Generational Wealth-Building

By J. Fisher-Kouadio—All Rights Reserved

We have all heard variations of the old adage–“Two things are certain in life–death and taxes,” or if you are from the African American Community as I am, you may be familiar with the saying, “The only thing I have to do is stay Black and die.” Well in this day and age staying Black appears to be optional for some and there are many strategies to legally reduce your tax burden, but death is still the one thing that remains certain for us all.

As a community, most Black folks simply refuse to talk about or plan for death in any meaningful way. Consequently, we are less familiar with the financial and estate planning opportunities that would enable us to build generational wealth by preserving the assets of our families, assets more often than naught acquired at great personal sacrifice. That said, we must all work harder at safe-guarding our assets for the well-being of our families and loved ones.

Whenever I ask people, “How much money would you like to pay an attorney, a personal representative, and a real estate agent when you die in order for your heirs to inherit the property you have worked so hard to acquire over your lifetime?,” invariably the response is a resounding “nothing.” Yet few people are willing to do what it takes to avoid giving away their hard earned assets to total strangers. You can take steps now to ensure that your heirs will inherit your estate (all assets acquired during your lifetime) with little or no costs by taking the time to establish a basic estate plan which consists of the following:

• Revocable Trust
• Pour-Over Will
• Durable Power of Attorney for Finances
• Durable Power of Attorney for Healthcare
• Advance Directive for Healthcare

Why are these things necessary you ask? Real property valued over $20,000, is subject to Probate–the court supervised distribution of your estate (or assets). For example, in San Francisco the median priced home of $700,000, would incur at least $69,000 in fees before your heirs could inherit the net proceeds. This does not include court fees, extraordinary costs or the personal expense of family squabbling.

Despite popular belief, having a will does not avoid probate. Probate proceedings are costly and time consuming; they can take six months to two years or more to complete. Worst of all, our heirs may fight and permanently devastate our family structures, within which our elders are often the ‘anchors’, ‘mediators’, and the ‘glue’ that holds our families together. Even if most heirs agree, it only takes one to disagree. Each lineal heir (your children or your brothers and sisters) has equal say so in your or your parents’ estate in probate proceedings. In an era when so many of our family members have fallen prey to substance abuse after drugs ravaged our communities in the 1980’s, those very same heirs are often the reason for “forced sales” in order for the remaining heirs to buy-out their proportional interest in our estates. Quite frankly, there are heirs; love them as we may, that we should never give any degree of authority over what we have worked so hard to acquire in our lifetimes. Perhaps these heirs suffer from an illness, perpetual irresponsibility or substance abuse. Giving them authority in your estate is a disservice to them (often leading to drug binging from their quickly acquired new wealth) and it is a disservice to your responsible family members who become saddled with someone whose sole aim is to get whatever they can as quickly as they can.

A revocable trust enables people to bypass the infighting and cost of dividing up estates. For example, you can designate responsible family members as successor trustees (those authorized to carry out your instructions and manage your estate upon your death or incapacity), giving them greater authority over your assets. You could provide incentives for heirs struggling with addictions by conditioning their inheritance on completing a rehabilitation program and remaining alcohol/drug free for a period thereafter. You could also encourage higher education by assisting with educational costs and/or rewarding heirs upon completing a college degree or for acquiring the wisdom that comes with age by distributing a percentage of their inheritance to them at age 30, 35 and 40 years.

Vow to leave a legacy upon which your family and loved ones can build. Before our ancestors had any possessions or wealth in this country that we call the United States of America, our wealth as a people were our children and our families and it is still so today. Now that we have the wherewithal to do much more, we must take the necessary steps now to avoid family disputes over our assets, and to add economic wealth to our families’ cultural wealth. As a community, we keep starting over wondering why we can’t get ahead. Do your part today to preserve your family’s wealth and harmony. Contact Jeannette Fisher-Kouadio, Trust & Estate Planning Attorney; Email: jfisher19@usa.net; (415) 859-1975.