal” or “this power of attorney shall become effective upon the disability of the principal” or similar words to show that it is your intent that the powers your are granting will be exercisable even if you are incapacitated.

The person empowered to act under a durable power of attorney is known as your “attorney-in-fact.” Kentucky law permits you to name any person 18 years of age or older to serve as your attorney-in-fact. You are not limited to your spouse or certain other relatives. You are also not limited to naming only Kentucky residents.

Your attorney-in-fact must act as your agent---they can only do what you empower them to do under the power of attorney document. While their activities on your behalf and with your assets must benefit you, your attorney-in-fact is not required to account to anyone or report their actions to anyone. Therefore, in deciding to whom to give a durable power of attorney, you should choose someone whom you trust to manage your finances and make decisions as you would yourself.

Consideration should be given to naming a first choice and an alternate choice for your attorney-in-fact. This better assures that you have long-term incapacity planning in place. If your first choice dies or become incapacitated, someone else is already empowered in the document to take over.

Financial management powers that may be granted include the power to make withdrawals and deposits from your bank accounts, collect monies due you, enter into your safe deposit box, sell your stocks, bonds and mutual fund shares, invest the proceeds from the sale of any assets, deal with any real estate you may own, sign your income tax return, apply for benefits to which you may be entitled and to make gifts.

Personal decision-making powers that can be granted to your attorney-in-fact include the power to make health care decisions for you, to discontinue life-prolonging medical treatment, to obtain and disclose private health information, and the authority to determine where you will live if you cannot make that decision yourself.

It is best to include a detailed list of powers in the durable power of attorney, rather than just saying your attorney-in-fact is authorized to do anything that you could do yourself. Including a detailed set of powers makes it clear exactly what powers you are granting and, in some cases, if the power is not expressly granted in the document your attorney-in-fact will not be authorized to take that action.

Prayer Focus: Take a moment now to pray for God to guide you in your planning as to how your personal and financial affairs will be managed if you become incapacitated.

Next Week: Incapacity Planning – Part II

For more information, please call us at (502) 489-3533 or toll free in KY at 1-(866) 489-3533

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 17, 2012

Need More Retirement Income?

By: Barry G. Allen- President & CEO

If you have not retired and would like to supplement your income once you do retire when you might need the additional income, a deferred payment charitable gift annuity is worthy of your consideration.

The most common form of a charitable gift annuity allows you to make a gift that provides immediate payments to you for life. With a deferred payment annuity you can fund the gift arrangement now but choose to begin the payments at some future date. Because a portion of your gift will be used for the charitable purpose(s) of your choice upon your death, you will be entitled to a tax deduction in the year you make the gift. When you begin receiving payments in the future part of each payment will be tax free over your life expectancy.

The size of the payment you will receive is determined by the amount of your gift, your age at the time of the gift and how long your payments are deferred. Generally, the more time between the gift date and the first payment date the higher the payment will be.

You cannot outlive your payments, and the payment amount will not change regardless of changes in interest rates or the economy. Also, you can designate another person to receive payments with you, instead of you, or following your death, which is a great way to provide income for a spouse or other loved ones or a friend. Because the combined life expectancy of two typically is longer than one, the payment amount will be lower. You can fund this arrangement with cash, stocks, bonds or other securities. You can avoid or delay capital gain taxes by using appreciated securities.

If you are 60 and plan to retire at age 70, your deferred payout rate is 7.0%. For every $10,000 you give now, you will receive $700 each year beginning at age 70. For comparison, the immediate gift annuity rate is 5.1%, and the annual payment for every $10,000 given would be $510.

Call Laurie Valentine or me for a customized illustration of a deferred payment charitable gift annuity for you.

(502) 489-3533 or toll free in KY at 1-(866) 489-3533

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.

Sunday, April 15, 2012

E-Devotional- Week 10


CHRISTIAN ESTATE PLANNING- WEEK 2 FINE TUNING YOUR PLAN FOR DISTRIBUTION OF ASSETS AT DEATH
By: Laurie Valentine- COO & Trust Counsel 
Estate planning is an important part of every Christian’s stewardship responsibilities. A Christian estate plan is one that you develop by determining God’s will for (1) how your assets should be distributed at your death and (2) how your affairs would be managed in the event you become incapacitated during your lifetime. This lesson will provide guidance in how you may “fine tune” your testamentary plan.

Scripture References: Proverbs 15:22, 21:5.

Please read these passages in your Bible now.

Can I include gifts of specific things or amounts in my Will?

Yes. Many people want specific things, assets or amounts to go to particular beneficiaries at their death. Specific bequests of designated assets (e.g., “my antique walnut dresser”; “Blackacre, my family’s farm”; “my AT&T stock”) and general bequests of cash gifts allow you to “fine tune” your plan of distribution. Specific and general bequests provide you with an opportunity to make gifts to those charitable causes, including your church, which you have supported during your life.

How do I make provision for my children that will allow them to benefit from my estate, but not give them too much at too young an age?
Most parents want to make sure that if they die before their children reach young adulthood what is left to the children will be well-managed and available for education and other needs. This can be accomplished by including a testamentary trust provision in your Will.

A “testamentary trust” is a provision in your Will that directs that the share you are leaving to the young child is to be distributed to a third person who will serve as the trustee (manager) of that share until the child reaches the age or ages you designate in the trust as the age(s) when you believe the child is ready to have full ownership and control of his/her share of your estate. The trustee can be authorized to use the earnings from the trust assets for the education, health and other needs of the child. You may also permit the trustee to use portions of the principal for those needs. When the child reaches the age(s) you have designated, the testamentary trust (or share of the trust) is distributed, outright and free of trust, to the child.

If you have life insurance or other contractual death benefits over which you have the right to designate beneficiaries, you should name the testamentary trust(s) for your child(ren) as the contingent or primary beneficiary(s) of those death benefits so that you have a coordinated plan of distribution of assets at death.

How can I assure that things will be handled smoothly at my death?
Smooth administration and distribution of your estate can be achieved by naming an executor who is familiar with your family and can handle the various tasks required at your death---determining what you own at death, paying your final debts and probate expenses, managing the assets in your estate, seeing that all required tax returns are filed and distributing your assets as your Will directs. To assure that someone of your choosing handles these important duties, you should name not only a first choice, but also at least one alternate executor in your Will.

What happens if I die without a Will?
If you die without a Will, the Kentucky Intestate Succession statutes (KRS §§ 391.010, 391.030) direct how your individually owned assets will pass at your death

Kentucky’s “plan” for how your assets will be distributed at your death may not meet your family’s needs. All distributions under Kentucky’s plan are outright distributions---no provision is made for management of the shares that will pass to young or incapacitated beneficiaries. Shares designated to pass to beneficiaries under age 18 will be distributed to a guardian selected by the court. At age 18, the young beneficiary gets full ownership and control of his/her share. Kentucky’s plan for asset distribution also does not allow you to include your church or any other charitable cause.

Using Kentucky’s plan for asset distribution may result in higher death taxes and probate expenses, which reduces what will be left for distribution to your heirs. It also results in the court and your heirs deciding who will serve as the executor of your estate.

Prayer Focus: Take time to pray for God’s guidance in how your plan of distribution should be “fine-tuned” to meet the needs of your family and Christian causes you wish to benefit at your death.

Next Week: Incapacity Planning – Part I 

For more information, please call us at (502) 489-3533 or toll free in KY at 1-(866) 489-3533

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.


Monday, April 9, 2012

E-Devotional- Week 9

CHRISTIAN ESTATE PLANNING BASICS

By: Laurie Valentine- COO & Trust Counsel 
Estate planning is an important part of every Christian’s stewardship responsibilities. A Christian estate plan is one that you develop by determining God’s will for (1) how your assets should be distributed at your death and (2) how your affairs would be managed in the event you become incapacitated during your lifetime.

As you begin these lessons, take a moment to ask for God’s guidance as you study the basics of Christian estate planning.

WEEK 1 PLANNING FOR ASSET DISTRIBUTION AT YOUR DEATH

Scripture References: Proverbs 3:9; Matthew 6:33; 1 Timothy 5:8.

Please read these passages in your Bible now.

How do I get started in accomplishing God’s purposes for distribution of what I own at death?
To accomplish God’s purposes for how your assets will pass at death requires a written plan of distribution---a Will---and coordination of the plan of distribution set out in your Will with how your assets are titled and how life insurance, IRA, retirement and other contractual death benefit beneficiaries are designated.

How do I make a Will?
Making a Will is not a difficult thing to do. Here’s how to do it in ten easy steps:

  • Determine the value of your estate. List all of your assets in one column. Assets are what you own---your real estate, investments, bank accounts, business interests, life insurance, retirement plan benefits and IRA’s, and your personal property. List all of your current liabilities in another column. Liabilities are what you owe---mortgage(s), credit card and other debts. Add each column. Subtract the total liabilities from total asset value; the difference is your net worth. 

  • Plan for each family member. You have a responsibility to take care of your family, especially your spouse and children. Include a provision for each person you want to benefit; don’t leave it all to one assuming they will “do the right thing” and share it with the rest of the family. 

  • Consider Charitable causes. Consider at least tithing your estate through the inclusion of a bequest to your church and other Christian causes. The bequest(s) can be outright or can be used to create an endowment fund from which only the earnings are distributed to the charitable cause(s) named as beneficiaries. 

  • Decide whom you want to name as executor/executrix. This should be someone who is both competent and familiar with your family and capable of dealing with the assets that will be in your estate. 

  • Decide whom you want to name as guardian for minor children. This person or couple will be given custody of your children if both parents die before all children are 18 years old. 

  • Provide for common disaster. Provide for an alternate plan of estate distribution should something happen to your entire family. 

  • Choose an attorney to prepare your Will. Use an attorney whose practice includes estate planning and probate work. 

  • Keep your Will in a safe place. The signed original copy should be kept in your safe deposit box, a fireproof lock-box or by your estate planning attorney. Make sure that your executor has access to the place where it is kept. 

  • Keep your Will updated. Your Will and other estate planning documents should be reviewed every three to five years. Making a Will is also not something you do just once during your lifetime. As what you own changes over your lifetime and as your family situation changes---marriage, births, deaths, divorce, etc.---you will need to review your estate plan and determine if God has different purposes for how your assets should be distributed at your death. 

How do my life insurance, retirement benefits and IRA’s factor into my estate distribution planning?
If you have life insurance, an IRA and/or other contractual death benefits for which you can designated a beneficiary you need to make sure the plan for distributing those benefits (your beneficiary designations) is coordinated with the written plan for estate distribution under your Will. This includes designating trusts for young children as the beneficiary of life insurance and/or other death benefits, rather than the children themselves, and making sure you have designated alternate/contingent beneficiaries of all such benefits.


What impact does the way in which my assets are titled have on how my assets will be distributed at my death?
Your Will controls only assets titled in your name alone (“individually-owned”) and assets that you have designated to be paid to “my estate” or “my executor”. Who receives jointly-owned with rights of survivorship assets at your death is not controlled by your Will---the ownership of those assets will pass to the surviving joint owner(s) at your death by operation of law, not by the provisions in your Will. Therefore, as you develop your plan for distribution of your assets at death, you must consider how your assets are titled and coordinate that with the provisions of your written plan (your Will).

Prayer Focus: Take time now to ask God to reveal His plan for how your assets should be distributed at your death.

Next Week: Fine Tuning Your Testamentary Plan

For more information, please call us at (502) 489-3533 or toll free in KY at 1-(866) 489-3533

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, April 5, 2012

Why You Need a Will

By: Laurie Valentine-COO and Trust Counsel

If you die without a Will, the state will decide how to disburse your estate. And if you have minor children, the state will decide who will raise them. If you haven’t made a Will your plan to leave certain assets to specific persons or make charitable gifts to various causes won’t happen; instead the state’s plan will govern.

Each state has laws directing how to distribute the estate of those who have not made a Will. The state’s plan may direct distribution of your assets to persons for whom you may not want to provide. The court will assign someone to oversee the probating of your estate. It will all be done “by the book.” No special gifts to people outside your family. No provision for churches or other charitable causes you might want to honor with a gift at your death. No concern for your thoughts and desires.

In effect, the state says, “You did not create a Will while you were living and now it’s too late. We will take over and make our own decisions about how it should be distributed.”

Just imagine the difficulties this may cause for your family or friends. Imagine the added expense for an additional layer of oversight. Imagine people you never knew making decisions about your most personal items.

There are many reasons people never create a Will: fear of death; uncertainty about estate distribution; family conflicts; expense; procrastination; no lawyer. However, the plain fact is, no excuse is justified if it allows you to die without a Will.

You don’t need all the answers to get a Will started. You can begin with what you know and make changes and/or additions as you progress. Better to have something workable in place, than nothing at all.

And, make sure you review your Will on a regular basis. As what you own changes over your lifetime and as changes occur in your family (marriages, births, deaths, etc.) your plan will very likely need to be revised and updated.

Make sure you have taken steps to accomplish the single most important act of financial stewardship a Christian can do-----making a Will.

For more information, please call us at (502) 489-3533 or toll free in KY at 1-(866) 489-3533

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 3, 2012

Mentor Tributes

By: Barry G. Allen- President & CEO


A mentor is a trusted counselor, tutor and coach. Throughout our lives we all have one or more mentors both in our personal lives and in our vocational lives. What we admire in our mentors may range from personal qualities to specific skills, from life-style habits to leadership abilities. Our mentors might include a parent, a grandparent, a friend, a sibling, a spouse, a teacher, an administrator, a church staff minister, an elected official, an employer, a co-worker or a fellow professional.

Oftentimes groups of individuals have the same mentor. For example, a beloved college professor may be the mentor of hundreds of students. A beloved pastor may be the mentor of hundreds of church members. A parent or grandparent may be the mentor of more than one generation of children, grandchildren and great grandchildren.

A group of physicians, who were former residents at a hospital, decided to honor the surgeon who had trained them. They formed a society in the surgeon’s name, which was designed to continue the tradition of excellence in surgery taught and practiced by this beloved surgeon-teacher. They established an endowment named after their mentor to attract funds to assure the future of the chair of surgery at the hospital-related university. The testimonials of some of his former students were inspiring.

I wish more Kentucky Baptists, individually and in groups, would get serious and be more intentional about establishing endowments in honor of our beloved mentors. Not only would it provide a means of paying tribute to those who have made a difference in our lives, but also a means by which the influence of that special mentor can live on and enrich the lives of countless others.

We Kentucky Baptists are fortunate to have a variety of worthy and deserving missionary, educational and benevolent ministries, through which our mentors’ influences can be perpetuated.

Call Laurie Valentine or me for information and assistance on how you or your group can establish a lasting tribute to that special mentor in your life.

(502) 489-3533 or toll free in KY at 1-(866) 489-3533

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.

Sunday, April 1, 2012

E-Devotional-Week 8

Biblical Stewardship Truths (Part 2)

By: Barry G. Allen

Part 2-Week 4 My Testimony (continued)

What does the Bible say about money and possessions? (continued)

Biblical truth #14: We must understand and practice required giving. My father’s favorite Scripture was Malachi 3:10,”Bring the whole tithe into the storehouse that there may be food in my house. Test me in this, says the Lord Almighty, and see if I will not throw open the floodgates of heaven and pour out so much blessing you will not have room enough for it.” My father convinced me by his words and deeds that giving anything less than one-tenth was robbing God. Although my mother did not work outside the home, my father provided her an allowance on which to manage the household needs. She gave a tithe of that allowance. I remember my father checking my church offering envelope after I received my first paycheck. Guess what? I had included a tenth. Over the years the practice of Biblical stewardship has been a way of life for me, and I have been able to prove both the reason and the promise Malachi gave the people of God about tithing.

The principle of the tithe was born in an agricultural setting. The people of God came to realize if there were going to be another crop, some of the current year’s harvest had to be saved out for seed. If everything were eaten and nothing put back into the cycle, the whole process would collapse. So the tithe was the seed fund, and it is a principle applicable to all of life. Many of us ought to put back more than a tithe. What Zaccheus did in giving half of what he had to those who did not yet have enough is not out of the question for some people.

Biblical truth #15: We must understand and practice sacrificial giving. The two best examples of this kind of giving for me are the Macedonian Christians (read 2 Corinthians 8:1-9) and the widow’s offering (read Mark 12:41-44). The Macedonian Christians, out of their extreme poverty, literally “begged to give.” But the Scripture says they gave themselves to the Lord “first.” That’s what true stewardship is about – giving ourselves “first” to the Lord.

In terms of the coins she used, the widow made the smallest gift, but to Jesus she made the most significant gift. The truth of that incident is it’s not the size of the gift, but the size of the sacrifice that really counts in the eyes of our Lord. Also, it teaches us that no one is excluded from making a worthy gift to our Lord.

Prayer focus: Pray that you will not be a taker, a freeloader or a burden on the process of life, but that you will give sacrificially and take hold of life that is truly life.

Next month: Christian Estate Planning Basics by Laurie Valentine