6 Steps of Estate Planning

The Bible tells us that it's good to leave an inheritance to our children.

How we do that is still a matter of some discussion. Hi, I'm Rob West. We often talk about the importance of having a will, and while that's certainly true, there's a bit more to putting your estate in order. I'll talk about that today with financial teacher and author Ron Blue. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, my friend and mentor Ron Blue is co-founder of Kingdom Advisors and the author of many books on personal finance, including Splitting Heirs, giving your money and things to your children without ruining their lives. It's the best book on this topic. You need to pick it up if you haven't already. Ron, great to have you back with us.

No, good to be here, Rob. Thanks for asking me. Absolutely.

Ron, you've talked about this and written on wealth transfer a lot, and I know you've identified the six steps of estate planning and wealth transfer that are essential. We will get to this list. But first, you compare in the book this whole process to following a recipe. Explain that for us. Well, when you follow a recipe, you follow it sequentially. You do step one, step two, step three. I use the illustration of baking a pie, for example.

You don't just throw the ingredients in the pan and cook and hoping it turns out okay. But there is a process. And what I find, Rob, is that most people jump to the end of the process and ignore the front part of the process. And the end of the process would be an estate plan, something that's documented. But the beginning of the process is more important than that because the estate plan that you end up with should follow some rational, legitimate thinking that leads you to having the right document at the end of the process.

That's really good. And it really starts with the why before the how. And I know these steps will uncover those key issues.

You know, these decisions aren't easy, as you know, Ron, which is probably why so many people put this off. But I think this list in a sequential order perhaps will help folks get started in these wealth transfer decisions. So what is step number one? Well, step number one is you only have three places where an estate can go. It can go to heirs, either relatives or people, or it can go to charity, or it can go to the government and attorneys through expenses. So obviously, most people want to avoid the expense side and the tax side. And therefore, they want to maximize the amount to the heirs and to charity.

Yes. So first of all, is, okay, who am I going to leave this estate to? And then secondly, then is, and how much am I going to leave to each one of those people? Yeah, and that's really important. So as you make that decision on the who, then the logical next question is, how much and this is one that can change over time, Ron, for our listeners wondering, especially for heirs, how much to leave any thoughts on how they go about making that decision?

Yeah, I do. I think if you ask yourself, let's say three questions. Number one is, if I'd leave X amount to an heir, whatever that may be, what's the worst thing that can happen? And most people don't answer that question. You know, I had a son-in-law whose dad taught him to provide for his family. And so when that particular child was married and they were young in their careers, had we left any significant sum to them, it would have destroyed his need to provide for his family.

Yes. And the second question then is, well, how serious is that? And the answer is real serious. And third is, what's the probability?

And in this particular case, we said it's 100%. So the how much question to who, those first two steps really revolve around where you are in your life stage. So somebody that's young in their life stage in terms of a family was going to need more, if you will, than somebody like myself, who's 80 years old and have children that are in their fifties.

They've already made their life and they've educated their kids. So my wealth transfer or estate plan looks a lot different than it did 10, 20 years ago. Yeah, that's really helpful, Ron. Well, we'll continue to unpack this and talk about the six steps of wealth transfer with Ron Blue today. Following this interview, your questions today at 800-525-7000. Stay with us. We'll be right back. Great to have you with us today on Faith and Finance Live.

I'm Rob West. Joining me today, my good friend and mentor Ron Blue. He's the author of, among many other books, Splitting Heirs, giving your money and things to your children without ruining their lives. If you've been putting off the wealth transfer and estate planning conversation, perhaps today's six steps from Ron Blue can help you get started. Before the break, Ron, you were sharing step number one, and that is to decide who gets the money. And you said there's only three places it can go, the government, heirs or charity or ministry.

And then secondly, how much? And you said that's really a question that needs to be answered with some other questions, including what's the biggest risk that exists and how likely is that to happen? And Ron, if we're going to look at our heirs through that lens, that means we may be offering differing amounts. In fact, one of the principles you share in this book is that if you love your kids equally, you will treat them uniquely. A lot of people struggle with that idea.

Why do you think that's important? Well, you know, it's just the way God treats us, Rob. He loves us equally, but he sure treats us differently because he knows us. And I, as a parent, we have five children and their personalities are different, who they married and the families that they're raising is different. And so to think that just equal, that's not wrong.

But you need to ask the question, really, is there a difference? You know, for a while there, we had a single mom daughter. Well, her needs at that particular stage of life were a lot different than her brothers and sisters. And so we had to take that into account when we were doing our planning. And you mentioned it earlier, do you're giving while you're living, so you're knowing where it's going. Before that is the idea of, I don't want to ruin my children by how I treat my estate. That's a big, big concern. And it gets bigger as you get older.

Oh, yeah. And there's not only financial implications to that, but spiritual implications as well. All right, Ron, so we've said we need to decide who gets what and how much. The third step is around the timing. Tell us about that.

I think that should occur on an ongoing basis throughout your life. So as God, you know, blessed us, we helped our children, but we never wanted to help our children by giving them something that would ruin perhaps or have a real damaging impact on their family. We didn't want to make them wealthy. We didn't want to give them mortgages, for example.

We wanted them to be able to have the thrill of buying their own home and affording it. So the timing issue is one that needs to be really visited and almost on an annual basis, Rob, asking the question, you know, is there anything we need to do now with our children? Yes. Well, and that goes on and on and on throughout your life and it changes throughout your life. So timing is very important. With regard to your charitable giving, Ron, I know you've also said you encourage stewards not to wait to do all of their giving at death, but really they should prioritize giving throughout their life, right? Oh, for sure, Rob. And I think one of the big reasons is that giving breaks the power of money and it does and it gives me joy. But the joy comes after I give it.

It doesn't come before I give it. So I, you know, I encourage the people that I counsel with to do their giving while they're living. You don't have to give it all away. But the more giving that you can do while you're enjoying the benefit of seeing other people impacted, I think is a blessing that God wants us to have. And when I'm dead, of course, I'm not going to get any joy out of the giving.

I've left everything because I didn't have any choice. That's right. That's an important idea. All right, Ron, let's deal with steps four and five. Four is the idea of whether or not you transfer the title when you transfer it. And then fifth is, of course, the tools and techniques.

What do we need to know there? Well, by the title, it means don't give with strings attached. A lot of people manage their children by making the giving conditional. Judy and I have the philosophy that when we give, be it to a ministry or be it to a person we know or to our children, there are no strings attached to it. We gave it.

And so title is a way to identify it. But when you give it, give it with no strings attached or you haven't given it. You've really just used it to get a need met in your own life. And then there's the tools and techniques, Ron, which is really the how of the giving, right? Yeah, that's where you bring in the professionals that can help you with the trust. And perhaps you want to leave it to an organization like a donor advice fund. Perhaps you want to leave it to charity.

But it requires different tools and techniques. And also, Rob, I think we need to realize that we're dealing with your balance sheet and not your income statement. So when we're talking about what we leave and what we give, it comes out of my balance sheet, not out of my income. What comes out of my income is my tithes and offering. This giving that we're talking about is giving out of your net worth, giving out of the things that God has blessed you with.

And it can require a lot of professional advice from the tech standpoint and from the legal standpoint. But make sure that when you give, you've given. No strings attached. Oh, that's really helpful. And by the way, if you want a professional to help you with all of this, you can find a certified kingdom advisor in your area at faithfi.com. All right, Ron, we're down to the final step, number six. And this one is about talking.

What do we need to know here? I believe that an heir to your estate, when the will is read, should not be surprised. In other words, throughout your life, you can communicate with your children, your philosophy, your belief system, your values, and have family conferences.

I know a lot of people with significant wealth. In fact, I know one family that has a quarterly family conference. And they talk about the estate and they talk about where things are going to go. So the way that I would phrase it is you don't want to have a coping gap. And a coping gap with your heirs is where their expectations are different than reality. So you have these conferences in order to pass on values, beliefs, and teaching. And you're helping your children think also, and they then understand why you did what you did, so that there's not a surprise. They don't have to ask the question, why in the world did my parents do this? It should not happen. That's really helpful.

Ron, just about 30 seconds left. What final thoughts would you leave us with on this topic of wealth transfer? The final thought would be, this is really important. It's never urgent until maybe it's too late, but it's really important.

So start with that step one and two. And I don't like to promote my own books, but the book Splitting Ears is one that I wrote after counseling thousands of people. And I do think there's things in there and processes in there that can be helpful. And it's very important.

It sure is. Well, Ron, we are always grateful for our time with you. Thanks for stopping by and sharing these important ideas. Thanks for having me. All right. Ron doesn't want to promote it, but I will.

Pick up a copy of Splitting Ears, giving your money and things to your children without ruining their lives. You'll be glad you did. Your calls are next, 800-525-7000. We'll be right back. Great to have you with us today on Faith and Finance Live.

I'm Rob West. It's time to take your calls and questions today. 800-525-7000 is the number to call. Again, 800-525-7000. We'd love to hear from you today.

Always great to hear from Ron Blue today talking about Splitting Ears and how we can make estate planning decisions, starting with really the why, the questions before the actual documents are drafted that can lead us to the outcomes we're ultimately looking for. And that's really key as we think about our role as stewards. By the way, you know, our role as stewards is a really big idea that we see in scripture, and we need to take that very seriously, as after all, we owe nothing. It all belongs to God, and he gives us the resources we have to meet our needs, according to Philippians 4.19. Now, he may provide an abundance for us in a season, so we have the ability to meet the needs of others, or he may allow us to experience lack often, so we might benefit from the generosity of fellow Christians. But the Bible makes it clear that Christians are not promised material wealth, neither financial abundance nor a lack thereof is any indication of an individual's faithfulness. On the contrary, God uses financial abundance as a tool to either refine us and reveal our faithfulness. What counts ultimately is what we do with the resources that have been entrusted to us.

So whether you find yourself with a great abundance right now, or you're in a season where you're lacking, God calls us to serve and glorify him with everything that we have, and to be found faithful as stewards. We want to help you do that on this program each day, and we'd love to hear your specific questions about your financial life so we can help you move forward with confidence. The number to call, 800-525-7000. Let's dive in. We'll head all the way out to Washington State. R. Lee, thank you for calling. Go right ahead.

Hi. I have a will in place, but I was told to, in order to avoid probate, I need a living trust. Is that true? It is true to avoid probate, although most states go through probate, and in, you know, that case, I don't know that there's a big problem with it. Now, in Washington, there is, my understanding is there's a relatively high threshold for which estates must go through probate, but typically what you would find is a will allows you to exercise or name a personal representative that would essentially, at your death, facilitate the transfer of your assets and the settling of your estate by paying off debts through the probate court according to your wishes outlined in the will, the last will and testament.

There are some costs involved. It is a part of the public record because it's going through probate, but it does allow you to name someone and it allows you to designate where you want your estate to go once all of the bills and debts are settled. A living will does allow you to bypass that process, so you would operate outside of the public record and the probate court. It would allow you to also express your wishes on how your estate is handled. The difference is not only is it anonymous and happening outside of probate, which can be a little more efficient, certainly less costly at that point because there's no court costs, but also it allows you to handle your estate prior to your death if you're incapacitated or beyond your death if you wanted your estate to be passed according to certain events happening, a minor child reaching adulthood or other factors that you would lay out in the living will. So there are some benefits to a living will, but it is more costly. Whereas a typical last will and testament might run you $300 to $500, a living trust would run you $1500 to $2000.

So it really just comes down to what are you trying to accomplish and which document or instrument is best for you to accomplish that. Does that make sense? Yes, it does. I have an executor named in my will, and I have no debts. I have real estate and money. And won't that be sufficient?

Yes, it would. You know, a lot of times when folks have a lot of real estate, they will put them in a trust. It could be in a property trust. And the main reason you would put a house in a trust is to bypass probate again so that it would be you'd have immediate access to the property to handle according to however you would like.

Probate in real estate is the process where it passes when you die, and it can be a bit lengthy. And so if you wanted to avoid that, that's why a trust may be beneficial. But it's not necessary, and you can handle your entire estate through your will, which is what would happen if you were to die right now. It's just that there are some added benefits of the living trust.

So at the end of the day, if you're thinking perhaps you might benefit from a trust, I would visit with an estate attorney just to talk about that. But you certainly can take care of it the way you have currently. Okay. Well, thank you for your help. God bless you.

All right. Thank you, Arlie. We appreciate your call. Eight hundred five two five seven thousand is the number to call.

It said, well, we'll stay in Washington. Linda, go right ahead. Hi. I just heard the other day about Ron Blue's book about splitting hairs. So the steps sound really good, but I'm just trying to figure out how to get advice or work through the part of splitting our inheritance in all the timely ways and with loving equalness, but maybe not just half and half or however it would go. Just so many questions are going through my mind of how to do it. We don't have a lot, but we'd like to do it right before the Lord.

Yeah, very good. Well, first of all, I'd be happy to send you a copy of the book as our gift to you, Linda. It's called Splitting Errors, kind of a play on word there, H-E-I-R-S. And we can put that in the mail to you. I'd start by reading it. That may answer your questions. Beyond that, I would visit with a godly estate planning attorney, somebody who can not only help you with the actual drafting of the documents, but they would also be able to ask you some of these key questions that Ron has raised. If you don't have one, I'd go to our website, faithfi.com. That's faithfi.com.

Search for a certified kingdom advisor there in Washington, and then you can ask for a referral to a godly estate planning attorney. The combination of those two should give you everything you need. So you stay on the line. We'll get your information and we'll put Splitting Errors in the mail to you. Thanks for your call. We'll be right back. Stay with us. So great to have you with us today on Faith and Finance Live.

I'm Rob West. We're taking your calls and questions today. We've got some lines open.

We'd love to hear from you. 800-525-7000. That's 800-525-7000. You can call right now. Let's head to St.

Cloud, Minnesota. Hi, Tom. You'll be next on the program, sir. Go ahead. Yeah.

Hi. I have a question for you about TSP. My question is I separated from the company because I'm no longer working for them, and I get my disability. I read on the Internet that once you hit 55, you won't be penalized for withdrawing that because you're separated from the company and no longer working. Is that true?

You have to leave service in the year you turn 55 or later to be able to use the rule of 55 to take that TSP withdrawal without penalty. Is that true for you? Yeah.

I'm going to be 55 in September. Okay. And when did you separate from service?

Like two years ago. Okay. Yeah. So the IRS rule says you have to leave service in the year you turn age 55 or later. You left service prior to the year in which you turned age 55, so this rule would not apply in your situation. Okay.

What if I started a job at the VA and then turned around and left again? Yeah, that's a good question. I don't know about that.

You could check with your CPA on that, but I just know the current rule is you have to separate from service in the year you turn 55, and I'm not sure whether there's any other way around that, but currently based on the way the rule reads, you wouldn't qualify, and therefore you'd have to wait to 59 and a half to pull it out without the 10% penalty. Okay. All right. All right. Thank you for calling, Tom. God bless you, my friend.

We appreciate it. 800-525-7000. We've got some lines open today here on Faith and Finance Live, helping you make your financial decisions as a faithful steward. Whatever you're thinking about today, we'd love to tackle it with you. Again, 800-525-7000 you can call right now.

To Grand Rapids, Michigan. Hi, Roger. Go ahead, sir. Hi, Rob. I'm a Blaise Burkett boy. All right. We always loved hearing from faithful Larry Burkett listeners back in the day.

I have never called in all the years I've been listening, but I've taken a lot of your advice and it's all worked out great for me. Well, I'm delighted to hear that. What do you remember about Larry's teaching back in the day? Honesty.

You could bet on what he told you. That's so true, isn't it? Yep, that's exactly right. Well, Larry's home going. We celebrated 20 years yesterday, if you'll believe it. It feels like just yesterday and the way folks still reference the impact of Larry on their lives, it feels like it was yesterday and yet it's been 20 years.

Hard to believe. Roger, how can I help you today, sir? I have my girlfriend and she wants to invest five hundred four to five hundred thousand dollars into cryptocurrency. Oh, wow. And I told her I was going to check with you guys before she does anything. Well, I suspect you know what I'm going to say, but let me ask you a question first. What would this half a million dollars represent of the total investable assets? I don't know.

OK. All right. Well, I would stay away from crypto as an investment. The technology behind crypto, in my view, is here to stay. I mean, it's a it's a form of digital assets based on a network that's distributed across a large number of computers. It has a decentralized structure, which means it exists outside of the control of governments and central authorities.

Some of the advantages include that it's cheaper and faster. And of course, the decentralized system ensures that there's not a collapse at a single point of failure. And the technology behind it, the block chain technology, has far reaching implications beyond even digital currency. So crypto is not going anywhere. But as an investment, I would put it in a highly speculative category.

Here's why. Number one, it has incredible volatility. I mean, so it's not uncommon to see 50% increases or declines in a one year, you know, period or more. So you've just got incredible volatility. Second, there's a lot of risk in it because a lot of the cryptos, you know, are going to ultimately end up worthless.

And this shouldn't be a shock. We saw tons of Internet companies disappear 20 years ago as the Internet was going mainstream. And the same winnowing process is likely to occur in the crypto space over the next several years. We've already seen it happen with a few of them that collapsed. Now, she could say, well, I'm just going to stay in Bitcoin.

And I would say that is the biggest. And, you know, at least today, the one that we, you know, don't think is going anywhere. But if you're investing across the crypto space, there's certainly are going to be a lot more, you know, losers to come. And then one of the third or the third and perhaps one of the biggest risks, in my opinion, is how governments are going to react as Bitcoin or any of these other cryptos threaten their stranglehold over money.

You know, governments get a lot of benefits from controlling their currencies and giving people a way to opt out of the official money via something like Bitcoin is, well, it's ruffling a lot of feathers, not to mention that any big bank or other entrenched financial interest isn't going to be keen on having a new, better alternative that takes their business away. So we're probably going to see a lot more in the way of regulation in the days ahead. That's, of course, going to have an effect on how these cryptos perform. So if you were to go into any speculative type investment, like crypto or something else, and there's plenty of them, I would say, first, you have to have the ability to lose it all. Number two, you'd probably want to never commit more than 10 percent of your investable assets if you could afford to lose it. But bottom line is, I'd stay away from it as an investment for the reasons I mentioned.

Okay, that sounds great. If you look at Los Angeles, is there money, a kingdom advisor there? Yeah, yeah, not quite as many on the West Coast, but there are certainly some there. She may just have to widen her search a bit.

But in L.A., absolutely. Plenty of certified kingdom advisors. So just head to our website, Roger, or have her head there, faithfi.com, and just click find a C.K.A. Faithfi.com. That's it.

Faithfi.com. And you'll see the button at the top of the page. Okay, thank you very much for your help.

And people are a bit caught in your mind all the time. Absolutely. Thank you for calling, sir. We appreciate it. May the Lord bless you. Well, folks, we're going to continue to take your calls just around the corner at 800-525-7000.

We'd love to hear from you today. You know, as we think about how we manage God's money, let me remind you, you know, if you don't have a spending plan, if you're not giving every dollar a name, it's going to be tough, especially in light of inflation, for you to stay on track, really allowing your money to be used in a way that reflects what's truly most important to you, your values and priorities as a believer. The only way to do that is to have a plan. And one of the best ways to have a plan for your money is to use a budgeting system. The Faithfi app could be just what you're looking for.

It's simple, easy to use with a beautiful interface, and it's built on Larry Burkett's tried and true envelope system. You can check it out today on our website, faithfi.com. Just click the app button. You'll also find it in your app store. Just search for Faithfi.

That's Faith F-I. We'd love for you to check it out. Let us know what you think. Hey, we've got phone lines open room for your questions at 800-525-7000.

Call right now. We'll be right back. God owns it all, and therefore we're stewards or money managers of God's resources. The key is faithfulness to opportunity. As stewards, we want to be found faithful and act as wise money managers, not that other word we see in the Bible related to money management, a fool.

Well, the way we can be wise is heeding the council of Scripture and applying God's wisdom to our financial decisions and choices. We want to help you do that on this program. We've got some lines open. Whether you're thinking about reining in your spending, paying off debt, maybe it's your wealth transfer decisions or even your long-term investments or saving, whatever it is, give us a call today. We'd love to hear from you.

We'll take as many questions as we can get to here in our final segment of the broadcast. The number is 800-525-7000. Charles is standing by today to take your call, and we'd love to hear from you. Again, 800-525-7000 to Northwest Georgia. Hi, Caroline. Go right ahead.

Hi, Bear. Thanks so much. We are looking at our daughter is 20 and boyfriend, same age, neither have debt. They're looking to get married maybe in the next year.

What are some tips to encourage them? Again, no debt, no school debt. Should they be at a certain place financially before? What does that kind of financial readiness look like for very young aged young people getting ready to get married?

Sure. Well, the first thing is, I would say, you know, don't start joining your finances until you're married. You know, two become one in marriage, but not before. So even though they're on this track, and perhaps expect this is what God has in mind for them, I wouldn't take that step of, you know, buying cars together and merging accounts and things like that, until such time as, you know, they are in fact married.

But this is a great time to do two things. Number one is to get their own financial houses in order, and we can talk about that. And then second, to start talking about money. You know, there's a reason that 70% of couples have conflict over money, and it's often because of, first of all, a lack of communication, where they're not on the same page, they're not communicating and talking about it. A lot of that happens prior to marriage.

And then secondly, one of the keys to overcoming conflict is to have margin. So it's really not a matter of your income as much as it is the fact that you're living below it, the studies say, will really be one of the keys to helping you overcome that. Now, what about financial readiness? Well, as 20-year-olds, I think the key is, you know, you want to minimize debt, they've done that.

That's great. You want to have three to six months living expenses in an emergency fund. You know, that can be one of the things they're working on. Second, or beyond that, they certainly want to be giving systematically and starting to exercise that muscle of being regular givers. That's going to break the grip of money over their lives.

And they could start with the tide, the principle of the tide, giving a tenth on the increase. I would say once the emergency fund is there, then they need to be looking to take at least advantage of any matching they have through their employer's retirement plan and fully subscribe that. Beyond that, I would say put away 10 to 15 percent of their income if they have that ability. And then, you know, perhaps beyond the retirement piece is starting to fund any short term goals. So if their expenses are lower right now, maybe one of them is still living at home. Or if not, just continue to keep lifestyle at a minimum so they can start socking money away, you know, for that first apartment, first last insecurity or ultimately the down payment on a house. But I think anything they can do to establish the right disciplines, having a spending plan, minimizing debt, contributing to a retirement plan, of course, giving generously and that, you know, comes first. But then also being regular savers, then as they merge their finances, they're already in a really healthy place. And now it's about communication and shared values and goals that drive toward their new plan as one flesh, as a married couple.

But they're in a really healthy place financially, individually, and they bring that to the table as a married couple. I think beyond that, the conversations that need to be happening are around, you know, what was money like growing up? Often our earliest memories of money have a key, you know, ability to shape our thinking about money today. And so maybe one grew up with, you know, excess or an abundance, one grew up where money was a little more tight. That can, you know, lead to how we think about money, whether we hold it with a clenched fist or an open palm. What is their thought about giving and, you know, what is that going to look like? Does one have more of a tendency toward a saver and one more toward a spender? One is not right or wrong, good or bad.

It's just how God has wired us. And the key is going to be, you know, how they kind of make a plan together, you know, also just around, you know, the desire to save and have a plan, a spending plan. So, you know, all of these things can be discussed early.

And I think a lot of that conversation that will uncover some of, you know, how they think about money is going to be really key to how they, you know, make a plan moving forward once they're married. But I've thrown a lot at you there, Caroline. So give me your thoughts. Great. That's great. I think it's good. They both have seemed to be savvy and have had that upbringing of financial responsibility and have been taught well, and that they are looking already to doing a lot of that.

They each have their own savings and, you know, are looking into already that tithing mentality for sure in that practice already as well. So I think it's great. I just will jot those things down and pass them along. I appreciate it so much.

Well, you're welcome. Listen, all the best to them. And I would say, you know, if they do nothing else but just intermarriage as healthy and with as solid a foundation as they can individually, giving, saving, minimizing debt and having a spending plan. And then they do a lot of, you know, conversation and discussion before marriage about the things that I mentioned.

And they will be well ahead of most as they enter this next season. So thanks for calling today, Caroline. May God bless you to Ohio. Hey, Marty, go right ahead. Hey, how are you today?

Doing well. Hey, I have a question on my wife and I both have whole life policies, life insurance policies. We also have term insurance policies through our individual employers.

And we have a kitchen remodel we need to do due to some water damage. So I was just wondering if instead of borrowing money, would it be better just to cash in those whole life policies? Yeah, possibly. I mean, I'm not a big fan of whole life. If you listen to this program, you know that I like to keep insurance and savings and investments separate.

I just think you do better that way. I'd rather you buy pure insurance, which is what you have through the term policies where you're just paying the mortality expense to offset that risk. If one of you were to die before the other and leave a hardship for the one that is facing now a loss of income and then do your investing outside of an insurance policy, you know, in company sponsored retirement plans or Roth IRAs with stocks and bonds where you get the full upside, not some percentage of the upside, and you don't have the complexity and the fees that go along with it. Now, before I'd be canceling that policy, though, I would want to make sure that you do have an in fact enough death benefit through those term policies.

So as a starting point, you would typically say if you're trying to replace income, you need 10 to 12 times the income that would go away upon one, you know, person's death in the form of a term life insurance policy. And then you can add on top of that. If you wanted to pay off debt, that would be on. In addition, if you wanted to pay off a mortgage, that would be in addition. If you wanted to fund a college education, that would be in addition.

But at a minimum, you need 10 to 12 times. So I want you to have enough death benefit before you go cancel in that policy. But if you do have enough death benefit on the term policies, I like that a lot. As long as you don't know about a preexisting condition that's going to, you know, prevent you from getting a new policy at some point down the road so that you've got a policy in place until you retire. And then absolutely, you could cancel that policy, take the cash value, perhaps use that for this renovation. And then, you know, just make sure you're saving at an appropriate level, you know, outside of now this insurance policy in company sponsored retirement plans, things like that.

Does that make sense? Yeah, we're doing all that we're both 60 years old, we don't have any bills other than a car payments, or mortgages off paid off. We don't have any credit card bills other than our just our monthly bills. Great. So we're, we've got a 401k, she's got a Roth. So we're, we're doing pretty good that way. Just okay.

Yeah. So I think you've got that term policy if that's going to cover you until you guys get to retirement. Sounds like you're living modestly. You don't have a lot in the way of debt. That's great. Then yeah, this could be a great source of funds for you to tap into that.

You know, make sure you understand the tax implications if there are any. But other than that, I think you guys are in a great spot. Thanks for calling Marty. We appreciate it quickly to Idaho.

Paula, I've just got about a minute left. Go ahead. Okay, yes. I have a property and home that I purchased and my son and daughter in law share it with me. But at the purchase, I put his name on it.

Is that all I need to do? Or do I need to make a will or you need a will because you want the will would cover anything that doesn't have a beneficiary named or has shared ownership. And you will undoubtedly have things and that's where a real a will comes in play. Now one of the challenges you've got is you're going to be hurt or he's going to be hurt from a tax standpoint based on the way you did this because he's not going to inherit the property. Now he may inherit the portion that you own if he only owns a percentage, but the portion that he received because you gifted it to him, you know, he's not going to get a stepped up cost basis, which just simply means that if he inherits it, then you know, the cost basis would be stepped up from what you paid for it to the value as of the date of death. And then when he turns around and sells it, he gets, you know, he doesn't pay any capital gains if he does it right away.

So that may be the only thing to consider. You could talk to your CPA or an estate planning attorney about that. One way to get around that would be if he gifted his portion back to you. So you're now a hundred percent owner. There's no tax implications for him gifting that as long as he just fills out a gift tax form and there's no tax on it, you're just notifying the IRS. And then if he inherits a hundred percent of the property at your death, now he gets a stepped up basis.

But the bottom line is you do need a will just to cover anything that doesn't have a name beneficiary or joint ownership. And there will of course be some things. Thank you for your call, Paula. God bless you. That's going to do it for us, folks. Faith and Finance Live is a partnership between Faith Buy and Moody Radio. Thank you to Amy, Tahira, Charles on his last day, and Robert. God bless you. Bye-bye.