Legacies 4th Qtr 2023

Legacies A publication of the United Methodist Foundation of Louisiana

Inside This Issue

4th Quarter 2023

A GREAT WAY TO END THE YEAR:

Avoid Errors in Planning Your Estate

5 Major Errors in Estate Planning Page 2

Retirement Planning Tips Page 3

Foundation News Page 4

E

state planning is the process of arranging for the distribution of your assets after your death.

It can be a complex process, but it is important to avoid common errors that can jeopardize your intentions and cost your loved ones time and money.

The best way to avoid estate planning errors is to work with an experienced estate planning attorney. An attorney can help you create a plan tailored to your needs and circumstances. They

“Where Faith and Money Come Together”

can also help you plan to transfer your assets after your lifetime to the people and ministries that mean the most to you.

Three tips most estate planning experts recommend are: •

Start early;

•

Keep your records organized and

•

Review your plan regularly.

Turn the page to read and learn how to avoid the five most common mistakes in estate planning.

“Where Faith and Money Come Together”

2023 Board of Trustees Bobby Fahey Chairman L. Nettles Brown Rev. Clifton Conrad Rev. Jo Ann Cooper Joe Crouch, Jr. Omer Davis Rev. Doug deGraffenried Drew Kennedy Bob Kimbro Sandra Kuykendall Eunice Val Lavigne Richard Lewis Troy Searles Rev. Drew Sutton Dianne Wilkinson Chris Spencer President

5 Major Errors in Estate Planning 1. You Don’t Have a Plan Many people don’t realize they need a plan and then fail to make a will or create one during their lifetime. Not having a plan means your state’s laws will dictate the distribution of your assets, and if that happens, you have no say in how your property will be divided.

2. Using Online DIY for Legal Help The internet makes it seem easy to prepare a will or trust online. However, these “do it yourself” plans often fail to consider variations in state law.

(And Louisiana law is different than the rest of the U.S., so that adds to the possibility of error.) Contact an estate planning attorney to help.

3. Failure to Properly Designate Beneficiaries

Contact Us: 8337 Jefferson Hwy. Baton Rouge, LA 70809 Phone: (225) 346-1535 Email: information@umf.org Web Addresses: www.umf.org www.umfgiving.org Legacies Editor: Kelly Johannessen kellyj@umf.org

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Have you designated beneficiaries for all of your assets? And recently? Most investment accounts, such as IRAs and 401(k)s, allow for the designation of a beneficiary. These designations control who receives your assets, so it’s essential to review your designations periodically.

4. Failure to Maximize Annual Gifts Gifting your property during your lifetime is the oldest and best way to minimize future estate taxes. Many people need to realize the prudence of making annual exclusion gifts each year to family members. Over the long run, you can transfer significant sums of money from your estate and reduce your taxes.

5. Failure to Take Advantage of the Gift Exemption Above and beyond the annual exclusion gift limit, you can make gifts during your life up to the federal gift exemption amount without owing any gift tax.

Making lifetime gifts is a simple and effective way to minimize estate tax.

Let us show you some creative ways to help your family, your church and your favorite ministries while reducing your taxes. Contact us at www.umf.org/contact.

4th Quarter 2023

Savvy Living Retirement Planning Tips Dear Savvy Living, What retirement planning tips can you recommend? I am worried that I may not have enough saved for retirement.

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ost individuals require some financial planning before retirement. Inflationary pressures may significantly affect the value of your retirement savings over time.

While Social Security payments can be a valuable assistance resource, they are not meant to be the only source of retirement income. The Social Security Administration reports that the average monthly retirement benefit for recipients as of February 2023 is about $1,781, which may fall short of sustaining a comfortable retirement lifestyle.

A recent survey found that Americans believe they will need approximately $1.8 million for retirement. For instance, a 65-year-old who retires with $1.8 million saved could receive a retirement income of $72,000 per year. The average U.S. retirement account, however, held $113,000 last year, while accounts of those 65 and older had an average of $233,000.

Therefore, individuals must familiarize themselves with financial matters and learn how to save more effectively for retirement. Here are some tips and resources that may help.

Start Saving Aggressively Suppose your employer offers a retirement plan, such as a 401(k). In that case, it is advisable to contribute enough to at least capitalize on a company match, if available, or if possible, consider contributing even more. In 2023, you can save as much as $22,500 in a 401(k), or $30,000, including the catch-up contributions for those 50 or older.

If you do not have a workplace plan, consider opening a Traditional or Roth IRA. Both are powerful tax-advantaged retirement savings accounts that let you contribute up to $6,500 annually or $7,500 when you are 50 or older. If you are selfemployed, consider a SEP-IRA, SIMPLE-IRA or an individual 401(k), which can help reduce your taxable income while putting money away for retirement.

Additionally, suppose you have a high-deductible health insurance policy with an annual deductible of at least $1,500 for self-only or $3,000 for family coverage. In that case, you should consider opening a health savings account (HSA).

HSAs allow you to set aside funds pre-tax, which will lower your taxable income. The money in the account will grow taxfree, and if the money is used for eligible medical expenses, the withdrawals are tax-free, too. After age 65, withdrawals for nonmedical purposes are treated as though they are from a traditional retirement account.

Pay Off Debts If you have debt, it is best to reduce it as much as possible.

Consider working with a nonprofit credit counseling agency that can help you set up a debt management plan.

Reputable credit counseling organizations should send you information about their services at no cost. It is advisable to research the organization with your state’s attorney general office and local consumer protection agency.

Find Help A great resource Saving Matters, at the U.S. Department of Labor: savingmatters.dol.gov or visit SSA.gov/retirement.

“Savvy Living” is written by Jim Miller, a regular contributor to the NBC Today Show and author of The Savvy Living book.

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Foundation News Foundation Hires New Grants Coordinator Britney Winn Lee has joined the Foundation staff as Grants Program Coordinator and will be responsible for administering and facilitating the Foundation’s grants program.

Foundation president and CEO Britney Winn Lee Chris Spencer said, “Britney brings expertise that will greatly benefit our outreach efforts. She keenly understands the needs of our churches, and we look forward to her guidance as we continue to impact churches and ministries, as well as clergy and laity across Louisiana.”

Lee lives in Shreveport with her family and is a lifelong United Methodist who has spent her years since graduating from Centenary College working in faith-based nonprofits and United Methodist churches. Lee also earned a master’s degree in nonprofit administration from LSU-Shreveport. She will begin her seminary journey in the deacon tract at Perkins School of Theology at Southern Methodist University next year.

“I have great hope for the changing church and am excited to walk alongside the Foundation and its communities to create, implement and tell the stories of innovative ministry,” Lee said.

Frequent hurricanes in our area are making it difficult for churches to afford skyrocketing insurance premiums. Some policies are being canceled altogether.

Church Property Insurance Crisis Addressed The Foundation and the Louisiana Annual Conference held a webinar in October to explore the future of church property insurance in Louisiana and answer questions from church leaders. Reports of churches within our conference facing policy cancellations and escalating premiums prompted the webinar.

The webinar featured Jeff Albright, CEO of the Independent Insurance Agents & Brokers of La., joined by Foundation president Chris Spencer and Rev. Dr. Van Stinson, assistant to the bishop in the Louisiana Annual Conference. They recognized the need and offered potential strategies to address the challenges.