Browse Tag

lawyer

14 mins read

Fashion Attorney: Brand Partnerships, Fashion Law & Protecting Your Work From Copycats

The internet age has exacerbated many of the legal issues that creators and fashion companies encounter, fueling the necessity for specific legal advice and protection.

For example, design piracy and copycat litigation have grown in recent years, prompting new legislation that provides legal protection for fashion designs.

We decided to get in touch with a legal expert to shed light on these issues and others facing those involved in the creator economy.

Ashley N. Cloud, Esq., MBA is the Founder and Principal Attorney of The Cloud Law Firm, PLLC based in Brooklyn, New York.

fashion law
Ashley N. Cloud, Esq., MBA

What inspired you to become a lawyer?

My mother was the first person to suggest I become a lawyer. My mom was super strict, so I was always advocating for myself to hang out with my friends on the weekends for longer than 2 hours at a time. We would have full-on debates and I’d write her letters with carefully crafted arguments. I was relentless.

Although I was very convincing, most of the time, my mom’s answer was usually still “no,” but she figured I would be able to help others with my talents. Once my mom gave me the idea of being a lawyer, it just made sense. I’ve never been one to accept the status quo. I’ve always been quick to point out unfairness and injustices and I never shy away from the opportunity to help those in need.

Black women only make up 2% of the legal profession. The road has not been easy, but it has been more than worth it. Representation matters and I know the work that I do greatly impacts my community. It brings me so much joy to be a voice for the voiceless and to empower and educate people who look like me.

I am so thankful and honored to do this work. I have so many ideas of how I can continue to be a positive force in this world and I am just getting started!

What should creators include in brand partnership agreements?

Usually, creators are presented with brand partnership agreements, so there are a few clauses they should always be on the lookout for. They include but are not limited to Compensation, Deliverables, Exclusivity, Termination, and Disclosures.

Compensation is important for obvious reasons – you want to make sure you are aware of what you will be paid, any conditions associated with payment, and when you should expect your payment. With respect to deliverables, you want to make sure you understand what the brand expects to see from you and make sure what you create is aligned with their requirements. There will likely be an approval process that you will want to make sure you are compliant with as well.

Oftentimes, brands will require you to work with them exclusively for their respective industry. For example, if you work with one shoe company, you may be restricted from working with other shoe companies during the term of your agreement. Pay attention to the length of the agreement and under what conditions you or the brand may terminate the agreement; including any morality clauses.

If you are a content creator, you’ll also want to pay attention to any disclosure requirements, as the Federal Trade Commission requires you to disclose your relationship with any brands you promote. You can check out some helpful guidance on the FTC’s guidelines here.

Kim Kardashian was recently ordered to pay over $1 million for violating the FTC’s rules, so you’re going to want to pay attention to this!

In any case, you will want to read your contract, ask questions if you don’t understand something, and remember to know your worth! Advocate for what you want if you are unhappy with the terms of your agreement.

If you are unsure if the partnership is right for you or if you still don’t understand the implications of the terms of your agreement, I suggest you reach out to an attorney you trust to assist you.

What are some common misconceptions in fashion law?

One of the biggest misconceptions about fashion law is that it’s all about intellectual property. Sure, intellectual property is one exciting facet of fashion law, but there is so much more to fashion law than just intellectual property.

Fashion is a multi-billion-dollar industry. It can be glamorous, but like any other industry, fashion is a business. Aside from intellectual property, fashion law includes, business law, contract law, labor and employment law, real estate law, international law, e-commerce law, privacy law, supply chain law, technology law, consumer protection law, environmental law, and so much more! The law really touches every aspect of a fashion business.

As the creator economy grows, what types of legal matters do you foresee arising?

There are more and more creators entering the marketplace now that the barrier to entry is lower and consumers are more accessible. The major legal matter I can see growing in popularity is the world of Non-Fungible Tokens (NFTs), blockchain, and the Metaverse.

Because the law hasn’t quite caught up with this facet of fintech and intellectual property, I am interested to see what types of precedents are established to help further guide creators and attorneys in this space.

What are some recent lawsuits in the fashion world that you find interesting? That designers can learn from?

Recently, Skechers USA Inc. filed a lawsuit against Hermès International and Hermès of Paris, Inc. for patent infringement in relation to its Massage Fit sole technology. This case excited me because it is the perfect example of properly policing and enforcing your intellectual property rights.

Skechers has gone after brands for a similar infringement. With the popularity of the thicker, chunky shoe sole emerging in recent years, it will be up to the courts to decide if Hermès infringed on Skechers’ patents or if the company is simply hopping on a popular trend not originated by Skechers.

fashion law
CREDIT: UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

Another case that stands out and is not fashion-related but falls more within the realm of entertainment, is the lawsuit recently lodged by, Goldenvoice, the company responsible for the popular U.S. music festival, Coachella, against Afrochella, a popular Ghanaian music festival. Allegedly, Afrochella has infringed on Coachella’s trademark and goodwill in the promotion of Afrochella.

There are arguments on both sides on whether Afrochella should be held liable for infringing on Coachella’s trademark. One argument is that Afrochella specifically identified its own festival as being inspired by Coachella, which some say creates an unauthorized affiliation between the brands.

Another argument is that Afrochella is only held in Ghana and should be permitted to use its name since the company does not currently host its festival in the United States. I am interested to see how the courts decide this case or if the brands will be able to come to an amicable settlement.

How can smaller designers protect their work from being copied?

Formal intellectual property protections of fashion designs (i.e. the shape, style, or cut of a garment) are virtually unprotected. However, there are a few ways you can protect certain aspects of your work as a fashion designer. One way is that you can protect an original print, pattern, or sculptural adornment that is included on a garment through copyright protection. You can also protect certain types of creations through a design or utility patent.

Additionally, you should protect your brand through trademark and trade dress protection. Another way of protecting your designs is through the contracts you draft and sign in partnership with others. For example, you can require the manufacturer of your designs to sign a non-disclosure and non-compete agreement so they don’t disclose your design to another brand or try to replicate your design by creating a knock-off of their own. If they do, you may be able to recover damages for violating your contract and the sales associated with doing so.

I also suggest designers use the power of their communities to fill in the gaps where the law falls short. When you see another designer or brand copy your design, let it be known via social media. It’s a lot less expensive and you may be able to resolve the dispute a lot quicker than suing in court.

 

Ashley hails from Houston, Texas, and is a proud graduate of Howard University School of Law and School of Business. Ashley is licensed to practice law in New York, Texas, and the District of Columbia. Follow Ashley at @cloudesq  and @thecloudlawfirm, @cloudesq and @yourfashionattorney for updates. You can also visit www.thecloudlawfirm.com for more information.

Disclaimer: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information.  This website contains links to other third-party websites.  Such links are only for the convenience of the reader, user or browser; Ashley N. Cloud and The Cloud Law Firm PLLC do not recommend or endorse the contents of the third-party sites.
Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.  No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction.  Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.  Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors, contributors, contributing law firms, or committee members and their respective employers.  
All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed.  The content on this posting is provided “as is;” no representations are made that the content is error-free.
1 min read

Attorney Talk: The Connection Between Intellectual Property & Social Justice

Sommer Blackman is an Attorney at Grant Attorneys at Law PLLC.  Her practice areas include entertainment, trademark, and copyright law.

She is admitted to practice law in Ontario, Canada and admission is pending in New York.

Sommer grew up deeply immersed in music; she is a classically trained pianist and played the alto and tenor saxophones for 7 years. She also enjoys educating the community about their intellectual property rights.

In this episode, she shares:

  • The connection between intellectual property and social justice.
  • Notable past examples of exploitation of Black artists in America, the Caribbean, and Africa.
  • Some current intellectual property cases that she finds interesting.
  • IP trends she expects to influence the near future.
  • Best ways for creators to protect their IP on larger platforms.

-Tony O. Lawson

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2 mins read

Web3 Revenue Strategies for Entrepreneurs and Creators

As digital assets (NFTs, DAOs, the metaverse, and blockchain tech) become more mainstream, the need to develop effective Web3 revenue strategies is becoming increasingly important.

JoAnn Holmes practices in the areas of digital asset law and intellectual property licensing. She helps innovators, brands, and creators monetize IP, build Web3 revenue, and manage evolving legal risks.

She advises digital asset clients on a variety of issues including NFT launches, brand partnerships, DAO governance, and metaverse assets.  She also provides strategy sessions to help design and launch Web3 products and services, legal consultations for early stage projects, and recurring advisory services for scaling organizations.

For 20 years, Jo has successfully negotiated with Fortune 100s companies and managed IP portfolios spanning 150 countries that generate over $2 billion in annual revenue.

We caught up with her to find out more about her work.

VIDEO CHAPTERS

0:00 – Intro

0:39 – What inspired her to start her law firm.

2:36 – Why she pivoted to focus on digital assets/Web3.

3:57 – How Web3 differs from the present and previous versions of the internet.

6:36 – Why businesses, brands, and creators should consider incorporating Web3 technology.

8:53 – Types of businesses are best suited for a Web3 strategy.

14:00 – The first steps a brand or business should take in developing a Web3 strategy.

20:26 – How Web3 is influencing laws internationally.

25:40 – Using Web3 to advance diversity and racial equity in tech ecosystems.

32:33 – Contact info

Disclaimer: The information provided does not, and is not intended to, constitute legal advice; instead, all information provided is for general informational purposes only.

Tony O. Lawson

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1 min read

Attorney Talk: Things to Know Before Starting a Web3 Business or an Investment Fund

The Coleman Law Firm is a Black owned law firm owned by Bernard Coleman. Bernard has closed more than $1 billion dollars in transactions for clients in a variety of industries, including technology, entertainment, personal care, hospitality, healthcare, manufacturing, venture capital, and government contracting.

His firm specializes in representing diverse founders, small businesses, and early-stage growth companies through the stages of formation, organization, capitalization, expansion, and acquisition.

In this interview, Bernard discusses:

  • Why he left the world of Big Law to start his own firm.
  • Helping underrepresented founders raise capital via equity crowdfunding.
  • The legal ramifications of not differentiating between independent contractors and employees.
  • Best practices for trademark protection.
  • Determining when a cryptocurrency should be classified as either a utility token or a security.
  • Intellectual property issues in the Metaverse.
  • The benefits of acquiring businesses via the franchise model.

Tony O. Lawson

Disclaimer: The information provided does not, and is not intended to, constitute legal advice; instead, all information provided is for general informational purposes only.

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6 mins read

Black Estate Attorney Shares Best Practices for Wealth Building and Wealth Preservation

Maximillienne “Max” Elliott is the founder and Managing Attorney at The Law Offices of Max Elliott, Ltd. 

With offices in New York, New York, and Chicago, the 10 year old firm represents families and individuals in estate planning, estate administration (including litigation and uncontested cases), and business planning.

Serving estates with a combined size of more than $425 million, the firm’s focus is on helping families maintain and build legacies.

We caught up with Max to learn more about the importance of estate planning in the wealth accumulation and preservation process.

Black Estate Attorney
Maximillienne “Max” Elliott

What inspired you to pursue a career in law?

Being of service is very important. Initially, I wanted to be an international human rights advocate. However, when I was a law student, I already had a family member going to “hot spots,” such as Afghanistan, for NATO. So, I decided one family member in hot spots was enough, whereby a domestic-based role would be more prudent and manageable for my family’s collective psyche.

Describe your average client.

No client is “average.” They each have their unique set of circumstances and personalities. Common threads for many of our estate planning clients are the desire to create a legacy, prevent loved ones from going through the arduous estate administration and probate process, and protect loved ones from unfriendly family members.

Our clientele is also very diverse across most milieux – ethnicity, age, occupation.

What would you say is the biggest misconception about estate planning?

A few misconceptions about estate planning are:

(1) Estate planning is only needed if you are wealthy. FALSE. Even if you have a modest estate, where you don’t own real property, you have your personhood, and estate planning instruments such as Medical Advanced Directives, which protect you during your lifetime, and a Last Will and Testament that allows single parents to nominate guardians are critical.

Also, let us think – the wealthy can generally afford to spend tens of thousands on probate and estate administration; those with less wealth cannot.

(2)  Estate planning is costly. EXPENSE IS RELATIVE. Estate administration or probate, which is required when no planning is done, is usually double or triple the fees for estate planning and also requires a freezing of assets and potentially unintended beneficiaries, such as half-siblings.

(3) Estate planning is only needed if you have more than one beneficiary. FALSE. If you have a single beneficiary and your assets are not titled properly, financial institutions do not care. They will require your beneficiary to go through probate, regardless of what state law says.

When should individuals or families start putting a wealth preservation plan in place?

Individuals and families should begin crafting a wealth preservation plan as soon as they realize that they are in (or leaving) committed partnerships or have interests but no “real beneficiaries.”

It is sufficiently challenging to lose a loved one, let alone lose a loved one, and be told that for the next year and probably more, you will also have to work with attorneys to receive your inheritance.

For individuals without parents, siblings, and children, the issue is even more salient because, without a plan, complete strangers, e.g., your fifth cousin will inherit your estate.

What are your thoughts on the importance of accumulating and keeping wealth in the Black community?

We must first understand that wealth is accumulated by making wise decisions about money, people, and opportunities and it founds communities when that wisdom is passed up to generations. Wealthy communities tend to be more stable, safer for the vulnerable (children and seniors), and thus, better protected from uncontrollable external forces.

About 1/3 of my time is spent in court and another 1/3 is spent preparing estate plans to keep beneficiaries from fighting and from going to court where a lot of money is spent to send wisdom and wealth outside of our community, eroding the stability and protections our community could use.

In court, a large swath of beneficiaries are Black but a larger swath of attorneys are not. This means that inheritances, which represent wealth that could remain in the Black community, are leaving our community as attorneys’ fees to those who may not even be our allies.

Studies indicate that it will take more than 200 years to close America’s wealth gap, and that’s if nothing is done and things don’t get worse. We are now confronting inflation. I am not an economist, but it seems that the least we can do is create a plan for our families that fosters financial prudence, education in all its forms, protection of our vulnerable, and a pride and love of community in itself that passes up to generations so we, as individuals, families, and a community, become stronger as each decade passes.

CONTACT

Chicago

605 North Michigan Avenue,
Suite 400
Chicago, Illinois 60611

New York

902 Broadway,

Floors 6 & 7,

New York, NY 10010

Phone

(877)535-1600

Email

info@maxelliottlaw.com

3 mins read

Featured Professional: Attorney, Marirose Roach

As important as it is to recognize business owners and entrepreneurs, it is just as important to recognize the professionals and service providers who are excelling in their different fields of practice. Marirose Roach is one such professional.
Marirose is a partner with Philadelphia based, Roach-Leite. She is passionate about fighting for the rights of spouses and children, providing legal representation in divorce, custody and support cases.

Marirose Roach – Attorney (Philadelphia)

Marirose Roach
Attorney Marirose Roach

Why did you decide to practice law?

My mom wanted me to become a doctor or a lawyer.  I can’t stomach the sight of blood, so becoming an attorney was the default.  I was intrigued by the law from a young age.  I always wanted to help people and I felt that law would be an effective vehicle to do so.

What do you wish you had known about the legal profession before becoming an attorney?

They do not teach you how to become an attorney in law school.  Well, at least they didn’t when I was there.  There is a great deal of practical education that you do on the job.  Once out of law school, it is crucial to surround yourself with people that will make you great.
 

Your firm specializes in different types of law. Which do you enjoy the most and why?

It varies, each area has it’s pros and cons.  ​Each case is a window into a stranger’s life.  When you learn about their household, family, friends and struggles and can help them come out with a positive result, it feels absolutely amazing.  It’s a constant reminder of why I decided to practice law.

What do you do in your off time when you aren’t “lawyering”?

I’m a kid and an athlete at heart.  I still play in several recreational adult sport leagues.  It’s a great way to network and relieve stress.  When I’m not playing or working, I spend time with family and cook.

Where do you see your firm in the next 5 years?

We are currently going through a growth spurt at the firm.  ​In five years, if we continue this growth, I’d like to increase our support staff and strategize  marketing to refine the practice and be more efficient in how we target clients.

What advice do you have for students contemplating the legal profession?​

Get to know yourself and hone in on what you are truly passionate about.  Having a legal degree can create opportunities for change, but it’s a grind.  Be ready for a challenge.

Contact info:
Roach Leite LLC
6950 Castor Avenue
Philadelphia, PA 19149
Telephone: (267) 343-5818

-Tony Oluwatoyin Lawson (@thebusyafrican)
5 mins read

Black Attorneys, Lawyers & Legal Professionals

In 2009, Black attorneys represented 1.71% of law firm partners. Today, Black attorneys represent 1.81% of partners.

According to the National Association for Law Placement 2017 Report on Diversity in U.S. Law Firms, “women and minority partners remain fairly dramatically under-represented in U.S. law firms,” with women minorities being the “most dramatically underrepresented group” of all.

Given this information, we felt it fitting to acknowledge some of the  Black Attorneys, Lawyers, and Legal professionals who are the best in their field.

Black Attorneys, Lawyers & Legal Professionals

Ryan StoweStowe Law Firm, PLLC  (Salisbury, NC) Practice areas: Traffic violations, Criminal defense, DWI

black attorneys

Portia Wood – Wood legal Group (Pasedena, CA) Practice Areas: Estate Planning, Wealth Creation

Angel Murphy – The Murphy Law Firm (Upper Marlboro, MD and Oxon Hill, MD) Practice Areas: Family Law, Criminal Law, Personal Injury, Notary Services)

black lawyer

Ken Lanier – The Law Office of Ken Lanier (Decatur, GA) Practice Area: Personal Injury

black lawyer

Michael A. Walker –  The Walker Firm (Pennsylvania, PA) Practice Areas: Criminal Defense, Personal Injury, Real Estate and Discrimination.

Max Elliott – The Law Offices of Max Elliott (Chicago, New York City) Practice areas: Estate Planning, Estate Administration, and Business Planning

black lawyers

Diane Butler – Law Offices of Diane Butler (Hawthorne, CA) Practice areas: Personal Injury, Probate, Estate Planning, Bankruptcy and more)

James Saintvil – Jayde Law PLLC (Washington, DC and Marlton, NJ) Practice areas: Estate Planning, Estate Administration, and Business Succession Planning

Sekou Campbell – Law Offices of Sekou Campbell (Philadelphia, PA) Practice areas: Corporate Law, Entrepreneurship and Startups, Intellectual property, Tax

Shavon J. Smith – The SJS Law Firm (Washington D.C. & Maryland ) Practice areas: Entrepreneurship and Startups, Non-Profits, Government contracting.

Ayanna Jenkins -Toney – Law Offices of Ayanna L. Jenkins-Toney (San Francisco, CA) Practice areas: Matrimonial and Family Law

Image result for Ayanna L. Jenkins-Toney

Pamela Price – Pamela Y. Price, Attorney at Law (Oakland, CA) Practice Area: Civil Rights

Jerome Carter – Carter Law Firm (Mobile, AL) Practice Areas: Civil Plaintiff, Matrimonial and Family Law, Wills, Trusts and Estates

Aimee Griffin – The Griffin Firm, PLLC (Washington, DC) Practice Areas: Wills, Trusts and Estates

Black Attorneys

Hughie Hunt II – Kemet & Hunt (Calverton, MD) Practice Areas: Real Estate, Matrimonial and Family Law, Wills, Trusts and Estates

Black Attorneys

William Jenkins – Jenkins & Roberts LLC (College Park, GA) Practice Areas: Business Formation, Wills, Trusts and Estates

Image result for William Jenkins attorney

LaKesha Shahid – Shahid & Hosea LLC (Montgomery, AL) Practice Areas: Civil Plaintiff, Employment Law, Matrimonial and Family Law, Wills, Trusts and Estates

Black Attorneys

Andrew MaloneyMaloney Law Group (New York, NY) Practice Areas: Corporate Law, Mediation / Arbitration, Real Estate

Kwaku OforiOfori Law Firm, LLC (Silver Spring, MD) Practice Areas: Civil Plaintiff, Commercial Litigation, Real Estate

Joey Ofori

Natalee Drummond-Fairley -The Fairley Firm (Atlanta, GA) Practice Areas: Business Transactions, Civil Plaintiff

Ryan Hintzen – Franklin Square Law Group (Washington, DC) Practice Areas: Business Transactions, Employment Law

Image result for Ryan Hintzen

Fraline AllgaierAllgaier Patent Solutions (Glencoe, IL) Practice Areas: Intellectual Property, Trademark and Patents

Michelle Thomas – M.C. Thomas & Associates, PC (Washington, DC ) Practice areas: Matrimonial and Family Law

Picture of Michelle C. Thomas

Darcia Tudor – Eastside Mediation & Arbitration (Kirkland, WA) Practice Areas: Matrimonial and Family Law

Image result for darcia tudor

 

Joe H. Tucker – Tucker Law Group (Philadelphia, PA) Practice Areas: Civil litigation, Complex breach of contract, Products liability and employment discrimination litigation

Black Attorneys

Marirose RoachRoach Law (Philadelphia, PA) Practice Areas: Family Law, Foreclosure Defense, Sports & Entertainment Law, Estates & Asset Protection

Black Attorneys

George Edwards III – Edwards Sutarwalla PLLC (Houston, TX) Practice Areas: Corporate Law, Real Estate, Insurance, Retail Litigation

Shelice Tolbert – Tolbert & Tolbert LLC (Gary, Indiana) Practice Areas: Business Formation, Civil Plaintiff, Litigation and Insurance Defense

Johnny Hawkins – Law Office of J L Hawkins (Southfield, MI) Practice Area: Civil Plaintiff

Shevelle McPherson – McPherson Law Offices (Cherry Hill, NJ) Practice Area: Criminal Defense
E. Michelle Martin – The Martin Law Firm (Columbus, OH) Practice Areas: Civil Plaintiff, Criminal Defense

Alicia Howard – The Law Office of Alicia A. Howard(Memphis, TN) Practice Areas: Matrimonial and Family Law


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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.

Black Wealth

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.

Black Wealth

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.

Black-family-lying-on-grass

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.

Black Wealth

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.

Black Wealth

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.

Black Wealth

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.

Black WealthBusiness 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.

Black Wealth

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.

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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.

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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.

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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.

Black WealthDeveloping 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!

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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.

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