Know Your Tax Preparer

The holidays are behind us and you know what that means. It's tax season. But do you know who your tax preparer will be? I am Rob West. You may want to lock yours in early because there could be a shortage of qualified tax preparers this year.

I'll talk about the danger that might pose and how to avoid it. 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. So first of all, when you hire someone to do your taxes, the odds are that person will either be a CPA, a certified public accountant, or an enrolled agent. Both are qualified to prepare and file taxes for other people, although the CPA requirements are much stricter than those of an enrolled agent. Some attorneys also specialize in tax law. The problem is right now there is a shortage of CPAs and enrolled agents. In particular, not enough young people are choosing to become CPAs.

One major firm is even hiring high school interns at $22 an hour to entice them into becoming CPAs. This may be an inconvenience to a lot of people this tax season, but why would it be dangerous? Well, if folks become desperate to find tax professionals to file their returns, it opens the door to unscrupulous tax preparers who may even be falsifying their credentials. The IRS suggests a number of ways to protect yourself from these fraudsters who come out of the woodwork every tax season to perpetrate refund fraud, identity theft, and other scams.

Look for a preparer who's available year-round. If you're audited, you certainly want your tax preparer available to represent you, so obviously you want to avoid fly-by-night operations. When interviewing a tax preparer, ask for their IRS preparer tax identification number, or PTIN. Paid tax return preparers are required to register with the IRS, obtain a PTIN, and enter it on any returns they prepare.

You can check whether a tax preparer has done this by going to IRS.gov and looking them up in the directory of federal tax return preparers. This tool can help you locate a preparer in your area with the qualifications you're seeking. You should also ask if the preparer has a professional credential, such as a CPA or enrolled agent.

Ask about continuing education classes they've taken. Tax laws are complex and change frequently. Preparers have to stay up to date on tax topics. You can also check on the history of a tax preparer. For CPAs, check with the State Board of Accountancy.

For enrolled agents, go to IRS.gov and search for verify enrolled agent status. For attorneys, check with their state bar association. Then you also want to ask about fees. Avoid preparers who base their fees on a percentage of their client's refund, or if they brag, their refunds are bigger than the competition. Do not give any personal information or documents to a preparer unless you've checked them out and are satisfied that they're legitimate.

All a fraudster needs is your social security number to file a fraudulent return and steal your refund. You also may want to make sure the preparer offers IRS e-file and then ask to have your return filed that way. If the preparer can't or won't file electronically, that's a warning sign. Paid preparers who do taxes for more than 10 clients generally must file electronically.

It's also the safest and most accurate way to file. Next, watch out for a tax preparer who doesn't ask you for records and receipts. Legitimate preparers need those documents and will always ask you for them, so be prepared.

Here's another warning sign. If a preparer says they can e-file your return based simply on a pay stub, head for the door. They're required to use a W-2 and you'll need to provide it. You also need to understand the rules of representation. If you're audited, CPAs, enrolled agents, and attorneys all can represent you before the IRS in any situation. Non-credentialed preparers, including your cousin Bill who's a whiz with numbers, cannot represent you if you're audited.

The next one goes without saying, but let's say it anyway. Never sign a blank check or an incomplete return. Review the entire tax return and make sure it's complete before signing.

Ask questions if something's not clear or looks inaccurate. Also, any refund should go directly to you, not into your preparer's bank account. To make sure, check the routing and bank account number on the completed return. Now, one way you can avoid any potential problem with your tax preparer is to look for a CPA, enrolled agent, or tax attorney with the Certified Kingdom Advisor designation.

Just go to faithfi.com and click Find a CPA. All right, your calls are next, 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions.

We'll be right back. Thanks for joining us today on Faith and Finance Live. All right, it's time to take your calls and questions today on anything financial. The number to call is 800-525-7000.

The calls are coming in, but still a few lines open. We'd love to tackle what you're considering today, 800-525-7000. Before we dive in today, let me also mention, as we start a new year, so many folks thinking about getting their financial house in order as we begin 2024. That often involves a plan to get out of debt. And certainly near the top of the list is once and for all getting on a spending plan and maintaining that spending plan throughout the year, which is more important now than ever, especially given high inflation that's been mounting over the last few years. And perhaps some tweaking is necessary in your budget.

I know it has been in ours as we look at starting a new year at the West household. So if you'd like some help with that, we'd love to be a resource. The FaithFi app was designed for that purpose alongside the community where you can post questions, get encouragement, as well as all of our content. There is a money management system in there built around Larry Burkett's tried and true envelope system, but in a modern, beautiful, simple interface where you can set up your plan for the month, you can fund your envelopes automatically through the app. And you're not actually moving money, but you can see the money in the app allocated to each envelope.

And the key there is it lets you know how much you have left to spend in each budget category so that you can make real time corrections throughout the month. It's all there in the FaithFi app. Just head to our website, faithfi.com.

That's faithfi.com and then click the app button or go straight to your app store, Google Play or Apple and search for FaithFi and you can download it today. All right, we're going to dive in again. Four lines open, 800-525-7000. Let's start today in Lancaster, PA, WDAC. Hi, Steve. Go ahead, sir. How are you doing? Two quick questions.

I'll do the second easy one first. My wife and I, we tithe cheerfully and a little bit above, but her opinion is the tithe should go directly to the home church. And I think that if you're giving cheerfully where you see need in the ministries or wherever it might be, and you're giving in the spirit of the Lord, that that should count to your tithe. Do you have an opinion on that?

Yeah, I have an opinion and that's all it is because I think ultimately, Steve, and I appreciate the question. Ultimately, this is between you and your wife and the Lord. You know, you're right. New Testament giving is giving cheerfully. It's giving freely. I would say it's giving systematically, but also sacrificially. We see that clearly modeled when Jesus celebrated probably the most famous giver in the Bible, and that was the widow. We don't know her name. We just know she gave out of her poverty.

And so I think those are the keys. This is not about checking a box or being legalistic. It really is an act of worship, an overflow of our great gratitude toward the Lord for the grace that he's extended to us, starting with our salvation. And so, you know, again, I think that's between you and the Lord. Now, clearly God's plan, Plan A, is the local church. And I think we see clear precedent in Scripture that we are to give to support the work of the local church. So that's why I, this would get to, you know, where my opinion comes in, why I would start with the tithe going to the local church.

And then I'd look at that as a beginning point. You know, my friend Randy Alcor and the author calls that the training wheels of giving. And so if we're starting with that systematic guideline of giving a tenth of our increase to the local church, then we begin to give beyond that more sacrificially as the Lord leads. That's where helping those in need comes in, you know, along our path, maybe supporting the work of a Christian ministry or charity, that type of thing. But at the end of the day, I would say it's ultimately between you and the Lord. Okay.

And then the second question is, again, a more technical question. My wife tithes religiously, pardon the pun, on her gross income from her work as a nurse. I've been self-employed for almost 40 years, and mine is many shades of gray. But on her Social Security payment into a fund, whether it's coerced or not, I've raised the point that she's paying into a fund. And when you get a Social Security payment back when you retire, you're basically getting your own money back that she's already tithed on. Do you think that that could be a proper observation of that, or is that something that should just go by the wayside? Yeah, no, I think it's perfectly appropriate to take that approach.

You know, I would say first you pray about it and say, Lord, what would you have me to do? Second, I think there really are two approaches to this, and you've each touched on them in your different viewpoints. One is the simple method, which just says, despite the fact that she was giving off of the gross and therefore has given on a portion of what has been paid in and now being returned to her through Social Security, the simple method says everything I receive is a gracious gift from God, and so I'm just going to tithe on the entire Social Security check and act of worship and thanksgiving to the Lord. There is another approach, and I think you're hitting on it, where you try to establish, in my view, you could, you know, it's a little more complicated, but you'd establish a percentage that represents the portion of every benefit check that is returning what you paid in and the percentage, the remaining amount that you're receiving beyond that, which could be considered the growth in it.

And so one way to do that would be you could look at your benefit statement, which is available at myssa.gov, and they'll show you the total amount you paid in during your working years, and then you could estimate how much you would receive back over the course of your lifetime, and you could use your life expectancy as that number, and then say, okay, if I paid an X amount and I'm going to receive over the course of my life Y, then you could establish a percentage that says X percent is the amount that I'm being returned to me, and Y percent is equivalent to essentially what is the gain, and then that portion you could tithe on it because that would be your increase. Again, that takes a little work, but I think it would be a perfectly appropriate approach. Does that make sense or did I lose you? It certainly makes sense.

It kind of gives you a little bit of justification for what I feel, even though we're blessed enough that I'm probably not going to do it. Neither one of us are collecting Social Security yet, but I was just analyzing because yesterday on your program where we listened here, you were talking about Social Security, and I'm like, that's a fund. That's what you paid into.

That's exactly right. Clearly, through those FICA taxes that went in, but keep in mind, it gets even a little bit more complicated because if she was a W-2 employee, remember half of the FICA taxes, which includes Social Security, was paid by her employer, so she only paid half. It does get a little complicated there when you begin to look at it, and so that's why I think this other approach of just saying, you know what, Lord, I can never out give you, and everything I receive comes from your hand, and so I'm going to give freely and cheerfully and generously, but I certainly wouldn't minimize, Steve, your perspective on this because you're exactly right.

She has been tithing on the gross, and therefore, at least a portion of what's coming back through her benefit check, she's already tithed on. Hey, God bless you, my friend. Thanks for listening to us there in Pennsylvania. We appreciate it. Folks, we're going to take a quick break when we come back. A lot more questions coming up, and room for one or two more at 800-525-7000. Stick around. We'll be right back.

Well, it's great to have you with us today on Faith in Finance Live. I'm Rob West. We're taking your calls and questions today on anything financial, so let's head right back to the phone to a beautiful Juneau, Alaska. Hi, Christy. Thanks for your call.

Go ahead. Thank you. You or one of your predecessors years ago talked about employing children or teenagers to work in a family business, and there were regulations about it, but I can't recall if the discussion was about taxes or about the minimum employment age, so anything that you could give me information about that would be helpful. Yeah, that's great. Let me just ask, what type of family business do you have?

Oh, I don't. It's one of my kids who wants, who is a counselor, a therapist who wants to employ a child. Got it.

Yeah. So the key here is you can pay children under the age of 18 for working in a family business. You know, though, generally speaking, the wages are not subject to the usual Social Security or Medicare taxes for those children under 18.

18 and beyond they would be. And so this allows essentially the business to take the wages as a deduction from the taxable income without having to pay the payroll taxes, which is, you know, a great opportunity, and to, you know, allow your kids to begin building up some money as long as they're doing real work. You know, one opportunity you have beyond that is, you know, for instance, if you were to keep the annual wage less than or equal to the tax year standard deduction, you know, then the child wouldn't even need to file a tax return or, you know, owe any additional taxes.

So that, you know, for 2024 is for an individual is $14,600. So, you know, there is a great opportunity there. I think, you know, it's always wise, especially when you're doing something new and, you know, to check with the CPA or tax preparer just to make sure you're doing it properly. But generally speaking, this is a great opportunity for you to begin to compensate the kids.

Yeah, I think this is just something like cleaning the office and some of those jobs, not counseling people. Yeah, yeah. No, I understand that. Okay. Well, thank you very much. All right. You're very welcome. Thanks for calling today. We appreciate it. Eight hundred five two five seven thousand is the number to call.

Let's go to Minnesota. Hi, Ruby. How can I help you? Hi. Well, thank you.

You already have you. And Larry Burkett and others were just telling us what the Bible has to say about faith and finances. And it has kept us from a lot of messes. But now I'm helping a relative who is in a pretty big mess. I'm distributing an inheritance. I can give them seventeen thousand dollars a year.

We want it to count. And so they have four car loans over sixty eight thousand dollars each. I'm over sixty eight thousand dollars total from what we can see. And they have other loans, not credit card debt. We would like to be able to help them out by doing something with getting them out from underneath at least one of those loans.

That's twenty three point nine nine percent. How do we best work with them or with the car loaner to get at least something taken care of? Yeah. Let me just ask without getting into the details, is this just are you the executor of a will or are you a trustee on a trust? I was. The money was put in my name prior to the death because I was he was in the nursing home and I was paying his bills and paying the nursing home bills. We didn't expect him to die so quickly. We thought it would be his estate would be run down fairly quickly at a nursing home. But there was some left so that it was in my name. So thus it is like me gifting it to them. OK, because normally you would go through the state's intestate succession laws, which just basically says if you die without a will, the court still gets involved and makes the decisions on the the owner of the assets, the deceased's behalf. And generally, you know, they will distribute that to family. Now, obviously, if this money has been put in your name prior to the death and it's really your asset, not his. And at that point, you would be just trying to honor his wishes for the gift that he made to you, which is essentially what that would have been. So you just may want to check with an estate attorney just to make sure you're handling this properly.

So there's not any question down the road. But clearly, you know, if you have money, because that's essentially the way we'll treat this here and you're wanting to gift it to someone else, you can give up to $18,000 per person here in 2024. That's up from $17,000 last year to an individual, as many individuals as you want. And as long as you don't go above that $18,000, you don't even have to let the IRS know. At that point, it wouldn't be taxable beyond $18,000. You would just have to fill out the gift tax form, which would take away from your lifetime extension, which is now over $13 million.

So you got quite a ways before that comes into play. So I guess the question is, you're wondering how do we make the gift and structure it in such a way where we know that it's accomplishing the purpose for which we intended and that's to pay off debt. Is that right? Yes, especially to get them in a position where they're not going to have to go bankrupt again. So they've gone bankrupt in the past. They do not have credit cards because they're not allowed to. But they are allowed to have these car loans. Yeah, four of them.

Yeah, got it. Well, obviously, the key here is to write, you know, the ship in terms of getting them on a healthy track financially where they're making the right decisions and not just, you know, continuing a cycle that's of poor decision making here in the finances. Obviously, if you come in and pay off one of the debts, even if you verify that it's been paid off, there's nothing going to stop them from going out and, you know, trying to get another loan or continuing to spend beyond their means.

Obviously, you only have so much control. One of the keys I think might be getting a third party involved. We have a team of what we call certified Christian financial counselors here at Faithfi. You can find them on our website at faithfi.com slash cert, C-E-R-T, CFC, cert CFC, and that's short for Certified Christian Financial Counselor, faithfi.com slash cert CFC.

You'll find about a dozen, and this list is growing, but about a dozen men and women who've been trained as biblical financial counselors. And any of those could come in and work with this family member to help them set up a plan that's sustainable, start putting the right disciplines in place and create a plan to pay off the debt. That would be the direction I would go. I've got to hit a break, Ruby. Stay on the line. We'll talk a bit more off the air. We'll be right back.

Well, thanks for joining us today on Faith and Finance Live. I'm Rob Lask. We're taking your calls and questions today.

800-525-7000 is the number to call. Let's go to Paramount, Florida. Hi, Nancy. Go right ahead. Hi. Hi.

Thanks for taking my call. I caught up this Christmas in a little thing that I wasn't sure what was happening. I was sure, but I wasn't sure how it would affect me. I have a store card, just a store card. And at some point, they, without me knowing it, they changed it to a MasterCard, which is fine.

We have very good credit. But while I was paying for something, the cashier said, would you like to apply for a rewards card? You'll save $50 on this purchase. Like, I just did. And I thought later on, what did I just do?

What did I just do? So I'm wondering if it would hurt my credit if I closed that out. No, I don't think so. I mean, you may see a temporary drop of maybe 10 or 20 or 30 points at the most. But this isn't an account that had a lot of history associated with it, given that you just opened it a month ago.

You know, more than anything, probably what pulled your score down. And again, we're talking a minimal amount here was just the authorization that you extended when you, you know, allowed them to open the account in your name because they would have had to go pull your credit report to do that. So you turning around and closing it really isn't going to change anything. So I would just go ahead and do it if you don't plan to use it. You know, these these store cards are not the best just because they have, they tend to have very high interest rates. They're often with companies that are not considered top tier lenders. And so they just don't help you from a credit mix standpoint. And if you're not going to use it, it's just one more account to keep up with. So I wouldn't worry about it. Nancy, are you going to look into buy a car or a house or get a loan or anything in the next six months? Oh, no, no, we don't know.

Yeah. So it really, it really doesn't matter anyway. I mean, it's, it's nice to know that your credit score is as high as it can be. But it really doesn't come into play for somebody in your season of life unless you're going to go out and try to qualify for a loan. And at this point, you don't have any interest in doing that.

So it really doesn't matter anyway. So I would say absolutely close it. Don't look back and don't give it one more thought. Oh, thank you. Okay. Thank you very much. You're welcome. May Lord bless you. Thanks for calling.

Let's see. We've got three lines open at 800-525-7000. You can call right now to Anderson, Indiana. Hi, Becky. Go ahead. Hi, Rob. Thanks for taking my call.

I really appreciate your program. Thank you. So I recently received an inheritance. And so I'm interested in your thoughts about tithing from that and how taxes might figure into that.

Yeah. Well, from the tax standpoint, there really are no taxes. Any taxes that would be due would be paid by the estate prior to you receiving the inheritance. And given that, you know, the state taxes, at least on the current law, don't kick in until you get above $13 million. Most estates are taxable. There is no inheritance tax.

So you're not going to have any tax on that money. In terms of a tithe, I love the principle of the tithe as a guideline. I like considering it as a starting point for our giving. You know, we're not under the law of Moses, so it's not about a legalistic approach. And yet we did even see a reference to the tithe before the law of Moses.

So I think it's a great beginning point. The key, I think, to New Testament giving is giving freely and giving cheerfully, giving sacrificially. But using the tithe as a beginning place to say, on my increase, I'm going to give as unto the Lord, starting with my local church, I think is great. And if we apply the principle of the tithe, I would say it does apply to an inheritance because that's your increase. You know, everything we receive is from the Lord, whether it comes from the government as a Social Security check or our employer as wages or an inheritance.

You know, that's ultimately it all belongs to God, and he's now entrusting it to us. So an inheritance check would absolutely be an increase. So I would follow the same kind of pattern of giving you do with anything else you would receive. So just to clarify, the inheritance is in the form of stocks. So that's where I was wondering about the taxes part, because right now I've received the stocks, but at some point, if I sell some of them, then what would you how would you look at that from a tithing perspective? Yeah, it's a great question.

So, right. I wouldn't tithe on it now if you're going to if you receive the stocks and you're going to continue to hold them from a tax standpoint, what happens is you get what's called a step up in basis. So if you receive these as an inheritance, the cost basis that determines the capital gain or loss, the cost basis is stepped up to the market value of those stocks as of the date of death. So that the idea there is if you were to receive them as an inheritance and then turn around and sell them right away, you have no taxes due, no capital gains because of that step up in basis.

Now, if the basis steps up, but you hold the stocks and then they continue to increase in value over time, then, yeah, at that point, you would have a capital gain that you would owe either a short term gain if you sell it within a year or a long term gain if you sell it in more than a year. So that is something to consider. Now, in terms of the tithe, you have a couple of approaches. One is to say, well, all of this is an increase. And, you know, as of the day you receive it. And so you go ahead and liquidate a portion of the portfolio to pay a tithe. And then from that point forward, you would tithe on only the gains that you had. So maybe every time you sell a stock, you'd say, OK, on this particular stock, we made X dollars.

And so I'm going to tithe on the gain because you had already, you know, given the tithe on the whole thing when you received it. But that's just one approach. I mean, there's not a right or wrong answer here.

It's ultimately between you and the Lord. But does that make sense? Yes, it does. Thanks for helping me think that through. You're welcome.

Yeah. So I think that the big idea here is to break up you receiving this increase at the at the point of inheritance and you saying, OK, the full amount of this portfolio is my increase. And so I want to give a tithe. And then from that point forward, you've already tithed on that money. Think of it like money you would have received as income that you would have tithed on. And then now you're deciding to invest it, although you're just keeping the same stocks. And then at that point, from that point forward, we're just looking at gains or losses. And then you could look at that maybe on an annual basis total. And this is a good tax time is a good time to do it because you got to calculate gains and losses anyway for the year. And so you could total up all the gains, subtract all the losses.

And if you have a positive number, then you go ahead and tithe from that point forward. So I know we're getting a little technical here, but I hope that helps you, Becky. Clearly, you want to honor the Lord with this and I'm wanting to help you do that. So thanks for calling today. We appreciate it very much. Let's see. We're going to head to another break here in just a moment. So Jane will be coming your way after the break.

Charles in Indiana, as well as Kathy in Cleveland. Hey, let me mention, you know, as we start a new year, often we're thinking about how we can position ourselves well for the new year. And this week I've been sharing a couple of ideas on some financial moves you can make for 2024.

Here's one to consider. What about starting a monthly money date with your spouse? This would be a time to review your spending plan, update your goals, make course corrections, not finger pointing. This is a chance for you all to get on the same page financially.

And if you have a budget, especially, let's say you're using the FaithFi app, you could go in there and say, hey, we're out of money, you know, in our eating out. It's two weeks into the month. What are we going to do? Now all of a sudden we can talk about a plan to course correct and make some changes. And maybe we're eating at home for the rest of the month, the next two weeks, you know, whatever it is. Well, that happens, I think most effectively when we're coming together, communicating, planning, working together to manage God's money. It could be a game changer in your marriage.

Consider starting that this month. Hey, we're going to take a quick break and then back with our final segment just around the corner. Stay tuned. Great to have you with us today on faith and finance live. You know, something big happened at the end of the year. Mint, the popular budgeting app and software shut down.

A lot of folks, millions actually were relying on mint and into it. The owner decided to go a different direction and a well, if you're looking for a replacement for your spending plan, your tracking, and you want to be a part of the larger faith fi community, sharing wisdom around your finances, encouraging each other and growing and learning together. The faith fi app could be a perfect replacement.

Just head to your app store and search for faith fi or go to our website, faith fi.com and click app. We'd love for you to check it out today. All right, we're going to go back to the phones here in our final segment. Let's get to as many questions as we can to Chicago. Hi, Jane. Go ahead. Hi, Rob.

This is a chain. Of course, I'm calling because I have the, uh, I paid into the, uh, deferred comp 457 plan. And, uh, I've been hearing a lot about this digital currency and I'm concerned that it will, uh, replace the dollar. Uh, I've been retired since 2016, but I haven't made any withdrawals from my current plan. And I was wondering how can I protect my money?

Yeah, I appreciate that, Jane. Uh, you know, there's a lot of talk about the digital currency. I think there's a lot of reason to be concerned, uh, if that were to ever come to pass, just because of the loss of privacy that it would entail and the potential for even social controls like we see in other, a few other countries.

Uh, here's the thing though, it's a long way off. It's going to have to go through Congress and they can't seem to agree on anything. Uh, if it does happen someday, uh, you know, based on what we're seeing and reading, it would not replace our currency. It would only supplement it. So it would offer a digital option. And the idea would be that it would be to keep us competitive here in the United States because of the dollar. A digital dollar would be very attractive around the world, but that the actual legal tender of the physical currency would not go away. Uh, but again, there, there's a lot of reason why I think a lot of lawmakers and including some of the states that have gotten ahead of this, like Florida has said that the central bank digital currency would not conform with their uniform commercial code.

So they're trying to kind of make a statement out in front of this thing. But bottom line is it's a long way off. I think you were smart to put that money into your four 57 you got the tax deferred growth along the way. So I wouldn't do anything different than you're doing right now in terms of protecting your money. I'd probably, uh, if you've separated from employment, I'd look at rolling that out to an IRA and leave it invested. That's going to be the very best way for you to offset the effects of inflation and grow this appropriately for your age and risk tolerance. So you're going to want to get more conservative over time. And I'd recommend if you haven't to this point, and I can see why you wouldn't have with a four 57, it's kind of hands off. Um, you know, once you roll it to an IRA, you probably want to interview and ultimately hire a financial advisor, uh, to manage this for you.

But I wouldn't make any changes in light of a possible digital currency down the road. Oh, okay. Cause I've been hearing quite a bit of information, uh, out there and I just didn't know. Thank you so much. I'll call back at another time, Rob, if I have any questions. Thank you so very much. God bless you. Please do, Jane. Thank you. And Lord bless you as well. Uh, to Noblesville, Indiana. Hi Charles.

How can I help? Thank you, Rob, for taking my call. I have a grandson. I want to get a car for when he gets to 18.

And I was wondering, should I put the funds now in a CD or a U S I bond? Hmm. Yeah. That's a good question, Charles. You're a generous grandfather.

I love what you're thinking here. How old is your grandson today? Uh, 15. Okay. So we're only talking three years, huh? Yeah. Three years. Okay.

Yeah. I think a CD is your best option. You know, that, that I bond rate, given that the federal reserve is so laser focused on bringing inflation down, that I bond rate is going to continue to fall. Uh, whereas CDs are fairly attractive right now, especially on a three year CD. So as long as you don't think there's a need, you know, to have access to the money in less than three years, I'd probably head to bank rate.com and look for who has the best, uh, three year CD rates right now and lock that in, get as much as you can on that money for the next 36 months. And then you'll be ready to go.

It's guaranteed as long as you have an FDIC insured bank or credit union, and you'll have the money to be able to gift to your grandson at that point. Thank you, Rob. You know, you've really been a blessing.

Well thank you. That's very kind, Charles. We appreciate you calling today.

Uh, let's go to Cleveland. Hi Kathy. How can I help you?

Hi, thanks for taking my call. Um, back in 2015 when my dad passed away, my mother moved in with me and that was kind of always the plan in the back of our heads. Um, so she's been with me all that time now and I'm our primary caregiver as she's aging and, and, uh, her health is really taking a turn. And one thing that we did when she moved in at some point was put my name on her checking and savings account. And then as she lived with me, occasionally we'd buy a CD, you know, or do an I-bond, something like that, but we've never really touched that fund. And it's the money that she got from selling her condo when she moved in with me.

So it's just continued to grow and we primarily lived off my income, um, which we were able to do. Um, and her thought was, you're taking care of me once I'm gone, it's yours, but I just wanted to make sure, um, there's no legal issues with that. Yeah. Does she have a will Kathy? Uh, no, she's thinking in her mind, since I put your name on my account, I don't need one.

Yeah. The problem is that you're joint owners. So your co-owners of this money, uh, which means that you'd be entitled to 50% of it when she passes away, the other 50% would be a part of her estate. And without, um, a will, she would die in test state, which means that the court would decide who gets it now. They're going to favor family members. And if you're the only child is, is that the case?

No, it's not. Okay. Then, then she's already given money to my brother. So she, she made a gift of money to him twice over the past years. Um, so that in her mind she thinks she's good.

Yeah. But the challenge is it's not going to be up to her because she'd be gone at that point. And the court would be the one determining who receives that money.

And they're going to divide it equally in all likelihood. So what I would do is, um, she could either gift the whole amount to you. Uh, and then she, if it's over 18,000, she, which obviously it does, it is cause she'd, you have the proceeds of a home sale in here. Then she'd have to file a gift tax return with the IRS. There's no taxes due, but she'd have to report it cause it would take away from her lifetime gift exemption of $13 million, which is probably not quite that much. Uh, or she could go and get a will, which is probably not a bad idea anyway, because then again it tells the court exactly how she wants everything distributed.

And I realize there might not be much there, but maybe there are some personal effects and things like that. And you know, that would just save the hassle of having to rely on the court to make those decisions. So she would get a will establish her wishes that she wants everything left to you, make you the, uh, the executor. And then you would, uh, you know, handle that process at her death, which given her situation would be fairly simple.

Um, but apart from that, it's, you know, the, the portion that she owns, which if, if you're joint owners, she owns 50% of these accounts, that would be up to the court to decide how it's distributed. Okay. Gotcha. All right.

That makes sense. Thank you very much. Okay, Kathy, thanks for your call today. We appreciate it. Uh, by the way, if you want to find a godly estate attorney there in Cleveland, just go to our website, faithfi.com, click find a CKA and any of those certified kingdom advisors could help you find a godly estate attorney. And while you're there dealing with this issue of the will and just making sure everything is in order, it's probably good to make sure you have a healthcare surrogate so you can make healthcare decisions, a power of attorney so you can make legal and financial decisions and even a living will, uh, that establishes her wishes around end of life decisions.

So all of that could be handled at the same time and you'll be glad you'll have all of those in place. Thanks for your call. Let's go down to Florida. Hi Brian. It looks like you'll be our final caller. Go ahead.

Hello. Um, my mortgage, I only owe like $75,000. I got a timeshare.

Tell me how great it was. So I bought one and then the interest was really high. So I got a home equity loan to pay for. I thought I was doing the right thing, but it's just, but it went way up and I didn't know this till a couple months ago. Like $20 is going toward the principle on that. That's it. That's my $260 payment, you know?

Lovely. So I was wondering if I should, cause my, my mortgage is only three 45. I only owe 75. I didn't know if I, if I should get another mortgage and combine them or, well, you probably have a low rate though on that 75,000, right? Yeah, it's only 3.5.

Yeah, no, you're, so you're not going to want to touch that. Uh, you know, unfortunately, uh, I probably wouldn't do anything right now other than just try to pay as much as you can over the monthly payment to the home equity line of credit. The good news is rates are going to start coming down, although it won't happen quick. I mean, let's say, uh, you know, this rate is in the fives by the end of next year.

Uh, you know, we probably won't see the fours until the year following, but, um, at least it's coming down. But I wouldn't, you know, the cost of refinancing that mortgage on top of the fact that you'd be letting go of that great rate just makes that, uh, you'd want to take that off the table immediately. Um, a second mortgage fixed at these rates is not going to be attractive to you. So I'd probably just stick with it, uh, while ride the rates down. And in the meantime, let's eliminate any unnecessary spending so you can apply as much as possible toward, um, you know, principal on that 30,000 every month. And I owe about 11,000 on my, on my vehicle. And I was wondering if I could double up on that and pay that off as quick as I could.

And then that way I can pay a lot more on the, yeah, that's probably not a bad idea because that rate's probably not great either. Is that one of the sixes or sevens? Uh, actually it's like five. Okay. Yeah. I like that. Cause as soon as you pay that off, you get that full payment that you can redirect toward the, the, uh, home equity loan. Uh, so in line of credit, uh, very good, Brian. Well, I think that's a great plan. We appreciate your call today and folks we're out of time. Faith and finance lives, a partnership between Moody radio and faith by thank you to Lisa, Amy, Dan and Jim.

Couldn't do it without them. I'm Rob West. We'll see you tomorrow. Bye.