Inheritance Questions: Timing Out Your Inheritance

View Part One in our Inheritance Questions series: How Much Do I Leave and To Who?

View Part Two in our Inheritance Questions series: What to do in Challenging Situations?

Just as the offering of first fruits was an occasion of thanksgiving and obedience in the Old Testament, so the Christian is called to give with gladness to God before storing up their resources. There is great reward in planning the distribution of your inheritance such that you can see your legacy begin before the executor steps in to fulfill your requests.

Implementing your estate plan ahead of time allows you to invest in the Kingdom and begin building charities and projects that bring glory to God. Starting the distribution of your assets and plans with your future generations allows them to understand your goals, values, and legacy firsthand.

Distribute Your Inheritance

The Bible warns of the pitfalls of giving an inheritance all at once (at death or before death):

An inheritance quickly gained at the beginning will not be blessed at the end. (Proverbs 20:21 NIV)

One option is to distribute your inheritance over three or more time periods in your child’s life. This can also relieve specific tax implications that arise with transferring a large estate upon death. We recommend asking your family financial advisor if these advantages apply to you. If you choose to disburse your child’s inheritance in segments, there are several ways to do it. Here is one example:

Example of allocating estate to children in segments:

10% at college level

30% at career entrance

40% at middle age (40 years old)

Jesus shared one pertinent lesson about using this early inheritance method through the story of the prodigal son, who demanded his inheritance at a young age in Luke 15:11-24. The young son squandered his portion of family wealth, but through his repentance and his father’s wisdom, he was restored and accepted with grace.

Special Purposes

Consider wealth sharing before your death for special purposes. Possible needs warranting early inheritance gifts for children or grandchildren could include education or vocational training expenses, business startup costs, equipment needs, a house down payment, household furnishings, adoption fees, and more.

Starting in 2022, the IRS allows you to make tax-free gifts of up to $16,000 per person each year in most circumstances. Consult your financial advisor for how to best take advantage of this opportunity.

Timing Out More Than Finances

Remember, your inheritance is so much more than finances. In fact, the larger and more important distribution of values, life lessons, and faith to your loved ones should begin now and develop over time. Age and maturity still play a big role in what they may be ready for. Below are three questions to ask as you weigh what your inheritors are ready to receive and how you should communicate your legacy.

Should your goal be to inspire?

When thinking about what to communicate depending on age, are your inheritors ready to be inspired? Are they in a place to hear stories about how your legacy was shaped and how you came to acquire your assets? Will they soak in the values that are evident in your inheritance plans?

Should your goal be to inform?

Perhaps the goal is just to inform your family how you have lined up your plans. You can trust that your inheritors can act on your wishes, execute decisions, and understand why you made those decisions, but responsibility will not be with them. Invite comments and create understanding.

Should your goal be to involve?

If you expect family members to help you implement your inheritance and generosity plans, what specifically are you asking them to do? These individuals are ready to be trusted to act on your wishes, start working with you to execute your goals with value and virtue, and carry out your plans for charity.