Leaving Your Children an Inheritance – Rethinking the Issue

by Joe Plemon on August 12, 2011

In my post, “Should You Leave an Inheritance to Your Children?”, I concluded that giving some inheritance to my children while I am still alive is a good idea. While I haven’t totally changed those plans, Randy Alcorn’s book “Managing God’s Money”, has me rethinking this entire inheritance issue…again. The following thoughts are worth considering — or reconsidering:

What does the bible really say?

Most of us will readily quote Proverbs 13:22, “A good man will leave an inheritance for his children’s children.” as our proof text for leaving an inheritance. Seems clear enough…right? But Alcorn digs beneath the surface by pointing out that a typical inheritance in those days was the family farm: an absolute necessity (because the children couldn’t afford to buy that farm) for the ongoing livelihood of the heirs. Such is not the case in today’s world where most children have careers which are independent of whatever their parents may leave them. Today’s inheritance, therefore, does not sustain the beneficiary; it simply plops a windfall in his lap … much like winning a lottery.

Using the lottery analogy, perhaps Proverbs 20:21 “An inheritance gained at the beginning will not be blessed at the end” is more applicable than Proverbs 13:22 in today’s world.

What is best for the kids?

Alcorn points out (and I agree) that most inheritances – especially large ones — do more harm than good. After all, if our goal in raising our children is to teach them independence, dangling a windfall before them sends a contradictory message. Alcorn puts it this way, “How dare any of us, whether family, friends or government, allow our financial subsidies to deny the character building privilege and divine calling of a man to work hard to provide for his wife and children?

Wealthy men throughout the years have agreed that these windfalls do more harm than good.

  • Andrew Carnegie said, “The almighty dollar, bequeathed to a child is an almighty curse. No man has the right to handicap his son with the burden of great wealth. He must face this question squarely: Will my fortune be safe with my boy or will my boy be safe with my fortune?
  • Cornelius Vanderbilt said, “Inherited wealth is as certain death to ambition as cocaine is to morality.
  • Henry Ford stated, “Fortunes tend to self-destruction by destroying those who inherit them.”

Whose money is it anyway?

Lest we forget, we are talking about God’s money, not our own. So what does that have to do with inheritances? Alcorn poses this question: “What would you think if your money manager died and left all of your money to his children?” Obviously, we wouldn’t be very pleased. So the fact that we are leaving someone else’s money to our own children suddenly becomes quite relevant.

Even if we rationalize our thinking with, “Well, my children will use the money as God intends”, we have still missed the real point: God expects US to manage His money now…not delegate our responsibility to others when we die.

Are all inheritances wrong?

I think these principles need to be considered:

  • The money belongs to God, not us.
  • The greatest inheritance we can leave our children is spiritual, not monetary.
  • A financial inheritance large enough to compromise our children’s values is too large.

I see nothing wrong with leaving a small inheritance … enough, for example, to help our grandchildren through college. However, based on what Carnegie, Vanderbilt and Ford have to say, a large fortune will most likely be very destructive.

Janice and I hope to give as much as we are able to God’s work for as long as we are able. We will also consider funding specific needs our children may have, as long as we believe that doing so will motivate them toward excellence, NOT encourage apathy. For example, we helped cash flow college for two of our kids after they were in their thirties, and after they had given up their dreams of ever earning that diploma. Both graduated recently (with zero debt) and are quite enthused about their new teaching careers. In spite of our plans of generosity, I am sure that we will not spend every penny and that our children will some day divide an inheritance.   However, I am also sure that it will not be substantial.

Leaving a spiritual inheritance

In 390 A. D., John Chrysostom gave this advice to Christian parents, “If you want to leave much wealth to your children, leave them in God’s care. Do not leave them riches, but virtue and skill.

Chrysostom’s advice is my wish for my children. The greatest gift Jan and I can ever leave for our children is a deep spiritual heritage. Allow me to brag for just one moment: all four of our children have a passion for serving God and a love for their fellow man. All four of them have hearts for the underprivileged. They are generous, loving people whom we are very proud of.

Jan and I are blessed. We have the privilege of seeing our kids reap their inheritance while we are still living.

Readers: What inheritance plans are you making for your children?

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{ 7 comments… read them below or add one }

Paul Williams August 12, 2011 at 9:01 am

I agree with you, Joe. I have no children yet, but I think I would not want to leave them a large inheritance. If possible, it would be nice to leave them enough to start a business (which takes less than you’d think in many cases) or some other way to give a leg up. I agree with the quotes you had – if someone knows they’re going to inherit a lot of money then they’re very likely to lose all ambition. Why work hard when I’ll have daddy’s money soon?

By the way, I really like Alcorn’s question, “What would you think if your money manager died and left all of your money to his children?” Great way to put it in perspective!

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cashflowmantra August 12, 2011 at 9:03 am

I haven’t made specific plans since the children are still young. Any inheritance would be used for my wife and kids to replace my income for several years. That being said, would your life have been any different if you were financially free at an early age? Would you have been more responsive to a different call or volunteered more if you didn’t have to work for daily sustenance? Of course there is a point where there can be too much inheritance. But I doubt that all of it is bad, and I would hesitate to think that one part of the Bible would contradict the other. I will have to delve deeper into the meaning of Proverbs 20:21.

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Alex Humphrey August 12, 2011 at 9:38 am

I’ve thought about this from time to time. Currently I still sit on the “leave an inheritance for my children” side. But what does it mean to leave an inheritance?

I didn’t realize the “family farm” aspect of that time period, but reading that makes sense. Even so, wouldn’t it be just as bad to leave a highly successful farm (business) to your kids? Aren’t the Kings of Israel good examples of this?

At this point in my life (while kidless) I believe inheritance should be given out on a case-by-case basis. Is one child amazing with money and the other horrible? Would an inheritance bless my children or hurt them? Are they debt free? Do they have a solid job? Would this inheritance drastically change their lifestyle?

The answers to those questions would change my inheritance plans.

This also depends how much I have to give. If it is $100,000 that’s not as big a deal as say, ten million.

Great post, Joe. It has given me a lotsto think about.

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Paul Williams August 12, 2011 at 9:43 am

Another way to handle this if you’re not sure about how it might affect your kids is to use a trust. There will be costs in having someone administrate the trust, so it only makes sense if you’re talking a sizable amount. But you can attach provisions that can help prevent the chances that the inheritance would harm your children.

I think the family farm aspect is best understood as leaving an inheritance that provides stability and a way to be productive and earn income. We must use wisdom in how we might handle this today, but those are good guidelines to keep in mind.

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joeplemon August 12, 2011 at 6:46 pm

@Paul,
Applying biblical principles in today’s world can sometimes be a challenge, considering the different cultures. This being said, I think you captured the family farm aspect well: provide stability and a way to be productive and earn income. Yes…this all requires wisdom.

@cashflow,
I definitely want to leave enough to my wife to replace my income. But the gist of this post is about the inheritance my kids will receive. I like the hypothetical questions you raise, and I think the answers to those questions depend on the spiritual heritage we leave our children. Stated differently, people of character will do well with windfalls; those lacking in character will flounder. Glad the post inspired you to dig deeper into scripture!

@Alex,
I like the thought of giving an inheritance based on whether it would be a blessing or harm to the children. Much of this would need to be given before death…right? And your comment brings this question to my mind: would you give more to the one who is amazing with money or to the one who is horrible? I think I know the answer, but Matthew 25: 14-30 could be applicable here.

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Lee August 13, 2011 at 4:39 am

You are totally right Joe, the most important thing for the kids is to educate them for love and kindness to other people and for the love of god, this way god will take care of guiding them better then the amount of money I left behind, they will use it the right way.

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joeplemon August 15, 2011 at 8:45 am

Lee,
The best thing about the spiritual inheritance is that it not only is a guide for this world, but a preparation for eternity.

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