When hip-hop artist DMX died in 2021, he left no will in place and very few liquid assets. While DMX’s estimated 15 children are expecting a share of his $1 million estate, it has been tied up in probate court for months. In addition, an estate has to be established to manage any expected future earnings from his music. Yet with no appointed administrators and costly probate attorney fees, DMX’s estate will be dwindling until the proceedings are finalized.
Although music superstar Prince died in 2016, his $156.4 million estate was just settled in January 2022. Why? Because he left no will.
Like DMX and Prince, many Black Americans have failed to participate in the estate planning process. Only about a third of Blacks who have a will, a found a Caring.com survey. But, that percentage has increased since 2020. The number of Black Americans who have completed a will has increased by 6.2% (from 25.9% to 27.5%). An estimated 35 percent of white Americans have wills.
Estate planning will allow you to remain in control of your assets while contributing to your family’s generational wealth.
“We indeed to bust the myth that it is just for the rich or when the idea that when I die I don’t have to do the planning–it will just go to my children,” Sheila Samuels, estate planning attorney with Samuels Law Firm, told Finurah.
She continued, “Estate planning is not just about when you die, it is actually about what happens during your lifetime. It’s really about taking control over what happens. You have a say in who can make decisions, who inherits your assets and who can oversee your estate.”
Samuels said there are five tools necessary to create a comprehensive estate plan. Of course, it is necessary to consult with an attorney in your state to understand your specific state laws.
“The key is to be proactive and doesn’t wait for a crisis to occur,” Samuels said. “When you wait, your options can sometimes be limited and will cost you more money. When you plan, you are able to think in an objective manner.”
1. Last Will and Testament
Your will establishes the distribution of your individual assets. There are several sources online to help in creating you own will if you want to avoid having an attorney draft one. After it is complete, you must sign your will in front of witnesses to make it legally valid. in your will it is advisable to appoint an executor to act as your representative. The executor will be responsible for paying your final expenses and taxes before distributing your assets. A will must be filed in probate court after your death.
A will is especially important if you have underage children as this will be the only way they can have a guardian designated for them.
It is not uncommon for someone to choose a trust over a will because you can avoid probate, said Samuels. Probate court can become a costly cost for your descendants to inherit. Instead, using a trust is a simple efficient administration of your estate. A trustee will distribute assets easily and effectively to all beneficiaries.
3. Durable Power of Attorney
Have you ever considered what would happen to you if you become mentally or physically incapacitated? A power of attorney is an essential document that allows you to identify another person to act on your behalf as your agent or attorney-in-fact. This appointed person will handle financial decisions on your behalf such as real estate transactions, banking transactions, insurance, medicare, social security, and Medicaid planning. If you don’t have an appointed power of attorney, then a guardianship will needed to be appointed.
4. Health Care Proxy
We also do not know how an illness or an accident will affect our ability to make medical decisions for ourselves. A health care proxy will allow someone that you have appointed to make medical decisions in the event that you cannot.
5. Living Will
If you are faced with a terminal illness or death is imminent, you need to document what treatments or medications you would like administered. Without a living will in place, someone else will be responsible for making decisions about your life. While our family members and friends will often do what is in our best interest, a living will allows you to remain in control of your life.
“You are putting people on notice that this is what I want and don’t want,” Samuels said.
She added, Estate planning is always going to place you in control of your affairs.
“With an estate plan, you will possess control over your affairs,” Samuels said. “You will leave a legacy for whoever you choose, creating generational wealth.”