Tithing on your inheritance

I was recently asked the question: “Should I tithe on an inheritance that I receive?” My first thought (and in hindsight I wish I had verbalized it) was that I was pleased that the person didn’t ask: “Do I have to tithe on my inheritance?” That showed that they were coming at the question with the right heart.

In considering my answer, it might help the reader to understand where I am coming from, some of which you may have gathered from past articles.

I have a very distinct bias towards tithing (at a minimum) on all sources of income.

The tithe was Old Testament and legalistic but is also validated in the New Testament. The tithe is just the beginning. That’s where we start, not where we end. We are called to be generous; to give alms and offerings in addition to our tithe. The history of the tithe is that it went to the Levites (effectively the church at the time). The definition of tithe is 10 percent.

We live under grace, not under law, but that doesn’t excuse bad behaviour.

As a financial adviser, I have a financial incentive to encourage people to invest their money, not to give it away. So, when I tell people to give more, I am personally acting against my own financial interests.

Also, bear in mind that when discussing “ought to” issues, one has to come from a place of grace and humility rather than zealous dogma. The purpose of this isn’t to provide a list of dos and don’ts. It is to help the reader consider financial questions with an appropriate heart and wise thought. And I am the first to admit that this is only my opinion. You won’t find a “thou shalt” in the Bible for today’s unique scenarios, so we are called to be wise and generous. 

So, the unequivocal answer to “Should you tithe on an inheritance?” is “Yes!  Actually, well… probably… maybe.”

First understand that it’s a matter of the heart, not a matter of law. We are called to be generous. We are called to not be ruled by money. Being generous is one way we not only demonstrate we control the money rather than the other way around, but also helps us exercise those control muscles.

So, why so wishy-washy an answer? Let’s look at four examples of various $100,000 inheritances. 

Fred dies in a sky-diving accident and all of his assets ($100,000 in RRSPs) go to his wife Wilma.

Donald passes away peacefully at the age of 80. His will states that 10 percent of the estate is to go to charity with the remainder split among his 3 adult nephews: Huey, Dewey and Louie.

Monica dies with a rental condo in rural BC worth $300,000 and a $200,000 mortgage. Her estate goes to her brother, Ross.

Anna has a heart attack at age 45 and her assets go to her only sister, Elsa.

In the first example, even though the money was in Fred’s RRSP, it was there for both of their retirements.  Even though legally it was Fred’s, it wasn’t really just Fred’s. It was the Flintstone’s. It was Fred’s… and it was Wilma’s. Husband and wife are one, so I don’t see that as her getting anything new.  It’s just an administrative change in ownership. 

The second scenario could be more contentious.  Each adult nephew receives $30,000 and a tithe has already been paid once by the estate. Yet, it is new money to the nephews, and they have not paid a tithe on it themselves.  An argument could be made either way. My personal advice to them would be: “Don’t stress, but do pray about it. If you feel inclined, absolutely give some more – just don’t let anyone guilt you into anything. Understand that a tithe has already been paid by the estate.  But also understand that the estate’s actions don’t absolve you from a requirement to be generous yourself.”     

The third gets even trickier. A tithe is owed on that money. But it’s not liquid and Ross may not have a spare $10,000 kicking around. If Ross were to ask me, I’d suggest that he either wait and tithe when he sells the condo, even if that’s decades down the road, or figure out a way to pay extra and tithe over time. Legalists won’t like this approach, but it’s just a recognition of a reality in today’s world that sometimes the assets are there, but not the cash flow. God’s not going to strike someone down for not paying up.

In the final case Elsa, should just pay the tithe. It wasn’t paid from the estate and it’s new money to her.

Ultimately, tithing and generosity are matters of the heart. If tithing is important to you (and it should be!), when you are put in situations where the giving isn’t simple, God will honour your struggle to find the right balance.

Arnold Machel, CFP® lives, works and worships in the White Rock/South Surrey area where he attends Gracepoint Community Church. He is a Certified Financial Planner with IPC Investment Corporation and Visionvest Financial Planning & Services. Questions and comments can be directed to him at dr.rrsp@visionvest.ca or through his website at www.visionvest.ca. Please note that all comments are of a general nature and should not be relied upon as individual advice. The views and opinions expressed in this commentary are those of Arnold Machel and may not necessarily reflect those of IPC Investment Corporation. While every attempt is made to ensure accuracy, facts and figures are not guaranteed.