September 19, 2025 • 43 mins
Have you ever wondered what happens to your debts when you’re gone? The truth is, those obligations don’t always disappear, and without a plan, your family could be left to untangle a painful financial mess. On the next Faith & Finance Live, Rob West looks at how debt is handled after death—and the simple steps you can take now to protect the people you love. Then, it’s on to your calls. That’s Faith & Finance Live —where biblical wisdom meets today’s finances, weekdays at 4pm Eastern/3pm Central on Moody Radio.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
S1 (00:08):
Have you ever wondered what happens to your debts when
you're gone? Hi, I'm Rob West. The truth is, those
obligations don't always disappear. And without a plan, your family
could be left to untangle a painful financial mess. Today,
we'll look at how debt is handled after death and
the simple steps you can take now to protect the
people you love. And then it's on to your calls
(00:30):
at 800, 500, 25, 7000. That's 805, two, five, 7000.
This is faith in finance. Live biblical wisdom for your
financial journey. Losing someone you love is hard enough. Add
the stress of creditors, paperwork and unanswered questions and it
(00:52):
can become overwhelming. That's why it's so important to understand
what happens to debt after death, and how a little
planning today can spare your family unnecessary heartache and confusion tomorrow. Now,
of course, debts won't matter to you personally at that point,
but they could matter a great deal to those you
leave behind. Many people assume debts simply vanish. Well, that's
(01:14):
true in some cases, most of the time. The reality
is more complicated, and families can spend months sorting through
paperwork and hard decisions if they're not prepared. Creating a
clear plan now, one that includes organized records, updated beneficiaries,
and a will or trust can make all the difference.
Take student loans, for example. Federal loans, including plus loans
(01:37):
parents take out for their kids, are discharged if the
borrower dies. But private student loans often follow different rules.
Some lenders will forgive the debt, others seek repayment from
the estate or a cosigner. If you're thinking about co-signing,
make sure you understand what would happen if life takes
an unexpected turn. Medical debt can also be tricky. Some
(01:59):
providers will write off smaller balances, but there's no requirement
for them to do so. And in an age of
rising health care costs, those balances can be significant. Without
a plan, creditors can quickly drain assets your family may
be counting on. Loved ones may even need to sell
property to settle final bills. Most debts don't just disappear.
(02:20):
They'll either be covered by your estate or in some cases,
transferred to others. To understand how it helps to know
the two main types of debt secured and unsecured. Secured
debts are tied to an asset such as a home
or car. If you pass away with a mortgage, the
heir who inherits the property also inherits the payments. The
(02:41):
same is true for a car loan. If your loved
ones are unable to make the payments, the lender may
foreclose or repossess the property. That can be devastating when
a family is already grieving. Unsecured debts such as credit
cards are different. Unless someone is a joint account holder,
they won't inherit that debt. Authorized users, for instance, aren't responsible. Instead,
(03:04):
those debts are usually paid from your estate. Creditors, by law,
get paid before heirs or charities. That's why some families
are surprised to learn an unexpected inheritance is smaller or
gone after debts are settled. There's good news. Some assets
are protected life insurance proceeds and retirement accounts with named beneficiaries.
(03:26):
Bypass your estate entirely and go directly to your loved
one's creditors. Can't touch them. But this only works if
your beneficiary designations are accurate and up to date. An
outdated form can unintentionally exclude a spouse or child, creating
a financial and relational mess. In community property states Arizona, California, Idaho, Louisiana, Nevada,
(03:50):
New Mexico, Texas, Washington, and Wisconsin. Hodson marital assets and
often marital debts are jointly owned. A surviving spouse could
be held responsible for obligations they didn't directly take on.
And let's circle back to cosign loans. Whether it's a
child's car loan or a friend's personal loan, co-signing makes
(04:12):
you equally responsible. If either party dies, the other remains
on the hook. Many well-meaning parents and grandparents have been
blindsided by this reality because the rules can vary so much.
It's wise to meet with an estate attorney and review
your situation. A one time consultation could save your loved
ones months of confusion and heartache later. Of course, the
(04:35):
best safeguard is to carry as little debt as possible.
Living with financial margin not only provides flexibility today, but
also leaves a simpler, cleaner estate tomorrow. And along the way,
you'll model something far more valuable than any inheritance. A
life of faithful stewardship. So review your accounts, update your beneficiaries,
(04:57):
pay down debt, and meet with a professional if needed.
All right. Your calls are next. That number 800 525 7000.
That's 800 525 7000. Or if you'd prefer to email
your questions send it to us at ask Rob at baby.com.
I'm Rob West. A quick break and back with more
after this. Stick around.
S2 (05:35):
The opinions offered during this program represent the personal or
professional opinions of the participants, given for informational purposes only.
Any information provided is not intended to replace advice from
a financial, medical, legal, or other professional who understands your
specific situation.
S1 (05:58):
Great to have you with us today on Faith and
finance live, I'm Rob West. Looking forward to taking these
calls and questions that are coming in. We have nearly
all the lines full, but there's still room for you
at the moment. So there's something going on in your
financial life you'd like to talk about it today? We'd
love to chat about it with you. That number to
call is 800 525 7000. Again, that number is 800
(06:19):
525 7000. Go ahead and get in the queue right now.
We'll get to as many calls as we can today.
In fact, let's dive right in. We're going to begin
in Ohio today Jeff. Go ahead sir.
S3 (06:30):
Hello, Rob. Um, just first, we'd like to thank you
for your wisdom and dedication to helping others.
S1 (06:36):
Well, thank you, I appreciate that.
S3 (06:38):
No problem. Um, we recently were able to refinance our
house and save 1.25% interest. And we were able to
skip two months before the next payment, which is due
October 1st. We want to know, are we better off
to use those two skip payments that we've saved and
apply that to the principal payment only? Or are we
(07:00):
better off to make a payment early, apply one payment
to the principal and then start making our normal payment
on October 1st, and so forth on so that we
save on our and avoid possible daily compounded interest.
S1 (07:17):
Yeah, yeah, it's a good question. Let me ask you,
do you already have an emergency fund separate from the
money you've saved through the the gap and the payments?
S3 (07:26):
Yes. We have 17,000 in savings okay.
S1 (07:29):
And is that equal to at least three months worth
of expenses?
S3 (07:33):
Yeah, it's more than that.
S1 (07:34):
Yeah. Great. Uh, you know, you can never go wrong
here by going ahead and paying early. I mean, that
one extra payment early won't reduce the interest before the
first due date because it's already built into closing. Um,
but once that loan is active. Any extra principal payments
reduce future interest over the life of the loan, which
(07:54):
means that, you know that's going to serve you really well.
So I think, you know, paying one month ahead or
even adding a small amount extra to each month if
you have the ability to do that is a great habit.
It's going to shorten the loan. It's going to save
you thousands in interest in the long run and gives
you a peace of mind if something unexpected comes up.
So I would say, all things being equal, you know,
(08:17):
we haven't talked about other priorities you have, but as
long as you've got that emergency fund, you don't have
any other high interest debt that this could go toward.
You know, going ahead and getting that against the principal
is never a bad idea.
S3 (08:30):
Okay. Yeah. The only thing we do is we make
extra payments on every principal payment anyway, and we just
didn't know which one was going to work better for
us to just go ahead and apply it all to
principal or be one month ahead forever, hopefully until it's
paid off.
S1 (08:46):
Yeah, I see what you're saying. Um, yeah. I mean,
I think it really is just a semantics thing, um,
because you really can't get one month ahead unless you
send it during the, the cycle. That's going to allow
it to be credited as a payment versus credited to principal. Um,
so if your goal is just to save as much
(09:07):
as possible on interest, I'd go ahead and get that paid,
you know, as soon as you have the ability. And
if the money's sitting there, why not? Um, you know,
if the goal is to be able to, you know,
cover a month where for some reason, something came out
of left field, and you want to have that payment
that's counted toward the scheduled amortization payments, then you'd probably
(09:29):
want to set that aside, um, you know, and kind
of earmark it for that purpose over and above your
emergency fund. But if you're not concerned about that, uh,
I'd say just go ahead and get it in as
soon as you can.
S3 (09:41):
Okay. We'll just go ahead and do that then. Thank
you very much.
S1 (09:44):
Absolutely. Jeff, thanks for your call today. Hey, stay on
the line. I want to send you a copy of
our magazine. Faithful steward. I think you'll enjoy it. Just
to say, thanks for calling today. Let's go to Hamilton, Montana. Amanda,
how can I help?
S4 (09:56):
Uh, yes. I just, um, gathered some money for a
down payment on a house, and my closing got moved
from today until about a month from now. And so
I have quite a chunk of change in my bank account.
And I was wondering if I should reinvest that while
I'm waiting for closing in a month, or just kind
(10:17):
of let it chill?
S1 (10:19):
Yeah. Where is it now? Is it in a savings account?
S4 (10:24):
It's just in my checking account. It was in a Vanguard, um,
advised account.
S1 (10:31):
Okay. Yeah. And how much money are we talking about?
S4 (10:35):
Um, I have, like, 45,000.
S1 (10:39):
45,000? Yeah. So, I mean, right now you're getting about 4%,
you know, in potentially in the money market, maybe a
little bit more. You'd want to check that. So what
is the value of 45,000 at 4% for 30 days.
That's $150. That's not bad. Um, so, you know, I might,
you know, go ahead and move it back to that
(11:00):
money market. I wouldn't do anything else with it. You
want to keep it very liquid, very safe. But if
you can, you know, bring an extra $150 in interest
over 30 days. I don't think that's a bad idea,
especially if it just involves a couple of clicks to
do an ACH transfer over to that account.
S4 (11:18):
Okay. That's that's kind of what I was wondering. I
didn't know if I'd be too risky. Thank you very much.
S1 (11:25):
You are welcome. Yeah. You don't want to put it
at risk, but I think as long as it's just
a transfer in and out between accounts, you already have
open and you know you're using the ACH system to
move it back and forth just to maximize. It's called
the float, essentially. I mean, it's it's how banks make money.
It's how, you know, a lot of institutions make money.
They're making money on your money while it's waiting to
(11:47):
be settled after a transaction or something like that. So
you're essentially taking this extra 30 days and this great
job you've done in savings and putting it to work
for you, not in stocks and bonds or anything that
has the potential to lose value, but in something very
safe backed by the FDIC, which is that that money
market account. So I'm on board. I think it's a
(12:09):
great idea. Thanks for your call today. Uh, let's see,
we'll go to, uh, Arkansas. Sandra, how can I help you?
S5 (12:15):
Hi. Um, I have a tithe question. Okay. So my first,
if you first question is if you inherit a house,
how do you tithe on that? But then when you
sell it, as we did, we went ahead and sold it.
And so the situation is we it's on an unusual
piece of property in the midst of a ministry. It'd
(12:36):
be kind of like Lauren Cunningham's house in the middle
of Ywam. And so it gets sold. And it had
to be we had to be careful who we sold
it to. So we found a ministry minded people that
were coming, but their budget was about 7000, less about
15 to 20% less than what it was worth. And
I thought, well, as a gift to ministry to the kingdom,
(12:58):
we'll sell it to them for less. Um, but then
you get the money and you're like, do I need
to tithe on this money? And then I'm like, well,
if it were just a house and I was living
in it, would I tithe on that? And I'm just
kind of confused about inheritance and tithing.
S1 (13:13):
Yeah. Well, the good news is God isn't an accountant,
and he sees your heart and it all belongs to
him anyway. But I understand your question. And you want
to honor the Lord with the principle of the tithe,
which is to give off of your increase. So how
do you approach an increase with an inheritance? Well, technically
it's all an increase, 100% of it. Um, but it
(13:33):
comes to you by way of an illiquid asset, an
asset that is not easily converted to cash because it's
real estate. It's real property. Now, as soon as you
sell it, it really doesn't matter that you sold it
at a discount because it was all an increase to
begin with. And so I think, again, between you and
(13:54):
the Lord, how much giving do you want to do
off of it? Well, because it was received as an increase. Now,
as a gift to this missionary or missionaries, you sold
it at a discount. So I would say your increase
is really the net proceeds of that sale. As you
get that illiquid asset and make it liquid by selling it,
(14:15):
that's the amount you would consider for a tithe. Now
I'm up against a break here. I want to get
your thoughts on all this. If you don't mind staying
right there Sandra I'd love to pick it up on
the other side. This is faith and finance live. We'll
be right back. Great to have you with us today
(14:37):
on Faith and finance live. I'm Rob West. We're taking
your calls and questions. All the lines are full, so
if you're getting a busy signal, just be patient. We'll
try to get to as many calls as we can
here today. Before the break we were talking to Sandra
in Arkansas. She inherited a house from her parents. It
was worth about 550,000. It was located within a property
(14:58):
that's used for ministry. And so they actually sold it
to some missionaries for less than the market value. As
a gift, as a way to to help them get
into the property and to use it for ministry. And
she's wondering how to think about tithing on this property.
So as I was saying, Sandra, the principle of the
tithe is based on an increase. So technically your increase
(15:21):
was realized when you received the property. Um, you know,
as an inheritance so equal to 550,000. Now the challenge
is if you receive an asset as an increase, unless
you liquidate that asset, you'd have to have other resources
to come out of pocket in order to essentially give
a tithe on that property. But as I mentioned, you know,
(15:43):
New Testament giving is really, you know, giving. That's an
act of worship. I think it is proportionate. So I
like the principle of the tithe. I think it's sacrificial.
I think we give as just a natural response to
the grace that's been extended to us by God. We
can't out give him. Um, but again, he's not an accountant,
so we don't want to make this, you know, a
(16:03):
legalistic effort either. Which is why I would say typically
you receive an inheritance, you might wait until you liquidate it.
At that point. I love the idea of setting aside
a portion of it, uh, to give. And maybe it's
a 10th. That'd be a great starting point now, because
you sold this at a at a essentially under market value,
(16:23):
I think it would be very reasonable to say, even
though the true increase was the full amount you received
at inheritance, perhaps as you think about giving off of
the increase, perhaps you give off of that reduced amount because,
you know, you essentially gave that away to these missionaries
so you could take the proceeds of that sale and
(16:43):
essentially say, you know what? We're going to take a
10th of that. Let's say you sold that $550,000 property
for 500. We're going to put 50,000 in a donor
advised fund. And as the Lord leads, we're going to
give that away or we're going to give it to
our church immediately. I think that would be very appropriate.
But give me your thoughts.
S5 (17:02):
Well, I guess my heart was when I sold it
to them, I was giving to the kingdom. You know,
I was giving 70,000 to the kingdom. Um, so I
guess that's what I was thinking. But then you're like, well, cash,
when you get cash, you feel like you gotta you
gotta tithe on it.
S6 (17:19):
So. Yes. Well, I think that's very.
S1 (17:22):
Appropriate, though, because you you did. I mean, you gave
as unto the Lord to bless these missionaries. I'm sure
they're thrilled. You did sell it under market. So you
could have gotten 70,000 more, which would be sitting in
your bank account. You chose to do that differently, so
I think I would be very comfortable with that. Ultimately,
it's between you and the Lord. But I would say,
(17:42):
you know, that that's a very appropriate response. And and listen,
it all belongs to God. 100% of of the proceeds
and the home and everything you have, every dollar. It
all belongs to him anyway. And so we just look
at this as a privilege to give it as unto
the Lord. And you did that by way of these
missionaries and I think that's great.
S5 (18:02):
Mhm. Yeah. No I get what you're saying. And I'm
taking it's a bigger picture. You're giving me a broader picture. Okay.
Thank you so.
S6 (18:09):
Much. You're welcome.
S1 (18:10):
Hey stay on the line I'm going to send you
in our new edition of Faithful Steward, our magazine. We
take a deep dive on the issue of the tithe, and.
S6 (18:17):
I think you'll.
S1 (18:18):
Be encouraged by this article. So stay on the line.
We're going to get your information, and I'll have the
team put one in the mail to you. Thanks for calling, Sandra.
You're welcome. Mimi's in Florida. Go ahead.
S7 (18:28):
Hey, good. Good afternoon. I just want to ask if, um,
should I have an IRA irony into different banks. And
then if I have those, should I connect those to
different accounts?
S1 (18:41):
Yeah. You know, you can have multiple IRAs at different institutions. Um,
I don't think it's necessary. In fact, it's going to
make for more paperwork. Um, just by spreading it out
across institutions. And although the, the, um, the value of
the account is not protected, meaning when you have an
(19:03):
IRA and you invest it in stocks and bonds or
whatever it's invested in, there's no one that's going to
guarantee that those, uh, those investments aren't going to lose value.
But the account itself is protected by SIPC against, uh,
the financial institution, the custodian of the IRA going under
(19:24):
having fraud or theft or, you know, going bankrupt. Something
like that doesn't happen very often. Could it happen? Yes.
And that's why I the SIPC is there. So I
think bottom line is I don't think you need to
be in different banks just for safety's sake, um, or
different custodians. But you can it's perfectly appropriate. And if
(19:47):
you decided to or that's just the way it worked out,
connecting them electronically, um, is probably not something that they're
going to want to do. Typically you'd, you'd link, you know,
your maybe a checking or a savings account. Normally you
can't link an IRA to an outside account, another IRA,
you might be able to link an IRA to a
(20:08):
checking account or a savings as a funding vehicle, but
not normally to another IRA. But I don't think it's
needed if you're really worrying. Worrying about, um, you know,
the institution going under.
S7 (20:21):
Okay. Thank you so much.
S1 (20:23):
All right. Thanks, Mimi. Appreciate your call today. Uh, let's
go to Wildwood, Florida. Lynne is listening on the Moody
Radio app. Lynne. Go ahead.
S8 (20:32):
Hi, Rob. Thanks for taking my call. Sure. Um, I
have I have a question, um, about. I cosigned an
auto loan with my son. Excuse me. And I want
to take my name off of that loan. Now, um,
is that something that's very difficult to do or.
S1 (20:52):
Yes. Yeah. I mean, it is because you can't just
take your name off. The lender would have to agree.
And so. And they have no incentive to let you
out from under it, because that's just one less person
they can go after. If for some reason the payment
isn't made and it it elevates their risk by you
(21:12):
no longer being on it. So what are your options? Well,
you can refinance it. So you'd go out and find
another loan to essentially replace the existing loan. Except your
son would qualify for this one on his own. Second
is you pay off the loan that ends the obligation entirely.
The third is you sell the car. The loan gets
(21:32):
paid with the sale proceeds, but until then, you're legally responsible. Now,
I know you had a second part to your question,
so let's do this. I'll get your thoughts on that.
And the second question right after this break. Stay right there.
This is faith in finance. Live I'm Rob West taking
your calls and questions today. We've got some good ones
coming up. So don't go anywhere. We'll be right back.
(22:07):
It's great to have you with us today on faith
in finance live. Hey, before we head back to the
phones here, and we're going to pick up our conversation
with Lynn, let me remind you, we're in the midst
this month of our, uh, goal of putting shoes on
1000 children around the world and our partnership with Buckner
shoes for orphan souls. You know, here in this country,
a new pair of shoes, albeit very expensive. Um, is
(22:30):
pretty common, right? I mean, we need a new pair
of shoes or our kids. Do we just go out
and buy them? And another part of the world, uh,
the access to shoes for many in a vulnerable place
and in some third world countries is the difference between
them staying healthy and avoiding foot borne disease, their access
to school. They can't go to school without shoes. Um,
(22:52):
and as a part of these shoe distributions that Buckner
does around the world, they share the love of Jesus
and they partner with a local church. So there's ministry
that's taking place well beyond the shoe distribution. Well, our
goal this month right here is we're in the back
to school season in the US is to partner with
Buckner to put 1000 pairs of shoes and socks on
(23:12):
a child somewhere around the world. Every $15 does that.
We're on our way to 1000 pairs of shoes, and
we're about halfway there. We've got about 500 of those
shoes funded. We've got 11 days left in the month.
So if you would partner with us, we'd certainly be grateful.
Just go to give shoes today. That's give shoes today.
(23:33):
It'll just take you two minutes. And every $15 that
you give, we'll put a new pair of shoes and
socks and cover the cost of the transportation to get
the shoes to the distribution. Again, that website give shoes today.
All right, back to the phones. Uh, Lynn is in
Wildwood now. Lynn, we were talking before the break about
(23:54):
how you remove your name from a loan you cosigned. Lynn,
cosigned with her son on a car. She wants out.
And as I was saying, the the lender just has
no incentive to do that. And so it's going to
require either refi a payoff or selling the car. Give
me your thoughts on that.
S8 (24:10):
Well, I have to have my name removed, um, because
I'm retired and don't have any income to, um, you know,
pay the amount of the loan. So, uh, I and
I've talked to my son, And he said something about, well,
he thought about selling it, but he didn't know that
(24:31):
he would be able to get enough from, um, from
the sale of the car to cover the loan. So what, they, um.
What I guess what my question is, then would it
be better to get refinancing through, um, my personal bank or, um,
(24:51):
an online lender?
S1 (24:52):
Yeah. Well, the first question is, can he qualify on
his own? Why did you do it in the first place?
Was it, you know, did he have bad credit? Does
he have, you know, was he in between jobs? What
was the situation?
S8 (25:04):
Well, he's you know, he's working. Um, the only problem
is that business is slow down. And, um, this is
not as busy as it was. So he's having difficulty
making payments.
S1 (25:18):
Ah, yeah. Um, and so he, with regard to this loan,
has he had some late payments on this current loan,
or did you have to step in to keep it current?
S8 (25:29):
No I couldn't. So yes, he's had late payment. It's
been destroying my credit. Yeah, so.
S1 (25:36):
I know I get it. Unfortunately, this is the situation
that happened so often, and I realize, you know, out
of the goodness of your heart and this is your
son who you love, and you want to help at
all costs. Uh, you know, you're not. This is not
an uncommon situation. I will say. I think, you know,
one of the reasons the Bible is pretty clear we
shouldn't co-sign is because of what the reality is, is
(25:58):
that more than half the time when we do, the
person who's co-signing has to step in. There's a reason
that the person can't qualify on their own. The challenge
he's going to have, Lynn and I know this is
not going to be encouraging in this situation, but given
that his credit is probably trashed and he's already got
late payments on this loan, if he's even able to
(26:21):
refinance it without you. And that's a big question mark.
It's going to be at a very high interest rate
because of his poor credit and the fact that, you know,
he's got these late payments on this very loan. Um, now,
you know, could he go into his local bank or
credit union? That's usually where you can do the best. Yes.
He could look at some online, you know, payment or
(26:41):
online lenders. Um, you know, he could go to NerdWallet.
He could go to Bankrate and see who has the
best rates right now. Um, the challenge is just going
to be his credit. And so I don't think there's
going to be a quick fix here. You know, if
he's not in a situation where he can qualify for
this loan on his own, unfortunately the only option is
(27:03):
going to be selling the car. Um, you know, and
because the lender is, no way is going to let
you off of this loan, unfortunately.
S8 (27:12):
Right? Yeah. Oh, boy.
S1 (27:15):
Yeah.
S8 (27:16):
It's not a whole lot of option, I see.
S1 (27:18):
I know, I'm so sorry. Um, but is he upside
down on it? I mean, does he owe more than
it's worth? Do you know?
S8 (27:27):
Um, no. He's paid almost like, 55% of the loan already. Okay.
So he owes. I think he owes about 2223.
S1 (27:37):
And what do you think it's worth? Does he. Do
you know?
S8 (27:41):
I have no idea.
S1 (27:42):
Yeah. So that would be a good next step. Is
for you or him to go to Edmunds.com. Uh, or Kbb.com.
That's Kelley Blue Book and just put in the year
the condition, the mileage, the make. And it'll tell you
what it's worth on a private sale or a trade,
you'd be interested in private sale value. And the starting
(28:04):
point is to say, is this car worth more than
the loan? And if it is, then selling it as
an option. Now at that point he has no transportation.
He'd have to figure something out. But apart from that,
if he continues to have late payments, that's going to
continue to just erode your credit even worse than it
already is. Now, if you don't need any new credit,
(28:26):
meaning you're not out there, you're trying to open an
account or get a loan. You know, obviously it is
what it is. Um, but unfortunately, the only way to
kind of stop the bleeding here, if you will, is
to get you off. And that's only going to happen
if he refinances it. And that's not likely given what
you're describing. Or he sells it and pays off the loan. So, um, listen,
(28:48):
hang in there. Um, and, um, you know, if we
can help further along the way, let us know if
you would like. I'd be happy to offer a certified
Christian financial counselor to work with him on his budget
and his spending plan, and a debt repayment plan. We
would cover the cost of that, so it wouldn't cost
him anything. But at the end of the day, if
this is an income problem, you know, he's probably just
(29:10):
going to have to go get another job or get
a second job or do something to right the ship. Um, because,
you know, you can only do so much planning and budgeting.
At the end of the day, you got to have
enough income to meet your obligations.
S8 (29:23):
Exactly right. Yeah. Right. Okay. Yeah. If you have a
Kingdom advisor, that would be great.
S1 (29:30):
Yeah, it wouldn't be a Kingdom advisor, but I realize
what you're saying. It would be a certified Christian financial counselor.
So these are folks that are trained as stewardship counselors.
They really specialize in budgeting and debt, that type of thing.
So we'll cover the cost as long as he'll take
advantage of it. You hold the line, our team will
get your information, and we'll get one of those cert
kfcs in touch with you.
S8 (29:51):
Okay. All right. Thank you very much.
S1 (29:53):
You're welcome. Lynn. Lord bless you. Thanks for calling today.
Let's go to Ohio. Hi, Debbie. How can I help?
S5 (29:59):
Hi.
S4 (30:00):
Um.
S8 (30:02):
The lady summarized my issue very well.
S5 (30:05):
Um.
S8 (30:06):
My husband and I have a financial advisor that we
have been going to for five plus years.
S9 (30:13):
Okay. And, um, my husband retired on, um, May 30th.
I have a very a part time job, and, um,
our advisor is looking down the road to whenever we're
90 and said we need to start making a plan
for all these RMDs and how much money you're going
(30:34):
to have being owing in taxes. So he has advised
that we need to take out a variable life insurance policy,
which would be, um, which would have a high yield,
high risk.
S1 (30:55):
Um, yeah. Got it. Hang on right there. We'll pick
it up after the break. We'll be right back. Thanks
for joining us today on Faith and Finance Live. I'm
Rob West. We're taking your calls and questions today, helping
you live as a wise and faithful steward of God's resources.
(31:16):
Before the break, we had the privilege of talking to
Debbie in Ohio. Her husband has recently retired. He has
a large 401 K and their financial advisor. If I
understand correctly, Debbie is recommending that because of the RMDs,
the required minimums that are upcoming. Um, he would like
for you to take the money that's coming out as
(31:37):
an RMD, which is taxable, and use that to fund a, um,
a variable life insurance policy. Did I get that right?
S10 (31:47):
That's correct.
S1 (31:48):
Okay. And what is your what is your age or
your husband's age?
S9 (31:53):
I'm 68 and he's 66.
S1 (31:56):
Okay. Um, so that's a long way off because that
RMD is not going to kick in until 73. But
he's advising you do this now.
S10 (32:06):
That's correct. So that in the future.
S9 (32:10):
We won't have to RMD on this money. And it
will kind of like protect this money and give us
less R&D, less taxable income whenever we're like, I don't know,
85 or 90 or something.
S1 (32:25):
Yeah, yeah. Um, how much is in the 401 K?
S9 (32:31):
Both of ours together. Just cause.
S1 (32:33):
Uh, both together.
S8 (32:36):
Um.
S9 (32:37):
800.
S1 (32:38):
800,000. And so he's recommending that you try to systematically
get all of this money into the variable annuity.
S9 (32:48):
Not all of it. No. It would be, uh, it
would be 7000 a year, which would have 100 for
each of us, which would have 160,000 life insurance policy
attached to it. And after, you know, I don't have
the table in front of me like 12 years, then,
you know, if everything's at 9% and continues to grow and,
(33:11):
you know, then in um, 13 years, that will be
the amount of money in that account will be over 160. And,
you know, we'll be on the upside.
S1 (33:25):
Yeah. Yeah. I mean, this is just a complicated strategy
that I feel like is unnecessary. Um, I hate to
disagree with your advisor, and it's not that he's doing
anything incorrect. I mean, this is a planning strategy. Now,
there typically are commissions tied to these, but and so
you always have to just, you know, wonder what's the
(33:46):
the real reason behind it. But you know, annuities are complicated.
I mean, there is a strategy where you say essentially,
you know, once RMDs start, which would be age 73,
the withdrawals are taxable income, whether you need them or not.
So some advisors suggest you take those RMD dollars, pay
the tax, then put what's left into a permanent life
(34:07):
insurance policy. And the idea is that then it has
tax deferred growth inside the policy, and then the death
benefit passes income tax free to the heirs. And then
it's possibly a way to to transfer wealth more efficiently
than just leaving the taxable assets behind. Um, and so
(34:27):
it creates a tax advantaged inheritance for the heirs. But again,
there's high fees in these things. There are complex. It
requires ongoing premiums that are going to get more expensive
over time. You know, the investment side is market based.
So your cash value can go down, uh, unless there's
a floor on it. But you're certainly not going to
(34:48):
get all the upside. And there are other mechanisms by
which you get that money out of there without ever
paying any tax, namely a qualified charitable distribution. Which means
if you all are doing any giving, you know, anywhere
close to what your RMDs would be, you could stop
doing that out of after tax dollars from your checking
(35:08):
or savings account and start doing all of your giving
from your IRA. If we roll the 401 over to
an IRA. And when those come out and go straight
to your church or other ministries. You never pay any
tax on it. And then we've eliminated the tax. And
you don't have this expensive, complicated life insurance policy to boot.
S9 (35:32):
Okay. So that was my question. And that gives me
some guidance as to how to proceed. Thank you very much.
S1 (35:42):
Okay. You're welcome Debbie. God bless you. Thanks for being
on the program today. Let's go to Florida. George, how
can I help?
S11 (35:49):
Uh. Two questions. Um, I was running out of money,
and I was. So I decided to take my retirement early.
I'm 69. I've been taking my my social security, taking
my social Security for the last few months. And can I.
And I got a good job now that I'm real
confident in. Can I put that on pause and pick
(36:11):
it up in 16 months?
S1 (36:13):
Yeah. So, uh, when did you start taking it?
S11 (36:18):
About three months ago.
S1 (36:20):
Okay. Yeah. I mean, so you can suspend your Social Security. Um,
and if you've been receiving it for less than 12 months,
you can withdraw your application entirely. It's called a withdrawal
of benefits. Now, you'd have to repay everything you've received
so far, including any spousal benefit that was paid off
of your record, if there was any. And it's like
(36:42):
your application never happened. And then you can restart it
at age 70 with that, you know, by locking in
that higher amount. Um, if you don't want to pay
it back, you could suspend it, uh, until 70. And,
you know, that is an option so long as you
started it after full retirement age, which you did, and
then your payments stop and you start earning delayed retirement
(37:04):
credits at that point. Um, but if you have the
money to pay it back, you know you could treat
it as if it never happened.
S11 (37:13):
No, I don't have that.
S1 (37:15):
Okay.
S11 (37:16):
But if I do, but I don't. I don't want
to pay it back. Okay, okay.
S1 (37:22):
So you would just suspend your benefits until age 70?
S11 (37:25):
Okay. All right. Uh. Second question.
S1 (37:29):
Yeah. Go ahead.
S11 (37:31):
Reverse mortgages on my house. I'm getting real close to
having 50% equity in my house, and I can I
can get a reverse mortgage after I get 50% right.
S1 (37:44):
Yes.
S11 (37:45):
Okay. Now, my. The loan is in my name. The
house is in my wife's name. And my name. The
title is. Do I have to have her signature if
I get a reverse mortgage?
S1 (37:59):
Yeah. I mean, the only kind of reverse mortgage I
would recommend is a home equity conversion mortgage. And it's
got to be, you know, a planning strategy that makes sense.
But yeah. Uh, yes. The FHA requires that all owners
listed on the deed sign the loan documents regardless of
who's on the mortgage, the current forward mortgage.
S11 (38:19):
But I could go to home equity line of credit
without her signature.
S1 (38:22):
That's true. Yes, but the FHA requires. With a home
equity conversion mortgage, everyone listed on the deed has to
sign the loan documents. Uh, it protects her rights as
a non borrowing spouse to ensure that she can remain
in the home if you pass first.
S11 (38:39):
Right. Okay. All right. Thank you so much.
S1 (38:41):
All right. Thanks for your call, George. We appreciate you
being on the program today. You know, folks, we've covered
a lot of ground today. You know, as we think
about managing God's money wisely, it ultimately comes down to
our beginning point here is that God owns everything and
that we're stewards. And we look to God's Word to
find those principles, those passages, the heart of God as
(39:03):
it relates to how we manage God's money, and our
goal each day is just to help you do that.
As you spend less than you earn and avoid debt,
and set long term goals and give generously and have
some margin or some liquidity. And here's what we find
over time. And this came up several times today, is
that these principles that we see in God's Word, they
work well. We shouldn't be surprised, right? Because it is
(39:26):
God's Word. But I mean, you know, diversification. That's not
a Wall Street idea. That's a King Solomon idea. Ecclesiastes
11 two don't put all your eggs in one basket,
essentially is what it says. And we see that. And
when we violate it, we pay the penalty. You know,
and especially in an environment like this. We talked about
this yesterday with Mark Behler. You know when the market's
(39:48):
hitting new all time highs every day. And AI is
going crazy. And we keep hearing about Bitcoin. You know
there's this tendency to say oh diversification is just causing
me to lose money in this portion of my portfolio.
Why don't I just put everything in fill in the blank,
whatever it is, the hot kind of stock of the day.
And you know, what happens then is, you know, we
(40:09):
find ourselves in a situation where we've violated these principles
from God's Word. And when we do, we pay the
price for it. Another one that came up today is
this whole idea of cosigning. You know, we see the
principle in God's Word around cosigning that we should stay
away from it, that it's it's not wise. We should
avoid it at all costs. And when we go ahead
(40:32):
with it and then, you know, the other party doesn't pay,
we realize, wait a minute, there's wisdom there. So ultimately,
what we want to do is cause you to understand
that God's Word is relevant and authoritative to every domain
of life, and that includes money management. You know, when
we understand that this ancient text from, you know, inspired
(40:57):
by God through the writers of God's Word Um is
true and applicable to every facet of our lives, and
that includes how we manage money. And so our heart
condition and our understanding that money can be an idol
very quickly in our lives, and we need to be
on our guard against that. The principles that apply to
(41:19):
our daily money management practices, that we should follow the
the model of of Joseph and set something aside during
the years of plenty for the for the famine that
might be coming that we should, you know, go to
the ant and look at her ways and and see
how she stores up, uh, during the harvest for the,
for the winter. And understanding that, you know what, we
(41:40):
should give generously and there shouldn't be any needs among
those in the body of Christ if we're all sharing
what we have, uh, out of equality to love our
neighbors and and serve God's people through our generosity, you
put all of that together. And what you find is
there's an incredible opportunity to use God's good gift called
money that is intended to be a blessing from a
(42:02):
good God who created joy and delight for God's purposes
and for our enjoyment, and to love our neighbor through
our giving, and yes, to invest strategically. And when we
do that, we experience God's best. Now, when we allow
it to occupy a place that was never intended, when
it becomes the end and not a means to an end, well,
that's when all kinds of problems are created. I hope
(42:24):
today has been an encouragement to you. I'm so grateful
that you joined us today. Hey, Faith and Finance Live
is listener supported, so I would make an ask of you.
If you love the program, you found something helpful. Just
head to our website and if you can learn how
to become a partner, we'd certainly be grateful. Big thanks
to my team today. I've got an amazing group of
men and women serving us like we do every day. Dan, Anthony, Jim, Cheyenne, Tara,
(42:49):
Faith and finance lives. A partnership between Moody Radio and
Faith V. Come back and join us tomorrow. Or actually
next week. We'll see you then. Bye bye.
Have you ever wondered what happens to your debts when
you're gone? Hi, I'm Rob West. The truth is, those
obligations don't always disappear. And without a plan, your family
could be left to untangle a painful financial mess. Today,
we'll look at how debt is handled after death and
the simple steps you can take now to protect the
people you love. And then it's on to your calls
(00:30):
at 800, 500, 25, 7000. That's 805, two, five, 7000.
This is faith in finance. Live biblical wisdom for your
financial journey. Losing someone you love is hard enough. Add
the stress of creditors, paperwork and unanswered questions and it
(00:52):
can become overwhelming. That's why it's so important to understand
what happens to debt after death, and how a little
planning today can spare your family unnecessary heartache and confusion tomorrow. Now,
of course, debts won't matter to you personally at that point,
but they could matter a great deal to those you
leave behind. Many people assume debts simply vanish. Well, that's
(01:14):
true in some cases, most of the time. The reality
is more complicated, and families can spend months sorting through
paperwork and hard decisions if they're not prepared. Creating a
clear plan now, one that includes organized records, updated beneficiaries,
and a will or trust can make all the difference.
Take student loans, for example. Federal loans, including plus loans
(01:37):
parents take out for their kids, are discharged if the
borrower dies. But private student loans often follow different rules.
Some lenders will forgive the debt, others seek repayment from
the estate or a cosigner. If you're thinking about co-signing,
make sure you understand what would happen if life takes
an unexpected turn. Medical debt can also be tricky. Some
(01:59):
providers will write off smaller balances, but there's no requirement
for them to do so. And in an age of
rising health care costs, those balances can be significant. Without
a plan, creditors can quickly drain assets your family may
be counting on. Loved ones may even need to sell
property to settle final bills. Most debts don't just disappear.
(02:20):
They'll either be covered by your estate or in some cases,
transferred to others. To understand how it helps to know
the two main types of debt secured and unsecured. Secured
debts are tied to an asset such as a home
or car. If you pass away with a mortgage, the
heir who inherits the property also inherits the payments. The
(02:41):
same is true for a car loan. If your loved
ones are unable to make the payments, the lender may
foreclose or repossess the property. That can be devastating when
a family is already grieving. Unsecured debts such as credit
cards are different. Unless someone is a joint account holder,
they won't inherit that debt. Authorized users, for instance, aren't responsible. Instead,
(03:04):
those debts are usually paid from your estate. Creditors, by law,
get paid before heirs or charities. That's why some families
are surprised to learn an unexpected inheritance is smaller or
gone after debts are settled. There's good news. Some assets
are protected life insurance proceeds and retirement accounts with named beneficiaries.
(03:26):
Bypass your estate entirely and go directly to your loved
one's creditors. Can't touch them. But this only works if
your beneficiary designations are accurate and up to date. An
outdated form can unintentionally exclude a spouse or child, creating
a financial and relational mess. In community property states Arizona, California, Idaho, Louisiana, Nevada,
(03:50):
New Mexico, Texas, Washington, and Wisconsin. Hodson marital assets and
often marital debts are jointly owned. A surviving spouse could
be held responsible for obligations they didn't directly take on.
And let's circle back to cosign loans. Whether it's a
child's car loan or a friend's personal loan, co-signing makes
(04:12):
you equally responsible. If either party dies, the other remains
on the hook. Many well-meaning parents and grandparents have been
blindsided by this reality because the rules can vary so much.
It's wise to meet with an estate attorney and review
your situation. A one time consultation could save your loved
ones months of confusion and heartache later. Of course, the
(04:35):
best safeguard is to carry as little debt as possible.
Living with financial margin not only provides flexibility today, but
also leaves a simpler, cleaner estate tomorrow. And along the way,
you'll model something far more valuable than any inheritance. A
life of faithful stewardship. So review your accounts, update your beneficiaries,
(04:57):
pay down debt, and meet with a professional if needed.
All right. Your calls are next. That number 800 525 7000.
That's 800 525 7000. Or if you'd prefer to email
your questions send it to us at ask Rob at baby.com.
I'm Rob West. A quick break and back with more
after this. Stick around.
S2 (05:35):
The opinions offered during this program represent the personal or
professional opinions of the participants, given for informational purposes only.
Any information provided is not intended to replace advice from
a financial, medical, legal, or other professional who understands your
specific situation.
S1 (05:58):
Great to have you with us today on Faith and
finance live, I'm Rob West. Looking forward to taking these
calls and questions that are coming in. We have nearly
all the lines full, but there's still room for you
at the moment. So there's something going on in your
financial life you'd like to talk about it today? We'd
love to chat about it with you. That number to
call is 800 525 7000. Again, that number is 800
(06:19):
525 7000. Go ahead and get in the queue right now.
We'll get to as many calls as we can today.
In fact, let's dive right in. We're going to begin
in Ohio today Jeff. Go ahead sir.
S3 (06:30):
Hello, Rob. Um, just first, we'd like to thank you
for your wisdom and dedication to helping others.
S1 (06:36):
Well, thank you, I appreciate that.
S3 (06:38):
No problem. Um, we recently were able to refinance our
house and save 1.25% interest. And we were able to
skip two months before the next payment, which is due
October 1st. We want to know, are we better off
to use those two skip payments that we've saved and
apply that to the principal payment only? Or are we
(07:00):
better off to make a payment early, apply one payment
to the principal and then start making our normal payment
on October 1st, and so forth on so that we
save on our and avoid possible daily compounded interest.
S1 (07:17):
Yeah, yeah, it's a good question. Let me ask you,
do you already have an emergency fund separate from the
money you've saved through the the gap and the payments?
S3 (07:26):
Yes. We have 17,000 in savings okay.
S1 (07:29):
And is that equal to at least three months worth
of expenses?
S3 (07:33):
Yeah, it's more than that.
S1 (07:34):
Yeah. Great. Uh, you know, you can never go wrong
here by going ahead and paying early. I mean, that
one extra payment early won't reduce the interest before the
first due date because it's already built into closing. Um,
but once that loan is active. Any extra principal payments
reduce future interest over the life of the loan, which
(07:54):
means that, you know that's going to serve you really well.
So I think, you know, paying one month ahead or
even adding a small amount extra to each month if
you have the ability to do that is a great habit.
It's going to shorten the loan. It's going to save
you thousands in interest in the long run and gives
you a peace of mind if something unexpected comes up.
So I would say, all things being equal, you know,
(08:17):
we haven't talked about other priorities you have, but as
long as you've got that emergency fund, you don't have
any other high interest debt that this could go toward.
You know, going ahead and getting that against the principal
is never a bad idea.
S3 (08:30):
Okay. Yeah. The only thing we do is we make
extra payments on every principal payment anyway, and we just
didn't know which one was going to work better for
us to just go ahead and apply it all to
principal or be one month ahead forever, hopefully until it's
paid off.
S1 (08:46):
Yeah, I see what you're saying. Um, yeah. I mean,
I think it really is just a semantics thing, um,
because you really can't get one month ahead unless you
send it during the, the cycle. That's going to allow
it to be credited as a payment versus credited to principal. Um,
so if your goal is just to save as much
(09:07):
as possible on interest, I'd go ahead and get that paid,
you know, as soon as you have the ability. And
if the money's sitting there, why not? Um, you know,
if the goal is to be able to, you know,
cover a month where for some reason, something came out
of left field, and you want to have that payment
that's counted toward the scheduled amortization payments, then you'd probably
(09:29):
want to set that aside, um, you know, and kind
of earmark it for that purpose over and above your
emergency fund. But if you're not concerned about that, uh,
I'd say just go ahead and get it in as
soon as you can.
S3 (09:41):
Okay. We'll just go ahead and do that then. Thank
you very much.
S1 (09:44):
Absolutely. Jeff, thanks for your call today. Hey, stay on
the line. I want to send you a copy of
our magazine. Faithful steward. I think you'll enjoy it. Just
to say, thanks for calling today. Let's go to Hamilton, Montana. Amanda,
how can I help?
S4 (09:56):
Uh, yes. I just, um, gathered some money for a
down payment on a house, and my closing got moved
from today until about a month from now. And so
I have quite a chunk of change in my bank account.
And I was wondering if I should reinvest that while
I'm waiting for closing in a month, or just kind
(10:17):
of let it chill?
S1 (10:19):
Yeah. Where is it now? Is it in a savings account?
S4 (10:24):
It's just in my checking account. It was in a Vanguard, um,
advised account.
S1 (10:31):
Okay. Yeah. And how much money are we talking about?
S4 (10:35):
Um, I have, like, 45,000.
S1 (10:39):
45,000? Yeah. So, I mean, right now you're getting about 4%,
you know, in potentially in the money market, maybe a
little bit more. You'd want to check that. So what
is the value of 45,000 at 4% for 30 days.
That's $150. That's not bad. Um, so, you know, I might,
you know, go ahead and move it back to that
(11:00):
money market. I wouldn't do anything else with it. You
want to keep it very liquid, very safe. But if
you can, you know, bring an extra $150 in interest
over 30 days. I don't think that's a bad idea,
especially if it just involves a couple of clicks to
do an ACH transfer over to that account.
S4 (11:18):
Okay. That's that's kind of what I was wondering. I
didn't know if I'd be too risky. Thank you very much.
S1 (11:25):
You are welcome. Yeah. You don't want to put it
at risk, but I think as long as it's just
a transfer in and out between accounts, you already have
open and you know you're using the ACH system to
move it back and forth just to maximize. It's called
the float, essentially. I mean, it's it's how banks make money.
It's how, you know, a lot of institutions make money.
They're making money on your money while it's waiting to
(11:47):
be settled after a transaction or something like that. So
you're essentially taking this extra 30 days and this great
job you've done in savings and putting it to work
for you, not in stocks and bonds or anything that
has the potential to lose value, but in something very
safe backed by the FDIC, which is that that money
market account. So I'm on board. I think it's a
(12:09):
great idea. Thanks for your call today. Uh, let's see,
we'll go to, uh, Arkansas. Sandra, how can I help you?
S5 (12:15):
Hi. Um, I have a tithe question. Okay. So my first,
if you first question is if you inherit a house,
how do you tithe on that? But then when you
sell it, as we did, we went ahead and sold it.
And so the situation is we it's on an unusual
piece of property in the midst of a ministry. It'd
(12:36):
be kind of like Lauren Cunningham's house in the middle
of Ywam. And so it gets sold. And it had
to be we had to be careful who we sold
it to. So we found a ministry minded people that
were coming, but their budget was about 7000, less about
15 to 20% less than what it was worth. And
I thought, well, as a gift to ministry to the kingdom,
(12:58):
we'll sell it to them for less. Um, but then
you get the money and you're like, do I need
to tithe on this money? And then I'm like, well,
if it were just a house and I was living
in it, would I tithe on that? And I'm just
kind of confused about inheritance and tithing.
S1 (13:13):
Yeah. Well, the good news is God isn't an accountant,
and he sees your heart and it all belongs to
him anyway. But I understand your question. And you want
to honor the Lord with the principle of the tithe,
which is to give off of your increase. So how
do you approach an increase with an inheritance? Well, technically
it's all an increase, 100% of it. Um, but it
(13:33):
comes to you by way of an illiquid asset, an
asset that is not easily converted to cash because it's
real estate. It's real property. Now, as soon as you
sell it, it really doesn't matter that you sold it
at a discount because it was all an increase to
begin with. And so I think, again, between you and
(13:54):
the Lord, how much giving do you want to do
off of it? Well, because it was received as an increase. Now,
as a gift to this missionary or missionaries, you sold
it at a discount. So I would say your increase
is really the net proceeds of that sale. As you
get that illiquid asset and make it liquid by selling it,
(14:15):
that's the amount you would consider for a tithe. Now
I'm up against a break here. I want to get
your thoughts on all this. If you don't mind staying
right there Sandra I'd love to pick it up on
the other side. This is faith and finance live. We'll
be right back. Great to have you with us today
(14:37):
on Faith and finance live. I'm Rob West. We're taking
your calls and questions. All the lines are full, so
if you're getting a busy signal, just be patient. We'll
try to get to as many calls as we can
here today. Before the break we were talking to Sandra
in Arkansas. She inherited a house from her parents. It
was worth about 550,000. It was located within a property
(14:58):
that's used for ministry. And so they actually sold it
to some missionaries for less than the market value. As
a gift, as a way to to help them get
into the property and to use it for ministry. And
she's wondering how to think about tithing on this property.
So as I was saying, Sandra, the principle of the
tithe is based on an increase. So technically your increase
(15:21):
was realized when you received the property. Um, you know,
as an inheritance so equal to 550,000. Now the challenge
is if you receive an asset as an increase, unless
you liquidate that asset, you'd have to have other resources
to come out of pocket in order to essentially give
a tithe on that property. But as I mentioned, you know,
(15:43):
New Testament giving is really, you know, giving. That's an
act of worship. I think it is proportionate. So I
like the principle of the tithe. I think it's sacrificial.
I think we give as just a natural response to
the grace that's been extended to us by God. We
can't out give him. Um, but again, he's not an accountant,
so we don't want to make this, you know, a
(16:03):
legalistic effort either. Which is why I would say typically
you receive an inheritance, you might wait until you liquidate it.
At that point. I love the idea of setting aside
a portion of it, uh, to give. And maybe it's
a 10th. That'd be a great starting point now, because
you sold this at a at a essentially under market value,
(16:23):
I think it would be very reasonable to say, even
though the true increase was the full amount you received
at inheritance, perhaps as you think about giving off of
the increase, perhaps you give off of that reduced amount because,
you know, you essentially gave that away to these missionaries
so you could take the proceeds of that sale and
(16:43):
essentially say, you know what? We're going to take a
10th of that. Let's say you sold that $550,000 property
for 500. We're going to put 50,000 in a donor
advised fund. And as the Lord leads, we're going to
give that away or we're going to give it to
our church immediately. I think that would be very appropriate.
But give me your thoughts.
S5 (17:02):
Well, I guess my heart was when I sold it
to them, I was giving to the kingdom. You know,
I was giving 70,000 to the kingdom. Um, so I
guess that's what I was thinking. But then you're like, well, cash,
when you get cash, you feel like you gotta you
gotta tithe on it.
S6 (17:19):
So. Yes. Well, I think that's very.
S1 (17:22):
Appropriate, though, because you you did. I mean, you gave
as unto the Lord to bless these missionaries. I'm sure
they're thrilled. You did sell it under market. So you
could have gotten 70,000 more, which would be sitting in
your bank account. You chose to do that differently, so
I think I would be very comfortable with that. Ultimately,
it's between you and the Lord. But I would say,
(17:42):
you know, that that's a very appropriate response. And and listen,
it all belongs to God. 100% of of the proceeds
and the home and everything you have, every dollar. It
all belongs to him anyway. And so we just look
at this as a privilege to give it as unto
the Lord. And you did that by way of these
missionaries and I think that's great.
S5 (18:02):
Mhm. Yeah. No I get what you're saying. And I'm
taking it's a bigger picture. You're giving me a broader picture. Okay.
Thank you so.
S6 (18:09):
Much. You're welcome.
S1 (18:10):
Hey stay on the line I'm going to send you
in our new edition of Faithful Steward, our magazine. We
take a deep dive on the issue of the tithe, and.
S6 (18:17):
I think you'll.
S1 (18:18):
Be encouraged by this article. So stay on the line.
We're going to get your information, and I'll have the
team put one in the mail to you. Thanks for calling, Sandra.
You're welcome. Mimi's in Florida. Go ahead.
S7 (18:28):
Hey, good. Good afternoon. I just want to ask if, um,
should I have an IRA irony into different banks. And
then if I have those, should I connect those to
different accounts?
S1 (18:41):
Yeah. You know, you can have multiple IRAs at different institutions. Um,
I don't think it's necessary. In fact, it's going to
make for more paperwork. Um, just by spreading it out
across institutions. And although the, the, um, the value of
the account is not protected, meaning when you have an
(19:03):
IRA and you invest it in stocks and bonds or
whatever it's invested in, there's no one that's going to
guarantee that those, uh, those investments aren't going to lose value.
But the account itself is protected by SIPC against, uh,
the financial institution, the custodian of the IRA going under
(19:24):
having fraud or theft or, you know, going bankrupt. Something
like that doesn't happen very often. Could it happen? Yes.
And that's why I the SIPC is there. So I
think bottom line is I don't think you need to
be in different banks just for safety's sake, um, or
different custodians. But you can it's perfectly appropriate. And if
(19:47):
you decided to or that's just the way it worked out,
connecting them electronically, um, is probably not something that they're
going to want to do. Typically you'd, you'd link, you know,
your maybe a checking or a savings account. Normally you
can't link an IRA to an outside account, another IRA,
you might be able to link an IRA to a
(20:08):
checking account or a savings as a funding vehicle, but
not normally to another IRA. But I don't think it's
needed if you're really worrying. Worrying about, um, you know,
the institution going under.
S7 (20:21):
Okay. Thank you so much.
S1 (20:23):
All right. Thanks, Mimi. Appreciate your call today. Uh, let's
go to Wildwood, Florida. Lynne is listening on the Moody
Radio app. Lynne. Go ahead.
S8 (20:32):
Hi, Rob. Thanks for taking my call. Sure. Um, I
have I have a question, um, about. I cosigned an
auto loan with my son. Excuse me. And I want
to take my name off of that loan. Now, um,
is that something that's very difficult to do or.
S1 (20:52):
Yes. Yeah. I mean, it is because you can't just
take your name off. The lender would have to agree.
And so. And they have no incentive to let you
out from under it, because that's just one less person
they can go after. If for some reason the payment
isn't made and it it elevates their risk by you
(21:12):
no longer being on it. So what are your options? Well,
you can refinance it. So you'd go out and find
another loan to essentially replace the existing loan. Except your
son would qualify for this one on his own. Second
is you pay off the loan that ends the obligation entirely.
The third is you sell the car. The loan gets
(21:32):
paid with the sale proceeds, but until then, you're legally responsible. Now,
I know you had a second part to your question,
so let's do this. I'll get your thoughts on that.
And the second question right after this break. Stay right there.
This is faith in finance. Live I'm Rob West taking
your calls and questions today. We've got some good ones
coming up. So don't go anywhere. We'll be right back.
(22:07):
It's great to have you with us today on faith
in finance live. Hey, before we head back to the
phones here, and we're going to pick up our conversation
with Lynn, let me remind you, we're in the midst
this month of our, uh, goal of putting shoes on
1000 children around the world and our partnership with Buckner
shoes for orphan souls. You know, here in this country,
a new pair of shoes, albeit very expensive. Um, is
(22:30):
pretty common, right? I mean, we need a new pair
of shoes or our kids. Do we just go out
and buy them? And another part of the world, uh,
the access to shoes for many in a vulnerable place
and in some third world countries is the difference between
them staying healthy and avoiding foot borne disease, their access
to school. They can't go to school without shoes. Um,
(22:52):
and as a part of these shoe distributions that Buckner
does around the world, they share the love of Jesus
and they partner with a local church. So there's ministry
that's taking place well beyond the shoe distribution. Well, our
goal this month right here is we're in the back
to school season in the US is to partner with
Buckner to put 1000 pairs of shoes and socks on
(23:12):
a child somewhere around the world. Every $15 does that.
We're on our way to 1000 pairs of shoes, and
we're about halfway there. We've got about 500 of those
shoes funded. We've got 11 days left in the month.
So if you would partner with us, we'd certainly be grateful.
Just go to give shoes today. That's give shoes today.
(23:33):
It'll just take you two minutes. And every $15 that
you give, we'll put a new pair of shoes and
socks and cover the cost of the transportation to get
the shoes to the distribution. Again, that website give shoes today.
All right, back to the phones. Uh, Lynn is in
Wildwood now. Lynn, we were talking before the break about
(23:54):
how you remove your name from a loan you cosigned. Lynn,
cosigned with her son on a car. She wants out.
And as I was saying, the the lender just has
no incentive to do that. And so it's going to
require either refi a payoff or selling the car. Give
me your thoughts on that.
S8 (24:10):
Well, I have to have my name removed, um, because
I'm retired and don't have any income to, um, you know,
pay the amount of the loan. So, uh, I and
I've talked to my son, And he said something about, well,
he thought about selling it, but he didn't know that
(24:31):
he would be able to get enough from, um, from
the sale of the car to cover the loan. So what, they, um.
What I guess what my question is, then would it
be better to get refinancing through, um, my personal bank or, um,
(24:51):
an online lender?
S1 (24:52):
Yeah. Well, the first question is, can he qualify on
his own? Why did you do it in the first place?
Was it, you know, did he have bad credit? Does
he have, you know, was he in between jobs? What
was the situation?
S8 (25:04):
Well, he's you know, he's working. Um, the only problem
is that business is slow down. And, um, this is
not as busy as it was. So he's having difficulty
making payments.
S1 (25:18):
Ah, yeah. Um, and so he, with regard to this loan,
has he had some late payments on this current loan,
or did you have to step in to keep it current?
S8 (25:29):
No I couldn't. So yes, he's had late payment. It's
been destroying my credit. Yeah, so.
S1 (25:36):
I know I get it. Unfortunately, this is the situation
that happened so often, and I realize, you know, out
of the goodness of your heart and this is your
son who you love, and you want to help at
all costs. Uh, you know, you're not. This is not
an uncommon situation. I will say. I think, you know,
one of the reasons the Bible is pretty clear we
shouldn't co-sign is because of what the reality is, is
(25:58):
that more than half the time when we do, the
person who's co-signing has to step in. There's a reason
that the person can't qualify on their own. The challenge
he's going to have, Lynn and I know this is
not going to be encouraging in this situation, but given
that his credit is probably trashed and he's already got
late payments on this loan, if he's even able to
(26:21):
refinance it without you. And that's a big question mark.
It's going to be at a very high interest rate
because of his poor credit and the fact that, you know,
he's got these late payments on this very loan. Um, now,
you know, could he go into his local bank or
credit union? That's usually where you can do the best. Yes.
He could look at some online, you know, payment or
(26:41):
online lenders. Um, you know, he could go to NerdWallet.
He could go to Bankrate and see who has the
best rates right now. Um, the challenge is just going
to be his credit. And so I don't think there's
going to be a quick fix here. You know, if
he's not in a situation where he can qualify for
this loan on his own, unfortunately the only option is
(27:03):
going to be selling the car. Um, you know, and
because the lender is, no way is going to let
you off of this loan, unfortunately.
S8 (27:12):
Right? Yeah. Oh, boy.
S1 (27:15):
Yeah.
S8 (27:16):
It's not a whole lot of option, I see.
S1 (27:18):
I know, I'm so sorry. Um, but is he upside
down on it? I mean, does he owe more than
it's worth? Do you know?
S8 (27:27):
Um, no. He's paid almost like, 55% of the loan already. Okay.
So he owes. I think he owes about 2223.
S1 (27:37):
And what do you think it's worth? Does he. Do
you know?
S8 (27:41):
I have no idea.
S1 (27:42):
Yeah. So that would be a good next step. Is
for you or him to go to Edmunds.com. Uh, or Kbb.com.
That's Kelley Blue Book and just put in the year
the condition, the mileage, the make. And it'll tell you
what it's worth on a private sale or a trade,
you'd be interested in private sale value. And the starting
(28:04):
point is to say, is this car worth more than
the loan? And if it is, then selling it as
an option. Now at that point he has no transportation.
He'd have to figure something out. But apart from that,
if he continues to have late payments, that's going to
continue to just erode your credit even worse than it
already is. Now, if you don't need any new credit,
(28:26):
meaning you're not out there, you're trying to open an
account or get a loan. You know, obviously it is
what it is. Um, but unfortunately, the only way to
kind of stop the bleeding here, if you will, is
to get you off. And that's only going to happen
if he refinances it. And that's not likely given what
you're describing. Or he sells it and pays off the loan. So, um, listen,
(28:48):
hang in there. Um, and, um, you know, if we
can help further along the way, let us know if
you would like. I'd be happy to offer a certified
Christian financial counselor to work with him on his budget
and his spending plan, and a debt repayment plan. We
would cover the cost of that, so it wouldn't cost
him anything. But at the end of the day, if
this is an income problem, you know, he's probably just
(29:10):
going to have to go get another job or get
a second job or do something to right the ship. Um, because,
you know, you can only do so much planning and budgeting.
At the end of the day, you got to have
enough income to meet your obligations.
S8 (29:23):
Exactly right. Yeah. Right. Okay. Yeah. If you have a
Kingdom advisor, that would be great.
S1 (29:30):
Yeah, it wouldn't be a Kingdom advisor, but I realize
what you're saying. It would be a certified Christian financial counselor.
So these are folks that are trained as stewardship counselors.
They really specialize in budgeting and debt, that type of thing.
So we'll cover the cost as long as he'll take
advantage of it. You hold the line, our team will
get your information, and we'll get one of those cert
kfcs in touch with you.
S8 (29:51):
Okay. All right. Thank you very much.
S1 (29:53):
You're welcome. Lynn. Lord bless you. Thanks for calling today.
Let's go to Ohio. Hi, Debbie. How can I help?
S5 (29:59):
Hi.
S4 (30:00):
Um.
S8 (30:02):
The lady summarized my issue very well.
S5 (30:05):
Um.
S8 (30:06):
My husband and I have a financial advisor that we
have been going to for five plus years.
S9 (30:13):
Okay. And, um, my husband retired on, um, May 30th.
I have a very a part time job, and, um,
our advisor is looking down the road to whenever we're
90 and said we need to start making a plan
for all these RMDs and how much money you're going
(30:34):
to have being owing in taxes. So he has advised
that we need to take out a variable life insurance policy,
which would be, um, which would have a high yield,
high risk.
S1 (30:55):
Um, yeah. Got it. Hang on right there. We'll pick
it up after the break. We'll be right back. Thanks
for joining us today on Faith and Finance Live. I'm
Rob West. We're taking your calls and questions today, helping
you live as a wise and faithful steward of God's resources.
(31:16):
Before the break, we had the privilege of talking to
Debbie in Ohio. Her husband has recently retired. He has
a large 401 K and their financial advisor. If I
understand correctly, Debbie is recommending that because of the RMDs,
the required minimums that are upcoming. Um, he would like
for you to take the money that's coming out as
(31:37):
an RMD, which is taxable, and use that to fund a, um,
a variable life insurance policy. Did I get that right?
S10 (31:47):
That's correct.
S1 (31:48):
Okay. And what is your what is your age or
your husband's age?
S9 (31:53):
I'm 68 and he's 66.
S1 (31:56):
Okay. Um, so that's a long way off because that
RMD is not going to kick in until 73. But
he's advising you do this now.
S10 (32:06):
That's correct. So that in the future.
S9 (32:10):
We won't have to RMD on this money. And it
will kind of like protect this money and give us
less R&D, less taxable income whenever we're like, I don't know,
85 or 90 or something.
S1 (32:25):
Yeah, yeah. Um, how much is in the 401 K?
S9 (32:31):
Both of ours together. Just cause.
S1 (32:33):
Uh, both together.
S8 (32:36):
Um.
S9 (32:37):
800.
S1 (32:38):
800,000. And so he's recommending that you try to systematically
get all of this money into the variable annuity.
S9 (32:48):
Not all of it. No. It would be, uh, it
would be 7000 a year, which would have 100 for
each of us, which would have 160,000 life insurance policy
attached to it. And after, you know, I don't have
the table in front of me like 12 years, then,
you know, if everything's at 9% and continues to grow and,
(33:11):
you know, then in um, 13 years, that will be
the amount of money in that account will be over 160. And,
you know, we'll be on the upside.
S1 (33:25):
Yeah. Yeah. I mean, this is just a complicated strategy
that I feel like is unnecessary. Um, I hate to
disagree with your advisor, and it's not that he's doing
anything incorrect. I mean, this is a planning strategy. Now,
there typically are commissions tied to these, but and so
you always have to just, you know, wonder what's the
(33:46):
the real reason behind it. But you know, annuities are complicated.
I mean, there is a strategy where you say essentially,
you know, once RMDs start, which would be age 73,
the withdrawals are taxable income, whether you need them or not.
So some advisors suggest you take those RMD dollars, pay
the tax, then put what's left into a permanent life
(34:07):
insurance policy. And the idea is that then it has
tax deferred growth inside the policy, and then the death
benefit passes income tax free to the heirs. And then
it's possibly a way to to transfer wealth more efficiently
than just leaving the taxable assets behind. Um, and so
(34:27):
it creates a tax advantaged inheritance for the heirs. But again,
there's high fees in these things. There are complex. It
requires ongoing premiums that are going to get more expensive
over time. You know, the investment side is market based.
So your cash value can go down, uh, unless there's
a floor on it. But you're certainly not going to
(34:48):
get all the upside. And there are other mechanisms by
which you get that money out of there without ever
paying any tax, namely a qualified charitable distribution. Which means
if you all are doing any giving, you know, anywhere
close to what your RMDs would be, you could stop
doing that out of after tax dollars from your checking
(35:08):
or savings account and start doing all of your giving
from your IRA. If we roll the 401 over to
an IRA. And when those come out and go straight
to your church or other ministries. You never pay any
tax on it. And then we've eliminated the tax. And
you don't have this expensive, complicated life insurance policy to boot.
S9 (35:32):
Okay. So that was my question. And that gives me
some guidance as to how to proceed. Thank you very much.
S1 (35:42):
Okay. You're welcome Debbie. God bless you. Thanks for being
on the program today. Let's go to Florida. George, how
can I help?
S11 (35:49):
Uh. Two questions. Um, I was running out of money,
and I was. So I decided to take my retirement early.
I'm 69. I've been taking my my social security, taking
my social Security for the last few months. And can I.
And I got a good job now that I'm real
confident in. Can I put that on pause and pick
(36:11):
it up in 16 months?
S1 (36:13):
Yeah. So, uh, when did you start taking it?
S11 (36:18):
About three months ago.
S1 (36:20):
Okay. Yeah. I mean, so you can suspend your Social Security. Um,
and if you've been receiving it for less than 12 months,
you can withdraw your application entirely. It's called a withdrawal
of benefits. Now, you'd have to repay everything you've received
so far, including any spousal benefit that was paid off
of your record, if there was any. And it's like
(36:42):
your application never happened. And then you can restart it
at age 70 with that, you know, by locking in
that higher amount. Um, if you don't want to pay
it back, you could suspend it, uh, until 70. And,
you know, that is an option so long as you
started it after full retirement age, which you did, and
then your payments stop and you start earning delayed retirement
(37:04):
credits at that point. Um, but if you have the
money to pay it back, you know you could treat
it as if it never happened.
S11 (37:13):
No, I don't have that.
S1 (37:15):
Okay.
S11 (37:16):
But if I do, but I don't. I don't want
to pay it back. Okay, okay.
S1 (37:22):
So you would just suspend your benefits until age 70?
S11 (37:25):
Okay. All right. Uh. Second question.
S1 (37:29):
Yeah. Go ahead.
S11 (37:31):
Reverse mortgages on my house. I'm getting real close to
having 50% equity in my house, and I can I
can get a reverse mortgage after I get 50% right.
S1 (37:44):
Yes.
S11 (37:45):
Okay. Now, my. The loan is in my name. The
house is in my wife's name. And my name. The
title is. Do I have to have her signature if
I get a reverse mortgage?
S1 (37:59):
Yeah. I mean, the only kind of reverse mortgage I
would recommend is a home equity conversion mortgage. And it's
got to be, you know, a planning strategy that makes sense.
But yeah. Uh, yes. The FHA requires that all owners
listed on the deed sign the loan documents regardless of
who's on the mortgage, the current forward mortgage.
S11 (38:19):
But I could go to home equity line of credit
without her signature.
S1 (38:22):
That's true. Yes, but the FHA requires. With a home
equity conversion mortgage, everyone listed on the deed has to
sign the loan documents. Uh, it protects her rights as
a non borrowing spouse to ensure that she can remain
in the home if you pass first.
S11 (38:39):
Right. Okay. All right. Thank you so much.
S1 (38:41):
All right. Thanks for your call, George. We appreciate you
being on the program today. You know, folks, we've covered
a lot of ground today. You know, as we think
about managing God's money wisely, it ultimately comes down to
our beginning point here is that God owns everything and
that we're stewards. And we look to God's Word to
find those principles, those passages, the heart of God as
(39:03):
it relates to how we manage God's money, and our
goal each day is just to help you do that.
As you spend less than you earn and avoid debt,
and set long term goals and give generously and have
some margin or some liquidity. And here's what we find
over time. And this came up several times today, is
that these principles that we see in God's Word, they
work well. We shouldn't be surprised, right? Because it is
(39:26):
God's Word. But I mean, you know, diversification. That's not
a Wall Street idea. That's a King Solomon idea. Ecclesiastes
11 two don't put all your eggs in one basket,
essentially is what it says. And we see that. And
when we violate it, we pay the penalty. You know,
and especially in an environment like this. We talked about
this yesterday with Mark Behler. You know when the market's
(39:48):
hitting new all time highs every day. And AI is
going crazy. And we keep hearing about Bitcoin. You know
there's this tendency to say oh diversification is just causing
me to lose money in this portion of my portfolio.
Why don't I just put everything in fill in the blank,
whatever it is, the hot kind of stock of the day.
And you know, what happens then is, you know, we
(40:09):
find ourselves in a situation where we've violated these principles
from God's Word. And when we do, we pay the
price for it. Another one that came up today is
this whole idea of cosigning. You know, we see the
principle in God's Word around cosigning that we should stay
away from it, that it's it's not wise. We should
avoid it at all costs. And when we go ahead
(40:32):
with it and then, you know, the other party doesn't pay,
we realize, wait a minute, there's wisdom there. So ultimately,
what we want to do is cause you to understand
that God's Word is relevant and authoritative to every domain
of life, and that includes money management. You know, when
we understand that this ancient text from, you know, inspired
(40:57):
by God through the writers of God's Word Um is
true and applicable to every facet of our lives, and
that includes how we manage money. And so our heart
condition and our understanding that money can be an idol
very quickly in our lives, and we need to be
on our guard against that. The principles that apply to
(41:19):
our daily money management practices, that we should follow the
the model of of Joseph and set something aside during
the years of plenty for the for the famine that
might be coming that we should, you know, go to
the ant and look at her ways and and see
how she stores up, uh, during the harvest for the,
for the winter. And understanding that, you know what, we
(41:40):
should give generously and there shouldn't be any needs among
those in the body of Christ if we're all sharing
what we have, uh, out of equality to love our
neighbors and and serve God's people through our generosity, you
put all of that together. And what you find is
there's an incredible opportunity to use God's good gift called
money that is intended to be a blessing from a
(42:02):
good God who created joy and delight for God's purposes
and for our enjoyment, and to love our neighbor through
our giving, and yes, to invest strategically. And when we
do that, we experience God's best. Now, when we allow
it to occupy a place that was never intended, when
it becomes the end and not a means to an end, well,
that's when all kinds of problems are created. I hope
(42:24):
today has been an encouragement to you. I'm so grateful
that you joined us today. Hey, Faith and Finance Live
is listener supported, so I would make an ask of you.
If you love the program, you found something helpful. Just
head to our website and if you can learn how
to become a partner, we'd certainly be grateful. Big thanks
to my team today. I've got an amazing group of
men and women serving us like we do every day. Dan, Anthony, Jim, Cheyenne, Tara,
(42:49):
Faith and finance lives. A partnership between Moody Radio and
Faith V. Come back and join us tomorrow. Or actually
next week. We'll see you then. Bye bye.
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