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Have you every thought about leaving an inheritance for your family, friends or specific organizations you would like to support? For many Americans, blessing their families, friends and communities with an inheritance is a major financial goal, but have you thought about when an inheritance might turn into a curse instead of a blessing? Unfortunately, we have observed several instances of dependency and overspending as a direct result of generous gifts and inheritances. Each child, niece, nephew, spouse, brother, sister, grandson, granddaughter, friend, and non-profit is in different financial straits and has different talents. Do the individuals you have in mind have the financial independence or the ability to develop financial independence if they were to receive a large gift or inheritance from you? Importantly, will these factors impact the amount of financial resources you gift or bequest to them? We believe they could.

Loved Equally, Treated Uniquely

A prominent financial advisor, Ron Blue, is fond of saying “if you love your children equally, you’ll treat them uniquely.” We believe this is true of other family members, friends and organizations as well. If you think about it, God has given each person different gifts, talents and resources to steward during their time on earth. Should we not, as stewards of God’s financial resources, also prayerfully consider how to distribute the resources God has given us? We should ask God: Who will make the best manager of our financial resources? Who could use a financial “hand-up” most? Who will continue to be independent even if I bless them with a financial gift or inheritance? In order for clients to leave a lasting, positive legacy, asking these questions before it is too late is imperative.

The Course to Take

If you are as convinced as we are that it is important to carefully consider how to distribute your financial resources, we encourage you to engage in several practices to, as Ron Blue also says, “make sure the next steward is chosen and prepared.” Firstly, we recommend that you take the apostle Paul’s command in Colossians 4:2 to heart: “Devote yourselves to prayer, being watchful and thankful.” As God’s stewards, we must not only be thankful for what God has given us, but we must also go before him in prayer to seek guidance and protection in every area of our lives.

A second strategy that we recommend to clients and financial stewards is to seek wise counsel. Trusted friends, brothers and sisters in Christ, and financial advisers can give you excellent feedback as you weigh the best means to distribute your assets. Remember that outside parties can often give you a better assessment of the readiness of your heir(s) to receive financial blessings from you.

Lastly, we often recommend family financial conferences, particularly for individuals and couples with substantial resources to gift or leave as an inheritance. In an age-appropriate way, conducting these meetings with your potential heirs will allow you to assess their maturity and readiness to receive financial resources from you. These meetings will also give you an opportunity to communicate the legacy that you want to leave with your heirs: it can and should certainly be more than just a financial legacy! Some families even invite friends and advisors to these meetings to help them carefully communicate with their potential heirs.

Cutting Through the Complexity

We know that making these estate planning decisions can be a real challenge, particularly since the tendency in our culture is to treat everyone equally. If you want a team of advisors to walk beside you as you make some of these key estate planning decisions, please reach out to us at service@semita-am.com to schedule a conversation. You can also click on the “Schedule a Conversation” link found on our website to set up a conversation with us. We are here to help you answer these important stewardship questions!

Keywords: Estate planning, heirs, inheritance

Disclaimer: This content, edited and provided by Semita Asset Management, is intended to be educational and informational in nature. It should not be construed to guarantee any particular investment outcomes, nor should it be deemed to be tax or legal advice. Investing in the stock market involves risk for the investor, including the potential for loss of some or all of the investor’s principal. Certain statements made herein may be forward-looking in nature. While we do our best to clearly present advice based upon reasonable research, assumptions and knowledge, we do not guarantee that our predictions or suggestions will hold true in the future. Past performance is not necessarily indicative of future performance.

In preparing this information, we have attempted to present accurate information from our knowledge and sources. Nonetheless, we do not make any guarantees or warranties, expressed or implied, as to the accuracy of this information. Additionally, this information may not be entirely current and is subject to regular change. For the most current advice, we strongly urge you to consult with knowledgeable investment, tax and legal professionals who provide advice. We will not be held liable for any loss resulting from the implementation of the advice herein contained.