A few months ago, David Green, founder and CEO of Hobby Lobby, announced he was giving away his company instead of passing it down to his children.
Rather than seeing himself as the owner of his property, Green wrote of his purpose of honoring God, “[It] helped me realize that I was just a steward, a manager of what God had entrusted me.” His language echoes that of Peter: “As each has received a gift, use it to serve one another, as good stewards of God’s varied grace” (1 Pet. 4:10).
As an American, Green has a near-absolute legal right to dispose of his property. He can give it all to a family member or a friend, split it up into equal shares among his children, direct the dissolution of his company, force his heirs to vie for control of Hobby Lobby, or establish a perpetual trust for his descendants that keeps his wealth under the management of professional advisers until the end of time. An owner can do almost anything.
But a steward cannot. We know our wealth comes from and belongs to God, and we steward it in gratitude. Before taking my current job as a tax consultant, I was an estate planning attorney for 17 years—so I’ve thought a lot about how to do this well, even after we die.
Step 1: Make a plan to plan.
A poor steward avoids estate planning. Yes, there are default rules for what happens to your property if you die with no will. Do you know what they are?
If you have IRAs or other retirement plans, do you know who the beneficiaries are? Do you have life insurance and are there beneficiaries named? If you put one of your kids on a joint checking account with you, does everyone know whether that money is a gift to him or if he’s just helping you manage it? Are some of your assets taxable while others are not?
We know our wealth comes from and belongs to God, and we steward it in gratitude.
This is where an estate planning attorney can be helpful. Even for relatively small estates, there are many legal options and tax considerations. Documents must be prepared in accordance with state law, asset titles may need to be changed, and beneficiary destinations should be coordinated to ensure your estate plan works as you intend. Lawyers can be expensive, but the fee for getting it right now is much lower than the fees for getting it wrong. And yes, if you’re gone, you won’t have to deal with that. But it isn’t right to leave bills and a hassle for others to handle after you’re dead.
I’m often asked if it’s OK to just get a will form off the internet. Sometimes it is. Each state has its own rules for how to validly execute a will. Do you know if the will form conforms to your state requirements? If it does, do you know if you properly completed it and executed it in compliance with state law? If so, then go ahead.
There are also web-based law firms and estate planning services. These services are viable options for simple planning, but they have a reputation of being a one-size-fits-all approach. If you’re trying to do anything unusual, it might not be the best choice.
Another common question is “Do I need to have a trust?” Many lawyers now default to preparing a will and trust for their clients. A trust has some advantages and flexibility in planning that a will doesn’t offer, but not everyone needs a trust. It’s a matter to discuss with your adviser.
Making a will or estate plan is hard to do and easy to put off. To help find motivation, it’s wise to figure out ahead of time what you want to do with your assets.
Step 2: Plan care for your family.
When considering the Old Testament inheritance law, Abraham Kuyper observed that the right “was not intended to allow fortunes to be amassed but rather to secure the bond between members of one family and to maintain the organic bond of the nation.”
In the Israelite context, the Jubilee year every two or three generations both rewarded hard work and counteracted the entrenchment of wealth and poverty across generations.
Those are good principles to follow. Your estate shouldn’t be a way to hoard wealth. But it should be a way to care for the children and grandchildren, or the nieces and nephews, or the sisters and brothers that God has entrusted to you.
“But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever,” Paul wrote to Timothy (1 Tim. 5:8).
This doesn’t mean leaving your children and grandchildren such a large trust that they never have to work again. Too much unearned wealth enervates the recipient, while too many strings and conditions lead to resentment. But it might mean leaving them enough to pay off their college or mortgage debts. If someone in your family is a missionary, it may mean leaving a healthy sum to fund his or her work. If you want your grandchildren to attend Christian schools, make sure you leave finances to make that possible.
Step 3: Plan care for your local church and community.
If you have a surplus after caring for your family, then you can move on to thinking about the church and community that God has placed you in. God requires giving from your firstfruits, but there’s no injunction to stop there.
This doesn’t have to be cash. Some assets, like IRA accounts, are income taxable when received by an individual but pass free of income tax to charities. Your gifts can be structured to minimize tax and maximize the amount passing to both family and charity.
God requires giving from your firstfruits, but there’s no injunction to stop there.
Invest in the institutions God has brought you in contact with. I hope you have a church community. Perhaps you sit on a board, or spend Wednesday afternoons at a food pantry, or live near a pregnancy center. Perhaps you believe strongly in Christian education, or in Bible translation, or in the spiritual and physical effectiveness of disaster relief. If you know and trust the work that’s being done, give to those things generously and without reservation.
Most people give away their wealth to existing churches or charities. Others prefer to set up new charities, establish private foundations that support charities, or give to a donor-advised fund that passes out their wealth over time.
The Bible doesn’t give specific guidance on this. But institutional values shift over time, and I’ve seen charities spend money on initiatives or projects the original donors would abhor. While you may have good reasons to set up a long-term foundation, you cannot know what trustees might do in the future. However, you can do your best to fund good work now. Consider the time horizon—perhaps whatever endowment you create could terminate in 50 years, or whatever amount of time you prefer.
Many foundations are established to carry the glory of the donor into the future. But, in the words of Gandalf, “A steward who faithfully surrenders his charge is not diminished in love or in honor.”
In All, Reflect Christ
Your estate plan should be a reflection of Christ in you. As you move through this process, prayerfully ask God to show you the best stewardship of your wealth. Consider who God has entrusted to you. Consider the local church and communities God has placed you in. Then consider what God has entrusted to you.
Making an estate plan shouldn’t be done reluctantly or with grumbling but with great joy and gratitude for the ability you have to give to your family, to your church, to ministries, and even to secular charities. It should be a cause for thanksgiving, even for anticipation.
Good stewards give cheerfully and freely, knowing all their wealth comes from and belongs to God.
The Gospel Coalition