When I sit down with families who are preparing estate plans, the hardest question they face is how much they will leave their children. This question is full of emotion. For some parents, the inheritance question is a way to make up for guilt for what they feel is their improper parenting. For some, the inheritance question is a matter of love and devotion.
Here are four questions that can help guide your decisions:
1. Are your children healthy?
There’s no doubt that this question involves physical health. If there are physical disabilities or chronic illnesses, there are practical issues to address. There may be a need for a special needs trust or another variation on that theme.
But an issue of equal importance is whether they are thriving. Are they individuals who are contributing to society? Do they enjoy their lives, their relationships? Are they connected to people? Thriving people are far more likely to handle an inheritance properly.
2. Are they prepared?
The question of preparation is different from that of health. This relates to how well the children handle their finances? Do they have a mountain of debt? Do they regularly overspend? Are they givers of the income that they have? Do they have a work ethic? One of the first rules of inheritance is to do no harm. Don’t let an inheritance cripple. Let it contribute to thriving individuals.
3. How well have I communicated?
On too many occasions, I’ve seen parents who have never communicated their level of wealth to their children or their plans for that wealth. In many cases, children may have guesses about the amount of their parents’ wealth, and it remains an unspoken topic of discussion that creates an uneasiness. While I’m not advocating blurting out net worth, there’s a need to communicate. And the need to communicate must be considered in light of the previous two questions.
4. Have I considered eternal things?
I believe that it’s important to consider making a gift from your estate to eternal things—whether it be the church, missions, favorite ministries, etc. (The readiness of those organizations is the subject of this blog.) But the reality is that we make a powerful statement to our children about what we value when we make gifts to God’s Kingdom through our estate. And it is the easiest point of communication. If a child argues or questions our giving through our estate, then we need to consider each of the three questions above.
This blog is part if a series of “4”: 4 Questions, 4 Things, etc. It’s a way of offering concise commentary. Check out the rest of the series of “4”!
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Published September 26, 2017
Topics: Estate Planning