Ask Chuck: Managing inheritance or sudden wealth

Dear Chuck,

Before my grandfather was put on hospice care, he shared his estate plan with our family. He was a generous man, but we had no idea he had accumulated SO many assets.

As a result, my wife and I will be inheriting a lot of money. At age 30, we have no experience managing this kind of money. We need some guidelines.

Young Heirs

Dear Young Heirs,

A young widow once sought advice from our ministry shortly after her husband’s passing. She received a million dollars from a life insurance policy intended to provide for her and the three young children. He had instructed her to wait one year before making any major financial decisions and to follow the advice they learned from Crown. Her question, only 90 days after his funeral, was whether buying a high-end RV was a good idea. She thought she and the children could use it to “create new memories” and that “her husband would likely approve.” We said her husband had given her great advice and suggested that she wait the full year. More on this later.

Your financial future is about to be altered dramatically, but by abiding in Christ and following His financial principles, you will be prepared to handle it with humility and wisdom. I admire you for taking steps before the receipt of funds and seeking outside counsel.

Be faithful stewards

You have been entrusted with much, but never forget that God is the owner (Psalm 24:1).

“As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. They are to do good, to be rich in good works, to be generous and ready to share, thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life” (1 Timothy 6:17–19 ESV).

Find trusted advisors

Take the time to find a wise, godly mentor, one who has managed wealth wisely, one who can address your questions and concerns and direct you to those with the expertise needed for your situation. You may need to assemble a team of professional advisors, including a Certified Public Accountant, an attorney, and a financial adviser.

Avoid hasty decisions

Any dramatic change in lifestyle can be accompanied by unexpected problems and the appearance of new “friends.” Do not make major purchases until you understand the tax and legal repercussions of your inheritance. Before signing any documents, know exactly what you are signing. It is far better to go slow, seek counsel, and avoid the temptation to splurge than to make costly mistakes.

Create short- and long-term goals

Carefully think through needs and wants. Pray together about how much to give, what you need to live on, and where and how you want to invest for the future. Do you have children or plan to? If so, set aside funds for things like braces, education, and weddings. Consider your family’s goals and impact in your community or around the world.

Define ‘enough’

Set a budget to guard against the accumulation of things. This will enable you to set a realistic spending plan and protect you from frivolous spending, waste, and greed. A team of advisors will give you great insight, but educate yourself by doing as much research as possible. You will need to cautiously guard your heart and mind against the schemes of the devil. Keep your eyes on eternity.

Define your purpose

Opportunists may appear with investment deals that seem credible. Always, always seek the wisdom of the Lord, your spouse, and wise counsel. Connect your resources to God’s purpose for your life so you can make the greatest impact over the limited time you have here on earth.

Be aware of sudden wealth syndrome

The newly rich often suffer from stress that manifests itself in discomfort around old friends, guilt, paralysis in decision-making, fear, distrust, and isolation. Placing your identity in Christ and being involved in a Bible-believing church with a community of believers will minimize the possibility of this added stress.

Walk humbly with gratitude

Micah 6:8 says, “He has told you, O man, what is good; and what does the Lord require of you but to do justice, and to love kindness, and to walk humbly with your God.” Your inheritance is between you, your family, and God. Avoid displaying your wealth in ways that attract unwanted attention or distract you from serving Him. Remembering the price Christ paid for you and the responsibility He has entrusted to you will help you keep things in perspective.

The rest of the RV story

So, the young widow who came to us for counsel bought a brand new, very large, very fancy, expensive RV shortly after we advised her to wait. She and the children took a cross-country summer vacation in it. It was stressful and not much fun. She discovered that it was expensive to operate, she felt unsafe driving it, and she preferred staying in a hotel rather than being cramped in the RV with young children. She sold it at a 30% loss, all before the one-year anniversary of her husband’s passing. To our knowledge, most of the money was gone within five years of receiving the insurance money.

Many wealthy families have set great examples for us to learn from. Here are a few highlighted by the National Christian Foundation that will inspire you. Remember, money doesn't love you, so never fall in love with it.

Here are some other helpful resources:

National Christian Foundation
Trust Bridge Global
Preparing Your Estate Plan
Alan Barnhart’s Testimony

Do you want more tools and tips on financial stewardship? Are you interested in receiving ministry updates from around the world? Sign up to receive the Crown Newsletter emails by using the form on the homepage at Crown.org.