Distributing
Your Estate
Christian
Stewardship
Estate
planning is likely the single most important act of stewardship
that most of us as Christians will ever undertake.
"Stewardship
is of course not limited to my paycheck - I want to steward everything
I have - that includes my IRA, my home equity, even my life insurance.
Our goal at PhilanthroCorp is to serve people as they create wills and
trusts that fulfill their goals for heirs and the Lord's work, while
using tools that Congress has set up to eliminate unnecessary taxes."
Greg Ring - CEO PhilanthroCorp
Appropriate
estate planning is beneficial to almost everyone. Whether we
are nearing the end of our lives and are primarily focused on getting
our affairs in order, or perhaps in middle age and contemplating approaching
retirement, or even younger couples with growing families and seemingly
little of life's financial resources, estate planning boils down, at
its core, to a process of determining to whom, and how, and when, we
will transfer the stewardship of what God has entrusted to us when the
time comes for us to no longer serve as the steward ourselves.
As believers,
we understand that God is the owner of all that He has entrusted to
us, and we seek to arrange our affairs in a way that would please the
Lord who has created and who owns all that we see. He said in Psalm
50, ".for every animal of the forest is mine, and the cattle on a thousand
hills. I know every bird in the mountains, and the creatures of the
field are mine. If I were hungry I would not tell you, for the world
is mine, and all that is in it."
We are faced
with a number of fundamental considerations. How much is enough
for my children? When should they receive an inheritance, and how much
of that inheritance should be an outright gift of capital versus an
income stream that might be made available over a number of years?
What kind
of eternal impact do I want to make through ministries that
have been important to me and my loved ones over the course of our lives?
What kind of tax and probate strategies need to be adopted to assure
that there is the smallest amount possible lost to estate taxes, income
taxes and probate at the time of my death? And ultimately, because I
know that one day I will stand before the One who owns all the cattle
on a thousand hills, I care above all else that I create a "Christian"
estate plan. But what does that look like?
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Children's
Inheritance/Gifts to Ministry
There are
two Biblical perspectives that affirm the idea of leaving the
estate to a combination of children and charities. The first priority
we see in Scripture is that of dependency; Timothy says that we are
worse than an infidel if we fail to take care of those in the household
of faith. As a Christian, it's difficult to imagine anything worse than
being called an infidel! The phrase, "those in the household of faith",
refers to those who are our financial dependents. Obviously, children
who are minor are financially dependent upon us.and anyone who has raised
children understands only too well that their dependency doesn't
necessarily end the day the children turn 18.
Financial
dependence can extend beyond that, hopefully on an annually
diminishing basis, but at some point our own experience, wisdom and
Scripture all seem to agree on the importance of children learning to
stand on their own financially. In much the same way, ministries that
have been important to us over our lifetimes.those places where we have
worshipped, mission organizations in which we or our friends have served,
schools in which our children have been able to receive an education
from a Christian worldview, these and other kinds of ministries that
we have been supporting during our lifetimes, have become, in
a very real sense, dependent upon us.
The second
Biblical perspective that should inform this discussion is
that of love. John 3:16 says, "God so loved that He gave," and in that
context, we have the freedom to do whatever we feel God is leading us
to do for people and for ministries that we love.
For families
who want to benefit ministries, the ministries would be included
in the plan from the beginning, but the documents would usually be structured
in such a way that if the parents die while the children are still young
enough to need the children's trust, nothing would go to charity at
that time; rather, everything would remain in the children's trust,
available to the trustee to use for the benefit of the children until
the division date of the children's trust. At that point, the children
are grown, they are launched in life, they have received their education,
they are no longer dependents in the Biblical sense of the word, and
so the value of the estate at that point can be allocated among
children and ministries in whatever percentages you choose.
Once the
children are grown, there are two overwhelmingly common ways
that families determine the allocation of the estate between the children
and ministries. Keep in mind, we've said that as long as the children
are young enough to be dependent upon the children's trust, nothing
would be given to charity at that point, but once the children have
been educated and have been helped into their first home to whatever
extent the parents choose, many Christian families decide to designate
a tithe of the estate to the Lord's work. Tithing in this context does
not seem particularly Scriptural, since tithing in Scripture relates
primarily to income. In estate planning, remember, we are determining
the ultimate stewardship of the capital we have accumulated over a lifetime
of work; nonetheless, tithing is a familiar percentage to believers,
so that's often the percentage that is chosen to give to ministries
from an estate.
Even more
frequently than tithing, what we see families doing once the
children are grown and independent, is treating charities like one additional
child. If a family has three children, they might carve the estate into
four equal parts, giving each of the children 25% of the estate, and
dividing the remaining 25% among their ministries. We think of this
as creating a "child called charity". Families seem to like this approach
because of the clear statement it makes to their children of
the value they place upon perpetuating and participating in the work
of the Lord.
Thoughtful
planning can also have the effect of capping the children's
inheritance at a certain level, and leaving the excess to ministry.
This is particularly prevalent among individuals with large estates.
Often these individuals will determine an ideal inheritance in today's
dollars for the children. Their estate documents direct that a cost-of-living
adjustment be applied to this inheritance over time, and that the excess
be gifted to ministry
Importance
of Estate Planning
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