in God’s People’s Hands” Presented by FAITH FUNDING Associates “Keeping God’s Money in God’s People’s Hands” Presented by FAITH FUNDING Associates

You work hard all your life to provide for your family You save for your family, you give to your church, you are a good steward. You do the best you possibly can to leave an inheritance. Something deep inside of you says “Maybe you could do a little more,” but you don’t know what to do or where to turn to find the answers. Sadly, you realize that regardless what you seem to do, the government is still going to get a major portion of all you have worked so hard to leave.

Your Inheritance Who do you want to benefit from it? Probate Courts and the IRS or Your Heirs and Your Church

What We Are Going To Discuss Estate Planning options that are available What estate planners can do to help Scenarios that show the maximum distribution of inheritance to the family instead of the government or those involved in probate How you can include contributions to your church or charity out of inheritance funds

Estate Planning Options Option 1 - Do Nothing 60-70% of all Americans choose this option People will spend 35 to 45 years working and saving yet not spend an hour or two on planning the best way to distribute their estate When you do nothing, you are putting your estate through probate process called intestate Intestate means the laws governing the distribution of your estate applies – not your wishes as would be done with a last will and testament or trust

Estate Planning Options Option 2 – Get an Attorney Attorneys are great for setting up wills so assets are directed to whom you designate A will is important if there are minor children under the age of 18 or there are large creditors. An attorney is not required, but you may find it necessary, depending on the size of the estate All wills are open records and open to public scrutiny Wills take from several months to several years to probate Administrative costs and attorney fees in middle class estates can be as much as 5-10% of the estate Heirs may be subject to income taxes on certain liquid assets at their current tax rate.

Estate Planning Options Option 3 – Consult an Estate Planner Estate planners can guide you in the best way to set up your estate They assist in restructuring or reallocating assets in such a way that it may be possible to avoid probate They also help you pass along liquid assets to heirs so income taxes are greatly diminished or even eliminated Estate planners are usually not attorneys and as such, cannot give legal advice They are experienced in helping people use new tax laws for more efficient estate distribution

Estate Planners Most estate planners work with financial service companies and are compensated by them and not by the client Estate Planners work with “leave behind” assets rather than “living now” assets Estate Planners recommended changes that avoid probate, diminish or eliminate taxes to heirs and increase the distribution of the estate Following the advice of estate planners, in many cases, may totally eliminate the need for the family to retain attorneys during the probate process

Why Estate Planning? Maintain control of your assets Keep decisions within your family in the event of incapacitation Protect assets as allowed by law Avoid probate whenever possible Pass inheritance along to heirs with diminished or eliminated taxes In some cases, increase the size of the heir’s inheritance

What Determines Probate? Any Gross Estate in Excess of $50,000 Land, Home, Car, Equipment Investments, Insurance, Annuities CD’s, Cash, Savings Bonds Personal Property, Business Interests Accounts Receivables These may escape federal taxation, but may be included on IRS Form 706 and subject to probate

IRS Form 706 Federal Estate Tax Return Lists all assets owned by the decedent at the time of death Determines the dollar value for the estate to be probated

Typical Probate Scenario Form 706 Itemizes Estate Estate escapes federal taxation Will is probated with help of an attorney Costs to probate amount to 5-10% of estate Some assets escape further taxation Final disposition of the estate is reduced

This just doesn’t seem right, does it? The Final Disposition Heirs do not receive the full portion of what was designated for them Probate costs and professionals get the rest This just doesn’t seem right, does it?

Alternative Probate Scenario Form 706 Itemizes Estate Estate escapes federal taxation Will or Trust is probated Minimum Cost to probate estate Most assets escape further taxation Liquid assets are passed on to heirs, tax free Amount of estate is intact or increased by the final disposition Funds are available for charitable giving

Doesn’t this make better sense? The Final Disposition Heirs receive what was designated for them Charitable contributions are made in your name The probate courts are cut out of the loop Doesn’t this make better sense?

If you could conserve 10-25% of the value of your estate, what could you do with it? Provide additional funds to your children Provide an endowment or some other financial legacy for your church or school Establish an education fund for your grandchildren __________________ (You fill in the blank)

Here is an example CASE NO. 1 79 year old female CURRENT SITUATION Assets: Home 105,000 Annuity 67,000 Savings Bonds 60,000 Total Estate 232,000 Probate Fees 23,000 Tax to Heirs 0 209,000 NET ESTATE BEFORE Confidential Review THE SOLUTION Reallocated Funds 188,000 Total Estate 293,000 Tax to Heirs 0 no taxes to heirs 293,000 NET ESTATE AFTER

Another example CASE NO. 2 68 year old male CURRENT SITUATION Assets: Home 138.000 Bank CD’s 47,000 IRA 184,000 Total Estate 369,000 Probate Fees 36,900 Tax to Heirs 0 (may be more) 332,100 NET ESTATE BEFORE Confidential Review THE SOLUTION Assets: Home 138,000 Reallocated Funds 92,000 Stretch IRA 184,000 Total Estate 414,000 Tax to Heirs 3,600 only taxed on RMD 410,400 NET ESTATE AFTER

Another example CASE NO. 3 71 year old male CURRENT SITUATION Assets: Home 68.000 Bank CD’s 22,500 Savings 4,000 Total Estate 94,500 Probate Fees 9,450 Tax to Heirs 0 ) 85,050 NET ESTATE BEFORE Confidential Review THE SOLUTION Assets: Home 68,000 Reallocated Funds 30,000 Total Estate 102,000 Tax to Heirs 1,200 (only taxed on savings) 100,800 NET ESTATE AFTER

Summary What is the secret? Total Estate Net Estate After Review Difference Case No. 1 232,000 209,000 293,000 84,000 Case No. 2 369,000 332,100 410,400 78,300 Case No. 3 94,500 85,050 100,800 15,750 What is the secret?

The Secret? There isn’t one . . . Our tax laws allow anyone to make changes that are in their best interest. Unfortunately, most people are not aware of the options available to them. Our goal is to help you avoid probate, to reallocate your existing assets in such a way that your heirs get the full benefit of their inheritance, and to assist you in providing an on-going legacy for the Kingdom. What would work best for you? That remains to be seen. We work with each client to find the best solution for them.

What Can You Do? Consult a professional to determine if a trust is needed or if a will is sufficient Give consideration to gifting options Create the legal documents Create Healthcare Power of Attorney Create a Directive to Physicians Reallocate Assets to maximize the estate Update records periodically

Can We Help YOU? Probably. But we never know until we sit down with each family. It may take several sessions to sort out all the options, so don’t expect a quick fix. If you have an interest in speaking with us, we will schedule a free confidential review of your situation to help you determine which options are best.

FAITH FUNDING Associates in partner with Personal Financial Advisors/Estate Planners (We are not attorneys and do not give legal advice)

What About Faith Funding? Dr. Stephen E. LaFleur is the founder and director of Faith Funding Associates. As a bi-vocational pastor/financial advisor, he recognized the need for the church to better conserve its assets and plan for the future. Faith Funding was formed to assist church members in better estate planning so that the maximum inheritance is passed to heirs instead of funding more government excesses. The desired result is for a greater portion of estate planning to include churches and charitable organizations so that God’s Money Remains in God’s People’s Hands. stephenelafleur@yahoo.com 210.646.4546 Copyright 2009 All Rights Reserved Licensed in the State of Texas

Faith Funding Associates PO Box 14711 San Antonio, Texas 78214 202.461.3242 National Message Center 210.393.9258 Texas Line www.faithfundingassociates.com info@faithfundingassociates.com

Referral Compensation Many pastors work in bi-vocational positions and rarely have adequate retirement programs. Many churches have limited resources to help pastors with their own estate planning. To assist in this area, Faith Funding will pay a small stipend to pastors and to members in the name of their church. For Pastors – stipend based on each referral that leads to a seminar and generated business. Pastor may accept or defer the payment to the church. For Members – stipend based on each referral that leads to a seminar and generated business. Payment is made out to the church or non-profit as directed by the member, with no stipulations as to the usage. For Churches – company practice is to return 10% of company profit back to the participating churches, without any stipulation as to the usage.