My Son's Unexpectedly Inherited $400,000

Brought to you by CHL, a budget-friendly faith-based alternative to health insurance, chministries.org slash budget. This morning, my husband got a phone call from somebody representing a life insurance policy and our three sons inherited $400,000 this morning. And since it's not my, if it was our money, my husband and I would have a plan and we'd be paying off our mortgage and we kind of know what to do with it, but we're not sure what to do with it when it's given to your children. So they were named the beneficiary on someone's policy that passed away, obviously? Yes. Who? It was a crazy, crazy blessing. It was, my husband and I rented our first home when we were married. We rented from a lady and we just became friends, but we were kind of friends at arm's length and she originally said that she wanted to bless our boys with the house that we had rented for three years and that she wanted them to have it. And so we talked to her and we promised to be good stewards of it and gave the boys information for her to be able to do that. But the call that my husband got this morning wasn't about the ownership of that house that we had rented. It was about life insurance cash payouts. Wow. How old are your boys? They're told at about 400,000. How old are your boys? Yeah, they're 10, seven, and four. And it's equally split amongst them? Well, there's actually one account that is all three of them and then there's one account that is just two of them because the third one wasn't born yet. Okay. I would just sit down with a SmartVestor Pro and I would just open some mutual funds in their name. That's simple. Okay, and my husband wanted me to ask about a UTMA account. Yeah, that's it. That's gonna be a Uniform Transfer to Minors Act, only there's no transfer here. She's transferred the money to them, but these are minor accounts and you're the custodian, meaning you're in charge of the money until they turn 18. And just invested in good mutual funds. Like you would for yourself and then that's gonna set them up beautifully. They're gonna have a lot of money by the time they're in their 20s. And then the thing that goes with that is the problem that this sets up is that this is their money at 18 years old. And so if they're doing drugs, they're gonna be well-financed drug users. Right. That's a problem. When you're in the baby steps, every expense deserves a second look and healthcare is one of the biggest. That's why I recommend Christian Healthcare Ministries. CHM is a health cost-sharing ministry and their programs start at just $115 a month. A lot of families find CHM gives them more room in the budget and it's why members say they're better with CHM. Right now, new members can get a 50% credit towards their first month. Go to chministries.org slash budget and use promo code Ramsey. Is there any way to move it into a trust? Nope, not yours. You don't have a choice. I mean, you could get sued if you do by the kid later because your job is to manage it for them as their parent. And if you use it personally or you somehow trap the money, you could really come back on you. I wouldn't do that. But what it does do is it kind of highlights what happened with me and Sharon as well with our three was it highlighted that we didn't get an inheritance like this, but we were making a lot of money as the kids were growing in this business. And so it highlighted that this money is gonna screw up their lives. Oh, wait, no, it's not. It's gonna reveal that we were horrible parents or it's gonna reveal that we did a good job parenting, one of the two. And so we started raising our children not to be good children, but to be good adults. And so I'm gonna teach the little Turk characters how to work. I'm gonna teach them how to save. I'm gonna teach them how to spend. I'm gonna teach them how to live on less than they make. And then I'm gonna gently start revealing the fact that there's some money there for them as they move into their teen years. I would not just surprise them on their 18th birthday. They might lose their minds. And so I would gradually unfold how investing works, how investing works, and then go, and you've got some investments that have been done for you. And you can talk about it vaguely. And then later on, talk about it in more specifics to where it becomes just a part of the rhythm of their life, but do not allow them to be entitled brats that don't work. This is not that much money. Okay, what about through their childhood? Is there any time that you would use that money for expenses before they turn 18? Yeah, I mean, I might buy them a car with it. What we did was we matched what they saved because we wanted them to have some skin in the game on the car. We had 401 days. So whatever they save, we'll match it. And I would just match it out of this account. I wouldn't match it out of your pocket. What about college? You could use it for college. You can use it for college. It's a college that's taken care of. But the sticky thing is, it's technically their money at 18. And so they could choose not to spend it on college. They can choose to do something stupid like going to student loan debt and keep the money in the account because some bonehead financial advisor told them to do that or something like that, right? So instead of just paying for things. And so, but if you can make it through to where these become good adults that know how to work, save, spend wisely, be generous, that are grown up, become good young adults, then this money is gonna be a massive blessing. If it's, if you don't, then it's gonna be, it's gonna reveal whatever shortfall is in their young character. So it just, it made me and Sharon get very, very serious about growing kids with character, not kids that are characters. And so, you know, and we just went at it. And so the book that Rachel and I did together was her first bestseller was called Smart Money, Smart Kids. I'll send you a copy of it on how to raise smart money kids because you need to now. And that's a little bit scary. That sounds a little scary. I could. You know, and it's kind of like we had this money coming into the Ramseys because we're at bestselling books and we had all this stuff going on, you know, 25 years ago when Rachel was little and Denise and Daniel and, you know, and on top of that, we had even worse because we had some notoriety, some, in air quotes, fame, right? And so we had to also teach the kids, you know, no, you can't use your dad's popularity with your teacher to get a grade. You know, Rachel might've done that once, but just once, yeah. And do you know who I am? Yes, do you not know who my father is? I mean, what kind of grotesque human being says something like that? That's the most gross thing that could ever come out of somebody's mouth. And so we had to, you're not allowed to play the Dave card. Your life will come to an end. We will take you out. You know, you're not going to do that because you got to learn to do stuff on your own, you know, and, and besides that, everybody that knows that they, you know, something about Dave Ramsey, not all of them like Dave Ramsey. So you've got that other problem, right? Yeah. I mean, so you might work against you. You're going to have to run into that too. Yeah. So anyway, all of that to the side, you know, we faced all of this head on, but the good news was that it just made us more cognizant that, you know, we had to be very intentional about installing character. Yeah, because the fear isn't in the money or the dollar amount. It's in the person who has it. Because you run into people all the time who are almost afraid, afraid of success, afraid of having a lot of money. I mean, the way I grew up, it was like, oh no, you don't want, you don't want millions. That'll wreck you, you know? Well, people, when I'm with wealthy people and we're talking generosity or we're talking about other things, one of the number one questions they ask me is how do I not ruin my kids with money? And I'm like, money's not going to ruin your kids. It just exposes that you did. Yeah. You know, money doesn't do anything. Money just magnifies, money does not make people evil. It just, it just, it reveals evil people. It doesn't make people generous. It just reveals that someone is a generous person. So whatever, if you get a big old pile of money, it just magnifies who you are. And so that goes into this discussion because this isn't a lot of money today. It's a hundred something thousand piece. But by the time those kids get there, it's going to be several hundred thousand. And it really doesn't even have to be a large sum of money, whatever you're thinking of as a large sum to magnify. I mean, if you start out broke, but if you learn to manage your money when you're broke, when you get a little bit of money, even if you just start making $100,000 a year, you'll learn, you'll know how to manage your money. Exactly. If you were a good manager when you were broke, you'll be an even better manager when you got something. Exactly. Good stuff. Christian Healthcare Ministries can save your family hundreds of dollars on healthcare every month. Learn more at chministries.org slash budget.