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Have You Had a Family Meeting on Inheritance Issues?
Posted by Clare
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inheritance

Twice in the last 15 years, we’ve held family meetings to discuss inheritance and we’re about to have our third.  As an advisor and spiritual mentor, I’ve seen first-hand, the devastation poor communication with grown children, can cause over inheritance issues. Our children still may not like every decision, but at least Susan and I are committed to full disclosure and getting input from  our children.

Most Christian parents avoid telling about their inheritance plans, because “it’s none of their business.” But, it will be their business once you die and the hurt of surprises found in so many wills, often destroys all the goodwill and joy an inheritance ought to bring. Wise parents will leave behind wise and informed children.

So, the following letter, except for changes in the financial data or personal information, was sent to our children, in preparation for one of our family meetings on inheritance.

Dear Children,

We would like to meet as a family, obviously including sons and daughters-in-law, Thursday, August 20, at 7:00 PM at our house, but without grandchildren, to discuss the contents of this letter.

We’re excited about thinking through with you the whole issue of estate planning because it is part of the legacy we’ll leave behind. We want your inheritance to be a joy to you and enhance the quality of your life in more ways than just the things you can purchase with it. We hope for some of you it will enable you to be a one wage earner home. For others, it may allow you to take early retirement to serve the kingdom, and for others, allow you or your children to have an educational experience, which will equip you to be more effective men and women of God in this world.

We realize that the discussion of inheritance can be dangerous. Therefore, several principles and practical ideas have guided our thoughts regarding inheritance:

  • Inheritance is not a right. Our desire is that you would look at this for what it is, a gift – a gift from God, to us, and in the future, to you. It’s money you never earned – it’s God’s grace.
  • It’s our desire to be fair to everyone and to be open and above board with everything so that there are few surprises following our deaths.
  • It all belongs to God – our lives belong to God.
  1. It is our intention that each child receives $250,000 upon our deaths. When we meet we’ll explain how we arrived at that number. This amount will remain fixed until we are 65 years old (five years from now). This means the total amount for all four children is $1,000,000, less than half of our total estate. The rest will be given away to ministries upon our death.
  1. Approximately $150,000 will be payable upon Dad’s death to each child, because only the $600,000 in life insurance proceeds will flow to children. It’s our intent that the surviving spouse should not have to liquidate assets to pay an inheritance. This $150,000 is tax-free.
  1. The balance of the inheritance will be payable upon Mom’s death, if Dad has already died, or dies simultaneously. If Mom dies first, only a small inheritance will be paid, as there is significantly less life insurance on Mom.
  1. Beginning at age 65, the $250,000, (or the balance if one of us has died and some payment has been made) will be indexed for inflation. That means the $250,000 will increase with an inflation to maintain the purchasing power of your inheritance.
  1. Any substantial gifts made by us prior to our deaths to any of the children will be recorded by the executor of our estate, and deducted at the death of the last to die.
  1. Each of the grandchildren will receive $10,000 upon the death of the last to die (also indexed for inflation at age 65).
  1. Prior to our deaths any gifts given to any child for a specific need, will be done confidentially and will not be “family business”. Remember, because each family is receiving a fixed amount rather than a percentage of our estate, gifts to one child do not affect in anyway the inheritance to any of the others. We love giving gifts to our children and as we grow older, we would love to give some gifts to you, during our lifetime. It’s our hope that you are as grateful to God for what He will give you as we are for what He as given to us.
  1. It’s our intention to reassess these plans every eight to ten years as our lives and finances, as well as yours, change. We may need less insurance as we get older and we will have the perspective of observing how you handled your own finances. We want to be right up front that if we believe everything we have really belongs to God, we would be poor stewards to leave a full inheritance to children who are poor stewards in handling their own money. We reserve the right to alter our wills as we feel God directs and we feel is prudent.
  1. We will strongly be urging you individually as couples to participate in a Crown Financial Study. (We’ll bring information to the meeting.) We would also like to attend, as a family, a future Generous Giving Conference. Our purpose is to prepare you to live and give generously.
  1. Finally, we would urge you to read and discuss Generous Living, by Ron Blue. We’ll give each couple two copies when we meet.

To make this meeting or gathering most productive and “safe” for you, you may want to meet as a group prior to our meeting and discuss these issues. We won’t view this as going behind our back. If you have questions, it may be helpful if we knew your questions prior to our family meeting, so we could pray about a wise response. One of our fears is that one or more of you would not voice your concerns or feelings and secretly harbor a hurt or sense of unfairness. This future gift is meant to bring joy and we need to hear from you what might rob you of that gift. So, please be honest with us.

We’ve also included a draft of both of our Wills, which we are in the process of amending. We invite your input before we finalize and sign it. Perhaps there is something we’ve forgotten or a decision we’ve made, which will have consequences we can’t see. We would really value your input; you will note that our personal representative or executor is our CPA, Tom Smith and not a family member. This was done intentionally to minimize potential friction, within our family, upon our death. We will explain more at our family gathering.

Finally, please pray about all of this. We are so thankful to God for giving us a family who loves each other and love God. It’s our pray that that would be our ultimate legacy.

An inheritance claimed too soon will not be blessed at the end. Proverbs 20:21

Love,
Mom and Dad

On the issue of inheritance, I strongly recommend reading, Splitting Heirs, by Ron Blue.

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