Most families spend far more time preparing the legal documents for their children’s inheritance than they do preparing their children for their inheritance. If you want a successful inheritance plan, what you do around the kitchen table with your family is far more important than what you do around the conference table at your attorney’s office.
Most wealthy families have very good attorneys and accountants who have attempted to serve them well. However, if clear directives from the parents are not provided, legal documents typically end up with standard, boilerplate, inheritance language that is anything but carefully and strategically thought out for the family’s unique situation.
Here are a five issues that come up:
1. Treating your children/heirs the same
All our children are not the same in their readiness to handle a sizeable inheritance. However, we feel obligated to treat them all the same because we love them all the same and do not want to be perceived as showing favoritism.
2. Business involvement
Some of our children are involved in our family business, and others are not, yet the vast majority of our wealth is tied up in the company. How do we treat them all fairly when not all of them will get the business?
3: Leaving an inheritance to the grandchildren directly
We would like to leave our grandchildren an inheritance, but we do not want to override the influence of their parents by giving an inheritance directly to the grandchildren.
4. A disapproving lifestyle
We have one child that is not living a lifestyle of which we approve. We do not know how to address these inheritance issues with our “black sheep,” —which significantly affects how we can plan for our “good” children. This issue may cross over into an issue of your children’s faith or lack of it.
5. Family conflict caused by equal inheritances
Our children are all extremely different and do not get along that well. If we simply divide all our property up equally among them, family conflict will be inevitable.
These complex issues will take a lot of time, prayer, and conversations to create a strategic inheritance plan that will bless each child. Trained counselors and seasoned professional estate planners may be required to help guide you to appropriate answers.
So how do you address these problems? What we have found helpful, is to utilize maturity markers as a starting point.
Spiritual Maturity Marker #1: An Heir’s Relationship with God
Signs for this Spiritual Maturity Marker would include an heir who is…
1. Growing as a personal follower of Jesus
2. Developing in godly character;
3. Ministering to others
Emotional Maturity Marker #2: An Heir’s Relationship with Themselves
Signs for this Emotional Maturity Marker would include an heir who is…
1. Taking responsibility for he/her actions and proactively seeking to correct his/her mistakes and sins
2. Controlling his/her anger, frustration, disappointment, and stress appropriately
3. Avoiding chronic problematic and self-destructive behavior
Relational Maturity Marker #3: An Heir’s Relationship with Others
Signs for this Relational Maturity Marker would include an heir who is…
1. Developing and maintaining healthy and meaningful long-term relationships with friends and family
2. Treating other people with respect and dignity
3. Making personal sacrifices for the benefit of others.
Financial Maturity Marker #4: An Heir’s Relationship with Money
Signs for this Financial Maturity Marker would include an heir who is…
1. Living financially independent of parents;
2. Exercising consumptive self-control in spending; and
3. Engaging in enthusiastic and generous giving.
These maturity markers should better equip you to have real, meaningful dialog with your children allowing you to establish measurable and attainable standards by which to make inheritance decisions. Does this make sense?
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By Joe Sturniolo
Christian Family Legacy and Wealth Planning
Joe believes that stronger families are the vehicle God uses to bring
about significant impact for His Kingdom.