I told you way back in part 2 (remember? We were so young and carefree back then) of this series that I was going to give you a little whiff of how the inheritance game can go quickly and destructively sideways in the life of a person. Today is kind of like back in elementary school when you were on Indian Guides campouts and the dads told you to all gather round and listen to scary stories. Except, unlike the deerslayer yarn, the statistics and tales that I’m spinning are all very real. TOO REAL, you could say. So, if you’ve got an open box of graham crackers and some marshmallows, now would be the time to fire up the campfire.
…the Lord gives wisdom; From His mouth come knowledge and understanding; He stores up sound wisdom for the upright; He is a shield to those who walk uprightly; He guards the paths of justice, And preserves the way of His saints. Then you will understand righteousness and justice, Equity and every good path.
Proverbs 2:6-9
Listen up young uns, as I spin a tale of inheritances squandered! Of fortunes destroyed and reputations maligned! Yes, it was on a night just… like… tonight…
Frankly, I could stick to kitschy fun stuff like the story of Jonathan Jackson, who died in Columbus, Ohio and bequeathed his fortune to further the establishment of… a cathouse. Nay, ‘twasn’t a brothel – it was a house designed from the ground up to serve the needs of hundreds of cats. Replete with a conversation room (…check this out guys, it was PURRRRfect… I’m here all night) and an accordion listening area. Who is going to play the accordion to these cats? We don’t know, but whoever he is, his salary has been endowed for life.
Yeah, I could stick to that kind of stuff but, although fascinating in a macabre sort of way, that would feel gimmicky and probably wouldn’t get my point across very well. And since I’m on a cautionary tale kick as of late, I’ll steer us towards some more instructive histories.
But before I hit you with the heavy stuff – why would I write this article? To convince you that inheritance is bad? Right after I spent a whole lotta time painting a picture of the nobility of Biblical Inheritance? No no no… guys! I’m trying to illustrate one thing here – that when inheritance is divorced from the Biblical model (identity-laden, productive assets that require claiming and work to realize), it all goes to shinola. (Am I being a little too generous with the links? Hmmmmm…. I don’t know. Maybe maybe not.) Anyway… this is what shinola looks like:
Tale One – I Will Hunt You Down
If you enjoy these inheritance-blowing-up-lives type of stories, you’re in luck. Any Google search remotely tangential to inheritance will yield virtually endless tales of inheritance-related disaster. And that was my diligent and thorough process in coming up with a few savory morsels for your enjoyment right here. But dear reader, there was one that caught my eye right off the bat… because it went down in the house next door to my childhood home. TRUE STORY!
I grew up on a pretty nice street in Dallas, Texas; I’m not going to pretend for a second to have come from a blue collar background. However, there was a house at the end of the block that made all of our homes, by comparison, look like they could be attached to semi-trucks and carted off by a collection agent.
Note: I’m not sad about this. These wealthy neighbors owned several acres of wooded lots surrounding their home, which they left undeveloped, and a large part of my childhood was spent exploring these woods and jumping my BMX bike therein. Hooray for the unobservant rich!
Anyways, inside that colossal home lived a certain Mr. Hunt, heir to (part of) the fortune generated by H.L. Hunt – a classic Texas oil tycoon who was at one point among America’s richest men (his son invented the American Football League and the Super Bowl! True story!). Being a multigenerationally-minded tycoon (here at AW, we think that’s the best kind), H.L. had set up trusts to push his fortune out into future generations. To make a very long story very short – one of the heirs didn’t like the cut he was getting and decided to sue my neighbor and a few other heirs to the fortune. As a result, the family ended up selling Grandpa’s company and dismantling what was meant to be a family asset for the ages and turning it into a pile of cash. And we all know what happens when you turn a productive, identity-laden, family asset into a pile of cash, right? (Hint: it’s a loser.) What’s more, the litigious beneficiary was disinherited and shortly thereafter indicted on multiple counts of mortgage fraud. Desperate folks can end up turning to crime in effort to make ends meet, but, evidently, inheritance can make a man feel like he’s desperate for more than the millions he’s already receiving from the family trust. Or whatever.
If you didn’t know the family (and I didn’t: I was more of the “12-year-old, slightly creepy kid leering from the bushes” type), this would sound like a big nothingburger of a story – par for the course. For me, the kicker lies in the fact that my billionaire neighbor drove an old pickup truck. When H.L. Hunt had made great efforts to provide for many generations and, evidently, trained his descendants in useful skills like not wasting money on depreciating assets (and that’s a real good one!), no matter how many billions they had socked away, it’s particularly sad to see benefactors behaving as some say they always will and tearing apart what should have been 100 generations of family strength. Let’s all pour one out for H.L. Hunt – he tried.
A foolish son is the ruin of his father
Proverbs 19:13
Tale Two – Jack Takes a Wrong Turn
Jack Whittaker is a fine proxy for the lottery winner portion of this article. I say proxy because you can sort of replace his story with about 95% of the people who have experienced massive windfalls, be they from parents or from state-sponsored programs by which the poor are voluntarily taxed (snap). And I write about lottery winners alongside inheritors because that’s basically what our backwards society has turned inheritance into, right? A big pile of money (and not much more) that everybody just sort of hopes doesn’t destroy you.
[THIS WHOLE SYSTEM IS BEREFT OF ANY VALUE WHATSOEVER. It’s ALMOST as if a demonic power invented it to maul and maim families! It makes me seethe with righteous anger. –Ed.]
Ahem. Back to the story.
On the day after Christmas, 2002, this Johnny Cash lookalike woke up as usual at 4:30am (he worked hard laying sewer pipes and tending a small business that employed over 100 folks in West Virginia and Ohio) to find that he’d won the largest undivided lottery jackpot in history. What a cool story – married for 40 years to the same woman and caring for children and grandchildren faithfully – could it have happened to a nicer fella?
This story is gonna turn out great isn’t it! I bet it is! Overnight riches for a super nice guy! Oh man… But wait there’s more!
Jack’s next move was to tithe a tenth of his winnings! Whaddaguy! At this point every person on every church staff in America is nodding in approval of our man Jack. (Except the jealous ones. And the authors of this blog.)
But his second move, well… his second move was to visit the local strip club. NO JACKY… wrong way! And here, our story devolves, exposing Jack the Churchgoing Gambler as yet another victim of American finance brain corrosion…
Within 8 months, Jack’s devoted granddaughter had become known for smoking really big crack rocks around town, Jack had been repeatedly robbed, he abandoned his wife in favor of prostitutes, and had transitioned from noble benefactor of his impoverished community to Loathed Entitled Scourge. A few months later, his daughter, granddaughter and her boyfriend had all died from [likely] overdoses. Jack is alone and pretty much broke these days. And alone. And whatever multi-generational dreams he once had are all dead.
The more easily you get your wealth, the sooner you will lose it. The harder it is to earn, the more you will have.
Proverbs 13:11 (Good News Translation)
“Ok, ok, Marco”, you may be saying, “I see that inheritance can wreck a person like the ones you’re describing… but not THIS cowboy [thumbs tucked behind belt buckle; feet more than shoulder width apart]. I’m real, real, super smart-like. I really have my ducks in a row – I’m a capable (and willing!) vessel for a windfall”. I have one for YOU as well, my doubting friend.
3rd Tale – The Gambling Widow/Mayor/Burger Heiress of SoCal (Unwieldy title, we admit)
Maureen O’Connor was a political up and comer, already in the midst of a run for the San Diego city council, when she married Robert O. Peterson – the gentleman who would found Jack in Box and gift the world with the Sourdough Jack (I maintain that this is a remarkable choice in the world of fast food hamburgery). Maureen, postnuptially, went on to become the first female mayor of San Diego and hold the office for the better part of a decade.
This is all to say, she was a baller before and after her husband’s success. (Probably smarter than you self-confident jelloheads, even.) And yet!, when he died and his $50 million of equity turned into cash, deposited di-REC’ly into Ms. O’Connor’s accounts… things didn’t fare so well.
To wit: ol’ Maureen decided to engage in what psychologists have since termed ‘grief gambling’. On the positive side, Maureen won a billion bucks during this binge! Hey! But on the negative side, over the same time period, she lost MORE than $1 billion, leaving her with… debt. Seeing her unenviable position, she did what any go-getter with a gambling problem would do: why, she raided the coffers of her late husband’s charitable organization, natch! Of course, legal censure and destitution are where this story ends.
Whoever loves money never has enough
Ecclesiastes 5:10
[This feels like a really depressing Choose Your Own Adventure book, doesn’t it, where it doesn’t matter if you give the mysterious heirloom BACK to the gypsy, or use the incantation scrawled inside for yourself… either way everybody’s gonna die… doesn’t it start to feel like that? Guess what it IS like that, Chachi. These stories all suck.]
Some statistics
Lest you just quit now and say, “Whoa, Snoop, I’m up out that game. Sign me up for the charitable giving option, I don’t want NONE of that pain”, let me remind you that every one of these statistics result from being woefully unprepared for dealing with a massive pile of (unearned) cash. Money by itself, I AGAIN remind you, doesn’t meet any of the requirements for Biblical inheritance.
Reminder: a real inheritance is:
1. identity-laden,
2. productive, and
3. requires claiming
But that DOESN’T mean that money, as part of a larger inheritance, should be just burned to the ground. No way. We just want to be savvier than our run-of-the-mill lottery winner. So put these stats into your thinking cap:
- When it comes to large ($1M+) intergenerational wealth transfers, 70% will be exhausted by the recipients. Put another way – only 30% of people who pass large inheritances down to their children will successfully fund generations beyond their children.
- TAKE AWAY: multi-generational vision has to be carefully articulated and trained or it just. Won’t. Transfer. The money will get eaten along with your dreams of true legacy.
- Amongst lottery winners (just think: unearned financial windfall), 70% spend their winnings down to zero within 5 years.
- TAKE AWAY: limiting the spending power of inheritors (through giving gates or, heck, through good child training! -saying NO often to children, for example) is a smart move if you care about your great grandchildren.
- Receiving more or less money doesn’t impact the odds of going broke in the long term. Those who receive small amounts are more likely to go broke for the first two years, but after that, bankruptcy rates are the same whether you receive $10 thousand or $10 million (AND, both rates of going bust-o are higher than the people who receive zero!).
- TAKE AWAY: We reiterate that giving unearned money to people who have no vision for it will default to the flesh and hang themselves with it, doesn’t matter how much it is. Money without training and maturity is a disaster.
- Suicide, depression and divorce rates all increase for individuals who experience financial windfalls.
- TAKE AWAY: The American dream is one of material abundance, conspicuous consumption, and not much else. If your hope is in those things, and you luck into getting them without paying any dues, then you see they’re destitute and void of true meaning… you end up empty. In other words:
- TAKE AWAY 2: It’s Jesus or else.
- Lastly, those who inherit a successful family business… are 10 times more likely to avoid ALL of the above mentioned pitfalls. Another study found that successful family businesses that make it past one generation are highly correlated to strong social relationships (you know… the kind that tend to exist in a healthy family). A third study found that the primary determinant of happiness is the strength of social relationships. Put all that together and it may actually be true that money alone (that is, a non-productive pile of spendable dosh) has nothing to do with the fact that a family capable of passing along Biblical inheritance will also produce successful, happy people.
- TAKE AWAY: a family capable of passing along Biblical inheritance will also produce successful happy people. Said another (and more easily misconstrued) way, wealth is inevitable.
So:
POINT ONE: big piles of cash, earmarked for consumption, are dangerous to almost everyone, no matter how they were acquired.
POINT TWO: that danger is doubled when that money is unearned (and “outliving a relative” doesn’t count as “earned”). Again, “The more easily you get your wealth, the sooner you will lose it. The harder it is to earn, the more you will have.” Proverbs 13:11. The stats are very clear about the hazards of overnight wealth.
POINT THREE: here at Abraham’s Wallet we regularly aspire to be the types of dudes who are capable of being entrusted with more of the King’s resources (again, there are FOUR that are worth more than hard cash). We want to be trustworthy managers of Dad’s riches (chief among them, His revelation, and His children) so not be disqualified from any of it- money included.
POINT FOUR: If you’re in the family-building business, you are in the inheritance game, as well. Simply handing down cash jackpot wads is a LOSER of an idea. It will hurt your progeny, not help them. (For an example, read this entire post again.)
So in our family we’re looking to create identity-laden, productive assets that require each recipient to work hard if they want to squeeze the juicy goodness out off their inheritance. That looks like a lot more than a family business – it’s the spiritual heritage that we build around the table on Shabbat, or the equity we all acquire in our vision for the family God has given us as we engage in annual summits or, yes, the productive endeavors we build alongside each other to finance the work we’ve been collectively called towards.
I don’t know if we will end up with a lot of money to hand down or a little (early returns say: quite a good bit, thank God)… but I do know that we’re aggressively constructing our family culture, planning our investments, and training our children so that Biblical inheritance can be a healthy, productive (NOT destructive) part of our story.
And if you’re asking exactly what that looks like, and want more practical how-tos… well I’ve got you right where I want you. You’ll have to join me for part four to get the deets!
A righteous man leaves an inheritance to his children’s children.
Proverbs 13:22
*Mark Parrett is one of the founders of Abraham’s Wallet. When not blogging for you here, he’s raising a family in Salt Lake City, UT and working as a financial planner at Outpost Advisors.
