In Your Interest – by Valerie Rumbough

Do you plan to leave an inheritance to your children and/or grandchildren?

Rumbough

Many people who are able to do this feel they are blessed to be able to leave something to their loved ones. There are two biblical principles regarding an inheritance, however, that many people do not realize exist.

The first one is found in Proverbs 20:21, where it states that “an inheritance gained hurriedly at the beginning, will not be blessed in the end.” I have seen this played out in families many times. Someone receives an inheritance, only to go through it in a short time and then be almost destitute when it was gone. This is probably what the writer of this proverb was trying to warn us about.

Typically, people feel they are a better manager of money than their children are. When they see their children struggle in this area, they have concerns when it comes to leaving something to them. The most common way to solve this problem is to fund a trust with all or a portion of your estate. This instrument will allow you to dictate the terms under which your children receive their inheritance, such as payment amount, length of time to receive payments, and distribution of the remaining assets when the trust term ends. When this happens, the remaining assets can be paid out to your children, your grandchildren, or even your church or other charity.

This brings me to the second principal, found in Proverbs 13:22, which states that “a good man leaves an inheritance to his children’s children.”

This can be accomplished with the same trust. If this sounds like something you would like to have as part of your estate plan, consult your CPA, financial planner, or estate-planning attorney for guidance in this area. Your children can then avoid the problem that we read about in Lamentations 5:2: “Our inheritance has been turned over to strangers, our houses to aliens.”

– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.