The Bible tells us that it’s good to leave an inheritance to our children. How we do that is still a matter of some discussion. While it’s critically important to have a will, there’s a bit more to putting your estate in order. We’ll talk about that today with financial teacher and author Ron Blue.
Ron Blue is cofounder of Kingdom Advisors and the author of many books on biblical finance, including Splitting Heirs: Giving Your Money and Things to Your Children Without Ruining Their Lives.
Ron compares estate planning to cooking and following a recipe.
THE ESTATE PLANNING RECIPE
If you bake a pie, you don't just take all the ingredients and throw 'em into a pan and assume that the pie is gonna come out.
You have to take each step in order, from preparation to adding layers, to baking, and topping. With estate planning, you also need to follow a process.
And Ron has identified several steps to the estate planning recipe that need to be followed in sequence:
1. Who? The first step is to figure out who's going to get it. You have to figure out who's going to get it before you make decisions as to how much. It could be to your heirs, to charity, or anyone else, but you must decide the “who” first.
2. How much? Next, you’ll decide how much to leave to each of these individuals or organizations.
3. When? The third step is to figure out the timing. In other words, if you have an estate, you could choose to begin transferring some of that now and avoid the tax consequences later, as opposed to waiting until later. When do you want to transfer this estate? Do you want to do your giving now or later?
4. Strings or no strings? Then the fourth step is, when you transfer your wealth to someone or something, are you transferring it with no strings attached?
5. How? (Tools and techniques) The next step is to use what Ron Blue calls “tools and techniques” to determine the best way to transfer your wealth from a tax efficiency standpoint.
6. Talk! The last step (and really, an ongoing step) is to communicate with family and/or other beneficiaries about the why, the who, the how much, the when, and the what.
EVERYONE should go through these steps in their estate planning, regardless of how much you have to give or leave behind!
On today’s program, Rob also answers listener questions:
-How long should you hold onto tax documents and other records?
-What happens to your insurance policy if the insurance company goes out of business?
RESOURCES MENTIONED:
- IHIGA.org
Remember, you can call in to ask your questions most days at (800) 525-7000. Faith & Finance is also available on the Moody Radio Network as well as American Family Radio. Visit our website at FaithFi.com where you can join the FaithFi Community, and give as we expand our outreach.
Remember, you can call in to ask your questions most days at (800) 525-7000. Faith & Finance is also available on the Moody Radio Network and American Family Radio. Visit our website at FaithFi.com where you can join the FaithFi Community and give as we expand our outreach.
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