“Financial freedom my only hope
(…) living rich and dying broke”
– Jay-Z “The Story of OJ”
Nobody wants to think about death. Especially their own. That fear, however, is seriously crippling the African-American community. Planning for what should happen in the event you die, isn’t a welcome invitation for final destination to come knock on your door. It’s merely preparation for when you are 102, and ready to go on to a better place. Without these plans in place, we leave unexpected bills and overwhelming burdens for our loved ones to deal with. In this post, we’ll be discussing things you should be doing to prepare for life after death.
LIFE INSURANCE – Every human alive should carry life insurance. This does not require a job, a bank account, or good credit. You can literally find a policy online, and pay an amount each month almost equivalent to Netflix or an Apple Music subscription. Most employers offer life insurance when you are first hired, you should always sign up for it. Especially when you are young because as you grow older, the monthly amount will increase. Whenever you pass away, the Life insurance is paid to whoever you designate as a beneficiary. This amount will cover your funeral expenses or provide compensation to your dependents etc. I know you have seen frequent Gofundme requests on social media to pay for funeral expenses. Well, it’s because the person did not have a life insurance policy. Don’t leave that burden on your loved ones.
BENEFICIARIES – A beneficiary is someone(s) you designate that will receive your assets when you pass. Any agreement you’ve signed that has a cash value, asks for a beneficiary. For example, when you open a bank account one of the many forms they give you is an beneficiary assignee form. This means when you pass away, Person X will have access to all the money in your account. Your mama can’t just take your bank card and empty out your account. Your sister can’t just go to the bank and withdraw your money. It has to be pre-authorized, legally, via beneficiary form. Bank accounts, retirement accounts, again anything you’ve signed an agreement with that has a cash value should have a beneficiary form. These forms should be regularly reviewed and updated.
Q: What happens if I designated someone I’m no longer on good terms with?
A: If you don’t update your beneficiary forms, if you pass they are legally, entitled to the money.
WILLS/LIVING TRUSTS – If you have children or own property, you also need a will. You need to specifically identify who should get custody of your minor children if something were to happen to you. Also, who should take ownership of your house or cars (if paid for). Trusts are similar to wills in that you can specially identify who gets what. You assign all of your assets to a trustee, who will transfer it when you pass to whoever you to inherit it. Trusts have different tax implications, and you should speak with an Estate Planning lawyer to discuss further. Again, if you have kids or property, you absolutely need ONE OR THE OTHER.
Q: What happens if I don’t have a will or living trust when I pass away?
A: If you haven’t designated a beneficiary or left a will, any property that you solely own will be held by Probate Court for at least 4 months. Yup, that means no money for no one until after probate is done. Probate Court holds all of your non-beneficiary designated assets and lets your creditors submit claims against the value.
Q: What happens if I do have a will?
A: Again, any assets you have not designated a beneficiary will be held by probate court. The court will use your will to disburse your assets. It is not an immediate process, and could take at least 4 months. A Living Trust is the only bypass to probate court, if you have property.
*If you are married and hold joint accounts, and your spouse is still living when you pass, they will retain ownership of those accounts. You both should still have all of the above items.
In closing, the things you can do to prepare for life after death are:
1. Regularly check the designated beneficiaries on your bank accounts, retirement accounts, life insurance policies.
2. Find a life insurance plan, sooner rather than later. Protect your loved ones from having to campaign a Gofundme to bury you.
3. Create a will or living trust. Find a local attorney that specializes in estate planning.
This is a brief overview of future planning, and hopefully encourages you to start a plan now for what happens after age 102.