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  • Writer's pictureNeil Chacko, CFP®, CKA®

Choosing and Preparing the Next Steward: A Christian View of Wealth Transfer

As stewards of what God has given us, it is our responsibility to manage our finances for the will of the owner. Scripture tells us in Psalms 24:1 that “The earth is the Lord’s and everything in it, the world and all who live in it (NIV).” Thus, the owner of all that we have is God.

However, one day we will be called home and we must remember that we cannot take anything with us when that time comes. But we do have the ability to transfer it forward. This is what Christian author Randy Alcorn calls The Treasure Principle. Ultimately, the resources God provides us can be left to three places: our heirs, charity or to the IRS. While we are living, we need to determine the answers to several questions: who will I entrust to be the next steward(s) and are they prepared? What will be the impact of leaving $xxx to this person or entity? And, most importantly, what would God want me to do with what He has entrusted me with?

Wealth transfer can be difficult for many reasons. Many people do not want to think of their own demise but, as Christians, we have a blessed assurance of our life after death and a responsibility as stewards to prepare for this day as if it can happen at any time. Other reasons that wealth transfer can be difficult is that most of us want to help our heirs financially without harming them or their own ambition. There could also be issues related to sibling rivalry. There may be a family business involved. Finally, there could be legal and tax complexities involved.

However, as Christians that have a Biblical worldview, it is more important to prepare the next steward to be able to make decisions with wisdom rather than leaving this to chance. Ecclesiastes 7:11-12 tells us “Wisdom, like an inheritance, is a good thing and benefits those who see the sun. Wisdom is a shelter as money is a shelter, but the advantage of knowledge is this: Wisdom preserves those who have it.” If our heirs can make wise decisions with their inheritance, it preserves them. This wisdom can be imparted early and throughout their lives. Proverbs 22:6 tells us “Train up a child in the way that he should go and even when he is old he will not depart from it.”

There are six “T” decisions that make up the wealth transfer process. These are:

1. Transfer: Who are you going to transfer the wealth to? (This can include charitable organizations)

2. Treatment: How are you going to treat them? (Equally, unequally, etc.)

3. Timing: When are they going to get it? Now or on a deferred basis? All at once or over time?

4. Title: When do I transfer title and ownership? Early or later?

5. Tools & Techniques: What are the tools and techniques that can be used to efficiently transfer this?

6. Talk: Have I talked to those impacted?

The final “T” of Talk is key to avoid creating a coping gap for your heirs. For example, if you decide to leave half of your assets to the church but did not inform your children of this intent, it can come as an unwelcome surprise at your death. Therefore, it is important to have a family conference discussing your intentions before your passing. I have facilitated these types of meetings in the past with many of my clients. They have always been well-received. The benefits are that it helps train the next generation in terms of values, goals, and priorities. It also helps educate the next generation in tax laws, investment principles, and strategies. It is a formal transfer of stewardship. Once the children have become adults, it is important to have this conference every few years as intentions, tax laws, and assets may change.

For those that may be uncomfortable with a family conference, an option that I have seen some clients employ is including a “love letter” with their will. This is a letter describing your intentions and why you came to these intentions and letting each individual heir know how much they meant to you. This can be very powerful at the reading of your will.

Regardless of who you choose to be the next steward of the resources God has given you, it is important to prepare that steward and wisely manage what has been given to us for passing on to future generations or for Kingdom causes. This way, when we finally go home, we can be assured to hear our Lord say to us: “Well done good and faithful servant. You have been faithful over a few things; I will make you ruler over many things. Enter into the joy of your Lord.” (Matthew 25:23)

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