One of the most important reasons for accumulating wealth is passing it on to the next genera-tion.
For too long, this was not a tradition within the black community, but this has been
changing. Transferring wealth means more than just building it through equity investments or
building the value of a business. You must engage in solid tax planning for your heirs. Without careful plan-ning,
your rock-solid estate could shatter, leaving your heirs with a mere fraction of the assets you intended.
The following will safeguard your material legacy:
Coordinate your assets
Figure out how your property will be distributed in a tax-efficient manner. For example,
many stock brokerage accounts are called joint tenants with rights of survivorship. This title
results in the immediate transfer of the account upon death to the surviving joint owner.
Many assets are distributed according to beneficiary designations such as life insurance,
retirement plans, and annuities.
Prepare a will
It is best to hire an attorney to help you draw up the document, no matter how simple. You
should name an executor who will have an inventory of your assets, protect them against loss,
pursue outstanding claims, pay bills, file and pay taxes. If you have minors, you should assign
them guardians and leave a letter of instruction that spells out all your assets and how you want
them distributed. A will only becomes effective upon your death and after it is admitted to pro-bate.
Make sure you have ample life insurance
This policy is extremely important if you have children. Work with a financial planner to deter-mine
what your family’s income needs will be, what sources of income will be available, and how
much life insurance will be available to provide for the loss of your income.
Develop a living trust
A trust is an entity created to hold and manage property or goods for the benefit of individuals
in the future. Under certain laws, the property or goods held in trust are often shielded in part
from taxes. Assets transferred into a trust are immediately available to your heirs, saving them
the time and expense of probate court after you die. A revocable trust, as the name suggests,
is one that can be canceled by the creator, who acts as a trustee to retain control of the trust
assets. A co-trustee should be named and a successor trustee should be designated. An
irrevocable trust is more permanent, designed to survive after the creator’s death.
Power of attorney
Your estate plan should include measures to protect you and your assets if you’re no longer able
to manage your affairs. Planning for such afflictions usually begins with a durable power of attor-ney—
a document that names an agent, someone who can take charge by signing checks, paying
bills, and making other financial decisions on your behalf. Durable Power of Attorney for Health
Care appoints a person you designate to make decisions regarding your healthcare treatment in
the event that you are unable to provide informed consent. This includes consent to certain med-ical
treatments, hiring and firing of medical personnel, and gaining access to your medical
records. Durable Power of Attorney for Property appoints a person you designate to act for you
and handle your assets should you be unable or unavailable to do so. This includes paying every-day
expenses, collecting government benefits (e.g., Social Security), handling bank transactions,
filing taxes and managing your retirement accounts.
Draft a living will
A Living Will or Directive of Physicians is a document that essentially puts doctors and hospi-tals—
and family members—on advance notice. It sets forth your instructions regarding the nature
and extent of the care you want should you suffer a permanent incapacity, such as a coma.
To Ensure That My Wealth Is Passed On To Future
PRINCIPLE NO. 10
34
O
Declaration of Financial Empowerment
steps

resources
Websites:
www.lifeinsurance.net
www.quickquote.com
www.insweb.com
www.quicken.com (Willmaker Plus software)
www.nolopress.com
Books:
Plan Your Estate by Denis Clifford & Cora Jordan
9 Ways to Avoid Estate Taxes
by Mary Randolph & Denis Clifford
Nolo’s Simple Will Book by Denis Clifford
Suze Orman’s Protection Portfolio: Will and Trust Kit
(book/CD)
Organizations:
National Network of Estate Planning Attorneys
888-337-4090; www.netplanning.com
American College of Trust and Estate Counsel
310-398-1888; www.actec.org
National Association of Financial and Estate
Planning, 801-266-9900; www.nafep.com
National Committee On Planned Giving
317-269-6274; www.ncpg.org
PRINCIPLE no.10 Generations
35
YOU CAN’T TAKE IT WITH YOU
Estimate your estate, estate tax and probate costs
YOUR ESTATE
Value of real property and things attached to it $____________________
(houses and other real estate)
Value of personal property $____________________
(bank accounts, securities, cash, furniture, automobiles, jewelry, etc.)
What you will own with someone else when you die $____________________
(joint tenancy)
Life insurance, annuity contracts, pensions, IRAs, 401(k)s and 403(b)s $____________________
Property for which you have “Power of Appointment” $____________________
(right to direct who gets someone else’s property)
Monetary gifts that you can evoke or amend $____________________
All business and business interests $____________________
All claims you have against others $____________________
(law suits)
TOTAL $____________________
Deductions from your estate $____________________
Funeral expenses $____________________
Administration costs $____________________
Debts and mortgages $____________________
All debts and obligations owed to others $____________________
Marital deduction $____________________
Charitable gifts $____________________
TOTAL $____________________
TOTAL VALUE $____________________
(total of your estate minus the deductions from your estate)
NOTE: By 2006, legacies totaling $1 million or less won’t be subject to federal estate taxes (ranging from 37%
to 55%). Check with your local government to find out about state and inheritance taxes.
COMPILED FROM THE SMART GUIDE TO ESTATE PLANNING (JOHN WILEY & SONS)