estate planning Archives

Published on April 12, 2020April 13, 2020

10 mins read

More People Are Taking Estate Planning More Seriously Because Of The COVID-19 Pandemic

Estate planning professionals are seeing a boom in business as people hunker down at home to prevent the spread of the coronavirus.

The COVID-19 pandemic has many of us grappling with the possibility that our health and lives could change drastically within a short period of time.

If these possibilities have forced you to consider doing a will and other legal documents or simply getting your affairs in order, this article will provide you with some tips to aid you in the process.

estate planning

Small Steps Towards Peace of Mind

It may not be possible to get a plan in place during the novel corona virus lockdown. However, there are things you can do that prepare you to act once services are more available and provide you with some comfort that you can take care of the items that you can address now.

Write down everything of financial and sentimental value that you own.
Write a list the people in your life that you trust in categories of trust. List who you trust with healthcare decisions, financial decisions, with children, and with conflict. For each category it’s important to have at least two people. When you choose people in your estate plan, a nominee and one or two back-ups are sufficient.
Write down a list of people and pets who need your care and could be impacted if you are no longer able to care for them because you need care yourself or because you have passed away.
Download or request the beneficiary forms for all of your financial accounts and confirm that they list the beneficiaries you want. Don’t forget you can list a mix of primary beneficiaries and you can list your beloved organizations such as religious institution, alma mater, etc. as beneficiaries too.
Research estate planning attorneys in your area and reach out to learn about their services and fees. You should also consider getting a consultation to understand what happens based on your circumstances if you get sick or pass away. The legal answer may surprise and/or comfort you.
Research business attorneys well-versed in business succession planning. Just like with estate planning, you should consider getting a consultation to understand what happens to your business if you get sick or pass away.

What Documents Do You Need

These are the basic documents you need take care of you while you’re alive and support your loved ones in settling your affairs when you pass away:

Financial power of attorney;
Healthcare power of attorney;
Advance healthcare directives, e.g. living will;
Trust; and
Last will and testament.

In addition to these documents, beneficiary forms and asset titles (such as vehicle titles) provide important opportunities to do planning. If, for example, you have a retirement account or life insurance account, they will have forms on which you list the people or organizations that will become owners of those assets when you pass away.

Therefore, a first step in your planning should be to write a list of all of your assets. In that list, determine which assets you can plan for by using a beneficiary form or updating title (ownership). It is important to include them in your pandemic estate planning.

If you own a business, you should also consider whether your business legal documents are set up for management and ownership succession if you are not able to lead your business or if you pass away. Each business type (e.g. limited liability company, corporation, etc.) has associated governing documents that can be used to plan. Working with a lawyer to make sure these reflect your needs and values will be a boost to achieving your goals.

Where To Get the Documents You Need

I will always advocate for working with an attorney. Even in these extraordinary times, working with a skilled estate planning attorney is the best option because they are tasked with developing a plan that meets your individual circumstances and your goals.

Legal documents that you download or buy from the store may support your needs and goals. However, in using them you run the huge risk that they will not and that they will not be executed (signed) according to the law in order to make them effective. So start with an attorney.

If you absolutely cannot find an attorney in your state who can help you during this time, you can use the form documents for everything but the will. Handwriting your will and signing it is likely better than using a form document since states have specific requirements for what makes a self-prepared will effective.

CAUTION: if you go this route in using form documents and a handwritten will, your first priority when you can regularly access legal services should be to hire an estate planning attorney to assist you in developing a plan for you.

How Do You Get the Documents Signed

To be legally effective, the documents described above need your signature and they need the signature of others too- witnesses and a notary. The exception to this for most states is the handwritten will.

Witnesses must be people who will not personally benefit or potentially receive any asset from your death. Finding witnesses and a notary under these circumstances will be very challenging.

Therefore, it is important that you:

Understand whether your state requires witnesses and/or a notary for each of the types of documents described;
Understand whether your state requires all of the signing parties to be present at the time you sign or at the same time as each other;
Understand whether your state allows remote witnessing and/or remote notary services (witnessing by video); and
Create a list of potential service providers who can help you meet those requirements.

Again, start with attorneys as your first resource for the above information and for the actual services.

National Notary Association provides up-to-date information on notary services available across the country including measures states have taken during COVID-19.

There you will find a list of states that allow remote notary services. Note that remote notary services are different from electronic notary services. Your focus should be on remote notary services.

Funeral homes, especially in the Black community, are a bountiful resource in our lives during any period. Your local funeral home may have a notary on staff and have witnesses available since they are essential business that are continuing operations.

Also check with banks in your area, especially branches located in retail spaces, e.g. big box stores. Bank branches typically have notaries on staff. It’s helpful to call ahead to confirm the availability notary services and witnesses and set an appointment if you can.

Whether you get documents with the help of an attorney or on your own, make sure you store your documents in a safe place and communicate your plan with your loved ones. Find more detailed information on estate planning, please review this article for addition insights and information.

If you haven’t created an estate plan with the help of an attorney, why not? What’s holding you back? Let us know in the comments or email us an info@shoppeblack.us

– Contributed by Mavis Gragg

Mavis is a seasoned attorney and conservation professional with nearly two decades of experience in real estate, conflict resolution, estate planning, and probate. She serves as the Director of the Sustainable Forestry and African American Land Retention Project at the American Forest Foundation.

Prior to this role, Mavis founded the Gragg Law Firm, PLLC in which she assisted her clients in estate planning, estate administration, and heirs property matters.

When she is not being a justice girl, Mavis can be found at an art gallery, trotting the globe, or on the dance floor.

Published on April 30, 2019April 30, 2019

9 mins read

Legal and Life Lessons Learned From the Passing of the Great John Singleton

I remember as a child watching Boyz in the Hood with mixed emotions. Although I could not relate to many of the characters’ issues, as a Black teen growing up in the Appalachian mountains, it was a relief to see Black people in a Black community living their Black lives.

I remember feeling proud that the filmmaker was a Black man and that he wrote the story. Admittedly, I was also sad that the story depicted realities for some Black people in America.

John Singleton on set of his debut film Boyz N the Hood, 1991.
BY AARON RAPOPORT/CORBIS/GETTY IMAGES

After reading the news about John Singleton’s health and the rumors of conflict it brought up for his family, I again had mixed feelings. His work and his tenacity in an industry that is not inviting to Black people has had an indelible impact on our community and on film.

My gratitude and pride in his work maintain. Unfortunately, the circumstances of his legal affairs and some of the responses I’ve seen on social media gave me a sense of horror, albeit quite different from that I felt in watching Boyz in the Hood.

Luvvie Ajayi (@luvvie) pleaded with her public to basically get your shit in order, presumably in response to Mr. Singleton’s situation. Her post is timely because celebrities’ stories often astonish and spark conversation. However, I read some of the comments with great concern and, quite frankly, frustration.

Quite a few people suggested websites where you can get your power of attorney documents, wills, and etc. done for cheap or even free. Some folks suggested to simply write your wishes down and give them to someone you trust. Others expressed that they don’t know what to do because they are not married or have kids.

There were, of course, people who recommended working with an attorney and offered advice that is legally sound. God bless you!

From my 12+ years as an attorney working in death and dirt*, I believe we as a community don’t do ourselves justice when it comes to the power we have to do estate planning that works for us with the help of an attorney.

Disclaimer: non-Black people also don’t value hiring attorneys to do this work. Most Americans don’t. However, not only are black people not planning, we are also dealing with all the adversity our country has to offer. We’re undermining our own ability to fight back against all the systemic bullsh*t we’ve had to and continue to fight.

If Mr. Singleton’s condition had continued, someone would have to seek appointment from a judge to make decisions on his behalf regarding health care and assets. If multiple people applied or if others contested the application, there would be a delay in taking care of him and his assets and it would have cost a lot.

The initial fees for conservatorship in California are $1,115, and they go higher. Contrast this with an estate plan prepared by an attorney that includes a financial power of attorney and healthcare power of attorney, which would cost between $800-3,500 in California. Mr. Singleton’s plan would have likely costed more given the mix and complexity of assets, but it would have saved thousands of dollars and preserved relationships.

What sounds better? A person other than you making the decision of who can care for you at great expense or you making the decision for yourself at some expense?

A new set of challenges come into play in addressing his estate now that he has passed. If he didn’t have an estate plan, and it appears that he did not, there will be significant legal fees that drain his estate.

Mr. Singleton had multiple children. For any child born from a relationship that was not a marriage, there will be legal fees, and likely emotional pain, to confirm if the children were legitimated and, therefore, entitled to inherit. I have estates where thousands of dollars have been spent just confirm if a child is an heir.

For the minor children, additional legal fees will have to be paid to seek guardianship of each minor child’s estate until they turn 18 years old in order to manage their inheritance. I’ve had custodial parents who can’t qualify for the bond required to manage their child’s inheritance. So it sits in limbo.

Like Aretha Franklin, Mr. Singleton apparently personally owned assets totaling more than the threshold amount for consideration of estate taxes. His assets will be significantly diminished to pay the taxes and assets may have to be sold in order to pay the estate tax. His creations could be sold to pay the IRS.

Then there was his significant other. If he doesn’t have a will or trust that provides for her or if he didn’t list her as a beneficiary on a financial account, she likely gets nothing.

I’ve had estates where the deceased had a will that they never updated even after having a kid and after getting married. Their spouse and adult child didn’t inherit anything. Instead, their surviving parent inherited everything, including the home.

If you haven’t worked with an attorney to create a plan customized to your unique, beautiful life I hope you find the following encouraging:

you are worth every dollar you spend with the attorney;
many attorneys accept payment plans;
an attorney gives you a lot more than the documents, i.e. you get intimate counsel online and boxed plans can’t give you;
people with no partner or spouse can do so many wonderful things with their assets like give back to your favorite organizations and schools or treat your besties a life celebrating trip.

I could go on but I want to hear from you. If you haven’t created an estate plan with the help of an attorney, why not? What’s holding you back?

I’d love to hear from you and I will share some additional horror stories I’ve seen.

Let us know in the comments or by sending a message through my website.

– Contributed by Mavis Gragg

Mavis Gragg is an attorney at the Gragg Law Firm, PLLC in Durham, North Carolina where she specializes in estate planning and estate administration. She is very passionate about maintaining and growing Black wealth through sound legal strategies and problem solving. When she is not being a justice girl, she can be found at an art gallery, trotting the globe, or on the dance floor.

Feature Image: John Singleton on the set of Poetic Justice in Los Angeles, 1993.BY ANTHONY BARBOZA/GETTY IMAGES.

Published on August 23, 2018August 23, 2018

7 mins read

$80Mil and no Will? Here’s why I’m not surprised that Aretha Franklin didn’t have a will.

We lost our beloved Aretha a week ago and, in addition to grieving the loss of the Queen of Soul, we are dumbfounded that she has a purported estate worth $80 million and no will.

As an estate planning attorney, I am not surprised that Ms. Franklin did not have a will. Seventy percent of Americans do not have wills. Why would someone with an abundance of wealth be any different from the rest of us?

One possibility is that Ms. Franklin had similar misgivings about our legal system as our other legend, Prince, who also did not have a will. In fact, lots of people have a significant distrust of the legal system. The Black community has especially great cause for mistrusting a system plagued by systemic racism.

Another possibility is that Ms. Franklin believed that her estate, despite the size, was simple. She was not married and had four kids as her heirs. They will each receive a one-fourth share of her estate. That’s simple. Yet another possibility, one that I often hear from people I educate about estate planning, is that planning for your death will hasten your death, i.e. if you talk about it, it will happen.

Any one of us who uses the aforementioned reasons as an excuse for not creating an estate plan is simply demeaning ourselves, whether we are wealthy or not, whether we are a celebrity or everyday person.

Systemic racism definitely exists in our legal system. The rationale that you should not have an estate plan because of this is actually ironic because, in failing to create a customized plan for yourself, you ensure that same system will dictate what happens to you and your stuff. Boom! For those of us who believe we have simple lives that don’t necessitate hiring a lawyer to create an estate plan, this is simply not true.

I have seen many “simple” or small estates become incredibly complex because our laws are not simple and a lot expense and conflict come up just because there was not a customized plan. And, finally, there is no proof that talking about or planning for your death will make it happen. I have never heard of anyone who has lived longer because they chose not to have a will.

So, protect yourself and your assets by getting an estate plan. A typical estate plan can cost less than $1,000 for single person and sometimes for a couple. If you pay way less or way more, you should probably consider the quality of what you are getting. The process should take 1-2 months or less. I usually meet with my clients to discuss their goals. Then I draft the documents and we meet a second time to sign them.

If they have questions or changes in between we discuss them. The documents you should have in your estate plan include documents that help while you are alive and documents for after you pass. Financial and healthcare power of attorney documents allow you to appoint someone to make decisions on your behalf while you are alive.

A “living will” is actually a healthcare directive in which you decide whether or not your life should be artificially prolonged if you are in a vegetative state or have a terminal, incurable condition. A will, on the other hand, is a document that appoints the person to settle your affairs when you die and allows you to decide who gets your assets and how.

Now, people are shocked that Aretha and Prince did not have wills. They had way more money than most of us, and they definitely had way more money than the estate tax threshold, which is around $11.18 million. So their estates will be taxed at approximately fifty percent (50%). A trust would have saved most if not all of those millions of dollars that our government will get. Trusts are also beneficial for planning for Medicaid assistance and for protecting family real estate over many generations. Black land ownership peaked in the 1920s and continues to decline because of that good ole racism, but also because of no estate plans.

I discuss each of the documents in an estate plan in this article on Shoppe Black. If you are still not convinced you need a will or power of attorney documents, then do one simple piece of research for me. Google the person in charge of estates in the county where you live.

This may be the clerk of superior court or probate magistrate. Find the currently serving person for where you live. Take a long look at them and ask yourself if you want them to be the person making the decisions about you or your estate. I think most of us will determine that we do not!

– Contributed by Mavis Gragg

Mavis Gragg is an attorney at the Gragg Law Firm, PLLC in Durham, North Carolina where she specializes in estate planning and estate administration. She is very passionate about maintaining and growing Black wealth through sound legal strategies and problem solving. When she is not being a justice girl, she can be found at an art gallery, trotting the globe, or on the dance floor.

Published on April 24, 2016April 9, 2020

24 mins read

Growing and Maintaining Black Wealth: Watch your Ass-ets

This is the second installment in our series around the topic of “Growing and Maintaining Black wealth through sound legal strategies and problem solving.” Let’s continue with a discussion about Assets.

Growing and Maintaining Black Wealth: Watch your Ass-ets

“Gator Boots, with the pimped out Gucci suit

Ain’t got no job, but I stay sharp

Can’t pay my rent, cause all my money’s spent

but thats OK, cause I’m still fly

Got a quarter tank gas in my new E-class

but that’s alright cause I’m gon’ ride

got everything in my mama’s name

but I’m hood rich da dada dada da”

tumblr_ls1xvauL0s1qiebmoo3_250 — Still Fly by Big Tymers

Even though this song came out in 2002, it’s still a club banger that many of us get excited about as soon as the first beat drops. And most of us will shout the lyrics at the top of our lungs because it’s just one of those songs that brings joy to our dancing hearts. Raise your hand if you started bobbing your head a little while reading the lyrics above. Some of us relate to those lyrics a lot. My friend, in a bid to save money, decided to change his car insurance to get the cheapest car insurance quote possible. Money Expert helped him out tremendously. But getting car insurance can be really expensive for people though, there are some deals out there which have been designed to help people when it comes to getting car insurance. For example, you could check out this cheap monthly car insurance with no deposit.

Big Tymers and many other rap artists brag about their wealth over hypnotic beats, easily impressing listeners with what they have. Chains that cost a condo. Expensive cars with even more expensive add-ons. Couture fashion. And there is some validity to what they’re doing. We all should be able to list out what we have, how much it is worth, and whether it is in line with our life goals and beyond.

Have you ever stopped to wonder what your list of assets would be if, per chance, you decided to rap about it or brag a little? Have you ever wondered while listening to the rappers bragging about their purported wealth, “how liquid is [insert bragging rapper’s name]” and, more importantly “how liquid am I”?

Knowing what you have and what it is worth could possibly impress others. However, in the context of growing your wealth and estate planning, it is critical that you are actually able to list your assets as fluidly as Lil Wayne, Jay-Z, and the rest. At a minimum, you should:

be able to list everything that make up your assets;
know the individual and total value of your assets and the type of ownership; and
know what will happen to each asset when you pass away.

If you know all of these things about your assets, you are positioned to maximize the power to make your assets do the most for you and for those you plan to give them to when you pass away. If you do not know what you have, what it is worth, and what will happen to it when you pass away, then you just might be wasting a lot of hard work and hard earned money.

The focus of this article is on creating an inventory that identifies the assets that make up your estate, their value, and whether you need to make some adjustments or additions to your assets in order for you to develop an estate that meets your needs during your lifetime and meets your goals for when you pass away. Although there is basic discussion on the different types of assets that can make up your estate, you should make the time to do additional research to get a full understanding of each of these. This includes doing research online but also meeting with professionals who have solid, reliable knowledge about different financial instruments and financial planning. One feature of financial planning that many people do not quite realise the importance of is equity release. Equity release is a financial product for people aged 55 to 95 which allows you to release some of the cash (equity) tied up in the value of your home. To release equity from your home, you need to get expert advice from a qualified equity release adviser. You can actually calculate your equity by using something like this equity release calculator, just to make sure your finances are in the state they should be.

You first want to list everything you own, how much each item is worth, and the beneficiaries of each item. Again, an estate is everything you own from real property (house) and personal property (cash, accounts, deejay collection, and etc.). To get you started on your inventory, we provide a worksheet you can download. Link

Most people’s estates also include a combination of some or all of the following:

Cash
Savings Accounts
Checking Account
Term Deposit Account
Life Insurance
Retirement Plans
Investments
Securities
Business Interests
Notes Receivable

Let’s take a more in-depth look at some of the financial vehicles above, because it is important to be clear on what you have and how it operates.

Term Deposit Account— This is a cash investment with a financial institution such as a bank that gives you an agreed rate of interest over a fixed period of time. A common term deposit account is a CD (certificate of deposit).

Life Insurance— Life insurance can be a significant part of an estate plan. Life insurance policies come in a variety of forms (e.g. term, whole, and universal), but the basic function of a life insurance policy is to provide a cash payment at the death of the life insured. This payment is known as a death benefit.

The death benefit from a life insurance policy has numerous advantages and it takes careful planning to ensure that your life insurance is doing for you what it is intended to do. A major benefit of life insurance is to provide liquidity for your beneficiaries. In other words, it gives your beneficiaries cash and often it is soon after your death, which can be very useful, if not essential, to a surviving spouse and children. The death benefit is typically not taxable as income to the beneficiaries and it is paid directly to the beneficiaries rather than being paid to the estate of the deceased, so long as beneficiaries are listed.

Other than a will, life insurance may be the best and only financial tool a person of modest means needs in their estate plan. Regardless of the policy owner’s means, it is critical to have a comprehensive understanding and strategy with your life insurance or the benefit can be lost.

Retirement Plans— As with life insurance, there are various types of retirement plans that you may have or that you will consider getting. Baby boomers and older generations often rely on Social Security, which is a government mandated plan, and pensions (an employer-sponsored plan profit sharing plan). Nowadays there are new, more robust retirement plans. For example, a 401(k) is an employer-sponsored retirement plan and most employers will match a percentage of what you contribute to your plan. Each year you can contribute up to $18,000 of your income before taxes are taken out, per federal law. Nonprofit and government employees usually have a 403(b) or 457 plan, respectively. You can also establish an Individual Retirement Plan (IRA or Roth IRA) on your own and there is a maximum amount that you can contribute each year. And if you leave your employer, you can roll your employer sponsored plan into your IRA.

Business Interests— Whether you have a side hustle as a deejay or your main gig is your own business, know what your business is worth. More specifically, know what your share of the business is worth. Also, have clear instructions for what happens to your business or share of the business when you pass away. Should it be dissolved? Do you want to leave it to someone? Ideally, any business interest should not be compromised by your death undermining the effort and money invested in it. If you have a business partner(s), you should maintain life insurance policies on each other’s life and have a buy-sell agreement, so your interest in the business is not compromised when your partner passes away.

Notes Receivable— This is a written promise to receive money from another person on or by a set date. The note formalizes a loan you make to someone and it is an asset. It is important to have any loan you make to someone put in writing and to use an attorney to draft this agreement to ensure your interests should the debtor file for bankruptcy, die, or disagree with the terms at a later date. Notes receivable can also be passed on to your heirs.

Next Steps

After you have listed and determined the value of your assets, add them up to see the total value. You might find yourself impressed with what you have or you might realize that you need to make some changes to either grow your estate or to make sure what you leave behind is suitable for the loved ones you leave behind. Liquidity comes to mind again. Liquidity is an important and often overlooked characteristic of one’s assets. A basic way to determine your liquidity is to find out how much easily accessible money you have in the form of cash and equivalents, which you can do on your own or you may to speak to financial professionals to get the number.

Also, take a look at your debt and ask similar questions about your debt obligations as you do for your assets. How much is each debt? What happens to the debt when I die? How does it affect my potential heirs and beneficiaries? Keep in mind the assets that will go directly to the beneficiaries you named such as life insurance. Also, certain student loan debt is forgiven when you pass away, i.e. it does not become a debt of your estate.

TIPS

Nominate beneficiaries. Many of the assets discussed in this article are set up so that you can nominate beneficiaries and alternate beneficiaries to receive the assets directly when you pass away. It is critical that you nominate beneficiaries, plus alternate beneficiaries, on any account that you allow you to do so. Not nominating beneficiaries plus alternate beneficiaries can and will likely undermine your entire estate plan. In most states, if you fail to or intentionally do not nominate beneficiaries, the asset will go to your estate and be used first to pay the costs of administering your estate and then your debts. Only after those obligations are paid for will the money be received by your loved ones.

Do not rely solely on employer-provided life insurance and retirement plans. These may not be sufficient for your family’s needs and they often do not continue after you leave a place of employment.

Do regular check-ups. Regularly check in on your assets to ensure that you have the coverage you need; that they are growing to meet your goals; and that the beneficiaries are who you need or want them to be. Annual check-ups and life milestones, such as family changes, retirement or changes in health, are good times to do a check-up too.

Develop a plan unique to your needs. It is not uncommon for people to follow the financial advice of their parents or friends. Although they can provide helpful advice, you must pay attention to your unique circumstances. Many baby boomers would advise putting your assets in a trust. Trusts are complicated and expensive. One of the greatest benefits of a trust is avoiding estate taxes and you currently need to have an estate close to $5 million to be concerned about estate taxes. Likewise, if you are single and have no children, your financial goals can be very different. Life insurance may not play a major role and the money you would use for life insurance premiums can be targeted to financial vehicles with greater growth potential than life insurance. You can also consider leaving your assets to your alma mater or a non-profit.

Don’t let debt undermine the value of your estate. Many people prioritize paying off their debt paid during their lifetime and when they pass away. Having no debt or keeping debt low certainly gives you more financial freedom. However, this is not a reality for most Americans, especially for people with student loan or mortgage debt. It is possible, though, to grow wealth in spite of debt. In order to do this, you need a plan and this plan involves a good estate planning attorney, a good CPA specializing in taxes, and good financial professionals. These professionals will help you build a strategy to grow wealth and sufficiently address debt to meet your individual needs.

A good estate planning attorney will assist you with creating an asset protecting estate plan. The cost for this is minimal compared to what you could lose to paying off your debt. A good CPA can assist you with tax planning strategies that allow you to put more of your income towards growth and reducing your tax obligations based on your debt repayment. Then financial professionals can address your specific circumstances and provide advice on financial vehicles that work for you.

Developing a team of professionals to aid you will likely require a lot of work on your part in getting referrals, interviewing people, and doing research. This effort is needed and in the long run, benefits are priceless. Just remember: your ultimate goal should be growing enough wealth to take care of yourself while you are living and to take care of you any loved ones you leave behind or building a legacy.

Consider inexpensive life insurance policies to cover some debt. Inexpensive life insurance policies can cover some of your debt at your death or the death of a co-borrower. Your car loan lender may offer a policy that pays off your vehicle loans. If you have student loan debt, find out what happens to your student loan debt when you die. It may make sense to get an inexpensive policy to pay off the debt if you have a co-borrower. For example, it may make sense for you and a co-borrower on student loans to get policies each other’s life to pay off the loans when one of you dies. The same holds true for business loans and home loans. With student loans, though, you and your co-borrower should also seek removal of the non-student co-borrower as soon as possible, which is usually a few years into repayment of the loans. Many lenders will not tell you that you can do that. You have to be proactive.

Balance your funeral wishes with transferring your wealth regardless of its size. Historically and presently, many people have “funeral insurance” which is either a standard life insurance policy for which the policy owner wants the death benefit used to pay for their funeral or it is a policy very similar to a life insurance policy that will direct the death benefit to the funeral service provider to pay for funeral expenses. The difference is that with the standard life insurance policy, the beneficiary is legally under no obligation to use the money to pay the funeral expenses. It is merely a promise. In either case, if you have or plan to have a life insurance policy to pay for your funeral expenses and even your debts, consider whether doing so is really helpful to those you leave behind. Traditional funerals are expensive. The average funeral is in the ballpark of $6,000. Could $6,000 make a difference in the lives of your loved ones if it could be used for something other than your funeral? There are many options less expensive than a traditional funeral. Some options are better for the wallet and the earth. Go green!

Conclusion

Hopefully by now you feel encouraged to take an in-depth look at your assets. The goal is not to be able to brag like the rappers or even to see if you have something to be proud about. Regardless of your asset level, whether it is modest or very high, it is important to know what you have, how it operates, how it will transfer on your death, who it will go to, and the various scenarios of what can happen with all that you have worked hard to earn.
At the very least, you need to have a basic understanding of the financial assets you may have. Then, try to take it one step further and find out if what you have meets your needs and goals. Do you have the right type of assets? Also, find out if your assets are set up to meet your goals (i.e., have you nominated beneficiaries and alternate beneficiaries on accounts that allow it?). And once you have taken a good look at your assets, work with your loved ones to do the same by sharing this article and even sharing what has worked for you.

– Contributed by Mavis Gragg

Mavis Gragg is an attorney at the Gragg Law Firm, PLLC in Durham, North Carolina where she specializes in estate planning and estate administration. She is very passionate about maintaining and growing Black wealth through sound legal strategies and problem solving. When she is not being a justice girl, she can be found at an art gallery, trotting the globe, or on the dance floor.

Published on March 12, 2016November 8, 2017

17 mins read

Growing and Maintaining Black Wealth: Estate Planning

This is the first installment in our series around the topic of “Growing and Maintaining Black wealth through sound legal strategies and problem solving.” Let’s begin with a discussion about Estate Planning.

Estate Planning

In October of 2015, retired NBA player Lamar Odom suffered several strokes and kidney failure at the young age of thirty-five, leaving many people shocked and shaken by the fact that someone so young and presumably healthy could possibly die.

Of course, given his position in the Kardashian realm, many were also enthralled by the latest drama in America’s most famous (for now) family. Yet, if we unpack that drama and look at it plain and simple, Lamar’s circumstances should be a lesson for us all.

At the age of 35, Lamar was in the final stage of divorce and a father of two minor children from a previous relationship when he experienced a life-altering medical event.

Those are the mind-numbing facts: 35 years old, estranged wife, father of two minor children—and a very uncertain future. While his medical crisis was extraordinary, the other key circumstances in Lamar’s life were not.

Amidst all of the sensational discussions surrounding Lamar’s unfortunate situation, there was little, if any discussion around whether or not he had legal documents appointing someone to handle his affairs, i.e. step into his shoes to make his medical and financial decisions.

Presumably he did not, because his estranged wife put a halt to their divorce, and under the authority of California law as his wife, became his decision-maker.

Thankfully, Lamar’s health has improved and he is still with us. However, imagine if someone in the exact same situation as Lamar passed away leaving an estranged wife, two minor children, and no legal documents to dictate what happens with whatever assets they have and how their affairs are settled.

Now ask yourself, if something happened to you today, who would step in? Who could legally step into your shoes? You may not know the answer to the last question. And you probably do not even like the question.

So, let’s consider this question instead: if you had the rare opportunity to become a secret agent on some James Bond-type mission but you had to pick a family member or friend to assume your identity and continue living your life until you came back, who would that person be?

Who is most likely to have your life intact when you come back? Who would be your agent? The person you would choose to be your agent and who the law chooses could and likely would vary greatly when you do not have the legal documents in place to effectuate your choices.

The solution is simple. Go to a knowledgeable estate planning attorney and create an estate plan.* If you don’t know who to use then you might want to check out someone like this new york estate attorney. However, there are loads that you could use. Many, in fact, most of us avoid estate planning. We think we do not have an “estate” or that lawyers are too expensive. We believe our loved ones will “take care of everything” because we trust them. We think we are too young. Most importantly, it is very unpleasant and scary to think about a time when we cannot take care of ourselves or when we die. If you have any questions about preparing your estate it is worth speaking to an estate planning lawyer as they might have the information needed to put your mind to rest and help you plan for the future.

So, consider the fact that you have a unique opportunity to put the law on your side. This power is especially important during a time when many of us have considerable doubts and questions about the laws of our nation and our states when it comes to issues such as policing, voting, and clean water—to say the least.

You have the power to create a plan and make decisions about how you are cared for in a time of need or transition. You have the power to create a plan for optimizing your assets for their use while you are living and when you pass away.

Take advantage of this opportunity! ??The first step is developing a basic understanding of estate planning, which is the purpose of this series of articles.

What is estate planning? Estate planning is making a plan in advance for what happens to you and your assets when you cannot take care of them yourself and for when you die. You get to make the decisions on the who, what, when, and how of your affairs rather than that determination being made by the law. A basic estate plan includes a will, a financial power of attorney, a healthcare power of attorney, and a healthcare directive (a “living will”).

What is an estate? Many people believe they do not have an “estate.” We all have an estate. An estate is everything you own from your collection of baseball cards or Chanel purses to your cash, retirement accounts, life insurance and vehicles. When it comes to real estate, find out more information through companies such as PFC Property Management, especially if you are looking to work in this particular industry. There’s a lot to learn, but it is quite interesting. I’m sure you’d rather know more now, than know nothing at all. Even if the cash value of your what you own is small, you have an estate.

What is a will? A will is a document that states your final wishes. In a will you appoint someone to settle your affairs: an executor. You state who gets your property, what property they get, and how much of it. You can even state when they get your property.

You can nominate guardians for your minor children. The court ultimately decides who the guardians will be, but a will provides very useful information in that determination. You can even provide instructions on paying your debts and on your funeral.

In most states, the property of someone dying without a will, leaving behind an estranged spouse and children from a previous relationship, would have to be divided between the estranged spouse and children. For most people, this scenario is not ideal, it’s a nightmare.

On the other hand, you could have circumstances that are not complex at all. Perhaps you are a single person with no children. Without a will, in most states, the person(s) eligible to manage your estate would be your parents. Does that work for you? If you do not have parents, the law looks to your siblings. Again, does that work for you? If you don’t have parents or siblings, then who?

A will is a critical document that can save relationships and money. It can also be a foundational element in your legacy. So, it is important to have a will and for it to be designed with a knowledgeable estate planning attorney.

What is a power of attorney? There are two types of power of attorney documents: financial power of attorney (also known as durable power of attorney) and health care power of attorney. Both allow you to appoint someone as your attorney-in-fact which means they can make the same actions you can make.

The types of activities the person operating under your power of attorney can do vary from speaking to financial institutions about your accounts, signing legal documents, such as contracts and deeds, to speaking with healthcare providers, including your doctor.

The power of attorney document can be very powerful, especially if you use a fill-in- the-blank type of document, instead of one tailored to your needs. If you use one that’s fill-in-the-blank, you could be unintentionally giving someone the ability to abuse the role you have given them.

In a customized power of attorney, you can set the conditions under which the attorney-in-fact can act, as well as limit the types of things they can do. For example, you can have a limited power of attorney for real estate that allows the attorney-in-fact to take actions related to a specific piece of property during a specific time or transaction.

Having either power of attorney, and preferably both, can give you peace of mind that the person you trust most will be able to help you when you are unable to take care of yourself.

If you are incapacitated and do not have power of attorney documents, it is extremely difficult and costly for someone to be able to help you.

The absence of power of attorney documents could even lead to litigation and destruction of relationships. Consider the scenarios discussed under the description of the will when thinking about what would happen.

Also, keep in mind, a power of attorney document does not replace a will. Many people mistakenly believe that the instructions in their power of attorney or in their loved one’s power of attorney carry over after a person dies. The power stops at death.

What is a living will? A living will is also known as an advanced directive and it is a document in which you give the medical personnel instructions for your end-of-life medical care. It comes into to play when your death is certain and gives instructions on things such as palliative care (easing pain and suffering), extraordinary measures, and nourishment.

The decisions you have to make in a living will are very difficult to think about but imagine if your spouse, child, or parent had to make those decisions for you. Having a living will is also a key part of your estate plan.

How do I get started on my estate plan? The first step is to find an attorney who specializes in estate planning. Many people believe they can do their estate planning themselves and want to do so to save money. Imagine your profession is a hair stylist, a bank manager, or a professional athlete.

You are very good at what you do. Your car needs new brakes and they are expensive. You can probably go on YouTube to find a video with instructions for putting new brakes on your car. Let’s say that technically you can put new brakes on your car and save a good deal of money.

Is this the best choice? Alternatively, you could save money by taking the car to the detail shop where you get your car cleaned and let the owner put brakes on your car. He takes good care of your car and he can save you money. Is he the best choice, though?

If your well being or the well being of those you love depended on it, are you or the detail shop guy the right choice for putting brakes on your car? Can you be reasonably sure that the condition of your car will be safe and it will not lose monetary value after you or the detail shop guy repair it?

Your life and your assets deserve the same level of consideration and you deserve to have a comprehensive estate plan done by an attorney who focuses on estate planning.

Attorneys charge by the hour or offer a flat fee for estate planning. A typical plan costs on average $600-$800 for a single person and around $1,000 for a couple. The costs depend on your circumstances. Many attorneys require a retainer.

A retainer is money delivered in advance to the attorney and held in trust for the client. They take the fees earned from that retainer. Many people balk at the request for a retainer. However, you should consider the retainer as incentive to you fulfilling your role in this process.

It is not uncommon for someone to start the process and then not complete it because they still have the fears around estate planning or simply do not prioritize it.

In the next articles we will discuss the financial components of your estate planning including life insurance, retirement accounts, and real and personal property. Stay tuned!

– Contributed by Mavis Gragg

Mavis Gragg is an attorney at the Gragg Law Firm, PLLC in Durham, North Carolina where she specializes in estate planning and estate administration. She is very passionate about maintaining and growing Black wealth through sound legal strategies and problem solving. When she is not being a justice girl, she can be found at an art gallery, trotting the globe, or on the dance floor.