It is one of the most common questions I get: how much should I leave my children? You may know this all too well already, but it can be surprisingly difficult to decide on the amount of inheritance to leave to your children.
It is not uncommon to see parents who have already given their children some level of wealth, and they have seen the fruits of it. Some children handle it responsibly. Some do not. In fact, instead of responding with gratitude, I have seen some children on a quest for more.
Cause for Unequal Distribution?
Anna Sulkin, in “When is Equal Inheritance the Wrong Answer” for Wealth Management, raises a scenario from ethicist Kwame Anthony Appiah:
Should a parent of two children split her estate equally when (a) child A is single, wealthy, lives far away and rarely visits, and (b) child B is married, lives nearby, has children and grandchildren to support and regularly visits and helps with the estate?
Kwame argues that in this situation an unequal inheritance is warranted.
It is true nonetheless that in our culture the prevailing idea is to treat our children equally in everything, including inheritance.
Looking at Scripture
Sometimes people familiar with the Bible point to the story of Jacob and Esau as a cautionary tale. There, each parent, Isaac and Rebecca, favored a particular child. This provoked resentment on the part of each child. While it is easy to use that story to proclaim that equality is essential, it actually misses the mark.
The story of Jacob and Esau is about favoritism, and favoritism is not good. But it is not a story about inheritance. In fact, if we go on in the biblical narrative, we find that Jacob did not treat his 12 children equally at the time of inheritance. In fact, in Jewish tradition, the oldest of Jacob’s children, Reuben, should have been the primary inheritor. But he was not. And neither was child 2 or 3—Simeon and Levi. Each of them had character flaws: Reuben had been unfaithful, and Simeon and Levi had anger issues.
It is the fourth child, Judah, to whom Jacob gives leadership of the family and through whom God’s promises are fulfilled in future generations. The story is instructive.
The 5 Keys to Determining Inheritance
Through discussions of these issues with families, I find that there are at least 5 key principles to help determine the amount a parent might consider leaving as an inheritance:
- Does your child demonstrate responsibility?
A child that demonstrates responsibility with work, but also is responsible with relationships and truth, can be trusted to handle wealth. And on the flip side, less responsibility means less inheritance.
- Does your child demonstrate gratitude?
Gratitude is one of the first key indicators that your child can handle an inheritance. Gratitude is an “others-first” mindset vs. a “me-first” mindset.
- Does your child demonstrate generosity?
Generosity is the opposite of selfishness. When a child can give and help others in need, you will understand that your child is less likely to spend only on themselves.
- Does your child demonstrate a work ethic?
A child that knows how to work will not be one to receive an inheritance and rest on their laurels. They will keep growing and working to build.
- Does your child demonstrate a generational mindset?
From biblical times an inheritance was always designed to preserve the family name and family line. It was not meant to be a windfall. When your child understands that inheritance is designed to establish the family vision and values for generations, the inheritance becomes something to be invested.
When planning for your estate, consider how much weight you give to each of these attributes. Differences in your children’s character or circumstances will at times be readily apparent, and these principles can serve as a starting place to guide your decisions.