Proverbs 13:22 tells us we should leave something to our heirs. It says A good man leaves an inheritance to his children's children But it doesn’t say how to do it. Often when parents make out a will they simply divide their assets equally among their children. That includes property but some experts will tell you that’s asking for trouble. We’ll explain today on MoneyWise.
It's a difficult thing to divide equally when an estate contains property and most do. It immediately forces heirs to make a difficult decision to either hold the property in joint ownership or sell it and divide the proceeds. (A third option - one or more heirs buy out the others.)
Deciding as a group what to do with property becomes a complicated business.
POTENTIAL PITFALLS OF DIVIDING AN ESTATE
Sometimes properties can actually become a financial burden when you factor in maintenance costs, taxes, insurance HOA fees.
Joint decisions about the property have to be made as a group which can cause problems.
If the property become something akin to a timeshare for the heirs and their families, who determines who gets to use the place and when?
Many times, family homes become a money pit that breeds contention among surviving children who can’t agree on even mundane decisions.
Resentments that were hidden for years may boil up to the surface when Mom and Dad aren’t around anymore especially if one sibling is made executor of the estate.
Many experts suggest, instead of bequeathing real estate to your children, stipulate in the will that upon your death all property be sold and that the proceeds be divided equally among your heirs. (Obviously, you don’t have to divide the proceeds equally among your heirs. In his book Splitting Heirs, financial teacher and author Ron Blue says that if you love your children equally, you’ll treat them uniquely in your will.)
Discuss your wishes with your family so that no one is surprised.
If you need help drawing up a will (or changing one) it’s important to work with an estate attorney who shares your Christian worldview. You can do that by finding aCertified Kingdom Advisor.
LISTENER QUESTIONS On today’s program, Rob also answers listener questions: ●If a credit card lender lowers your credit limit, does that impact your credit score? ●How do you balance paying off student debt with saving? ●What’s the best way to give your kids an inheritance while you’re still alive? ●Is it biblical to ask a creditor to settle a debt for less than the full original amount? RESOURCES MENTIONED ●Christian Credit Counselors Remember, you can call in to ask your questions most days at (800) 525-7000 or email them toQuestions@MoneyWise.org. Also, visit our website atMoneyWise.orgwhere you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app.
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