Estate planning is not as common in families of color compared to white families for several reasons. One main reason is that many families of color do not own significant assets that would require a will or living trust. Another reason is that they’re not sure about how to create a living will or a living trust. We often think that estate planning is primarily for rich people but even those with fewer assets should consider creating a living will. A will keeps your assets from being distributed by the courts and this means that your assets may go to people you don’t want to have them. Here is how to create a will.
Take Inventory of Your Assets
One of the first steps is to take inventory of your assets. These are the items and financial accounts you’ll leave to beneficiaries after you pass away. Put your assets in different categories to keep the information organized. For example, you can organize your assets by type. These types include fine jewelry, investment accounts, cars, primary residence, and savings accounts. Once you do this, write down the names of loved ones to whom you’ll give these assets. Put the list away for later use when you create your will.
Choose Your Executor
When you create a will, you’ll need to choose your executor. The executor is the person who carries out your wishes according to your will. The executor collects debts you’re owed, pays debts you owe, communicates with the courts, and distributes assets to your beneficiaries. Choose an honest executor who has integrity and who has organizational skills. Talk with the potential executor about what his role would be if he accepted the position. Once both of you agree that he’ll be the executor, name him in your will.
Choose A Guardian
We all believe our children will outlive us, but what if we pass away before them? This is why a will is so important. Your will needs to state who will care for your children should you pass away. In addition to this, you should purchase life insurance while you’re still alive so the guardian will have the necessary funds to care for your child after your death. Choose a guardian whose values are similar to yours. The guardian should also be financially stable and have the emotional maturity to raise your child.
Include Healthcare Decisions
A major part of a will includes healthcare and end-of-life instructions for loved ones. Start by choosing a healthcare proxy. This is the person who makes medical decisions on your behalf if you’re no longer able to make decisions for yourself. You should also mention which medical decisions should be made by the healthcare proxy on your behalf.
Update Your Will As Needed
You’ll experience life changes and this means you’ll have to update your will periodically. Some life changes that require your will to be updated are the birth of your first child, divorce, when your adult children get married, the death of your will’s executor, when you acquire a substantial amount of money, and when you develop a chronic or terminal illness.
If you have grandchildren, this is a vital time to update your will. Maybe you set up a living trust for them and you need to include instructions to the trustee on how and when your grandchildren will receive assets from the living trust. Your will can state that your grandchildren cannot receive assets until they reach a certain age or after they had jobs for a few years.
What About Your Digital Assets?
There are physical assets you protect with a will, but you should also protect your digital assets. Examples of digital assets are cryptocurrencies, your domain names for websites, digital rights to musical, artistic, and literary works, your business website or blog, online platforms where your content is monetized, and digital photos you own. Write down the passwords of all online accounts you own and store them in a hidden and safe place in your home. In your will, only give trusted relatives the authority to access your online accounts upon your death.
Notarize Your Will
After you create a will, bring it along with one or two witnesses to the notary public and have the will notarized. This is important because it adds an extra layer of protection in case someone decides to contest your will and claim that it wasn’t valid at the time it was written.
Update Your Beneficiaries
You may not realize that even if you state that certain relatives will be beneficiaries of certain financial accounts in your will, it won’t be valid unless you designate them as beneficiaries by adding them to your account. It’s crucial to update your beneficiary list from all of your accounts so they can inherit your assets.
Wills Don’t Generally Apply To Joint Properties
Suppose you and your spouse own a second home but you wanted to leave this home to your niece after you pass away since you never had children. In this case, your spouse automatically becomes the new owner of the home even if your will states that your niece gets the second home.
Having a will gives you peace of mind in knowing that your affairs are in order before you pass away, and you can proceed with other estate planning tasks such as purchasing life insurance and creating a living trust.
