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Prov. 13:22 – “A good man leaves an inheritance to his children’s children”

Leaving an inheritance to immediate family and extended family as this passage speaks to, is something that the Word of God speaks well to.

But what are some of the thoughts and factors that need to be processed when one is considering leaving an inheritance to their children, grand children, and even to their church or other ministries that they are connected with or passionate about.

Today’s episode we’ll be diving into various questions to ask and answer pertaining to leaving an inheritance, but also some guidelines/principles that one ought to consider…especially the good steward that is longing to be the “good man” that is mentioned about in Prov. 13:22.

 

Questions to consider when thinking about an inheritance

Charity vs Family. Where does the inheritance go?

Do you give it away? Or create generational wealth? In the Christian Money world, there tend to be 2 camps.

  • The biggest and loudest camp is giving the money away to Christian ministries (one that is specifically Kingdom building), is really the best, Godly thing you can do.
  • The other camp is the camp that says investing in companies that are doing good work can do more good for the world in some senses and in some cases more than simply giving to charity. Therefore, leaving that money invested and challenging your children to steward that investment well may be the best thing to do for the world.
  • We land in a third camp where investing and giving should be part of one’s broader stewardship (and estate) plan. It’s not either/or, it’s both/and.

 

How much is enough? How much is too much?

The Bible talks about the dangers of loving money, or the dangers of wealth.  When we leave money to our kids, do we consider the spiritual relational implications of that gift?

How much is enough to show them that you love them, that you care for them, and is there a point at which there will be too much?

A good question to process is this one…what if they are not prepared or able to steward it well?

The reality is that the “number” is going to differ from family to family and from steward to steward. I can’t sit here and tell you that leaving $100k to a child is better than leaving $1m to a child without knowing more data.

There may be cases where leaving $100k might be too much and leaving $1m may be too little based on the capabilities and consciousness of your heir.  If it was just a “money question” it would be simple. But as we see now, there are many different factors to bring into consideration. This is a question that too few Christian stewards wrestle with. They worked hard for the money their entire lives, and rightfully so, they want to see it bless their children and their lives.

 

Should I wait until I’m dead to give my money away?

The sad reality for many individuals is that by the time their kids receive the inheritance, the opportunity where it could have made a substantial improvement on their lives is well passed.

We encourage families to practice giving away part of their assets to their kids while they are alive and can see them enjoy it, and can see it benefit their lives.

Coincidentally, this is a great testing ground to see how prepared they are to manage money and to know how much to give them in the future, or how much to withhold based on the little bit you give them now. It can be a great way to fulfill the Scripture in Luke 16:10 which says…“he who is faithful with little will be faithful with much…”

Think about this in terms of giving money currently to meet needs. If you give them some money when they still have substantial need, it may mean more at that stage of their life. It could encourage and promote proper habits such as savings for education or retirement.  Or what about giving? You could give them money with the stated intention of giving that money away.

 

Are the next generation of stewards prepared? (Spiritually, emotionally,…)

One study found that one third of people who received an inheritance had negative savings (blown through it) within two years of the event (MarketWatch).

  • Is the inheritance going to harm their work ethic and their sense of generating their own income?
  • What will a large inheritance do to your kids’ marriages?
  • Are they going to just go and buy more toys? Or will they set their families up for future success? How do they view the money they received? Are they viewing themselves as the stewards or as the owners?

The best way to know if they are prepared is to see how they handle money today, or even how they manage a financial gift today. (See our last point about giving while you are still alive!)

Have you thought about the potential tax impact of the inheritance?

If you are leaving a $1m IRA to your kids, they will have to realize all $1m in income taxes over the next 10 years at what is likely their highest lifetime tax rates.  This can significantly decrease your generosity to them…and increase your blessing to good old Uncle Sam 🙂.

Think about the nature of the inheritance itself.

If it’s a business, or real estate, it may be unwise to sell the real estate or continue to manage the business so that the income can provide for the needs of the family, and to generate the opportunity of giving. Many times, we see large cash transfers.

Will your children squander the inheritance and spend it on stupid things?

What has been their”financial”  pattern over the last 3-10 years, or what have you observed from a distance?

 

Will your kids fight over the money? Will it cause division within the family?

Giving an inheritance can be a huge blessing, but it also could be a curse and cause problems, specifically division of siblings.  As difficult as it may be, try to come up with a plan that will draw the children (and grand-children) closer together instead of driving them further apart.

Don’t just transfer your valuables, transfer your values.

  • When you graduate from here to Glory, remember, your stuff stays! That means you are transferring your stewardship responsibility to your children.

When and how can you control your inheritance from the grave?

  • If the beneficiary is a wise steward who takes their role seriously, you can feel free to release the inheritance to them.
  • If the beneficiary is unwise, you may want to set up guidance on how the inheritance should be used. For example, you can inspire generosity by setting up donor advised funds (give a little explanation on this).
  • One also needs to process their ability and inability. If your heirs are wise and able, you may feel free to release the inheritance to them. If they are unwise and unable, you may want to give greater structure in your estate plan that may include a trustee of the assets.

Stewardship Application:

We get excited when we can help navigate someone toward setting up both an inheritance and also continued generosity within an estate plan. By doing this, it leaves the legacy of generosity, which allows your children and grandchildren to have the experience of generosity, and they get to see and hear of the Kingdom’s impact through their small part in directing their parents’ generosity.

Don’t make generosity be the thing you do once you’re dead. If you want to leave a legacy of generosity, start the process now through being sacrificially generous today!  In doing so, your kids (and grandkids) will see it and consider having them involved in some way while you are alive.

They will never fully see your legacy of generosity after your gone…so let them hear…see and participate with you in it today…so when they are in those same upper years, they will reflect back on your heart and smile toward Kingdom generosity…and Lord willing, they will do the same with their kids and grandkids…to the Glory of God!

 

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