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EFFECTIVE ESTATE PLANNING
Is God a daily part of your financial life?
By Keith Tigue, Special to The Catholic Sun
Did you know the Bible has more verses on money and possessions than it does about heaven and hell combined? It is clear that this is an important issue in our lives and as Catholics we must answer the question, “Is God a daily part of my financial life?”
Outlined below are eight steps that will help bring your faith into your financial life:
1) Recognize the truth about money and possessions. If we begin to recognize that everything we have is a gift from God, it takes the “me” out of the equation and we start to recognize how blessed we are as we take inventory of all that God has given to us. Give thanks to God every day and include your finances in your daily prayer life.
2) Give the Lord our first fruits. Recognizing that all we have is a gift allows us to joyfully give back to God that which belongs to Him. We give back to God the first fruits of our labor and then God allows us to decide what to do with the other 90 percent.
3) Develop a financial plan. We should be responsible with our finances and have a budget that takes an honest look at our income and expenses. The four components of a responsible Christian budget are:
a. Tithe 10 percent
b. Invest 10 percent or more
c. Save 10 percent (save 3 to 6 months of monthly needs)
d. Spend 60-70 percent
Also, annually develop a personal financial statement that lists your assets and liabilities.
4) Be proactive with the management of your assets. You should regularly review the assets on your balance sheet including real estate, stocks, bonds, mutual funds, CDs, money market, savings, life insurance and retirement accounts. You need to diversify and allocate your assets amongst growth, safety and income in a manner that is congruent with your values, goals and objectives. What is your tolerance for risk? When do you want to retire? If you are retired, how much income do you need? How much are you paying in fees? Are you paying too much in taxes?
5) Be proactive with the management of your liabilities. If you have any liabilities on your balance sheet, mortgage debt or consumer debt, make sure you are paying the lowest interest rates possible. Keep an eye on interest rates and check your credit report at least annually.
6) Legal planning. At a minimum, most individuals need a will and a financial power of attorney. Many individuals or married couples will also need a trust. In this area, please seek the advice of a professional and go to a reputable estate planning attorney for assistance. These are legal issues and you do not want to create problems for yourself or your beneficiaries down the road.
7) End of life issues. As Catholics, we should make sure that our living will includes advance directives that consider such things as ethical and religious directives such as last rites and receiving the Eucharist before death, nutrition and hydration, terminal illness, etc. The U.S. Conference of Catholic Bishops has developed great guidelines for us in this area.
8) Wealth transfer. To whom are you going to leave your assets? Your spouse? Your children or family? Your parish? Your favorite charity? And how much to each? Again, as Catholics and recipients of God’s great gifts, we should first think about our tithe at death. We can allocate funds to our parish, a religious order, a Catholic school or whatever ministry we feel passionate about. The important thing is to make sure that your tithe at death is documented in your will or trust.
May God abundantly bless you and your family with good, solid financial health.
Keith M. Tigue serves on the board of directors for the Catholic Community Foundation and chairs the Estate Planning Committee. He is an active parishioner of St. Thomas the Apostle and past chairman of the parish finance council. He is the managing partner for Robinson, Tigue, Sponcil & Associates, a wealth management firm serving individuals and families in Arizona, California and New York.
The Catholic Community Foundation is pleased to provide this column as part of its ministry for the Diocese of Phoenix.
For more information on the many ways in which you can create a legacy of your faith through giving, call Tom Thieken, director of planned giving for the foundation, at (602) 354-2401 or visit the Web at www.ccfphx.org.
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EFFECTIVE ESTATE PLANNING
Perpetual endowments: They keep giving and giving and giving
By Thomas L. Thieken, Special to The Catholic Sun
March 1, 2007
The Energizer Bunny reminds me of the enduring character of an endowment fund. Once established, it just keeps paying out money year after year, after year.
But unlike the battery that eventually runs down, the endowment fund lasts in perpetuity — a duration without time limitations.
The permanence of an endowment is exactly what attracts some individuals to this means of supporting their parish, school or ministry. They like the idea that the principal amount of the endowment will stay intact while the income will be used when needed.
They realize they will someday be gone and their outright annual gifts will no longer be available to help meet current needs. Through an endowment they can keep making their annual gifts.
Endowments enable us to plan ahead with confidence. We can project endowment income and develop programs accordingly.
Anyone with foresight will plan for the future — especially when it comes to retirement funds. People know that Social Security income does not provide enough to care for the day-to-day needs. Supplemental funds will be needed to make ends meet.
Parishes, schools and ministries must look to the future as well. Committed parishioners realize that building up an endowment is a smart way to prepare for the uncertainties that lie ahead.
Sustained communities
Many of the parishes and schools within the Diocese of Phoenix are building a strong endowment. Preparations are being made to meet future challenges.
St. Bernadette Parish in Scottsdale is a community dedicated to tithing. According to pastor Fr. Mike Straley, “We are concerned with the future of the parish and those who will be here in the future. And for this reason, we dedicate 1 percent of our Sunday plate collection to our parish endowment fund within the Catholic Community Foundation.”
An endowment can be created during life or at death through a bequest or trust remainder. It can be restricted to specific needs or unrestricted for general use. You can create your own endowment or contribute to one that already exists. Endowments can be made at once with a single gift or established over time with repeated gifts. Endowments can originate from a single source or through the efforts and support of many persons.
St. Agnes Parish in Phoenix was blessed when they received a very substantial bequest from a former parishioner. Fr. Peter Liuzzi, pastor, along with members of the pastoral council and finance committee, decided to place a portion of this windfall into their parish endowment.
Fr. Liuzzi said, “Of all the decisions facing my parish and my finance council, the one I feel I will never regret is to have placed our funds within the Catholic Community Foundation. I rest in peace knowing that we accomplished something that guarantees a return that will sustain this faith community in the years to come.”
When you establish a named endowment fund, you do more than endow a program or ministry — you endow your values. Through your endowment, your commitment will carry forward for generations to come.
Fr. Pat Robinson, pastor at Blessed Sacrament in Scottsdale, runs a bulletin announcement each week mentioning the parish endowment.
Fr. Robinson said, “As a pastor, my first concern is paying today’s bills. But wouldn’t it be nice to be able to plan for the future in a safe and productive way?”
Count for good
It is quite natural to desire that our lives continue to count for good after we are gone. We do not want our values and influence to evaporate into thin air.
An endowment — the act of bestowing a permanent provision for support — might be something you want to pursue. Your parish, school or ministry would be very appreciative.
Thomas L. Thieken is the director of Planned Giving for the Catholic Community Foundation. Thieken has more than 35 years of experience in the philanthropic community and brings expertise in charitable gifting techniques to the foundation. He and his wife Kathy have two grown sons and are members of Blessed Sacrament Parish in Scottsdale.
The Catholic Community Foundation is pleased to provide this column as part of our ministry.
Create Your Legacy
For information on the many ways in which you can create a legacy of your faith through giving, contact Thomas Thieken at (602) 354-2401 or tthieken@ccfphx.org.
Also: www.ccfphx.org
Mom’s jewels, dad’s tools and the toddler creed: ‘It’s all mine’
December 21, 2006
By John Even, Special to The Catholic Sun
In our house, we are recent graduates of the toddler stage of development. You remember the “it’s mine” stage — If it’s yours, it’s mine; if I think it’s mine, it’s mine; and if I want it, it’s mine.
It’s amazing how rapidly mature adults can revert back to this stage in their lives after the death of a parent. It’s my ring. It’s my tool. It’s my painting. At this time, many adult children can forget all that you have taught them about sharing and caring. Usually, children are not arguing about the item itself, but about the sentimental value attached to the item.
It happens more often than you think, and it even happens in large estates. The last parent passes away and the children are fighting over one of mom’s rings or over dad’s tools. With lots of emotion, children will sometimes spend thousands of dollars fighting in court about items that have sentimental value, but not much monetary value. Obviously, selling these items is not an option, because the family wants to keep them in the family. What can be done?
First, I recommend talking with your children now to see if there are any personal property items that they would like to have after you are gone. In addition, one of the best gifts that you can give your family is the gift of a will or trust drafted by a qualified attorney for you to clarify what your wishes are after you pass away. An important part of your will is a personal property list describing how you would like certain special items to be distributed. As with a well-drafted will or trust, a personal property list can help to reduce or eliminate family disputes after you are gone.
Arizona law provides that a will may refer to a written list of personal property items. The list must either be in the person’s handwriting or signed by the person to be effective, and it must describe the items with reasonable specificity. The list can only contain personal property items, such as jewelry, tools, art, furniture, silver sets, and other similar items, and cannot contain money, bank or investment accounts or real estate. The personal property list may be prepared before or after the execution of the will, and it does not have the same execution requirements as a will.
Some people get overwhelmed by the thought of listing out all of their personal property items. You do not need to include every fork and spoon on the list — only those items that are of special value to you and your family. There is generally a section of the will or the trust that addresses what happens to all of the other personal property items that are not on this list. In addition, items that are extremely valuable monetarily should be specifically included in your will or trust.
As we enter into this season of giving, one of the best gifts that you can give your family is the gift of a properly drafted will or trust, with a personal property list as part of your will, so that those special family items can be passed on to the people that you love and so that family disputes can be minimized or avoided altogether. You have spent a lifetime teaching your children, providing for their needs and instructing them in their faith. Now is the time to prepare a plan for them that will give them a peaceful way to administer your estate. Even if you believe that your children would never argue about such personal property items, wouldn’t you rather have them focusing on you and your legacy after your passing, rather than worrying about the distribution of these items? Leave them a lasting legacy of love.
John Even is a local attorney who serves on the Catholic Community Foundation’s Estate Planning Committee. Even focuses his practice in helping families with drafting their wills and trusts, assisting them with their legal needs after the death of a loved one, and advising family-owned Arizona businesses.
The Catholic Community Foundation is pleased to provide this column as part of our ministry for the Diocese of Phoenix. For more information on the many ways in which you can create a legacy of your faith through giving, call Tom Thieken, director of planned giving for the foundation, at (602) 354-2401 or tthieken@ccfphx.org.
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Sept. 21, 2006
Effective Estate Planning
Take advantage of new law that makes giving easier
By Donna Esposito, Special to The Catholic Sun
September 21, 2006
Some good news from this summer: President Bush signed into law the Pension Protection Act of 2006. For years 2006 and 2007, qualified donors (IRA owners over age 70 1/2) will be allowed to withdraw up to $100,000 from their individual retirement accounts tax-free if they give the money directly to charity.
This legislation is designed to stimulate charitable giving and is potentially the most favorable charitable legislation in recent years. These incentives open up the possibility for increased charitable giving from IRAs.
And donors at the Catholic Community Foundation are taking advantage of it.
Take Martha for example. She is retired and volunteers at her parish. Over the years, Martha’s IRA has grown substantially. Since she has all the income she currently needs, Martha decided to make a gift of $2,000 from her IRA to the Catholic Community Foundation for its work in providing tuition assistance to diocesan elementary schools. Martha called her custodian last month and requested a transfer of part of her minimum distribution amount. It was easy for Martha to make the gift and she liked the fact that she could help without increasing her taxes.*
The IRA rollover gift is a simple and easy way to provide for your favorite charity, without increasing your taxable income. As long as the IRA distribution is made directly to public charities (but not to private foundations, supporting organizations or donor advised funds), there will be no amount included in taxable income, and no income tax deduction.
Qualified charitable transfers must come only from IRAs (not 401(k), 403(b), SEP-IRA or Simple IRA plans). For some donors, it may be possible to establish an IRA and then rollover assets from another plan to the IRA. This IRA may then be used to make qualified charitable gifts.
With an IRA rollover to charity, there will be a simpler tax return and potential favorable tax benefits due to a lower adjusted gross income. The IRA charitable rollover will also fulfill part of, or the entire, required minimum distribution requirement.
Potential IRA donors include:
-- The convenience donor who wants an easy way to make a gift;
-- The standard deduction donor who currently receives no tax benefit from his or her charitable gifts;
-- The category donor who could stay in the 50 percent Social Security taxable category as opposed to the 85 percent taxable level by transferring his or her required distribution to charity;
-- The major donor who wants to give $100,000 to charity and avoid complexity by not increasing AGI by $100,000;
-- The generous donor who would like to give over and above the normal 50 percent deduction level; or
-- The charity beneficiary donor whose IRA has a charity beneficiary and would prefer to give the charity the IRA during his or her life rather than at death.
The Catholic Community Foundation is helping all these by being a channel for donors to give to their parishes, schools and various ministries throughout the Diocese of Phoenix. Simply call Tom Thieken, director of planned giving for the Catholic Community Foundation, at (602) 354-2401 or at tthieken@ccfphx.org.
Donna M. Esposito specializes in individual and estate taxation. She has a Masters degree from Arizona State University and is a Managing Director for RSM McGladrey. She also serves on the estate planning committee of the Catholic Community Foundation.
The Catholic Community Foundation was founded in 1983 and is a 501(c)3 non-profit organization dedicated “to carry on the work of Christ by fostering philanthropy.” The foundation provides permanent endowment and memorial funds for donors interested in furthering Catholic education, communication and Christian formation in the Diocese of Phoenix. The foundation specializes in endowment and grant fund management, as well as estate planning for the Catholic community.
Additional information on IRA gifts can be found at the Catholic Community Foundation’s Web site, www.ccfphx.org, under “Planned Giving,” then “Donor Stories.”
June 1, 2006
Catholic Community Foundation
When it comes to estate planning, trust the professionals
By Jack Hough
Special to The Catholic Sun
March was “write a will” month and the Catholic Community Foundation was a participant again this year in this “Leave A Legacy” event. Foundation representatives made presentations in three of our parishes. Those of us who spoke to parishioners about the importance of preparing a will or a trust heard many stories about the problems that arose for those who did no “estate planning.” The following illustrate a few of these potential problems.
First case study
A common way for a husband and wife to hold assets is as “joint tenants with rights of survivorship” and to make the other spouse the beneficiary on insurance policies, IRAs, bank and brokerage accounts. Potential problems then arise when the surviving spouse has all of the assets and no will or trust.
One problem arises if there is a second marriage. Both spouses have intended that when the second spouse passed away, the assets would be divided equally among the children of both spouses. However, without a will or trust everything will pass, at the death of the surviving spouse, to the surviving spouse’s children (or if no children to the surviving spouse’s parents — or siblings — or nieces and nephews — as the case may be). Thus the children of the first spouse to die receive nothing.
Second case study
Those people who have established a will or a trust often frustrate the plan by making beneficiary designations inconsistent with the terms of the will or trust.
There are many examples, but the most common is when the will or trust distributes the assets equally between the surviving children but the “payable on death,” “transfer on death,” beneficiary designations or joint tenancy holdings can leave certain assets to certain children.
-Let us assume the bank account is payable on death to child “A” and initially has the same value as the brokerage account transferable on death to child “B” and the home in joint tenancy with child “C” and the life insurance policy with child “D” as the beneficiary. None of these assets will pass through the will or trust to be divided equally among A, B, C and D; instead they will pass directly to the beneficiary or joint tenant. Therefore, if the bank account and brokerage accounts are used to support the parents until death, very little may remain for A and B. If the home appreciated, C will get a greater amount than intended. D will get the life insurance, unless the policy was cancelled or borrowed against, etc.
Thus formal estate planning with a will or trust leaving the estate to A, B, C and D equally was frustrated by inconsistent actions.
Third case study
Often people attempt to do their own wills or trusts without professional help. Such was the case of a husband who typed his own will leaving everything to charity. He had a wife and children whom he did not mention in the will and he signed the will only in front of a notary public. His wishes could not be carried out for a number of reasons:
a) The alleged will was not witnessed by two persons and therefore it failed as a formal will;
b) The material provisions of the alleged will were not in his own handwriting and therefore it failed as a holographic will;
c) Even if we were dealing with a valid will, his wife, at the very least, would have been entitled to certain widow’s allowance and possibly an intestate share. In addition, his children could claim an intestate share.
Therefore, the “do it yourself” will would defeat his desire to leave assets to charity.
The moral of all the case studies is to do formal estate planning with a will or trust and when you do, refrain from taking other actions that might prevent the estate planning documents from doing their job.
Jack Hough is the managing partner of Hough Law Offices in Mesa, a firm whose practice is limited to wills, trusts, probate and estate planning. He served on the board of directors of the Catholic Community Foundation for a number of years and is currently a member of the foundation’s estate planning committee.
The Catholic Community Foundation is pleased to provide this column as part of its ministry for the Diocese of Phoenix. For more information on the many ways in which you can create a legacy of your faith through giving, call Tom Thieken, director of planned giving for the foundation at (602) 354.2401 or e-mail at tthieken@ccfphx.org. Additional information is available at www.ccfphx.org.
Catholic Community Foundation
14-year-old answers call to stewardship
By Tom Trush, Special to The Catholic Sun
August 17, 2006
At 14 years old, an age when many of her peers occupy their spare time by shopping at the mall or texting each other about their crushes, Ariana Iniguez is busy using her God-given gifts to support and help others in her community.
“I think it really means a lot to those who are receiving the help because they are experiencing an example of Christ’s love in their life and are grateful that someone is willing to share their life with them,” Iniguez said. “There is never enough help that you can give in this world; you can always give, give, give out to the community.”
In April, Iniguez, a graduate of St. Thomas the Apostle School and a soon-to-be freshman at Xavier College Preparatory, was one of 13 eighth-graders presented with an $8,000 award by the Catholic Community Foundation’s Christian Service Award Program. Based on school, parish and community service, students receive $2,000 each year for tuition to a Catholic high school in the Diocese of Phoenix.
Candidates had to be nominated by a non-family adult who was aware of their service activities. For Iniguez, that was Yvette Toledo Katsenes, past executive director of Phoenix Day, a local organization offering subsidized childcare and early education programs.
Inspired by her mother, who works in the healthcare industry, Iniguez began serving the community at the age of 8. Together they would attend health fairs to help promote well being and safety to low-income families by passing out water bottles, first-aid kits and healthcare insurance information.
“I felt it was important early on to teach her to give back to others, to share her gifts and talents, because not everybody has as much as she does,” said her mother, Lillian Garcia.
In the beginning, Iniguez had little interest in helping her mom; however, it wasn’t long before she started seeing the benefits of their efforts.
“As I kept doing it, I started enjoying it,” she added. “Not only was I meeting other people, but I got to help other people, so it kind of grew on me.”
As a student at St. Thomas the Apostle School, Iniguez was an active member of its choir. She also participated in the KidsCare Club, an after-school volunteer program where students gather and prepare items, including personal hygiene bags and canned goods, for organizations such as St. Mary’s Westside Food Bank Alliance and St. Vincent de Paul.
“She was one of those students you could always count on to do whatever was needed, and she was extremely giving of her personal time,” said Marion Patzem, who taught Iniguez in seventh and eighth grade. “She just singled herself out as being there whenever you needed her for anything.”
Two years ago, while singing “Ave Maria” at a funeral at St. Anthony Parish, Iniguez caught the attention of George Gonzalez, a member of the Christian singing group Family Spirit Music. Although the music ministry didn’t normally include members of such a young age, he was so captivated by her vocal abilities that he extended an invitation to join.
“I couldn’t believe the maturity in her vocals… they come few and far between that young,” Gonzalez said.
Family Spirit Music sings weekly at Most Holy Trinity Parish, as well as various churches and parishes throughout Arizona.
“It’s truly an inspiration to know our youth are developing in such a positive and Christian-like manner,” said Maria Hayes, who is director of women’s and children’s services at Phoenix Baptist Hospital and wrote one of three letters of reference for Iniguez’s award.
When she starts at Xavier later this month, Iniguez, who is already eyeing a future career on Broadway, plans on developing her gifts further by participating in freshman choir as well as theater and acting in the drama department.
“I won’t let this talent go to waste,” she remarked. “This is my gift from God. Why would I waste something so beautiful?”
Since 2001, 57 students have received awards totaling $456,000 from the Catholic Community Foundation’s Christian Service Award Program. To nominate an eighth-grade student for the 2006-2007 school year, please visit www.ccfphx.org. For questions or more information, call (602) 354-2400.
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