5 Estate Planning Moves You Must Make to Leave a Legacy For Your Family

BY: - 16 Mar '18 | Money

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Recently, I got off the phone with my mom, who shared some family updates— the on-goings of our family in the States, Antigua, and Tobago. Most of the news was positive; one piece wasn’t so positive, though. I learned that a family member was at the beginning stages of a debilitating mental and physical illness.

When I hear about illness, I can’t help but think about death. And when I think about death, I can’t help but think about estate planning. I hope that my older and not-so-healthy family members have their affairs in order. Hearing news like this reminds me that I need to take care of my affairs while I have youth and health on my side. In other words, I realized that I needed to get on the ball about estate planning.

Estate planning is the collection of preparation tasks that serve to manage an individual’s asset base in the event of his or her incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of an attorney experienced in estate law.

Despite the images that movies and television promote, estate planning isn’t exclusively for the wealthy or the old. We all need clear guidelines, orders, and plans for when we die or in case we become disabled, no matter our income level or the value of our estate. And the sooner you start getting your estate affairs in order, the more peace of mind you will have, the less confusion there will be, and the higher the chances that generational wealth will be passed down to the intended recipients with less contention and drama. When you sit with an experienced estate-planning attorney, please ensure that you plan to complete the following major estate-planning tasks.

Draft a will or testament, which is a legal declaration by which a person names one or more persons to manage his estate and provides for the distribution of his property at death. Limit estate taxes by setting up trust accounts in the name of beneficiaries, who are the individuals designated as the recipients of funds or other property under a will, trust, or insurance policy.

Establish a guardian for your dependents and make sure the individual or couple you choose shares your views, is financially sound, and is genuinely willing to raise children. As with all designations, a backup or contingent individual or family should be named as well. Absent these designations, a court could become involved and could rule that your children live with a family member that you wouldn’t have approved of. In extreme cases, the court could mandate that your children become wards of the state.

Name an executor of the estate to oversee the terms of the will. An executor is defined as the person named to distribute a deceased person’s property that passes under his or her will and who arranges for the payment of debts and expenses. Some of the other responsibilities of the executor may include, but are not limited to, getting a copy of the will and filing it with the local probate court; notifying banks, credit card companies, and government agencies like the Social Security Administration of the decedent’s death; setting up a bank account for incoming funds and to pay any ongoing bills; filing an inventory of the estate’s assets with the court; maintaining property until it can be distributed or sold; paying the estate’s debts and taxes; distributing assets; disposing of other property; and representing the estate in court, if necessary.

Create or update beneficiaries on plans, as a number of your possessions can pass to your heirs without being dictated in the will. A 401k is an example of this. In fact, all retirement accounts and insurance plans should contain a beneficiary and a contingent beneficiary because they typically pass outside of a will.

Set up a durable power of attorney (POA) to direct other assets and investments. It’s important to draft a durable power of attorney (POA) so that an agent or a person you assign will act on your behalf in the event of your disability. Without a power of attorney, a court may be left to decide what happens to your assets if you are found to be mentally incompetent. The court’s decision may not be
what you wanted.

Click Here to Download a FREE Copy of the BMWK Generational Wealth Pledge for Black Families!

Finally, be prepared to take immediate action to alter your estate plans as changes and shifts to your assets and relationships occur.

BMWK, are you prepared to leave a legacy for your family?

About the author

Kara Stevens wrote 149 articles on this blog.

Kara is a motivational speaker, life coach, and founder of the personal finance and lifestyle blog The Frugal Feminista .

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These 3 Money Exercises Are a Must If You Want to Build Lasting Wealth

BY: - 21 Mar '18 | Money

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Dr. Dennis Kimbro, author of The Wealth Choice: Success Secrets of Black Millionaires says, “I can tell you unequivocally wealth is not a function of gender, not a function of race. It is not a function of circumstance. It is not a function of condition—how the cards were dealt, which side of the town you were born on, but it is a function of choice, a function of discipline, and it is a function of effort, faith, and believing in yourself.” In other words, black folk themselves determine whether or not future generations will benefit from the wealth of those that came before them.

Once you shift your mindset from spending to building wealth, you will be ready to take concrete actions to help you successfully achieve wealth. Use the following exercises to help you get started today.

Exercise #1: Get clear about your means.

Do you really know how much you make? No, I mean really, really know? Most people forget that there’s a big difference between their salary before taxes (gross income) and their after-tax income (net income). When thinking about your means, you have to think in terms of your net income. Additionally, when calculating your means, you have to include all other forms of income that you might receive: alimony, Social Security, disability, inheritance, and others.

Click Here to Download a FREE Copy of the BMWK Generational Wealth Pledge for Black Families!

Knowing your means also includes understanding how much you spend. You need to know your monthly expenses—not just your fixed expenses, but also your variable expenses, like grocery bills, gas, personal care, clothing, and entertainment. Once you deduct your monthly expenses from your monthly income, you’ll have a clear picture of what your monthly means are and whether you need to adjust your spending, increase your income, or do both to ensure that you are living within your means. For this exercise, we would like for you to calculate your monthly means.

Resource: Here is a link to a free budget template to get you started: http://www.frugalfanatic.com/wp-content/uploads/2013/07/Monthly-Budget3.pdf

Exercise #2: Change your mindset.

In order for your financial future to grow, you have to cultivate a wealth mindset. To do so, you will have to sit down and figure out your top three financial values so you can identify your top priorities.

When my husband and I first married, we didn’t have our whole financial future written down to the letter, but we did have a clear picture of three of our financial values—we hated debt, were fundamentally frugal, and believed deeply in entrepreneurship, even at a part-time level. These guiding principles helped us make decisions about where we would live, what we would spend our discretionary income on, and how large our family would be.

For this exercise, we would like for you to read a book that will help you to change your mindset. Here are a few of our favorite book picks to get you started:

  • The Millionaire Next Door, by Thomas J. Stanley and William D. Danko
  • The Wealth Choice, by Dennis Kimbro, PhD
  • Girl, Get Your Money Straight, by Glinda Bridgforth
  • Money: A Love Story, by Kate Northrup
  • The One-Week Budget, by Tiffany “The Budgetnista” Aliche

Exercise #3: Create short-term, mid-term, and long-term goals.

For this exercise, we would like for you to define and document your vision for your finances and list the top goals for your money. (If you’re married, then you should sit down with your spouse and do this.) Identify what your top three priorities will be for this year, over the next five years, and the next ten years. This exercise alone will force you to completely rethink how you treat and use your money. With this exercise, you will be forced to live within your means if you ever plan to reach your financial goals.

Challenge: Adopt a pay-in-cash lifestyle for thirty days.

One of the best ways to live within your means is to pay for everything with cash. When you adopt a pay-in-cash lifestyle, you can save yourself from going into debt and avoid paying more for an item because of credit card interest rates. For the next thirty days, adopt a cash-only policy. In other words, commit to paying for everything in cash. Allot a weekly allowance for yourself. Once your weekly allotment is done, your spending is also done. Consider joining Facebook groups like The $20 Cash Crash Diet, which is an accountability group created to help people limit their discretionary spending to $20 during the work week.

About the author

Kara Stevens wrote 149 articles on this blog.

Kara is a motivational speaker, life coach, and founder of the personal finance and lifestyle blog The Frugal Feminista .

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