Transferring Wealth and Transitioning Well
(Disclosure: This is not legal advice. For legal advice, please consult an attorney.)
When it comes to stewardship most of us automatically think about spending money and investing only. However, stewardship involves every aspect of your personal finances and even includes areas outside of personal finance.
Wealth transfer and estate planning are some of the last areas that individuals approach when it comes to stewardship. This may be because it’s “so far in the future” or individuals just don’t want to have those conversations now.
Regardless of the reason, it’s vital to have a plan in order to transition your wealth and yourself well.
Three Wealth Transfer Principles
There are three principles that we want to be mindful of when planning our wealth transfer and setting our estate planning documents.
Treasure
The first principle is the Treasury principle. This principle states that we should be focused on sending our wealth ahead. Or put another way, “Do our giving while we’re living.”
By doing this it allows us to:
Better manage God’s resources for Him because we’re adopting a generous spirit towards things of eternal impact
Remember that this is a temporal home and not an eternal one
Combat materialism and the desire for “more” (giving breaks the power of money)
Perhaps one of the most rewarding aspects of sending our gifts ahead of us is being able to witness the fruit and impact of our gifts today, rather than waiting until after we've passed away and cannot see it.
Finally, we can’t take any of it with us.
“Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be.”
Wisdom
The Wisdom principle states that we should be training up the next steward that will take our place and assume what we will be passing on. Training up the next steward includes passing on the biblical wisdom, if not present already, essential for honoring God with what He’s entrusted to us.
Remember, transferring wealth without transferring wisdom has potential to be catastrophic.
“How much better to get wisdom than gold! To get understanding is to be chosen rather than silver.”
Unity
The Unity principle states that a couple must be in “unity” for all decisions. When we get married we become “one” and that includes “one” in decision making. Think of it as a checks and balances within your stewardship responsibility.
This isn’t to say we’ll “agree” on everything but that we both must come to unified agreement for all major decisions that involve our stewardship.
“Therefore a man shall leave his father and his mother and hold fast to his wife, and they shall become one flesh.”
Important Estate Planning Documents and Tools
There are several estate planning documents and tools that can help transfer your wealth, residual wealth, and authority/decision-making capabilities.
I won’t dive into the nuance of each document/tool but these tools include but aren’t limited to:
Will (aka Last Will and Testament)
Trusts
Healthcare/Medical Directive
Durable Power of Attorney
Durable Power of Attorney for Healthcare
Reviewing and Updating Beneficiaries
Donor-advised Funds
These different documents and tools allow for you to properly plan how you’ll transfer your wealth AS WELL AS the authority to make decisions on your behalf should you be unable to.
We at CFAN encourage you to meet with an estate planning attorney for any legal advice and documents that need to be created for you. Your financial planner paired with an estate planning attorney could be a great combination of counsel when considering how to make your plan.
The Impact
It’s important to understand the impact of getting the proper strategies in place and using the aforementioned principles properly.
Remember, as stewards it’s our responsibility to manage what we’ve been given to honor God. This includes transferring wealth in a way to increase kingdom impact but also includes the spiritual impact of such transitions that may be directly or indirectly related.
We want to be mindful of the financial implications of transferring such wealth but also want to remain rooted in our spiritual convictions and how our actions may spiritually affect those directly involved.
Keep in mind, the spiritual impact far outweighs the financial impact when considering what’s at stake. God cares far more about your heart, the hearts of your family, and the hearts of others than what will happen to his resources. How we transition wealth is important, just don’t get caught up in the minutiae that you lose sight of the spiritual stakes.
It’s never too early, or late, to start thinking about your wealth transfer and getting the proper estate planning documents in place. By developing and implementing a proper plan you’re fulfilling your responsibility as a steward AND you can be at peace that the transition will go much smoother than if you didn’t have one in the first place.
Don’t hesitate to reach out to one of our advisors should you need any help with creating your own strategy around wealth transfer and estate planning.
