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- I'm working hard to build wealth, and I want to make sure it lasts forever.
- My estate plan is designed to maintain my assets and ensure I don't leave any surprise debt behind.
- This article is part of "My Financial Life," a series helping people live and spend better.
Estate planning is a fancy way of saying you're planning for the future — a time when you'll be unable to manage your health and wealth.
Many people focus on financial planning, but not as many think about the broader picture. However, the process doesn't need to be complicated — it's a matter of creating legal documents appointing people to speak and act for you.
I'm an estate-planning attorney, and I've seen how important this process is and where some people's plans fall short.
I want to continue helping others after I'm physically unable to do so. A 2017 study by the Institute for Policy Studies looking at long-term projections for the racial wealth gap found that median Black household wealth could reach zero by 2053. That means my long-term goals need to factor into my estate plan to secure generational wealth.
I want to thrive today and help my future beneficiaries avoid conflicts, excessive taxes, financial burdens, and disputes that could cost time and money.
My financial plan and my estate are intertwined
I considered several questions about my estate when deciding on my financial goals:
- When I reflect on the wealth I have — and the wealth I'm building — what do I want done with it when I die?
- Who is or will be capable of managing my assets?
- What will happen to my digital legacy — my online accounts, digital files, pictures, and investments?
- What tax consequences will my choices have now and in the future?
- How will I keep my estate plan and financial plan updated as my life changes?
My estate plan consists of a financial power of attorney, an advance directive, a guardian nomination, a will, and a trust. As an estate-planning attorney, I frequently encounter families who created a trust but didn't understand how it works and don't have a plan for its upkeep.
My estate plan is designed to support all the assets I leave behind and ensure the financial moves I'm making now stay on track. For example, if I buy a house, I have to make sure there's a plan so my trust (and the trustees I leave in charge) can continue paying for the house. I'm accounting for a mortgage, maintenance and remodeling costs, and property taxes. In one case I saw property taxes go from $3,000 to $11,000 a year following a property transfer.
I want to minimize the debt my trust will have to pay off
If your estate plan is set up correctly, some debts cannot be collected after death. I've chosen to save, invest, and pay down debts to minimize the bills my estate and trust would be responsible for. Considering my estate plan early in life will help me figure out which debts I should pay off first.
When it comes to my plans, the most important part is educating the people around me about my moves and my wishes. It's easy for your plan to fail when the people you leave in charge don't know what to do or how to do it. Having financial conversations and being transparent is the best way to ensure my financial and estate plans remain on track.
My goal is to create a comprehensive financial road map that will address my current needs and future aspirations. I've thought about my financial stability at every stage of life. I've found it helps to think about your long-term goals and values first. Then you can ask yourself the big questions — the who, what, why, and how — and get the ball rolling.