Share This Episode
Faith And Finance Rob West Logo

Why Are We Generous?

Faith And Finance / Rob West
The Truth Network Radio
May 27, 2024 5:51 pm

Why Are We Generous?

Faith And Finance / Rob West

On-Demand Podcasts NEW!

This broadcaster has 142 podcast archives available on-demand.


May 27, 2024 5:51 pm

Do you think of yourself as a generous person? Most of us would like to think we are, but do we know why we’re generous? On today's Faith & Finance Live, host Rob West will share an excerpt from a recent teaching session, in which author and advisor Chris Gabriel explains why we’re generous and how we can be more so. Then Rob will answer your questions on various financial topics.

See omnystudio.com/listener for privacy information.

YOU MIGHT ALSO LIKE
Faith And Finance
Rob West
Faith And Finance
Rob West
Faith And Finance
Rob West
Faith And Finance
Rob West
Faith And Finance
Rob West
Faith And Finance
Rob West

Today's version of Faith in Finance Live is prerecorded so our phone lines are not open. Do you think of yourself as a generous person? Most of us would like to think we are, but do we know why we're generous?

Hi, I'm Rob West. Jesus told us that it's better to give than to receive, and Christians as a group are very generous people. Today we'll hear from Chris Gabriel about why we're generous and how to be more so. Then we have some great questions lined up for you.

But don't call in today because we're prerecorded. This is Faith in Finance Live, biblical wisdom for your financial journey. Well, Chris Gabriel is the author of Wise Generosity, a guide to purposeful and productive living and giving.

Chris spoke to financial professionals recently at the Kingdom Advisors Conference in Orlando, but his keen insights on why and how we're generous apply to all of us. There's a very simple explanation for why we behave this way and why human beings have a drive to behave this way. God.

God made us this way. And so all roads of generosity, all conversations about generosity ultimately lead to God. Maybe not immediately, maybe not initially. It's not the first thing that comes up in the conversation. But if you're having an opportunity to share your own story about giving and priority and purpose and meaning and money, it's going to be ultimately a more satisfying answer. There's something about generosity and conversations about generosity that are extraordinarily powerful.

And I don't think that's by accident. Who's the most generous person who ever lived? Jesus. There's a generosity mindset also that is the counterbalancing force to what we see in the wider world and what we might ourselves fight against and what our clients certainly fight against. It's that prevalent scarcity mindset that says whatever you have, it's not enough.

It's one of the biggest lies that the enemy has to us in our lives. The contrast to that is God's abundant economy, God's mentality of limitless opportunity. And how do we access that most directly in our work and in our lives? Through our giving and our generosity. It's the way in which we engage with others.

And not just with money. Across all dimensions of our lives. And that's what's really important.

This translation of Proverbs 11 24 is one of my favorites. Life gives to the giver and takes from the taker. And isn't that the truth?

And why is that? Because that's how God made us. That's how God wants us to live.

That's how we pursue the kingdom. But I do want to give you two tools that are part of this toolkit that may help you engage in conversations about giving in ways that help unlock the mystery of it. And really the whole point of this process is to do two things. It's got a positive purpose and a negative purpose. The negative purpose is to remove the barriers to giving that keep people from giving at all or giving as much or in the way that they should.

And what are those barriers? It's just this sense of identity when it comes down to it. People don't see themselves as generous. They look out into the wider world and they see other people who they label as generous and say, Oh, that's not me.

So I guess I'm not generous. The positive reason for giving is affirmative. It's illuminating and presenting opportunities to serve God and to serve others through giving. And so this whole system, this process is designed with those purposes in mind.

We're going to look at two things in particular. The first are the three expressions of generosity, kindness, charity, and philanthropy. So kindness is the most common form of generosity. It's everywhere, I'd argue. It's most of what makes life meaningful and enjoyable comes from kindness, simple human kindness.

Would there be more of it in our lives and in the world? I'm going to focus more on charity and philanthropy because those relate more to our work as advisors. Those terms are sometimes used interchangeably.

I suggest that they are distinct. Charity and philanthropy are two different approaches to giving, each of which is meaningful and relevant and appropriate, but each of which is going to resonate differently with different people. So one of removing the barriers to giving is to help you and your clients appreciate which you are. Are you more charitable or more philanthropic? Charity essentially is people helping. You are engaged in giving in a way that directly benefits the lives of others, either individually or in a group. Philanthropy is problem solving.

It's looking at a wider problem or issue in society or in the community and figuring out what needs to be done in order to address that problem. Which is better? Ah, trick question. They're both really important and good. So we're going to see where you all are thinking on that topic. With that idea, are you more charitable or more philanthropic? Are you more interested in helping people really tangibly getting involved in giving situations in which you're going to be seeing firsthand the benefit of the giving that you do? It's going to be more face to face, maybe more one on one, a little bit more emotionally connected. Or are you more about what's wrong in the world and what can I do to fix it?

How can I be involved in solutions to bigger problems, et cetera? That's author Chris Gabriel. You can find out more about Chris at wisegenerosity.com. Just a quick reminder, we're not here today, so don't call in, but we're going to head to a break and much more coming just after this. Stay with us. Hey, great to have you with us today on Faith and Finance Live. I'm Rob West, your host.

Our team is away from the studio today, so don't call in. But coming up a little later, we'll have more of your questions right here on the program. Hey, let me take a moment to mention the Faith Fi app. We'd love for you to download it. Just head to your app store wherever you download apps and search for Faith Fi. That's Faith Fi.

You can manage your money. You can access the best content in biblical finance, podcasts, articles and videos. You can also participate in our Faith Fi community where you can post questions and get answers from others on their stewardship journey. You'll find it in your app store. Just search for Faith Fi or if it's easier, head to our website at faithfi.com.

That's faithfi.com and you'll see the app right there on the home page. Hey, before we dive in today, you know, financial anxiety is often present in our lives. You know, depending on how God wired us, we might be even more inclined to have some concern or some anxiety around money. We may hold it with a clenched fist and it may occupy a lot of our thought life. How do we release that to the Lord?

You know, Larry Burkett would often say that it's about the loss of things that trip up Christians. And that what-if game that we can play leads right down the road to fear and that fear is a spiritual trap because it takes our eyes off the goodness of God and it places our eyes on our circumstances. We need to instead see God as our ultimate treasure, lean into the open arms of Jesus ready to receive us, our sustainer and provider, and release our fears and anxieties to him. Now I realize this may go beyond just anxiety that you can deal with on your own.

You may need to seek out professional help for that. But for those of us who just really, it occupies some of our thought life, maybe we lose some sleep over it, I think renewing your mind in God's word is the absolute essential. Understanding God's promises are true.

He can be trusted. We're actually working on a brand new resource to address this specifically. It's going to be a 21-day devotion that we'll have out this summer that is on fear and anxiety related to money, allowing you over three weeks to take every day and just renew your mind around a passage of scripture with just a few paragraphs worth of thoughts that help you apply what you're reading in God's word to your life to hopefully help you overcome fear and anxiety.

I can't wait to put it in your hands. It's called Look at the Sparrows. Our team is putting the finishing touches on it right now and it'll be out later this year. By the way, if you'd like to receive all of our studies, we come out with our FaithFi studies four times a year. We send those to your door along with ministry updates and discounts on FaithFi Pro when you're a FaithFi partner. That's just someone who supports the ministry here at Faith and Finance at $35 a month or more. If you'd like to learn more, just head to our website, faithfi.com slash give.

That's faithfi.com slash give and you can learn all about it. Let me mention from the news some information out about changes related to 529 plans, specifically as it relates to the FAFSA, that Free Application for Federal Student Aid. Often, previously, folks that had 529s that were grandparent owned, so you're a grandparent, you open a 529 to be a blessing to the grandkids and you're saving there. The distributions from those grandparent owned 529 plans were treated as untaxed student income on the FAFSA and that then potentially reduced the student's financial aid eligibility by up to 50% of the distributed amount. Under the new rules that are rolling out as of the 2024-2025 school year, and this is due to changes in the FAFSA, these distributions will not be reported as student income, removing this negative impact on financial aid eligibility. This is going to remove the requirement for students to report cash support, including distributions from these grandparent owned 529 plans. And this change is intended to empower grandparents to assist with educational expenses without affecting the grandchild's financial aid. Now, though distributions from the grandparent owned 529 plans will not affect the FAFSA calculation, which is the primary driver of financial aid, at least need-based aid, they may still be considered in something called the CSS Profile. Some private colleges use this profile to determine institutional aid, so the impact on financial aid might vary depending on the institution.

But this is a big change related to the FAFSA, which again is the primary driver of need-based aid. I love the 529 College Savings Plan. Think of it like a Roth IRA, but specifically for college expenses. So you make after-tax contributions, the money grows tax-free, so long as the withdrawals are used for qualified educational expenses.

What is that? Well, this is not only tuition, but room and board, books, supplies, rent, utilities, if the student lives off campus but is fully enrolled in school. They have flexibility in usage, you've got of course these tax benefits, and according to some other changes in the law, you will be able to eventually roll unused money, which is always a concern. Unused money rolled to a Roth IRA for the benefit of the student up to $35,000 and up to the annual limit, so it would have to be done over multiple years. It's got to be in there at least 15 years, so there are some requirements, but what it does is it gives you the peace of mind to know, especially as a grandparent thinking about, well, what if little Johnny doesn't go to school, college, he decides to go to a trade school or whatever he might do, what are we going to do with that money? Well, now we can get that into a Roth IRA at least up to $35,000 for his use way down the road.

Imagine what that money could do growing for 40 years in a tax-free environment. So I love the 529, this change specifically for grandparents is a big one, especially if you think the child would qualify for need-based aid, so be sure to check that out. I recommend savingforcollege.com, the website, if you're looking at a 529, because here's the thing, your state's 529 may not be the best plan for you. There are in-state tax deductions, not federal tax deductions, but often, not in every state, but in some states, you'll get an in-state tax deduction for contributions to a 529 plan. But that benefit may be superseded by another plan's, another state's plan's outperformance with their investments or their lower fees or both. And what savingforcollege.com will help you do is compare those plans across all the states across the country to your own state's plan to help you determine which state's plan is the very best.

Most of them, nearly all of them, allow you to participate out of state. So check it out, savingforcollege.com, this could be a great way for you to bless your grandchildren, not affect their financial aid eligibility if that applies, and make sure that they have some money to go toward college, which we know college tuition inflation has been running around 7 and 8 percent a year, so it's continuing to just get out of sight in terms of costs. This will, of course, be a big help. So hopefully that's helpful to you today, some news that's out related to next school year. Well, folks, before we head to this break, let me remind you, if you haven't checked out faithfi.com, that's faithfi.com, I'd love for you to do that. You'll find the best content in biblical finance there for you to grow in your understanding of managing money God's way.

You'll find our community and the money management system, it's all there at faithfi.com. Now, again, a reminder, we're not here today, but more of your questions that we lined up just around the corner. I'm Rob West, and this is Faith and Finance Live, helping you apply God's wisdom to the practical decisions you're making today. We'll be right back. Great to have you with us today on Faith and Finance Live. I'm Rob West.

Our team is away from the studio today. We're not here, so don't call in, but we lined up some great questions in advance, and we'll get to those in just a moment. First, you know, as I look at the Scriptures, one of the big ideas that literally jumps off the page when you look at this area of finance in light of a biblical worldview is the idea of contentment. We should foster an attitude of contentment, and I think that's the first understanding is that it is, in fact, an attitude. Matthew 633 says, And all these things will be added to you. If our aim is the kingdom, then that changes our perspective. It makes it focused on the eternal, not the temporal, and that's a game changer. Well, then from an attitude, we learn that contentment is, in fact, learned. The apostle Paul said it this way, So it's a learned behavior. It's also a choice.

You know, I can choose to be content in every circumstance, rich or poor, happy or sad, easy or difficult, because as Christ followers, well, our position in Christ never changes, and I think that's an important reminder for us today, and perhaps it could change your whole approach to your money. All right, let's head to the phones. To Texas we go. Hi, Mike.

How can I help? Yes, sir. I really enjoy your show.

I try to listen to it every day. Well, thanks. I had a question about a financial advisor. I retired in January 23, and in 22 I was still working, and the company that, you know, one of the big firms that had my 401K, you know, they contacted me about, you know, financial advisor and stuff, and I talked to him, and so anyway, I went with him and everything like that, but, you know, he, you know, I told him I want to be real conservative, you know, because I'm retiring within a year and stuff like that.

Well, to make a long story short, in like six or seven months, you know, he lost over $100,000, so I finally just said, you know, I'll just take it back, you know, because I've always done the best I could do better myself. So my question is, is that I've talked to a lot of different advisors, but how do you know, how can you choose, what are the steps to choose a good financial advisor, you know, they all say that, you know, they do good, and, you know, they've done this and done that, but how do you know what steps can you, or questions can you ask before we find out? Yeah, yeah, that's a great question. You know, I can certainly appreciate where you're coming from, Mike, and the bottom line is, there's no way to know what an advisor necessarily will do from the point you hire them forward. I mean, you can get some clue based on, you know, a conversation around historical performance. And you might, you know, ask a series of questions around that, you know, what would clients who are in my kind of risk profile have earned historically, you know, using your strategy, whatever that might be, because there's a wide range of approaches, whether they use individual stocks and bonds, maybe they use mutual funds, or ETFs, or a combination of the three to build portfolios, but they could give you an idea of, you know, what that historical performance has looked like, even though they, of course, can't guarantee that that's any indication of what will happen moving forward, you do want to ask what types of investments they use, how they get compensated, how do they monitor or how will you monitor? And how often will they report investment performance?

You know, do they consider the impact of income taxes on investment choices, I mean, things like that. Ultimately, you know, you're looking for a trusted professional. You know, and I think that's where starting with the Certified Kingdom Advisor designation, we believe is a great start, because at least you know, this person shares your values, they've met extensive experience requirements. You know, somebody who's been in the business 10, 20, 30 years, you know, typically, if they're doing what you described year after year for their clients, they're not going to be in business very long.

So that historical, you know, experience is important. They've had pastor and client references, they've been trained to bring a biblical worldview. But you know, at the end of the day, you want to build a trusted relationship, you want to understand that their investment strategy aligns with what you're looking for. And given that you have some expertise and experience in this area, because you've done it yourself in the past, obviously, you'll be able to kind of talk shop with them a little bit and maybe get a little bit deeper than the typical client in terms of how they're going to manage it moving forward.

And so, you know, I think that's about the best you can do. Of course, you know, if you look at their current holdings, for again, somebody in their risk profile, you could look at, you know, based on some of the if they own mutual funds, how have those funds done and, you know, those kinds of things. So I think just doing your homework, interviewing two or three, and then at the end of the day, you know, prayerfully select someone that you feel like is going to be a good fit for you, because they've taken the time to get to know you, they're curious about you and what God's doing in your life. And you feel good about not only the strategy that they'll employ on your behalf, but you know, the questions you ask around fees and historical performance, I think that's about the best you can do. I do think despite your experience in the past, Mike, you know, when you build up the assets that you have over a lifetime, and you've been working hard and you put away a nest egg, I think having that wise counsel, somebody who's arm's length, who's not emotional in terms of the buying and the selling, but can take more of a rules based approach and a disciplined approach to investing, you know, is the better solution than managing it yourself unless you have a particular expertise or skill set in that area. But I realize, you know, to some degree, you're trusting your discernment and, you know, in your interview process without having any guarantees about where the market's going to go or how their strategy will perform at the end of the day. What's your idea of being a fiduciary or not being a fiduciary in a financial advisor? Yeah, I mean, I prefer a fiduciary. I'm not saying that's the only way to go.

But you know, I think at the end of the day, if somebody has a legal responsibility to act solely in the best interest of the other party, that's a good thing when it comes to making investment decisions on behalf of your clients. And so I think that would be something you know, you would be want to be looking for and asking about in your interview process. Okay. All right. Well, thank you for your help.

You're welcome, Mike. And yeah, I think, you know, as you interview other advisors, I would head to our website as a part of that process. You can find Certified Kingdom Advisors there in Texas when you go to faithfi.com. Right there at the top of the page, it says find a professional and you can search for the CKAs that offer the investment services. I'd interview at least two or three.

There's also a list of questions right there that you can download to use as a part of your interview process. Faithfi.com. We'll be right back. Stay with us. This is Faith in Finance live with Rob West. Hey, if you hear a phone number mentioned today, please ignore that number and don't call us because today's broadcast was previously recorded, but we think the upcoming information will help you and make you a wise steward of what God's given you.

So please stay tuned. By the way, this ministry is entirely listener supported. That means we rely on your financial gifts and support to do what we do on the air every day. If you consider a gift, we'd certainly be grateful. Just head to our website faithfi.com. That's faithfi.com and click the Give button.

Thanks in advance. Let me also remind you that the advice that I give each day on this program is general in nature. We offer principles and ideas that apply at a high level. They are not personalized, so that's why you should always seek professional financial advice. And if you'd like to find a professional who shares your values, we, of course, here at Faith in Finance live recommend the Certified Kingdom Advisor designation. These are men and women who've met high standards and they've been trained to bring a biblical worldview of financial decision making.

You can find one at faithfi.com. All right, let's head back to the phones. To Mississippi. Hi, Ann. Thanks for your patience. Go ahead. Yes, I got the tail end of what you said.

In the past, the 529 plans have affected the scholarship eligibility, but now that may be changing sooner is. And if that's not right, correct me. But I opened some of those years ago, but I closed them after that, after I heard that or whatever.

I don't remember the details. But my question is now, how much can I give my grown children per year without it affecting my taxes or their taxes? And I would have to take it out of my retirement account to do it.

Yes. Well, what I was saying and you did catch that correctly. So beginning for the school year 2024 2025, based on changes to the FAFSA, grandparent owned 529 plans, which were previously distributions were previously treated as untaxed student income and therefore potentially reduce the student's financial aid eligibility by up to 50 percent of the distributed amount. Under these new rules, that will no longer be reported as student income, thereby removing that negative impact on financial aid eligibility, which does make this once again an attractive savings vehicle for grandchildren specifically, especially in the event that you think they may qualify for financial aid.

And so that at least puts pulls that off the table, at least as far as the FAFSA is concerned. In terms of the amount that you can give per year, whether you're giving that away or putting that into a 529 plan, it's 18,000 per individual. So you could give 18,000 to each grandchild. If you're married, you could give 36,000 total. If you go beyond that, you just have to file a gift tax form and and basically that would not trigger any tax. It would just start coming off of the annual lifetime exclusion, which is now at thirteen point six one million dollars for 2024. So you would just need to file that gift tax return and track the amounts given per year that are above 18,000, which you can do without any gift tax form. But again, let me just reiterate, because you go above the 18 doesn't mean anything is taxable to you or the recipient. It just means it's starting to chip away at that lifetime federal gift tax exclusion, which you can give up to thirteen point six one million dollars over your lifetime.

You know, and it wouldn't be taxable at least based on the current tax laws. Okay, well, I'm just wondering, even if I should do it, because my youngest grandchild is fifteen and a half and my oldest is about to be twenty one and almost finished with college, but I'd have to at my age, I'm seventy one and I think I have about three three hundred and fifty thousand in my IRA. And right now I'm getting, which is too much, I know two thousand a month out of it, plus my Social Security. Yeah, so, you know, I might live 20 more years nowadays. Yes, ma'am. Well, the yeah, you're so you're taking more you don't have a required minimum at this point.

Obviously, they've been pushing that out. You know, if you turn let's see, what is your age now? Seventy one. Okay.

Yeah. So your required minimum is not going to start until seventy three. And so, you know, but you're pulling out more than what would likely be your minimum anyway. I think the question is, are you looking to do some gifting now out of that IRA, which obviously if you pull more out to give it away, you're going to create more tax liability, because as that money comes out, it's creating a taxable event. Or are you wanting to just gift it, you know, as a to your heirs at death?

What are your thoughts at this point? I'd rather see him use it while I'm still alive. But then again, I don't want to depend on somebody else for my care, you know, for my cost of living every year. And I probably have too high of a cost of living.

I like to shop. Yes, ma'am, I understand. Did you say you have about three hundred thousand in that IRA? Three fifty.

Three hundred fifty thousand. Yeah. And you're pulling a couple of thousand a month. Is that right? Yes.

Yeah. So, yeah, you're taking about double what I'd like to see you take. And I'd love for you to be only pulling around fourteen thousand a year, fifteen thousand maybe at the most.

But, you know, that that's okay. We just need to understand the implications of that, that this is, you know, when you're not going to be able to sustain, you know, an eight or nine percent withdrawal rate without beginning to pull that balance down over time. How is it invested currently?

Well, I wish I had that in front of me. I'm with Wells Fargo and I'm going to, I keep saying I'm going to chat with a certified kingdom adviser and do something else. A good bit of stocks and mutual funds and that kind of thing. Well, that's probably a good thing because that is allowing you to hopefully offset some of what you're pulling out every year for sure. You know, it sounds like I mean, I think your desire to help, I get that and to be a blessing to them. There are ways for them to pay for college, whether that's, you know, working part time or in the summer or maybe getting a part time job. They can get loans, although we want to minimize that.

There are not ways for you to fund your care for the rest of your life in the same way that there are for these youngsters just starting out that have the ability to work and even pay back some student loans if they had to. So I would kind of err on the side of you not supporting them now, despite your desire to do so, because I think it, you know, at this point, just based on your lifestyle and the assets that you have, I'd love for you to try to hang on to everything that you have. Because if the Lord Terry's and you know, he's got a plan for you to live another couple of decades, I want to make sure this money lasts. And as you said, you don't, to the extent you can, want to be a burden on them, which I think means let's get the the investment allocation right. Let's bless them in other ways. You can be a great grandmother walking alongside them, encouraging them, praying for them, but trying to do some significant giving to them right now.

Just given everything else you've got and the need to let this money last as long as possible, I think is probably not the best approach. Does that make sense? Yeah, I figured that's what you say, but it makes me feel better because I want to do it, but I feel guilty if I don't do it. You don't need to feel guilty.

Yeah, you don't need to feel guilty. You pray for them. You be there for them. And let's pray that they'll you'll have something that you can bless them with when the Lord calls you home.

But I don't think now's the time to do it. Hey, God bless you. And we'll be right back. Stay with us. I'm so thankful you're joining us today on Faith and Finance Live.

I'm Rob West. Hey, just a quick reminder, our team is away from the studio today, so don't call in. But in just a few moments, we're going to get to some questions that we lined up in advance that I know you'll find very interesting. But let me take a moment just to invite you first to be a supporter of this ministry here at FaithFi. You know, we bring you this broadcast every day as a listener supported ministry only because of your generous support. So maybe you listen regularly.

Perhaps you count on this program. Maybe you've been able to apply some of the wisdom from God's word that you've heard in your financial life. Or it's just help you to be that wise and faithful steward.

And you'd like to be a part of our team. Well, one way you can do that is by investing in this work through a one-time gift or even by becoming a FaithFi partner. And this is a really important time between now and June the 30th, which is the end of our fiscal year for us to stay on track, finish out the budget year strong, and prepare for another year of ministry. I just invite you to join us on this journey when you head to FaithFi.com and click Give. A gift of any amount before June the 30th would be a big help. Again, that's FaithFi.com and just click Give. And let me say thank you in advance. Your gift will make a huge difference. All right, let's go back to the phones. We're going to head out to Texas next. Hi, John.

How can I help you, sir? I've got a couple of questions. At what age do you have to take out, like you have a 401K through Walmart or somebody, what age do you have to take it out of there? Well, you don't ever have to take it out and you don't even have a required minimum so long as you're still employed. But then once you separate from the company and certainly when you roll it to the IRA, if that's what you do, which is what most people often do once they separate from employment, either because they retire or go to work somewhere else, they'll roll it to an IRA to keep it in that tax deferred environment.

But open up the possibilities in terms of the investment choices and the fees that you're paying and that kind of thing. But you won't have to take it out until age 73 when the required minimum hits. That's eventually going to 75 years old. And then the IRS publishes a table that says, OK, based on the balance in the account and your age and therefore your life expectancy, here's how much you have to take out every year.

That would be the only time you have to take anything out. OK, cool. Yeah, we have some family members that one of them has dementia and with the 401 and then her daughter's 50 have stroke and she's going to need some of that money to take out to live on.

So there's a way to get it where it's not taxed so high and penalized. Yeah. So, yeah, I think so.

Who is it that has dementia? OK, the mother. OK, she has a house. Is there any way to protect the house and the 401 without, you know, she has to go in a home later or. Yeah.

Yeah. So what I would probably do is connect with an elder care attorney just to talk through all this. What is her age right now? Sixty seven and the daughter's 50. OK, so and it's the mother's 401K, is that right? They both worked at Wal-Mart and they both have 401.

I see. OK, so, you know, there is something called the rule of fifty five. This would be the first time that she'd be able to take the money out without incurring the penalty. So normally, if you're under fifty nine and a half, you'd have a penalty when the money comes out of 10 percent. And then you'd add to that, you know, any distribution is taxable. And so it would be added to the taxable income. So the 10 plus the tax federally and state tax.

I mean, let's say that could be 30, 35 percent right off the top. If you're fifty five and you lose your job or leave your job, you can begin taking distributions from your 401K without paying that early withdrawal penalty. Again, as long as you're fifty five or older. So that would be the first thing with regard to protecting those assets. You know, I think that's where talking to an elder care attorney is going to be important. It's always important to have legal documents up to date, but certainly with the diagnosis of dementia or of a stroke, it's important to make sure those wills, financial power of attorney, health care power of attorney, that all of those are up to date. And then, of course, a living will or what's called an advanced health care directive. And then the estate attorney can help with the preservation of assets in the event that either of them need skilled nursing or to help them qualify for Medicare or excuse me, Medicaid while preserving the assets for the heirs.

You know, in this case, your mom, the mom for the daughter. And then, you know, if they have as the dementia progresses, of course, they could likely have increasingly difficulty with money management tasks. And that's where having that trusted family member or caregiver selected to manage the finances is going to be really important.

But some of those things can be put in place with, you know, an irrevocable trust or, you know, some of the other tools that they have, even a special needs trust to protect assets and preserve Medicaid eligibility. So I think that may be the next step here, John, is to visit with a godly elder care attorney. OK. All right. Well, you've been very helpful. I appreciate your time.

Well, you're welcome, John. If you don't have somebody that you know of, you could reach out to a certified kingdom adviser there in Texas. They would all have a state attorneys that they work with and they would you could say, listen, I'm looking for somebody who's a believer. So just go to faith five dot com, click, find a professional, do a search. And you could call any one of those C.K.s and just say, I'm looking for a godly elder care attorney. Can you make a referral?

And they would likely be able to do that without any trouble. Hey, God bless you, John. We appreciate your calling on behalf of your family members. Let's go to Ohio. Hi, Pam. How can I help? Hi. God bless you all.

I appreciate your program. My first question and I hope it's very simple, but I have my will and everything specified in there how to how things are divided down as far as my house and etcetera, etcetera. I also have investments and those are all have beneficiaries on it. My financial adviser says I don't need a trust.

My kids are pushing me to get a trust to to avoid probate. Is that which is true? Well, everything is designated.

Yeah. Is it necessary? No, because eventually with a will that's valid and up to date, your estate, everything in it, your property, personal property and assets and cash, plus the beneficiaries that are named on the accounts will ensure that everything ultimately gets to the heir of choice or the ministry or charity that you designate the beneficiary. The accounts with beneficiaries will pass outside of probate.

They are correct that it will require the probate court to get involved, but it should typically be minimal in terms of time and expense if it's a fairly simple situation. You know, it happens every day, but it will extend it a little longer than if you have a trust. And just in terms of, you know, could it take a month or a couple of months?

Sure. If it's complicated, it could take even more than that. And there are some probate costs. But is it necessary?

No. A valid will and up to date beneficiaries and other legal documents like living wills and health care directives is sufficient. The benefit of the trust, even though it's going to cost a little bit more than the will, is that, you know, it's going to pass all of it. Well, anything in the name of the trust, which could be your home and other assets, will pass outside of probate, will not be a part of the public record. Therefore, it's anonymous, will not be subject to probate court costs and could be managed by a trustee in the event you're incapacitated prior to death. Whereas a trust only goes into effect at death. So there are certain benefits, but you're talking a couple of thousand dollars probably to put a trust in place, whereas a basic will is probably more like five hundred. Right.

Right. Now, my last will was made prior to my husband passing away. Everything was was to come to me and I did that happened. But do I need to get my will updated now that my husband's gone?

I believe the secondary was our children. After, you know, if I passed, my husband would get it. Do I need a new will? I would get it updated. You wouldn't need to have a new will, but you would want to have it updated.

And so I would go back to that. Yeah. Any time you go through a major life transition or you want to make changes to how you have, you know, your estate distributed. Absolutely.

It's a good time just for for that to be updated, just so that's going to streamline things, make it simpler. You know, in terms of the fees, I mean, an uncontested probate or administration through appointment with no minors involved. I mean, you're talking probably less than five thousand dollars in probate costs.

You know, it generally somewhere between twenty five hundred and forty five hundred. But, you know, again, it's totally up to you as to what your objectives are. But both will suffice at the end of the day, though, I absolutely would get that will updated following his death. And with the deed to my house, both my husband and I's name are on there. Do I need to get that changed? And does that take a lawyer?

Yeah, it's a good question. I would you know, generally it's advisable to update the deed of the property. You know, the laws say that, you know, you are now the owner as a result of it. But, you know, I don't think it's a bad idea.

You would want to get an attorney to help you get that new deed recorded with the local county recorder's office. And I think that's a good idea just to have everything current and up to date and exactly the way that it should be in light of who is currently living. I appreciate your time and thank you so much for your ministry.

Absolutely. Thank you, Pam. Hey, let me send you a gift just for being on the show today. There's a wonderful book called Wise Women Managing Money that was written by Miriam Neff after the passing of her husband, Bob Neff. Just about, you know, as you're stepping into this role where you're managing everything, not that you didn't manage some of it while your husband was living, but obviously you've now got all of it. And I think this will just be an encouragement to you. It was written specifically for widows as they step into this role of financial manager and steward of God's resources.

So stay on the line, Pam. We'll put Wise Women Managing Money in the mail to you, okay? Thank you so much. All right. God bless you. Well, that's going to do it for us today. Faith and Finance Live is a partnership between Moody Radio and Faith 5. Thank you to my amazing broadcast team. I couldn't do this without them. I hope you have a great rest of your day and we'll see you next time on Faith and Finance Live.
Whisper: medium.en / 2024-05-27 18:20:28 / 2024-05-27 18:37:13 / 17

Get The Truth Mobile App and Listen to your Favorite Station Anytime