How Much Inheritance is Too Much? | E61
What’s the right way to pass wealth to the next generation? How much inheritance is too much?
We explore the deeper questions behind inheritance planning in this Beyond Budgets® episode … questions about stewardship, generosity, and financial responsibility. You’ll learn how to balance financial legacy with personal growth and create an inheritance plan that aligns with your family’s values.
Net worth is only one part of the equation, and money amplifies character (or lack thereof). Inheritance can lead to overspending, entitlement, and lack of direction without proper guidance. Smart estate planning includes trustees who guide beneficiaries and flexibility for real-life needs.
Listen to this episode if you’re a parent who wants to define your family’s version of “enough.” Also, listen to our related episode 12, Mastering Estate Planning.
Episode Highlights
(00:00) The dangers of comparison, greed, and lifestyle inflation
(04:46) How to determine “how much is enough” vs. “too much” inheritance
(17:46) How to use Roth IRA matching to build good money habits in children
(20:00) The ways in which donor-advised funds can create a family culture of giving
(27:56) The pros and cons of liquid vs. illiquid assets like real estate and family businesses
Connect with Host Deb Meyer, CFP®
Founder of WorthyNest®, helping Christian parents build financial plans that reflect their values.
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Q&A
What is considered too much of an inheritance?
There is no fixed dollar amount that defines “too much” inheritance. It becomes excessive when it reduces a beneficiary’s motivation or ability to develop financial independence. The focus should be on preparing heirs, not just funding them.
2. How can parents prevent inheritance from creating entitlement?
Parents can prevent entitlement by:
Teaching financial literacy early
Encouraging saving and investing habits
Modeling generosity and stewardship
3. Are liquid assets or real estate better for inheritance?
Both have value. Liquid assets provide flexibility and immediate access, while real estate and business assets can build long-term wealth. A balanced mix is typically the best strategy.
4. Should parents prioritize giving or leaving inheritance?
Both can coexist. Generosity during life can teach values, while a thoughtfully structured inheritance can support future generations without creating dependency.
Full transcript
Deb Meyer (00:01.962)
Let's talk about inheritance today. I recently had a listener message me, send me an email, and this particular listener had some really great questions that I thought would be an excellent podcast episode. So I'm going to dive into some thoughts, not only about this question, but I think it needs to extend to some broader questions as well.
The listener described themselves, they're actually in their 70s, which is a little bit more life experience than most of our listeners who are in their probably 30s, 40s, 50s, even 60s. For this particular person, though, they do live a debt-free lifestyle. They also have a very simple lifestyle and they're very generous to church and other charitable organizations. And they posed a question to me.
They're in their seventies, and they're thinking about inheritance for their children. They asked how much is too much of an inheritance? So I want to answer that question, not just in the context for people who already have lots of assets accumulated that are in their retirement years, but also for listeners who are in that process of building family wealth.
Really thinking about it from the lens of, like how much is too much to be saving or, to be passing onto the next gen if something unexpected happened and like life insurance proceeds came into play. Even if you're not in the situation to be passing on a lot of assets to the next gen in today's dollars, there might be a time in the future where this would come into play.
Or if you're on the receiving end of that, maybe you're going to be receiving inheritance of some sort. How should you position yourself to be someone who stewards those resources well? So I want to touch on a couple of different things. One is thinking about an inheritance not as a curse, but really a blessing.
Deb Meyer (02:23.15)
Because I know, I mean, this was ingrained in me from a long time growing up in childhood, but like my dad used to joke, more money, more problems, right? And the idea that if you're given a lot of financial resources, you have greater responsibility with those resources. And I do think that's a very accurate reflection.
Just because you have those additional resources doesn't mean it has to negatively affect you, that money has to become your god or your savior, right? So the idea for us, any of us that are Christian or Catholic that are really looking at this from a faith lens, we want to be intentional thinking of it as stewardship, wise management of the resources entrusted to us.
realizing that God owns it all. along these same lines of inheritance and estate planning, I also want you to think about like age-based gates within the estate planning documents. I'll touch on that in this episode. What was interesting in this particular email from this listener, they also asked about continuance in the faith, if that should be part of...
the condition of receiving the inheritance. So I definitely have some thoughts on that. And I also want to tie in, I recently finished this book, Leaving a Legacy. It's by Johann Kurtz. And it's interesting. He, I believe is British. He, from what I gathered in reading the book, I think his family has
quite a bit of financial assets. So he comes at it from a unique perspective of someone already being in a family with lots of financial resources. And he makes a really bold argument that, yes, an inheritance is appropriate for children if it's the right kind of inheritance. So I'm also going to tie some of the concepts from the book that I found really interesting and share those in this episode as well. All right.
Deb Meyer (04:41.15)
What underlines all of this, like when we think about inheritance, how much is too much, I think the broader question actually needs to be how much is enough. And if we have this insatiable thirst for more, more, more all the time, it leaves us feeling very empty inside. If we can find contentment, if we can find peace when it comes to our financial position,
life's a heck of a lot easier. I've realized it in my own life. I've seen it in countless lives of other clients. And, it's, it's a topic that we don't talk about a lot because, you know, we live in a, an age where it is. Social media, Instagram worthy pictures of adventures and perfect.
perfect lives or so they seem on the outside, right? And what underlines all of this, and this even goes back to like Thomas Stanley's work, The Millionaire Next Door, or the updated version of that book, The Next Millionaire Next Door, co-written by Thomas Stanley and his daughter, Sarah Stanley-Fallah. Like all of these things lead us into, hey, there's an alternative to accumulating more. It's okay.
to be blessed with financial resources, but use those in a very specific way that is not only going to benefit you as a parent, but also your children and hopefully grandchildren, maybe even great grandchildren if you think about the possibilities. So as we go into that question, how much is enough, it was funny when I got this email the following day,
I was deep in prayer and pulled out my Bible. And of course I play a little Bible roulette where I just flip open to whatever I think God wants me to hear that day. So I flipped open to Luke chapter 12 verses 13 to 21. This is in the New American Bible. And yeah, I'm gonna read those passages for you so you can kind of see.
Deb Meyer (07:00.37)
what I mean on how fitting this was in the context of this topic of inheritance. All right. Someone in the crowd said to him, teacher, tell my brother to share the inheritance with me. He replied to him, friend, who appointed me as your judge and arbiter? Then he said to the crowd, take care to guard against greed for though one may be rich, one's life does not consist of possessions. Then he told them a parable.
There was a rich man whose land produced a bountiful harvest. He asked himself, what shall I do? For I do not have space to store my harvest. And he said, this is what I shall do. I shall tear down my barns and build larger ones. There I shall store all my grain and other goods. And I shall say to myself, now as for you, you have so many good things stored up for many years. Rest, eat, drink, be merry.
But God said to him, you fool, this night your life will be demanded of you. And the things you have prepared, to whom will they belong? Thus will it be for the one who stores up treasure for himself, but is not rich in what matters to God. So the idea of treasure here, right? What do we really treasure? And,
I think for a lot of us caught up in worldly material desires, it's about that consumption, having more, having the nicer, newer car, house, whatever it is, right? And...
Some people get more, they continue to buy and consume more things. But I think the more they find themselves in that lifestyle, the more it is sickening after a while. And they realize maybe some relationships that were truly important get burned in the process. So my encouragement when you're reflecting on that passage and just this topic in general is finding
Deb Meyer (09:12.524)
that contentment, understanding that comparison really can be the thief of joy. If you're constantly comparing yourself to what you see others doing or wearing or vacations they're taking or whatever, it can make you feel less than and truthfully, we're all made in God's likeness and image. So there is no
real score we need to be keeping track of, right? I have a great example of comparison. So a couple of weeks ago, we're in a very busy season with, I shouldn't say busy, we're in a very full season with sports activities. And my middle son had a soccer game out of the neighborhood that we had to drive like 45 minutes to and from the game.
and his particular team gets a bus transportation to and from the school. So they ride separately from us, both to and from the game. I had my other two sons with me to watch the game and cheer our middle son on. So there we are watching the game and afterwards, was a little later, it was probably about 7, 7.30.
something like that, we are driving back and I'm like, hey, let's stop over at Culver's for some dinner. So we got some hamburgers, some fries, and then I think they even ended up getting custard, the boys did. I didn't, but the boys got it. And then they were all happy, content, we get home and my middle son,
His bus is back and he's ready to eat dinner because they didn't have anything on the bus. So he asked my husband who didn't go to the game, Hey dad, can we go out to Five Guys and get burgers and fries? And as soon as my youngest son heard that they were going to Five Guys, he started getting very angry, even though he just had Culver's, right? So both fast food restaurants, delicious.
Deb Meyer (11:32.29)
burgers fries are their main mainstay. And, and my youngest one just got so jealous because he wanted the Five Guys fries. He didn't like Culver's fries as much as he liked Five Guys fries. But you can see like prior to knowing that my husband and middle son were going to Five Guys, he was perfectly content, right? He was happy, satisfied, had a good meal.
But the minute he understood, someone's getting something I want more, he got really angry and jealous that he couldn't go. And I said, you know what? I'm sorry. You're not going to Five Guys. You already ate dinner. You don't want to over, you know, stuff yourself. And that was a hard lesson learned that day, but I'm glad he learned it. And hopefully it won't rear its ugly head again in the future. But,
I think even as adults, we can be prone to doing that again, because we're in such an age of social media and yeah, there's just a lot out there talking about other people's great lifestyles. they, especially if people are posting on social media, usually they're posting the highlight reel. They're not talking about the hard stuff. So.
My encouragement as you're thinking about this concept again is don't compare yourself to someone else. Focus on your family's goals. Focus on your family's values. And really think about those just in a silo. Don't try to have a bunch of other noise that's really going to detract you from reaching those goals or living in accordance with those values.
When it does come to inheritance, think there is no one size fits all solution. So I'm gonna preface this with, there's no magic number where I could say, if you give more than a million dollars to your children, that's too much or whatever the number is, right? I don't believe that's true. But I also do encourage you, if you're a person of faith, to really prayerfully consider where you feel God is calling you in this direction. And when you think about inheritance, it's not just the,
Deb Meyer (13:52.672)
net assets on your balance sheet today, if you have life insurance or some other kind of policy that would pay out when you're deceased, that also needs to be taken into consideration for a potential inheritance that's going to the rest of the family. All right, let's take a quick break. If you're enjoying this episode or you've enjoyed any of the episodes, I really encourage you to leave a five-star rating or review.
It does make a big difference in terms of discoverability, having other people hear about the Beyond Budgets podcast. And even if you left a review or rating, you know, maybe a year ago, two years ago, whatever timeline, new ones are always appreciated. So I believe the cadence you can re-review like every six months or something like that. So I'd encourage you again, if you're enjoying this, you're finding this valuable.
and you want more people to discover it, please leave a rating or review. Okay, back to that original question, how much is too much of inheritance? Let's talk about greed for a little bit. And this could be self-reflection or it might be thinking about the potential beneficiaries if you are later in years and you're really looking at, what adult children do I have and what are...
their natural tendencies. So I'm going to ask some bold questions here. And I really do hope it's a time of self-reflection. Has greed taken a stronghold in your life? Let me repeat that. Has greed taken a stronghold in your life?
If you feel it has, or the potential beneficiary that's going to inherit assets has, really the key is generosity. That is the antidote to greed. And I try to live a very generous life. My husband and I have been much more intentional with inviting people into our home, trying to get more hospitality and deep human connections.
Deb Meyer (16:11.852)
That's one aspect of generosity. Another aspect is charitable giving, like financial.
financially supporting church or other charitable organizations that are important to you, it might not be a specific tax write-off. Maybe it's helping out a family that you know is in a difficult situation. In my neighborhood, we have lots of different Facebook pages and hear about, okay, so-and-so is needing clothes for their 10-year-old son. Does anyone have clothes to donate?
that's, you know, of nice quality and still in good condition that will really help this family in a time of need. When Hurricane Ian hit a couple of years ago, there were people opening their homes to say, hey, fortunately in our neighborhood, we kept power and water and we had the ability to help like do laundry of other people that were.
flooded and had no real source of getting laundry done. just basic things like that, trying to figure out, OK, if you're in a season of blessing, what can you be doing to really help others, not only in your local community, but even causes that might be further away, right?
Deb Meyer (17:42.592)
The other thing I'd like you to consider, especially if you've accumulated a lot of financial assets, is really tithing. We talk about the concept of tithing, giving 10 % of income, but maybe you're not earning much income anymore. Maybe you're relying on Social Security or other pension or other forms of retirement assets, know, income generated by those.
So your tithing number would be pretty small if you're tithing on income. However, if you have a significant financial net worth, I'd like you to consider tithing on that net worth. It's a bold concept, but again, generosity can really help a lot of people in need. Now, this is where...
The book, Leaving a Legacy, differs pretty strongly from my views. I do think generosity is super important and charitable giving is an extremely important component of that. This particular author was saying, no, let's figure out ways to be generous that don't necessarily mean supporting specific charitable organizations. this author was making the case that
you should really be investing in your own family and it's okay to live a very privileged life in a very nice home and estate and have lots of land and servants and things like that. It was a little extreme in my viewpoint. I don't think it's realistic for most of us living in this time in the US.
But I see the point that there are ways that you can still benefit other people if you have a large estate and you're helping employ people in a family business, things like that. So I see both ends of it, but for this particular example, I like you to think of generosity in terms of not only opening your home to people, but also charitable giving.
Deb Meyer (19:55.982)
with money, right? And there's lots of different avenues to pursue that. It could be a donor-advised fund. It could be gifting stock away out of a taxable brokerage account. There's lots of methods to go about it. It could just be as simple as writing a check, whatever that amount is. But
We are going to talk in a future episode just around charitable giving. There's podcast-a-thon coming up in March where we're going to highlight one specific charity that I've been supporting for many, many years, really believe in their mission and they work with poverty alleviation overseas. So you'll hear more in the episode in March, dream podcast-a-thon week.
But until then, I do want to kind of go back to the topic at hand. So do you think greed could take a stronghold in the life of one of your beneficiaries? When we think about beneficiaries, each person is created very differently. And I have three sons who have very different money personalities. One likes to spend it as soon as it's made or earned. Another likes to save it.
save, save, save, and then another is more charitably inclined, likes to things away, right? So in the case of my child that wants to spend money as soon as it's earned, for him, a strong tool might be something like a Roth IRA matching. So he's at an age where he could be earning an income from an outside source.
And with that income, I could say, hey, I can match it dollar for dollar or maybe just like 25 % of whatever he puts in. But the idea is to encourage him to start saving in an account that can actually appreciate value significantly. Just saving in like a traditional savings account that's earning a very small interest rate, probably not as beneficial for your child's long-term future, but getting them saving if they have that
Deb Meyer (22:07.618)
you know, trusted income source, making sure that they can start looking at like a Roth IRA. You of course would own the IRA if they're under the age of majority, but they're still getting the benefit of that account and unable to that journey. And the cool thing about the Roth too, like in my son's example,
We put money into it, and then he actually gets to pick the investments. So we're doing it as kind of a dual preparation tool, helping him figure out savings, but also helping him figure out investing while he still lives at home. So the idea of that matching, again, it's one for one match if you can afford it. If it's something too far out of reach, maybe just saying, hey, I'll contribute 25 % for every dollar you put in.
you put in a quarter for every dollar your child puts in. The other thing that I found helpful in my own family to instill that spirit of generosity is a donor-advised fund. So just as an example, at the end of last year, we were doing some tax planning. We transferred appreciated stock into a donor-advised fund. And with that donor-advised fund, we got the two-year double deduction last year. But...
that account has investments in it and it can continue to grow and we can make donations out of that account. So technically that money is now outside of anything we directly manage that's considered in our estate and that will be used for charitable giving for this year and likely into next year. It's a really great tool especially if you can get your
children involved in that donor advised fund. So in my particular case, we opened DAFFI, which you can go to daffy.org if you're interested in exploring one for your family. Their fees are quite reasonable. And on our particular level, we have an option to add our son as a viewer on the account. So myself, my husband, and our oldest son are
Deb Meyer (24:27.178)
all able to see the same account balance and activity and also make suggestions on the donation. So we have charities that my husband and I have supported for a long time and continue to support. The idea here is hoping my son will grasp, okay, if something happened to us, he could continue on with that same giving, but then he might also want to benefit some additional charities in the process. So.
From a structural standpoint, I like that kind of vehicle as long as you can find one that's reasonable price.
Let's move on and talk about estate documents themselves. So I know for a lot of people, estate planning is not a fun thing to be thinking about. You can go back to episode 12, where we were talking about mastering estate planning. I'll link to it in the show notes. That talks more about the terminology around estate planning and just overall considerations. This is a little bit more granular where I'm going to talk specifically about
age-based guardrails in the estate documents if you have, you know, children that are maybe anywhere from zero up to age 35. Okay. So if you have any children in that age range, this would be an important thing to consider. an age-based guardrail is essentially saying, we're going to give a set portion of an inheritance at different ages for the child. If you have multiple children,
Usually when an estate attorney drafts these documents, they're going to be creating a trust for the benefit of each beneficiary separate, or they might have like a pot trust where they have all the assets in one trust until a certain age is reached of the youngest beneficiary. There's different schools of thought on doing that. For our particular estate documents, my family recently did.
Deb Meyer (26:29.13)
we put in these age-based guardrails. So if something happens to me, my husband would be in charge. If something happened to both me and my husband, my brother-in-law would be in charge. And for my brother-in-law, he's going to try and help administer any trust assets. But in his particular case, he will have to follow whatever our trust document says. So our trust document says, OK, at age
Deb Meyer (27:25.398)
some of that inheritance early, but also have another party, in this case, my brother-in-law, who could help really decide what a good use of that money is when it does come out of trust. I hope that makes sense. So again, this is more like worst case scenario. I'm deceased, my husband's deceased, and we have my brother-in-law as trustee.
In this situation, we have different guardrails put in for our sons for whatever inheritance they're going to receive. And it works well because our trustee is not an actual beneficiary. He's just helping educate the beneficiaries. The last question that the reader posed in this email was, or I'm sorry, not the reader, the listener posed in this email is, if you are a devout
Catholic or Christian, should you insist through those estate documents that your children or grandchildren stay active in the faith? For me, this is a hard no. I don't think you should try to, it's a slippery slope. If you're saying, so and so needs to be practicing a particular faith, well, what is practicing? Is it going to church?
on Easter and Christmas, is it going weekly? You need to be praying for their souls. If they're not on a pathway similar to yours, you want to be praying that they turn to God through their own efforts, not through you trying to control them from the grave. I'm being blunt, but I really feel strongly about this. Everyone's at a different spot on their faith journeys.
And I don't think you should ever tie what their potential inheritance is to whether they are going to church on Sunday or not. There are some really great people I know who don't go to church on Sunday, but have the most generous kind hearts. Okay. I also know plenty of people that go to church every Sunday and can be really terrible in other situations. yeah.
Deb Meyer (29:43.982)
I've seen both ends of the extreme and I don't think church attendance or how devout you say you are in your faith really makes that big of a difference on whether you're going to steward that financial wealth well. So bottom line, in my opinion, pray for that person's conversion. Don't disinherit them.
Of course, it would be wonderful if you practice a certain faith and your children and grandchildren all practice it. That's ideal, right? But we don't live in an ideal world. We live in a fallen world. yeah, I hope I'm not being overly aggressive in my stance on that, but it's how I feel. So one more point I want to bring up from the Leaving a Legacy book by Johann Kurtz.
One of the interesting topics that he talked about with inheritance was this idea of passing on assets, that your children can really benefit from responsibly managing. So in his particular case, he was really gung ho about passing on a family business and, or real estate. And he said liquid assets really shouldn't be passed on. I begged to differ.
I feel like the liquid assets are going to be a nice compliment, especially if you think about your own retirement, you need some liquid assets to fund your retirement. We live in an age where social security, while it might be okay for people already in their 60s or 70s,
it's probably not going to be okay unless something's really corrected for people in their 50s and younger. They're probably going to get reduced benefits versus what they're seeing on those statements that come in the mail periodically, right? So like social security, not as reliable to count on that. Pensions are...
Deb Meyer (32:04.11)
pretty much non-existent. they happen, again, it's probably gonna be people that are already receiving a pension or might have a very small pension from several years ago when they worked for one particular company and have a very small portion of their retirement to count on that. So those are the tools that historically people have relied on for
you know, making sure in their retirement years their bills are covered. That's really not the case as much anymore. And I would strongly urge you to look at a mix of liquid and illiquid assets. I would never suggest putting all your eggs in one basket one way or the other. So.
For a lot of people that I work with in particular, we have a lot of liquid assets. They might be in a retirement account, but they're still accessible and available if needed. For real estate though, you're subject to finding the right buyer, selling at the right time. The market in that particular area, I mean, I know in my moving back and forth, the real estate market in Southwest Florida was really
unfavorable both at the time we left and even now that we've been back compared to the Missouri market. The Missouri market was growing leaps and bounds and it was a lot more difficult to find a house to buy up there. It was also relatively easy to sell but same time frame in different parts of the country completely different experiences with real estate. even like within Florida depending on which coast you're on and what specific
geographic area you're in, that can have a huge bearing on whether you're able to sell that real estate at a premium or if you have to take a big discount. I'm not personally a huge fan of real estate. I do like the idea of a family business being passed on, and I'm probably going to do another podcast episode specifically to explore that concept.
Deb Meyer (34:23.724)
Yeah, I think it's important to have that balance of both liquid assets and illiquid assets. And really, again, the overarching concepts are figuring out what is enough for you, what is enough for your potential beneficiaries, and are those beneficiaries in a position to steward the assets well, regardless of how devout they are (or not) in a particular faith. I hope this was a helpful episode to think about some of these bigger questions. Thanks!