Nineteenth century author Ambrose Bierce once said, Death is not the end. There remains the litigation over the estate.
Hi, I'm Rob West. Humor aside, dying without a will is a sure way to leave your loved ones in a legal mess in the probate court and family feuding over who gets what. But you can spare them that. I'll talk about that first today and it's on to your calls at 800-525-7000.
That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. So let's get into the reasons why you need to draw up a written will if you haven't already. And along the way, we can dispel some of the misconceptions about wills. Now it would be nice to think that most people realize the necessity for a will and have gone ahead and prepared one, but unfortunately that's just not the case. Studies show that only about four in ten adults have a will or living trust. As it stands, the majority of folks are leaving it up to probate courts to determine how their estates will be handled upon death.
Now if you're thinking, so what? Let the court handle it. You should know that often it won't act the way you'd like. In the end, state law will determine who gets what and that may be contrary to your wishes. But maybe the biggest reason that you need a will is that it will reduce the likelihood of family disputes after you're gone. In a will, you can leave specific instructions as to who gets what, potentially eliminating all the squabbling. It's true that your heirs could still have hard feelings, even if inheritances are clearly spelled out. But a will isn't just a set of instructions.
It's a document that can express not just your intentions, but your reasons behind them. Our friend Ron Blue spells this out clearly in his book Splitting Heirs. Simply dividing up your assets equally might be fair, but it isn't necessarily biblical.
Ron says wisdom can create wealth, but wealth almost never creates wisdom. One child may not be capable of handling money, or another might have much greater needs than your other heirs. So explaining why you're dividing things a certain way can also help eliminate family fighting.
Ron also says that if you love your children equally, you'll treat them uniquely. There are other reasons to draw up a will. It's a great way to itemize your assets. Without a specific list of your holdings and possessions, the probate court could take months or years sifting through your financial records. Meanwhile, your loved ones are denied the use of those assets. Another good reason for drawing up a will is that it can help you provide for heirs with special needs. As I mentioned, if one of your heirs is too young or immature to manage money, you can place restrictions on the inheritance with a will.
You can also do that with a living or revocable trust as well. There's one more really important reason for having a will, and this one's often a real sticking point for couples with children. A will enables you to name a guardian for your children. This is one of the reasons that some parents procrastinate in making out a will, because it forces them to decide who will care for the kids should something happen to them.
That's not a pleasant thought, and quite often it's a tough decision to make. Turning now to some of the misconceptions about wills, the one you hear most often is, I don't need one. But we just talked about how a will allows you to name who will care for your children if something happens to you. Without a will, the state decides who raises your kids.
You don't want that, so if you do have kids, you need a will. And of course, even if you don't have children, the state will decide who gets your assets if you don't have a will. Another misconception is that your spouse automatically gets everything you have, so you really don't need a will.
Well that's the case most of the time, but different states have different rules. For example, your state may require that your assets be divided equally among your spouse, children, or grandchildren, whether you wanted that or not. So you can't assume your spouse will inherit everything. You can avoid all that by having a will in place. Ok, our last myth is drawing up a will is too expensive. The truth is, writing a will is one of the least costly things that attorneys do. Many of them charge a flat fee to write a will or other basic estate planning documents. The average cost for drawing up a will is around $500. Of course, you can do it even cheaper by filling in the blanks at one of those online legal form sites. That may work just fine, but an attorney can help you address issues that may not come up in the do-it-yourself approach. And of course, you can find an attorney or estate planner who shares your values when you look for a certified kingdom advisor.
Just click Find a CKA at MoneyWiseLive.org. Well, if you don't have a will in place already, I hope I've convinced you to stop procrastinating and get the job done. Trust me, you'll be glad you did. Your calls are next, 800-525-7000. That's 800-525-7000. I'm Rob West and this is MoneyWise Live. Thanks for joining us today on MoneyWise Live. I'm Rob West, your host, taking your calls and questions today. We've got some lines open 800-525-7000. We'd love to hear from you.
The number is 800-525-7000. You know, as stewards entrusted with the responsibility of managing God's resources, money then becomes a tool to accomplish His purposes. But here's the thing, you know, it's a revealer of where we've placed our faith, our hope, and our trust. That is, how we handle money is one of the clearest indicators into what's most important to us.
So money issues really are hard issues. You know, beneath the working out of the daily spending and allocating of God's resources are the motivations that drive us. And as Jesus said, where our treasure is there, our heart will be also. So I think this is a great opportunity at the start of a new year to say, what story does the way I spend God's money tell about what's most important to me? And am I okay with that? Do I need to make some changes? Am I living within God's provision? Am I using debt to live beyond my means, outside of God's provision?
If so, what changes do I need to make to dial that spending back? And as my income increases over time, have I established a lifestyle that I'm comfortable with in prayer with the Lord, such that I don't allow lifestyle creep to consume every bit that I have? So if I have a bit more, maybe that's an opportunity to give more. Maybe it's an opportunity to save or help others or pursue the goals that you have that align with your values and your priorities. Well, when we handle money God's way, according to the Scriptures, 2350 verses, we put ourselves in a position to experience His best. Now, that doesn't mean we're always going to have an abundance.
We're going to have difficult times. But if we live within our means and we have some margin and we set long-term goals and we plan for the future and give generously and avoid the use of debt, we've at least put ourselves in the position to be able to maximize His resources for His purposes. Well, here on this program each day we want to help you do that. So whatever questions are on your mind today, be it saving or giving, lifestyle or debt, whatever it is, give us a call.
We'd love to hear from you. The number is 800-525-7000. That's 800-525-7000.
Let's begin today in Ocala, Florida. Hi, Shirley. Thank you for your call. How can I help you? Hi. Thanks for taking my call.
I listen to you regularly. Yes, I have a will and I also have a trust established quite a while ago, my trust in 2008. I'm trying to decide if I want to break the trust, but I also want to know if my heirs would have to do probate because I have those things in place. Yes, well, probate would come in for the will. Anything titled in the name of the trust would pass outside of probate.
You can, of course, have both as you do. They're both a part of a comprehensive estate plan, a will and a living trust, but they are sometimes inconsistent with one another. Where there are conflicts, the trust will take precedence. A will has no power to decide who receives a living trust's assets, be it cash or equities, real estate, that type of thing.
That's all dictated inside the trust. And again, the trust would pass outside of probate. The will, of course, would be administered by the probate court with your executor and pass according to your wishes spelled out in the document. Now, if you are to break the living revocable trust, then the will at that point would be the driving force. And at that point, you would go through probate, as most people do.
But as long as you have a valid will that's in place, that's at least going to dictate how you want your affairs to proceed upon your death. Always good wisdom just to seek the counsel of a professional as it relates to this last stewardship decision we will make, which is the handling of the passing of God's resources to the next steward, hopefully, who has chosen in advance and prepared to receive that wealth. And oftentimes, especially when it comes to children, I think we have to ask the question, have we passed wisdom?
Have we passed character? Have we passed spiritual capital even before the money? And depending upon what's going on in their lives, is it appropriate to pass the money and how much? So we need to be considering all of these things. But bottom line is, surely the will will go through probate. And if you're looking to make some changes, which we should all every couple of years or when a major change occurs, we should always be updating and reviewing our estate plans.
And again, a competent estate attorney would be a great resource in that. We appreciate your call today. Spokane, Washington, is where Steve is located. Steve, you're on MoneyWise Live. Go ahead. Hi, thank you for taking my call. Let me give you a real quick rundown. My wife and I are in our early 70s, both retired, totally out of debt and live on a budget.
Thanks to Larry Burkett in those days. And so we've followed through on that. We have about 80 to $100,000 just in a savings account that is low yield. And I wanted to find out, you've mentioned this on the other programs, but I never had a pen and paper. But where would be a good place to invest? And I'm assuming it's like two or three accounts where they're staggered and they roll off one by one so that we can have access to it when we need to keep the rest earning interest. Sure. With this 80 to $100,000 that you have, Steve, and you said you want to invest it. What is the time horizon on that money? There's not a big rush. So I don't know on, you know, five to 10 years.
Okay. And are you willing to take some risk with this, meaning putting it into stocks and bonds that have the ability to lose value? We actually have already some in stocks and bonds, and I think they're pretty conservative. But I realize that there's risk with anything, even a bank.
Sure, sure. Well, you know, I think the key is it's all about risk and reward, right? And so we expect a lower reward for a lower amount of risk. And as we move up the risk ladder, if you will, we expect to achieve over time a commensurate level of return to offset that risk. But we just have to make sure that the buckets of money that we have are appropriately allocated at the appropriate risk level with the appropriate expected return so that we have what we need at any period of time. So that's why with our emergency fund, I would say it's not at the risk of the market because we could need it at any time for the unexpected. And so that's where we take a very low interest rate and an FDIC insured account in a savings account because we need access to the money. But with money that's, as you said, five to 10 years or longer, we have the ability to take some risk again, depending on your age, risk tolerance, goals and objectives, and expect a better rate of return, which is important now more than ever, because as inflation has ticked up, we're losing purchasing power on that money that's not invested and we're losing that purchasing power a bit more quickly this year than we have in years past where inflation was down around 2% consistently for a long period of time.
And we expect these elevated levels of 3, 4 plus percent inflation, depending upon which sector of the economy we're talking about, to be with us for a little while. So I think the next question, once you determine the time horizon and whether you're willing to take some risk with it, is how do you want to go about that? Do you want to delegate this responsibility to an advisor who's going to make these buying and selling decisions for you, building those portfolios?
You're obviously in close communication. It's being done with your goals and objectives in mind, but it's being done for you and you, of course, pay for that, generally based on the assets under management, a percentage. Or if you'd want to do it yourself, you can either go with an index fund approach where you're buying the broad cross-sections of the market, usually through what's called a robo-advisor where algorithms are used to build a diversified portfolio, very low cost, and where you would expect to capture the indexes. So it might be a stock index or a bond index or a mix of the two. Or another approach would be kind of in the middle where you use something like our friends at soundmindinvesting.org where through the Soundmind Investing newsletter, they would make recommendations on various mutual funds that are more actively managed that would fit kind of what you're trying to accomplish.
So you could choose your custodian, Fidelity or Schwab or TD Ameritrade, and then you would buy these no-load mutual funds and then update them over time. Which sounds like would be most appropriate based on what you're trying to do? Well, obviously, you'd want somebody that was making decisions based upon a good knowledge base. So you'd want somebody pretty tuned into the market.
Absolutely. Somebody with a lot of experience and I would say somebody who also shares your values. Well, I think, Steve, a good next step for you would be to visit with a couple of certified kingdom advisors there in Spokane. I'd interview two or three, find the one that's the best fit for you, who you could delegate this responsibility to to make these decisions to build the portfolios. Again, you'd get the statements, you'd meet regularly.
It would be done with your goals and objectives in mind, but you'd have somebody that is making those decisions for you. So just head over to our website, MoneyWiseLive.org. Click Find a CKA.
You can search by zip code. And again, I'd interview two or three, find out how they're compensated, their experience level, kind of where you would fit among their other clients, how they would be communicating with you, who would be handling your account and their track record and how they'd go about managing it. All of those things and more can be discussed in that initial meeting. Steve, we appreciate your call today.
All the best to you and your wife. 800-525-7000. This is MoneyWise Live.
We'll be right back. Thanks for tuning into MoneyWise Live, biblical wisdom for your financial decisions. Just before the break, we were talking about a certified kingdom advisor. These are men and women who've met high standards as financial professionals, both in experience and character, but also in their training to bring a biblical perspective of money to their financial advice at a professional level. You can find a certified kingdom advisor in five disciplines, financial planning, investments, insurance, taxes, and estate planning, legal issues. When you visit our website, MoneyWiseLive.org, click find a CKA and you'll find a CKA, a designee in your area, and perhaps you can reach out at that point.
Again, MoneyWiseLive.org is the place to go. We've got two lines open today. 800-525-7000. We'll head back to the phones.
Chattanooga, Tennessee. Hi, Mary Lou. How can I help you? Hi.
I'm not as in good of shape as the other people they've called. My husband was killed and he was in the hospital two and a half months and he had canceled his insurance and he was attacked by a dog. But anyway, everything was in his name and the house and everything.
I was on the deed and I went into forbearance and now I want to sell the house and I don't know if I can, if I'm allowed to. I'm on a veteran's log. I finally got it straightened up to where it's in my name now.
Okay. So the home is in your name. Well, Mary Lou, I'm so sorry to hear about your husband's passing and the circumstances surrounding that.
I'm confident the Lord will provide here and certainly you need to make your church family aware of any needs that you have and we'll pray that the body of Christ will surround you at this difficult time as you make these decisions and the Lord will give you wisdom. You as the owner of that home, even though it's in forbearance, have the ability to sell it. There's not any particular restriction from selling a home that's in forbearance in even a VA mortgaged home unless it's a part of the agreement stating you must stay in it.
But that's typically not a part of it. Any amount you didn't pay as a result of the forbearance would be added to your total payoff, including any unpaid interest and fees. So you would have the ability to sell it. If you're still having financial difficulty and your forbearance agreement is about to end, some lenders may extend it if you prove you're selling the home. So you may want to let them know that, especially if you're right up against the end of this, because lenders would rather wait and receive a full payoff than go through the foreclosure process. So if that's a concern of yours, I would be contacting your lender to let them know what you're doing. But after you sell it, you then take the proceeds, you'd pay off any amount owed to the lender and then the anything left over would obviously be yours to then put in perhaps to a next property at that point. Does that make sense to you?
Yes. Another question is, the houses have gone up so much here. As soon as I find a house, it's gone the next day. My house is 4,000 square feet and it's just me. I don't know whether to, but the houses are so much more, the smaller house is going to cost me a lot more than what I paid for this. It's gone up from 266 to 680.
And that's the last quote I got on it. I don't know whether to stay in it. I'm 79 years old and I don't know what to do. That's another decision.
What would you suggest? Well, I can certainly understand what you're experiencing that's happening all over the country and certain pockets are even more pronounced than others. So you're seeing an incredible rise. And I understand as you're out there looking for something that quote unquote is a downsize, you're paying a lot more than you paid for this years ago. The good news is that your home is appreciated along with it. And hopefully because it's a little larger and because you're getting a significant amount out, you should have plenty to go ahead and then relocate into something else. I think the key for you, Mary Lou, is to have a plan to know where you're going to go and what you're going to need to spend before you do it. And I realize that can be challenging. So I'd connect with a real estate professional in your area who can help guide you through all of this to make a plan for perhaps even selling your place and then renting it back until you can find your next place and buy with cash.
Or maybe you move out and live with family for a period of time. But having that real estate professional to walk with you, help you understand what you're going to need to spend and even select the neighborhoods you'd be looking at would be really important. Stay with us.
We'll talk a bit more off the air and we'll be right back. Delighted to have you along with us today on MoneyWise Live. Hey, have you checked out the MoneyWise website recently? There's some great articles there, especially as you're thinking about retooling your finances in this new year.
There's a great article from MoneyWise called New Year Less Debt that might be helpful to you or a great new resource from Soundmind Investing and our friends there called 10, Your 10 Most Important Financial Moves for 2022. They actually give you an all inclusive list with dozens and dozens of ideas for you to prepare for the new year. You hand select out of their list much longer your top 10 for you that you can work on over the next coming weeks and months and perhaps get yourself on a more solid financial footing as you manage God's money. It's all available on our website. Just head there now, MoneyWiseLive.org.
And by the way, when you're there, create your free MoneyWise account and that'll ensure that you get our MoneyWise weekly wisdom email. The next edition goes out tomorrow. All right. Let's head back to the phones today.
By the way, a few lines open, 800-525-7000 is the number to call WGNR Indianapolis. Hi, Doug. How can I help you, sir? Hi.
Thank you. Well, there's a lot of information going out, especially on the Internet, about the monetary system and banking regulations changing to cryptocurrency Bitcoin type monetary changes. What do you know about that? Well, you know, Bitcoin and the other crypto currencies obviously are unlike fiat currencies. They're distributed, traded and stored with what's called a decentralized ledger system known as blockchain. Bitcoin, one of the more popular, launched back in 2009, and it's now the world's largest cryptocurrency just from a market cap standpoint. You know, I don't think it's going to replace the fiat currencies anytime soon. And, you know, for the benefit of our listeners, when we say fiat currency, we just simply mean a government issued currency, not backed by a physical commodity like gold or silver, which we used to be, but backed by the government that issues it, which is what our money is.
You know, we issue money here in the United States backed by the full faith and credit of the United States. I don't see that replacing or being replaced by the cryptos anytime soon. But I do think, Doug, you know, the crypto currencies are here to stay.
You know, they are going to be a place that people flee to in times of uncertainty and unrest. I think that the technology behind it, the blockchain technology, will not only be used for currencies, but for other uses over time. And so I don't think it's going anywhere. And we're starting to see more of a mainstream acceptance of cryptos. You know, it's being talked about it. Some of the biggest companies in the world, like Apple and others, you know, talking about accepting it.
So we're going to continue to see it more and more widely used. I don't think it's a place for us to be investing in cryptocurrency, which is different than it just being available as a currency option. Investing in it becomes a very highly speculative and very volatile type of investment that I think is just outside the bounds of how we should view investing for the long term as steady plotters, according to scripture. But I don't see any problem with the crypto currencies in its designed use, unless, of course, it's being used for illegal purposes, which fiat currency can as well.
So I don't think it's something to be worried about. I think it's here to stay. And it will be interesting just to see what the adoption of it looks like over time. I think it will continue to become more and more mainstream, though, in the months ahead. So hopefully that's helpful to you, Doug.
It'll certainly be something to watch that's really been fascinating as of late. Let's head to Missouri next. Ed is there waiting patiently. And Ed, how can I help you, sir?
Yes, good day. I have a degree this year. He's 13 years old and we're kind of in the stages of estate planning and everything. And I was wondering if you were aware of any regulations or statutes or anything about if he would happen to have kind of state help whenever he would get on his own. If anything that we would leave him would be taken by those authorities to, you know, kind of bolster his living. So I don't know. You know what I mean?
I do. And it's something to talk to an estate planning attorney about. You know, perhaps you would need a special needs trust. There is a type of account, though, for this purpose that is less involved, very easy to set up that you may or may not have heard of called an ABLE account. It's an ABLE 529 account. And that basically is to be able to fund so that you'll have resources available for him to remain eligible for Medicaid health coverage or supplemental Social Security income that assists low income people who are disabled. You typically can't have more than $2,000 in savings or other assets. But funds in these ABLE accounts don't count toward that total.
So it gives a disabled person the ability to save for the future or use the money for a range of needs like health care and transportation education without risking the loss of government help, which, of course, would be available depending upon his income level. So I think that might be something you'd want to look into. And then perhaps, you know, if there are other assets where you'd want to be able to put away more than you can through the ABLE account, that's where I think something like a special needs trust might come in.
So I'd check with an estate planning attorney just to talk through your options, make sure you understand all the implications of what you have, do some advanced planning so that you know these things have been settled. But I think an ABLE account, at the very least, might be a great resource for you. And we appreciate your call today very much. 800-525-7000 to call to MoneyWise Live today. Odessa, Florida is where Monty is. Monty, go right ahead. Hey, good evening, Rob.
Hi there. Yes, sir. My question is, I have two roths, the traditional IRA and the Roth IRA.
Okay. So I have two complaints. The traditional IRA is not making much money. This is with Merrill Lynch. I see that the advisory charges are taking money more than it's making.
And then the second one is the Roth IRA, it has less money. So it's not being managed, it's just getting there, it's not making anything. So I'm asking myself, should I ask for it to be managed or should I just move it somewhere else where it can make better money?
Yes. Well, Monty, the key is the investments inside of it. Being managed at Merrill Lynch really doesn't have anything to do with it. It really has more to do with the investments that have been selected. Is there an advisor overseeing this, Monty, or is it on the retail side where it's just kind of left for you to make the decisions?
The traditional IRA, yes. There's an advisor. So I think the next step is for you to visit with that advisor and just talk through the investment strategy that's been deployed. Look at the historical returns versus the appropriate indexes consistent with how it's being managed. Talk about what your expectations are going forward based on your age and objectives and talk about whether changes are in order because Merrill Lynch is a wonderful firm like so many others.
It's really just about you having an advisor who understands your need and is taking a proactive approach in managing it. Let's talk a bit more off the air. We're going to hit a break here and we'll be back with much more on MoneyWise Live. Stay with us. We're grateful you've tuned in to MoneyWise Live today. I'm Rob West.
This is biblical wisdom for your financial decisions. Let's head back to the phones today. Edward is in Tampa, Florida. Edward, we're so glad you've called. How can I help you, sir?
Thank you for being so helpful with such an important matter and being so principled. I'm wondering if the joint tenants with rights of survivorship would exclude the need for probate. Property held in joint tenancy, Edward, will bypass probate. When one of the joint tenants passes away, the property passes to the co-owner of the property by right of that survivorship without having to go through the probate process, which is a benefit.
A lot of folks are looking for that and that's why they set it up that way. It also allows for creditors to be unable to access a property held in joint tenancy. It's a private process, so your affairs aren't a part of the public record and there's a clear title transfer to the surviving joint tenant. The only downside would be you can't leave a portion of the property held in joint tenancy to another person or other than the co-owner.
If there's a judgment against the joint tenant, obviously the property could be at risk there and there could be an increase in estate taxes, although that's not a concern for most folks with the current estate tax situation. So, does that answer your question, though, specifically about probate? I'm just so appreciative for all the aspects that you know about. Yes, it does answer my questions, and I thank you very much. Okay, Edward, we appreciate your call today. Thank you so much. Thank you very much. Very kind of you.
I appreciate those kind remarks. Let's stay in Florida, which is where Celia is. Go right ahead.
Yes, thank you for taking my call. I have a question about will. Okay, I moved from Wisconsin to Florida. Now, do I have to have another will made out? Do they have different laws in different states or what is the ruling?
Yes. You know, among all the changes when you move to a new state, and I know how challenging that can be, voters registrations, driver's licenses, you don't want to forget your will. You know, your will should be valid in the new state. But there may be differences in the new state's laws that make certain provisions of the will invalid, which is why when you're moving to a new state, don't be concerned that it's all of a sudden null and void.
But it is a good idea to have it reviewed and updated, just to make sure that based on the laws of your new state that all the provisions are in force and there's not any minor changes that need to be made to update it. Okay. Okay, thank you.
One more question. If I have a state, I was told that takes over the will. Is that right? Or do you have to have a will and a state? Well, you know, your will is just how your estate is going to be passed. So your estate is made up of all of the things, the property and the assets and the possessions, personal effects that you have. And that makes up your estate. The will, last will and testament is the document that says who is going to receive that. And the executor of the will, along with the probate court, will distribute according to your will. So you have an estate essentially by way of what you've accumulated and amassed. And the will is the document that governs how that is passed at your death. The will only goes into effect at your passing. So it's a good thing that you have a will because that will make sure that somebody else, namely the probate court, is not making those decisions for you. You're making those decisions in advance. But anytime we have a major change in our life, including moving to a new state, we want to make sure that it's updated. So that's a good thing that you're thinking about that, Celia. We appreciate your call today.
WRMB, we're staying in Florida. Robert, go right ahead, sir. Hello, sir. I have two quick questions. My first question is, I was told that the durable power attorney does not take effect for a trust account. So my first question is, was there something that I missed, another form that I should have had done to be that right to handle my dad's trust? Because he's incapacitated now and I have to step in and help with financial matters. That's the first question.
Yes. Well, the durable power of attorney. And again, it's always a good idea to get the help of a legal professional with all of these issues. So I'll just talk generally about these things, but I would encourage you to go ahead and get some counsel on this.
But essentially, the durable power of attorney is a document that allows you, if you're the principal, to give authority to another person, your agent or attorney, in fact, to act on your behalf. And so did you say, though, you also have a trust? Is that right?
Yes. My dad has a trust. This is my dad, got a trust. And then he had some CDs that are outside the trust. And so some of it, I'm trying to find out if it's going to go through probate or by having a beneficiary specified on the CDs, is that adequate to keep it out of probate?
Yeah. So when it comes to a beneficiary designation, that's going to trump the will. And so that will pass directly as long as that beneficiary has been named for that particular account or in this case, a CD. In terms of the POA versus the trust, the power of attorney is going to allow you to act on someone's behalf. But there is no power of attorney for a trust. The trust would have a trustee that would be the one that would be named in the trust to handle the distribution of the trust based on the provisions of the trust with any triggering effects that take place.
So again, I would get some counsel on this. But the power of attorney is important for you to make financial decisions outside of the trust in the event your dad is incapacitated. As the trustee, if that's the role that you have, that would be specifically related to your role in handling the assets inside the trust. And then beyond that, I think it's important to consider other documents like a healthcare surrogate or living will things where he can name end of life decisions and make those decisions in advance. So I would get with somebody to review all of this. But the bottom line is those are different, the POA and the trustee.
And it could be the same person acting as both, but they have different purposes. Hopefully that helps to clear some things up for you, Robert. We appreciate your call today, sir, very much. On to Highland Park, Illinois. Hi, Sally. How can I help you?
Hi, thank you so much for your program. I am in the process of renewing the lease for the apartment that I rent. And the rent will be going up a little more than 9% this year. And I was wondering if there were government regulations that the owners of the apartment building needs to follow as far as how much they can raise the rent every year? Well, I'm sorry to hear that you're experiencing this rent increase, Sally. We are seeing it going on all over the place and it has to do with just the rise in real estate prices and the lack of inventory.
It's pushing everything up. The lease that you signed would be the controlling document. So if you agreed to pay increases in the lease, then they'd have the right to do that. In terms of a government agency, most states do not have laws banning or they have laws banning rent control ordinances. So typically you don't see those kinds of ordinances in place that would allow for rent control. So really the only recourse you might have is if the landlord is charging you more than what's stated in the lease agreement or the increase is allowed for in the lease agreement.
Apart from that, they can usually pretty much do what they want. And therefore it would require that you go look somewhere else for something that you could find that would be more manageable financially. But I don't think you're going to find any recourse unless the lease that you signed prohibits the action that's being taken. And that would be, so I'm renewing, I had a two year lease and I still have to renew my lease, but I can only, I was told I can only renew it for one more year this time. And I don't think there's anything on the lease that mentions what you just said.
Well as you renew the lease, there's going to be a new lease and they would tell you what the prevailing rates are right now. And you're either happy with what they're offering or you're not. And then at that point you have to decide, do I want to sign this new lease? Does it fit into my budget?
Is this where I want to remain? Or is the price now out of reach? And even though you disagree with what they're charging, they have the right to raise the rents and charge you more. And that would be then your prerogative to decide whether you enter into a new lease. So at the end of this period, if you have the right to extend it at a certain rate or price, you can certainly do that. But if it's not dictated and you're just then asked to pay the prevailing rates, they certainly have the right to do that.
So I think your only recourse at that point would just be to move on unfortunately. So I know it can be challenging Sally, especially with limited resources and it seems like things are getting more expensive all around us with inflation and that includes the housing market you're seeing at the grocery store. So I think the key is just to live as modestly as you can. In some cases we have to make hard decisions even with housing, which is one of the biggest ones because it involves a whole lot of moving and packing and that's difficult.
Nobody likes to go through that. So we'll pray the Lord gives you some wisdom as you make this decision moving forward. And the key is to just do your very best to live within your means and trust God to provide. Thank you for your call today, Sally.
All the best to you. Well folks, that's going to do it for us here at MoneyWise Live. We're thankful that you tune in each day. Thank you for your kind remarks, those of you who called today about the program. It's my privilege to come alongside you each day, help you find God's best for you as you manage his money as a steward.
MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to my team today, Jim, Deb and Amy. Thank you for being here as well. Come back and join us tomorrow. We'll see you there. God bless you.
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