How to Create a Financial Emergency Binder with Dr. Art Rainer

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Hi, I'm Rob West. That verse reminds us that wisdom means planning ahead, especially when it comes to life's most serious emergencies. If something were to happen to you, would your family know how to manage the finances, pay the bills, or access important documents? Today, Dr. Art Rayner joins us to walk through how to create a financial emergency binder, and then it's onto your calls at 800-525-7000. This is Faith in Finance, biblical wisdom for your financial journey. Well, it's good to have our friend Art Rayner with us again. Art is the director of the Institute for Christian Financial Health.

That's the organization that certifies Christian financial counselors, or what are known as CERT CFCs. Art, great to have you back with us. It is always an honor. Thanks for having me. Art, we're so grateful to be partnered with you.

The CERT CFCs do a great job of helping people build a strong financial foundation. And by the way, that includes being prepared for the unexpected. So let's talk about that. How would you encourage someone who's been procrastinating on taking this important step? Well, we might ask them some hard questions. You know, what if something serious were to happen to you? If you're married, what if something serious were to happen to you and your spouse? If prolonged hospitalization were required, would someone be able to manage your household, paying the bills, and in caring for your children? What if you were to die? Would your family members know where to find your most important information, or would they be left with a stressful search?

Those are really key questions. And boy, it's heartbreaking. We hear from callers all the time who feel completely lost after losing a spouse who handled all the finances. So what advice would you give to someone to help avoid this situation in their house?

Yeah, great question. Every household should have what's called an emergency binder. Now, an emergency binder is a single place where all of your most important information can be found.

It can be a huge blessing to your loved ones. Hospitalization and death are not necessarily enjoyable topics to consider. However, it is wise to prepare for such events. An emergency binder can bring about a sense of peace to you and your loved ones. Now in that emergency binder, you should start compiling pages that contain your financial information, your medical information, child care information, bill information, funeral preferences, and many other important categories that you can create yourself. Think through this process and make a list of all of your categories. This will help you feel more confident in your ability to create a thorough emergency binder. Yeah, now that may sound daunting to someone because when I hear those categories, that's going to involve a fair amount of effort and paper, right?

We get that a lot. So a helpful way to approach creating an emergency binder is to take it one section at a time. It's true, compiling all of the necessary financial, medical, and household information takes time and it can feel overwhelming.

However, setting aside 30 to 60 minutes daily to focus on a single section makes it far more manageable. Start by gathering the documents you'll need for that section to help you create a streamlined process. Once your binder is complete, be sure to print out a physical copy. A red three-ring binder is a great choice for visibility in an emergency.

That's what we use in our house. And it's wise to keep both a digital and physical version on hand. Preparing for these kinds of situations is certainly not an enjoyable process, but it's a meaningful way to love and serve your family. By organizing everything they need in one place, you're going to give them a peace of mind and direction in what could be one of the most difficult moments that they face. It's a simple act of stewardship that offers comfort, clarity, and care when it matters most. And when we see it through that lens, I believe the task becomes much more doable.

Yeah, I totally agree. Now, where do we keep it? What would you advise people?

Yeah, another great question. First, I would choose a secure location for your emergency binders, digital and physical versions. For the physical copy, consider storing in a fireproof locked safe for added protection. Next, ensure that your loved ones know where that binder exists and where to find it.

That way, if something were to happen to you, they'll know to access the binder as one of their first steps. Now, Art, wouldn't it be great if there was actually a template for this that was done for me? Wouldn't that be nice? And we have that for you. Hey, wait a minute.

All right. It's called the Essential Emergency Binder, and it's a pre-printed resource with more than 60 pages, including instructions to complete this important task. And you can get that at EssentialEmergencyBinder.com. Folks, if this sounds daunting to you, having this tool to get you started is a game changer. Again, you'll find it at EssentialEmergencyBinder.com. Art, thanks for stopping by.

Thanks for having me. That's our Rayner, Director of the Institute for Christian Financial Health, back with your questions after this. FaithFi is grateful for support from One Ascent. One Ascent believes that your values inspire why you invest and how they can inspire how you invest. One Ascent's goal is to provide solutions designed for every need and invest in businesses that bless the people and places God has made. They want to help investors do well by doing good, to explore a new way of investing that aligns with your values. More information is available at OneAscent.com and by clicking Analyze My Investments. Faith in Finance is grateful for support from Sound Mind Investing. For more than 30 years, they've offered Financial Wisdom for Living Well. SMI provides step-by-step guidance for do-it-yourself investors, from those just getting started to those getting ready for retirement.

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We're going to begin in North Dakota. Marie, go right ahead. Hi. Thanks for taking my call.

Sure. My question today is about consolidating our investments. My husband is retired.

He was a state employee, and so he's got a pension and he's drawing Social Security. He also has a Roth. I have a 401 at my place of work, and then I also have a Roth and a traditional IRA. My two IRAs and my husband's Roth are together at one financial institution here in town, and then my 401 is through another organization here in town. How do you feel as far as keeping those separate?

I know we've met with both. I'm very comfortable with the person who is the administrator of my 401. I would like to keep my monies there if possible. I know that the other person that's working with the IRAs would rather have us take it over there. Is it better to have everything in one place?

It's a great question. I actually like you having one advisor. I think with the size of the amount of assets you're talking about, there's benefits to having just one advisor. In particular, oftentimes when you get over a certain level of assets under management, their price breaks, so it's very likely that you're going to be able to save on the asset management fees if you're all one place. It simplifies things, which is really nice because you're not dealing with multiple advisors where you've got to have multiple meetings. You're also not dealing with as many different statements.

A lot of times you'll get a consolidated statement from your custodian with all the accounts in one mailing, either print or digital. I would imagine this is a fiduciary, somebody who's legally bound to act in your best interest. I think there's also some benefits just to ensure that there's not unnecessary or unnoticed duplication of investments between advisors.

I would pick the advisor that you're most comfortable with. It has the track record that you're happy with. It has a good rapport with you. You're happy with the ongoing communication. If it were me, I would consolidate everything there.

It's a great question though, Marie. Thanks for your call today. Danville, Illinois is where Tim is located.

Go ahead, sir. Hi, so I was just curious. I've been a member of my church for 10 years here in Danville. I've been working in the public schools here, and I've been putting part of my salary towards Ty as I know I have to do and as I have been my whole life, as my parents were doing when they were raising me. But lately, our church has been spending the money in a way that I'm just not sure if I agree with. It started off small. It got a drum set for the band.

And I don't know about yourself, but I'm more traditional. I think that the piano and a choir is about all we need. But after the drum set, I saw that they were putting money towards some charities. We used to give to this women's shelter, but they've been moving away from that, moving towards library donations for the reading programs, which I think is all well and good, but I don't think that's necessarily the Christian way.

Yeah, yeah. Well, Tim, I certainly appreciate your transparency on that. Have you set a time aside to go meet with somebody from church leadership, whether it's your pastor or somebody else in leadership to express your concerns and thoughts?

I've not. I've only read the bulletins every week, and they're telling us where the money is going, which I appreciate their transparency, but I have not had a meeting of my own yet. Yeah. Well, you know, I think if we back up for a second, we realize that as Christ followers, we should be a part of a local fellowship, a Bible believing church teaching from God's word, the inerrancy of scripture and equipping the body and, you know, developing disciples of Christ and where we're planted. We see clearly in scripture that we're to support the work of the local church.

And I think that should be our first giving priority. Now we always need to check our hearts because our giving, you know, needs to be done for the right reasons. I'm not saying yours isn't, but I think at its core, you know, when we, when we think about our giving, you know, our giving really should not be motivated by guilt.

It shouldn't be about control. So we shouldn't, I think, you know, try to use our giving to influence decisions, you know, for specific ministries. And this often comes with giving to maybe a designated fund while withholding support from the general budget. And I think that undermines generosity. I think when we give, we should give with open hands and open hearts, trusting that church leaders are seeking guidance and how they use the resources for his purposes, recognizing we may not always agree, but I think faithful giving reflects trust in God's sovereignty and a desire to support his work, even when we don't fully agree with every decision made by church leadership. Now I will say though, if you have genuine concerns, I think it's very appropriate for you to schedule that meeting and for you to go in and say, Hey, although I've questions and things from time to time, and you know, I'm going to trust you and I have, and I've continued to giving and, and we're fully planted here at this church. And although I may disagree with styles of worship, you know, we're, we're here and this is where God has us in this season, but I think we've gotten to a point now where I'm questioning, you know, some of the decisions that are being made about giving to outside entities that really aren't about furthering the gospel.

And I'd like to share that concern with you out of mutual respect and just transparency and, and just have that conversation. And perhaps, you know, that leads to a change or maybe not. And then at the end of the day, you'll have to decide whether or not that should be your church home over time. But I think it, you know, at its core, we need to give as an act of worship. You know, we need to give as a priority and proportionately, and we need to give cheerfully as Paul says in second Corinthians. And I think where we've been planted, our first priority is the local church. That's God's plan a, and I think there's a balance between trying to micromanage the decisions of the church and you having legitimate concerns about the ways that the church is, you know, supporting other outside ministries.

And I would say the best approach is not to talk to people about it and kind of create any kind of dispersion, but just to address it head on by visiting with your pastor or church leadership and, and making those known. Does that make sense, though? No, that's a thoughtful answer. And I appreciate that.

Okay. Yeah, absolutely, Tim. And I appreciate you asking the question because, listen, you know, I think part of this program, the purpose of it is for us to wrestle through these questions and realize that, you know what, we want to be found faithful and you are a steward of what God has entrusted to you. And you're trying to be faithful in that just as I am with what God has entrusted to me.

And there's going to be questions that come up and we all want to get it right. And as long as we're seeking God's wisdom with the, with our hearts in the right place, I think these kinds of conversations are very appropriate and can lead us, I think, ultimately toward, you know, greater work through our local church, but also greater alignment with God's purposes for the resources he's entrusted to us. So listen, I'll ask the Lord to give you wisdom as you navigate this. And hopefully that conversation you have with church leadership will give you more clarity on perhaps what the path forward is. Thanks for calling today, Tim.

God bless you, my friend. Before we head into our break, let me remind you, you know, as we look at God's word and think about our role as managers of God's money, we can pull principles out of scripture that are practical, but they're also timeless. For instance, the big ideas that we want to communicate is first that God would be your ultimate treasure. But then as we get into money management, we want to spend less than we earn because that's the key to every financial success.

We want to avoid the use of debt because debt mortgage is the future. We want to set long-term goals because the longer term your perspective, the better your financial decision today, we want to have margin to fund those goals that God has given us. And we want to give generously because giving breaks the grip of money over our lives. Well, I hope what we're sharing today is an encouragement to you and above all else. I hope it draws you into a more intimate relationship with the Lord. We're going to take more phone calls just around the corner.

But first this break, we'll be right back. Have you downloaded the Faith by app yet? You need to do that today because this is going to make your life easier. Yes, you can manage your money through the in-app envelope feature, but also plan out future goals. I want to buy a house in five years and I'm on track to do that.

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Mutual funds distributed by Timothy Partners LTD and ETFs distributed by Foresight Fund Services LLC. Thanks for joining us today on Faith in Finance. I'm Rob West. We're taking your phone calls today. Here in our final segment, we'll get to as many as we can. To Cleveland, hi Ann, how can I help you? Hi there.

Well, I hope we can discuss this. I'm on the high side of 75, I'll put it that way, and I've received a six-figure inheritance from my uncle in Florida and it's from various accounts, checking, savings, money market and then the Lutheran annuity and that sort of thing. And I'm told that we don't have a tax on inheritance here in Ohio, so I just wanted to verify that particular issue. Yeah, so in terms of the accounts you've received, are any of them in retirement accounts, pre-tax accounts like an IRA or an annuity? No, no, he was 100, he was very old, so I mean, he's that old, I don't know if that would make any difference, but what I wanted to know, I don't need it now, and what I wanted to do is just, I've got it in a local bank and that's in a savings account and I've told them, I had been informed by one of the staff at Jay Savings Bank that CDARS was a good, it's a bank program, you're familiar with that, and that I could, that would be the best way to go. And my bank does belong to that and they can shop for CDs at other banks. Is that, do you think that is a good recommendation for me?

Yeah, you certainly could look around. I would say, you know, one option would be to look for an advisor and just to close the loop on the tax issue. So you are correct, there is no federal inheritance tax. There is state inheritance tax, but it sounds like you've already checked on your state and that doesn't apply.

So that's not an issue. Any tax would be paid by his estate before it got to you. The only time you pay tax on inherited money would be if it came in an IRA. Again, there's no tax when you receive it, but when you take the money out of the IRA, it becomes taxable as ordinary income.

But if it wasn't inside an individual retirement account, then you don't pay any tax unless you invest it after you receive it, then you'd pay tax on the growth. But no inheritance tax federally, so you should be in pretty good shape there. In terms of what to do with it, I think you've got a couple of options. One is I'd make sure you don't have any high interest credit card or other consumer debt. You'd want to pay that off if you did. Second, you want to make sure you have an emergency fund and savings of three to six months expenses. Beyond that, you could, you know, select an advisor that could manage this for you, perhaps with maybe a bond portfolio with some high quality stocks, or you could keep it and manage it yourself and you could look to bank products like CDs.

And if you did, I would shop it around. I just wouldn't go automatically with your bank. I would look for those banks and they're probably going to be online banks that still have the FDIC insurance backed by the full faith and credit of the United States government, but might have a little, you know, better interest rate. So right now, you know, if you look at CD rates, I mean, the highest rates in the country, you know, right now are over 4%.

You know, whereas the average, you know, is down less than 1% with the typical bank, but you can find them for four and a quarter, four and a half, depending on how long you want to lock that in. Is that helpful, though? It is, but I didn't get to my answer or question about the CDAR.

The bank program, they will shop CD to other banks. That's what that is, I'm told. I don't know if that's in your area of thinking, but anyway. Well, so if they're willing to do that, absolutely. You know, I think if they can go out and shop it around, I mean, that takes some of the guesswork out. I would, though, you know, on top of that, I would look for, you know, just comparing what they come up with, you know, to what you might find on your own.

But I am familiar with the CDARS program. That's a certificate of deposit account registry service. And, you know, they'll go out and look for how it can be invested, making sure it's spread across multiple banks. So you keep the FDIC insurance and you know, making sure you get pretty good yields, I would just double check it against what you might find on your own.

Okay, that sounds good. One other quick question. There was a holdback of substantial amount which I will be getting a portion. And the attorney down there said, I would get a K one that's in 2025. Because that portion was received from one of the investment firms, the Loserin annuity, I guess is sweaty.

And so I don't have to be concerned. It's still just an inheritance. Is that correct?

Yeah, that is correct. But if you get that K one, you are going to need to, you know, share that with your CPA. Basically, that's a tax form that you get from certain investments like a partnership or an S Corp or a trust. And that reports your share of any income or losses or deductions. So even though you don't pay taxes on the inherited asset, as the asset throws off income, you know, or is sold for a gain, then that can generate taxes, you know, and that comes to you by way of the the K one.

So here's what I would do with that the year in which you get that if you normally prepare your own tax return, that's the year for you to get a CPA hand that K one off and he or she will tell you exactly how much tax you owe. I appreciate your call today. Antoinette, I know you have two questions. I'm only going to have time for probably one. I've got just about 90 seconds. Go ahead.

Okay, that's okay. I just want to ask for if I have real estate properties that I want to leave it to my children. I understand there's supposed to be like a trust and they don't have to pay capital gains.

And do I also need a will? Yeah, well, you're not going to pay capital gains anyway, if you leave it to your heirs. So if they receive these properties as an inheritance, they enjoy what's called a step up in basis.

So the cost basis, the purchase price that you had for these properties when you originally bought them, that's what's used to determine if there's a capital gain upon the sale. But when you receive it as an inheritance, that cost basis steps up to the market value as of the date of death. And so they're not going to have any capital gains and you're not going to have any estate taxes if your estate is under, you know, $13 million. Now, uh, do you need a will or a trust or what's called a transfer on death deed? A transfer on death deed is available in Illinois and it allows you to name your children on the deed. So the property passes directly to them at death, skipping probate.

It's fairly simple. It costs maybe between two and $500 to set up with a lawyer and it works well if your kids, you know, if you're, if you're in agreement on the ownership and determining what percent goes to each child and as long as they're all okay with selling it, then it's going to be fairly simple. The other approach would be a trust. It's not necessary, but it's an option that's going to cost you a little bit more, but it would also give you a little bit more control over the property with regard to how the money is distributed. And it could allow you to name a trustee so that even prior to your death, if you were incapacitated, the trustee could step in and manage things. I think your next step, Antoinette, is to go visit with a Godly estate planning attorney to talk through all this and get it set up.

If you don't have one, you could get a referral from a CKA in your area. Just go to faithbuy.com. Thanks for your call. Big thanks to my team today. Certainly couldn't do this without them. Sandy Dickinson managing our phones today, my producer, the amazing Devin Patrick, and providing research today, Mr. Taylor Stanrich and everybody here at Faith Buy. What an amazing team we have the opportunity to work with. If you want to support our work, just go to faithbuy.com and click Give and come back and join us tomorrow. We'll see you then. Bye-bye. Faith in Finance is provided by Faith Buy and listeners like you.