10 Questions about right-sizing childrens' inheritances

10 Questions about right-sizing childrens’ inheritances

What is the right size inheritance to give to your children?

I was first confronted with this question many years ago by an article in which the author asked if it made any sense to fund a child who has decided to rebel against everything you have ever stood for. –Should you give them an equal inheritance to that which you give your other children who are more deeply committed to the causes and values that you espouse?

It wasn’t that I had such a child, nor that I even had any wealth to pass to our children. But it got me thinking.

More recently, especially as our estate’s value has grown, I’ve been confronted by other questions. For example: Should the kids inherit everything you can give them?

As I noted yesterday, excellent questions, often, are more valuable than good answers!

Here are 10 excellent questions to help you begin to think through the issues. They are from Alan Gotthardt’s The Eternity Portfolio, p. 139:

What are we trying to accomplish by bestowing this inheritance upon our children?
Do any of the children need an inheritance to provide care for physical or mental limitations?
Will the amount we plan to give be a hindrance to our children’s proper character and spiritual development?
Do our children understand and practice faithful life management?
Is this inheritance going to further God’s purpose in their lives?
Have we passed along life values as well as the inheritance?
Have we spent a considerable amount of time in prayer and study of Scripture to determine God’s will for each child?
Are there educational needs of our children or grandchildren to be provided for?
Is it likely that this inheritance will create a dysfunctional work ethic or family dynamic?
Will the kingdom of God be advanced by virtue of this inheritance?

I’ve noticed–and I hope you will, too–that Gotthardt suggests something I never heard from my estate planning attorney or my CPA–that old question I raised “way back when”: what is your purpose in passing an inheritance to your children?

You should ask and answer that question first, before you decide, as so many estate planners assume, that you should maximize gifts to your children while minimizing the amount that should go to the government.

I’m perfectly happy to minimize taxes. But should the money thus freed up go to your kids? Or, perhaps, would it be better used for charitable purposes, endowing a family charity, or some other noble cause?

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