Updated: Aug 29, 2021
On this fine Sunday, we are going to talk a little about estate planning. This is a subject that a lot of people know little to no information about, especially in the African American community. But estate planning is a very important tool in building generational wealth. I know, it’s hard to think about death but it’s time to get real. It is crucial that we start to plan for those that come after us. So, we compiled a list of a few things you should begin to consider:
1. Consider preparing a will: All the things you worked for in life should benefit those you want it to benefit. You don’t want your loved ones to try to figure out your intentions. A will outlines your wishes upon death and acts as a contract to ensure such. You can also indicate a guardian for your dependents if you have small children.
2. Add a beneficiary to your accounts: Make sure you designate a beneficiary – someone you would like to have your money or investments if anything should happen to you. Your accounts will payable to this person upon death and will allow them to have access to your funds. Banks usually call this a “Payable on Death” on your accounts. So, those checking, savings, 401k accounts need to be updated now with a beneficiary. Keep your money out of probate court and gift it to someone!
3. Make sure you have life insurance: Nothing sucks more than having to mourn and figure out how to pay for funeral expenses, debts, or unpaid taxes for the person who has passed away. Life insurance will take that worry away. Don’t put that burden on someone else! Make sure it is all take care of. If you prefer not to pay for an insurance policy, another option is to have a special savings account for such an event and to add a beneficiary (as mentioned above) to access those funds for any expenses that will be incurred after death.
4. Power of Attorney: Please, choose wisely who you would like to handle your finances and property if you become physically or mentally unable to do so. We do not want anyone who might mishandle your finances or take advantage of you. Choose someone you trust will work in your best interest as well as your loved ones’ best interest.
5. Contemplate creating a trust: Creating a living trust will save your loved ones a great deal of time and money. Your assets will go to someone you choose and they will not have to fight in court to receive your property. There are two main types of trusts. A revocable living trust will let you keep control over your assets while you are still alive and you will be able to add successors to have those assets upon your death. It is flexible and you can make changes to the trust and the terms. Irrevocable trusts are just how they sound. They do not allow you to make changes. So, for example, if you put $1 million or your house into a trust, it’s not your property anymore. That money or property no longer belongs to you. You have no rights to it. This type of trust safeguards your assets from any type of legal judgements or from creditors and can be given to a beneficiary. You can specify how the assets in the trust are to be used. A benefit of this kind of trust is that it protects your assets while you are living and also has some tax benefits. But, you can’t get that $1 million back so choose the type that will work for you.
Estate planning should be considered, even if you are young. It will help build generational wealth as you pass down what you have worked for to your successors. It will allow your legacy to live on as well even in death and protect your loved ones. You get to choose how you want things to be handled – your money, property, and even personal belongings. It is very imperative to consider these things throughout life. If you want to know more about estate planning, feel free to like, comment, or contact us. Get this free advice while you still can 😊. Happy Sunday! Write to you next week…