What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values. How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity and have been trained to offer biblical financial advice. To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA. Did you hear about the guy who had major trust issues?
Yeah, it turns out his parents didn't leave him one. I'm Rob West. Getting aside, not everyone needs to have a trust in their estate plan, but everyone needs at least a will, and some folks might need both. We'll go over the whys and wherefores today, and then it's on to your calls at 800-525-7000.
That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial decisions. Okay, this is a topic we like to revisit from time to time on the program because people ask about it frequently and we're happy to do it because it allows us to urge you to plan ahead how your estate will pass to your heirs. We should probably start out by explaining the differences between wills and trusts.
They both do much the same thing. Distribute your assets after you die, but that's where the similarity ends because they do it in very different ways. A will can be a relatively simple document that names an executor and who will get what assets after you die. However, a will must go through the local probate court and becomes a matter of public record. If there are complications, the probate process can drag on and heirs won't have access to the estate's funds until things are cleared up. For that reason, we usually recommend you have an estate attorney draft your will to make sure your specific intentions are fulfilled and that the document goes through probate with minimum delays.
A will generally costs around $500 to draft and we think it's worth every penny. Now, there are a couple of reasons why you need a will even if you have a trust. For one, a will allows you to designate a guardian for your minor children if something happens to both parents. The probate court must appoint a guardian, but naming your preference in your will can eliminate a lot of confusion and squabbling by family members over who will care for your kids. You can also name a conservator to manage the assets you're leaving to your kids until they become adults.
It can be the same person as the guardian or someone else. A will also enables you to disinherit individuals who might otherwise receive some of your assets if things aren't specifically listed in the will. A will also goes into effect only after you die while a trust is put in place and can dictate how your assets are managed while you're still alive. Now, there are two basic types of trusts, revocable or living, and irrevocable.
An irrevocable trust requires court approval to be altered or dissolved. A revocable trust does not, and you can change it any time you like while you're still alive. Maybe the biggest reason folks establish a trust is that they allow assets to pass to heirs without going through probate. And since the estate, or at least the part of the estate that's placed in the trust, doesn't go through probate, all of its transactions remain private.
So how does that work? Well, when you establish a trust, you become the trust maker or grantor. You can then place assets in the trust, and the trust becomes the owner. You can also name a trustee who will manage the assets. Most often, you would name yourself as the trustee, so you retain the control of the assets, allowing you to do whatever you want with them, just like you could if you still own them. Of course, you also name your beneficiaries, and a successor trustee who will take over the management function when you die or become incapacitated.
And that's another key advantage to a trust. If for any reason you're no longer able to manage the trust's assets, such as with Alzheimer's disease or some other malady, the successor trustee can immediately take over and continue to manage the assets for you and your beneficiaries. The successor trustee does not have to be appointed by a court, as does an executor named in a will.
This is also beneficial if you have minor children or children whom you feel aren't capable of managing money responsibly. The successor trustee can continue to manage their benefits until such a time as you designate in the trust language. That's not the case with a will. You can put a minimum age for inheritances in a will, but children are entitled to contest the provision and inherit the assets when they reach 18. So the question remains, do you need both a will and a trust? The answer would be yes if you, for any of the reasons mentioned, have to set up a trust to manage your estate and you have minor children and need a will to name a guardian.
And again, regardless of which way you decide to go, we recommend you have an estate attorney draw up the necessary documents. You can find one with the certified kingdom advisor designation, someone who shares your Christian values at faithfi.com. Just click find a professional. I hope that was helpful. All right, your calls are next, 800-525-7000. This is Faith and Finance.
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How are you using God's resources? We're talking about it, and the lines are open to take your calls and questions. 800-525-7000 is the number to call. Let's go to Benita Springs.
Hi Donna, go ahead. My problem is, my husband wants to sell our house. Right now, they're saying we could get 575, I-030 on it, and then he has 20,000 in debt. We have a home, a small home that we built in the mountains of North Carolina that we own scot-free.
So the problem is, he says all couples live for this. This is the time to sell this house. He said he'd like to put 100,000 in stocks, risky things that he can make money on, he said. Put 400 in something safe, and that we could live on the interest of that with our Social Security, which together would be $2,350. And I have $30,000 in cash. That's just the Social Security alone, is the $2,350?
Yes. Okay. We do have $30,000 in cash for emergency funds in a safe.
Okay, got it. And what is your total bills today, roughly, on a monthly basis? Not much, $1,500. Okay, all right, that's helpful. This is great background information, Donna, I really appreciate the question. Donna, we can look at the financial side of this in a second.
Let's talk about the non-financial side in a second, just for a moment here. As you and your husband talk about this next season of life, you know, are you ready to relocate permanently to that small house in North Carolina? Have you guys prayed through what you believe God has for you in this next season?
And describe what you feel like you want this next season to look like for the two of you. Well, I do have elderly parents that my sister and I take care of, and I feel a little guilt about that. And I feel like I don't want to be rushed, because it's almost like, hey, this is our only time to take the money and run. And why is that? Is he feeling like because of the housing market he needs to get out now, or is there something else driving that?
Well, I think the housing market, plus he thinks, you know, something might happen, and he wants to be up in the mountains instead of in Florida, and he's tired of the heat, which I'm tired of the heat, too, but... Okay. Yeah. So something happens, maybe like some sort of major event or attack or, I mean, something that, you know, would... Okay, I see.
Yeah. Well, I mean, obviously, that's something that you all need to pray through and discern together, whether, you know, I wouldn't operate out of fear. You know, I think we need to ultimately replace fear with faith and trust in the Lord, but that doesn't mean we shouldn't be shrewd and wise and discerning. And you know, I think you also should take some time and really ask the Lord, Lord, what do you have for us? Because I don't think we want to take a bunker mentality.
I think we should be looking to be salt and light wherever God has planted us and ultimately have our trust in him. You know, I don't see, you know, and I'm not hearing you say this, but to the extent there's an element of this there for your husband, I'm not seeing any kind of collapse of the US government or the, you know, the economy or the banking system, anything like that. I think the housing market is where it is in large part due to the fact that we just have a shortage of homes in this country of 2 to 3 million.
There's just simply not enough to meet the demand that exists today, which is why, you know, this is not a bubble, in my opinion. You know, we're up where we are just because there is real value there because of a supply and demand issue. So ultimately, you all are going to have to decide what is the right time to relocate and for what reasons. And I think thinking about caring for aging parents has to be a part of that clearly. And, you know, asking yourself, Lord, what do you have for us in this next season? And what decisions do we need to make? So, you know, I would challenge you to, sounds like you're a little unsettled in the decision making process.
So I would just take a little bit more time, you know, be patient, make it a matter of prayer and you and he spend some time talking it through. From a purely financial standpoint, I mean, clearly with your expenses being as low as you're describing that they are around a couple of thousand a month. And by the way, as an aside, I would dig into that a little deeper and say, okay, if we were retired today, what would our budget look like?
And let's put everything in there, including potentially a long term care insurance policy, which is probably the biggest risk as you head into this next season of life. But let's say it is a couple of thousand a month. I mean, obviously with your Social Security being up at $2350 a month, which is, you know, what I think I heard you say, it sounds like that's enough to cover your bills. So then, you know, anything you were to pull off of that half a million dollars after that small debt is paid from the proceeds of the home, you know, it would just be what you could, you know, plow back into savings and continue to build that up.
You could give it away, maybe you accelerate your generosity. But I think at the end of the day, you all are in good financial shape. And if you don't put that in an insurance product, like an annuity, and you just invest it, you know, then you'd have access to it if you needed a larger chunk of it for some sort of, you know, long term care nursing care down the road. So I feel like you're in good shape with regard to his management of the stocks. I mean, at 65, I would say, you know, on a, on a portfolio, you'd probably want at least 40 to 50% in stocks.
You know, if you want to get real conservative 35 to 45%. But he's only talking about, you know, managing it about 20% of it in stocks. Now, you said risky stocks. And so if he's really wanting to be very speculative with it, maybe he's in high flying tech stocks, or he's looking at crypto or something like that, I would say, well, that's 20% a bit more than I would want him to take, you know, and put it into the highest risk category. But if he's just managing it in the stock market, he's not day trading and, you know, being overly aggressive, but he's taking a long term approach, then I would say, you know, that's not an inordinate amount of a half a million dollar portfolio in your 60s to put into stocks.
So I don't have a problem with that at face value. So I think all that to say you all have some more work to do on kind of planning for this next season. I think the finances sound like you're in pretty good shape.
I think the last thing I would say is that, you know, it behoove you to get an advisor to enter the equation, who could provide some accountability, challenge you all with some questions along the way, and then help give oversight to all of the financial pieces and parts as you go. And if you don't have an advisor, you could connect with a certified kingdom advisor there in Florida on our website at faithfi.com. Does that help though? Yes. And what was that website again? Yeah, it's faithfi.com. That's faithfi.com right there at the top of the top of the page. It says, find a CK that stands for certified kingdom advisor, and you could do a zip code search in your area. Thanks for your call today. Let's go to Nashville, Tennessee. Hi, Pat.
How can we help? I bought an IVON last year. I think it was December 29th. When I was looking at it this December, it went from six to like, it's 5.3, 5.5. It didn't drop a huge amount. But then I was also reading some things that suggested that until it drops more, to just hold on to it so that the three month penalty will not be as large. Does that make sense?
Yeah, that's right. Because the three month penalty is based on the prevailing rate. So if you got three months into the next rate, which we expected to come down, that would result in a lower payment.
And we're still competitive with what's out there today on CDs and high yield savings. I've got to hit a break here. Pat, stay on the line. We'll finish up off the air.
We'll be right back. We're grateful for support from Eventide Investments on the faith and finance program. Eventide's approach to values based investing is grounded in the belief that humankind was created in the image of God with intrinsic dignity, value and worth. Eventide calls this investing that makes the world rejoice. More information is available at eventideinvestments.com.
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This is Faith and Finance. I'm Rob West. We're taking your calls today. 800-525-7000. That's 800-525-7000. To Brian Ohio.
Hi, Frank. Go ahead. I really appreciate, you know, your, you know, your commitment as far as, you know, for the for the people as far as, you know, helping them out. What I what I'm asking is I have two accounts on credit unions and I'd like to basically look into getting out of the credit union and going to a regular bank to where I can see my money as far as going instead. I've been for the credit union for a long time and it seems like I'm not getting anywhere. So I'd like to see something that will help me out as far as, you know, assure me that I'm in the right place. Sure.
What is it that you're missing, Frank, that you're looking for? You mentioned moving from a credit union to a bank. What are you hoping to get out of the this move that you don't have today? As far as my money, some some kind of a helping out as far as, you know, I see it grow. Okay.
Yeah, very good. Let's talk about that because there are banking products that would be offered at both banks and credit unions and you can get very competitive rates in both. Perhaps you're looking for something beyond that, that would be more around the investments that are selected.
Frank, let's dig into this just a bit more. So what is the amount you have in the credit union that you're referring to? How much? I got $46,001 and I got another I'm thinking about maybe $7,000 or $8,000 on this other one.
Alright, very good. And then what would you say you all spend for your bills, your lifestyle on a monthly basis roughly? It's mainly utilities and I'd say groceries. That's about it. Alright, a couple of thousand a month, you think?
I'd say so, yeah. Alright, so let's say it is and if we had six months expenses, that would be $12,000 that we would call your emergency fund. Obviously you've got quite a bit more than that in this credit union. You put it all together, it sounds like you have about $55,000 or so.
So let's leave that there for a moment. Do you have anything else in investable assets? Do you have any retirement accounts or anything like that?
No, I don't. Okay. And what is your age, Frank? I have a pension coming in. I'm retired.
You are retired. Alright. Yeah, I have a pension on one of them that's a baby, you know, the lower one, which is like maybe $300, you know, that comes into the credit union every month. Alright.
And the other one is about $16,000 or $18,000 or $16,000 or $18,000. Okay, got it. Yeah. So are you saying then, you know, you all are able to live within those two pension checks, uh, you know, plus are you also earning social security? Oh, well that's including with my social security. Okay.
But the combination of the two checks gives you enough to pay your bills, correct? Oh yeah. Okay. Alright.
Now when you say you want to increase the growth of this money in the credit union, this roughly 55,000, what are you getting on it today and what are you hoping to get out of it? Well, actually I just want to advise as far as, you know, what to look for. I know, I know there's plenty of banks, you know, but as far as, you know, asking for or going into a good bank, uh, that will basically make my money grow. Okay. Uh, are you wanting somebody to invest it in stocks and bonds and take some risks to try to grow it or you want something that's guaranteed? I want something that's guaranteed. Okay.
Alright. So you could use a CD, uh, but that would be, uh, you know, you can find as good of CDs at credit unions as you can bank. So there's nothing that a bank's going to give you that a credit union can't. The question is just what banks or credit unions are you using and what who's offering the most competitive rates of return. Um, so it could be that you have a great option with a credit union that could offer something that's just as good as a bank.
Uh, again, one is not necessarily going to be better than the other. If you were to go into bankrate.com, that would be where I would direct you. And let's say we were to look at today's CD rates, um, you know, for a one year CD, uh, right now about the best you're going to find is about five and a half percent, uh, for a five star rated bank with FDIC insurance. And then they go down from there, maybe 5.3. Uh, now if you want to extend it out a little longer than a year, you know, you're gonna, you're gonna give up some yield on that.
So for instance, if we look at three years instead of five and a half, you're going to be down around 4.6, 4.5, 4.4, something like that. So what I would recommend that you do is go to bankrate.com and you look for either the CD or the savings account, um, that's paying the highest yield right now that's highly rated with either FDIC insurance for a bank or NCUA insurance for a credit union. Um, but I don't, I'm not going to tell you that you automatically have to switch from a credit union to a bank. You can get competitive rates in either one. The question is just who's offering the highest rates right now. Does that make sense?
Yes, it does. Okay, very good. Bankrate.com will be the place to go to, uh, to do that research and you can make your decision.
Uh, Frank, thanks for your call. By the way, folks, you know, more and more people are looking for a banking partner that shares their values. They just want to know that they're working with believers and that even a portion of the money is going to Christian causes. If that's you, I would check out a Christian community credit union. You can learn more and join Christian community.com to a Westfield, Indiana. Hi Michael.
How can I help you sir? Quick question for you. Is there anything inherently wrong with, uh, leaving my wife's 401k with her employer that she separated with a number of years ago? She's not working as no plans to enter the job market in a target retirement fund. And so my thought was if we moved it to an IRA, we'd put it in the exact same thing. Yeah, yeah.
No, there isn't. Uh, and one of the benefits of leaving it there, Michael, is that you don't have to make those investment selections on your own. Now, as you said, you could pick another target date fund in the IRA. I do think though, once you separate from employment and now we've got, you know, quite a bit of, you know, really the, the full retirement portfolio you all have built together and I realized they'll stay in each of your names, but that might be the point where you'd want to bring an advisor into the mix.
But if the bulk of it is with you and you're still employed and you'd just rather leave it right where it is and it's been performing well, then I would say do that. Uh, but at some point down the road, you're probably going to want to look at rolling it all out, uh, under the care of an advisor. All right. Sounds great. All right, Michael, thanks for your call today. Hey, we're almost out of time, but I wanted to let you know that you don't ever have to miss a program. Just download our faith by app for your mobile device and take us with you anywhere. Thanks for joining us today. I look forward to talking with you again next time on faith and finance. Faith and finance is provided by faith by and listeners like you.
