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OBG: b&b152 Why You Need an Estate Plan to End Generational Poverty

What happens after we die?

Estate planning, Trusts, Wills—these are things we associate with the wealthy, but do they matter even after we’re gone? For this episode, we were able to talk to Bomopregha Julius, an amazing estate attorney, on the importance of planning even if you don’t think you have much to your name. Estate planning is still important and is often, but not a necessarily known, a link to generational poverty.

Music Featured in this Episode:

Until I Die  by Jupiter 7

Destined by Definite

Run Until I Die by Tonye Aganaba

Episode Highlights:

Investment Appetizer:

Bomopregha: A transfer on death, as soon as you die a person can present your death certificate and whatever asset you designated to them transfers automatically upon death. Ideally the best situation. You don’t want to keep too many assets in the estate. If you have a transfer upon death in which you designate who should get something when you die, there’s no work to be done, courts don’t need to be involved.

Bomopregha: Every time you open an account, it is best to designate a beneficiary. It is a good way to designate monetary assets before you die so that upon death the people are entitled to them. It is the least stressful way of doing thing, but it only happens if you plan that.

Pam: So you create a trust, then put the assets in the trust and name the beneficiary in the trust?

Bomophrega: Yes, exactly. It is a good way to avoid the court system. Another simple way is a life estate. Your parents can take their house and instead of waiting for them to die to get the asset they transfer it to you before they die. This allows them to live in the house until they die and then it is reverted back to you when they die.

Pam: If you plan properly you won’t put your family in that situation. It is super important to think about, especially as you’re building wealth.

Dyalekt: These things aren’t supposed to be depressing, they’re empowering. What’s depressing is when you’re already grieving and having to do other stuff. Poor people get taken advantage of so much when deaths occur. People aren’t educated as to what to do. That’s the real tragedy we can’t even grieve because we have all of these practical stuff going on. So, this is empowering to have this information.

Bomopregha: The funny thing is, everyone has an estate when they die. Whether you do something with that estate or not do something with that estate, those depend on the circumstances. But an estate is for automatically, at least in New York state, that’s what I can speak to, upon death. So, whether you formalize that estate by going through the courts because you have to or because there are assets left over after your death and someone has to figure out what to do with them. So everyone has an estate.

Bomopregha: All the stuff. That’s the positive. The negative is any debts you left. So that’s the estate. The estate encompasses positive, so assets, and negative, so debts. So, if someone decides to sue you after death, they are going to sue your estate.

Bomopregha: An estate is just a vehicle by which we deal with people’s either positives, assets, or their negatives, debts and liabilities they may owe, after death. So, I can’t deal with the person, so I’m going to deal with the estate.

Dyalekt: If I am getting phone calls after my relative has died saying that I owe something, how do I know which debt is real, which one has been discharged?

Bomopregha: A distributee is someone who inherits from an estate doesn’t have to deal with all debts or liabilities. You shouldn’t worry about debts and liabilities after death in which the person doesn’t have enough assets to cover them. You’re never personally liable, the estate is liable. Creditors have the right to go to court and put a lien on the estate, and that is what has to satisfy the debt.

Pam: So if a debt collector tries to call you and tries to collect it, they are trying to scam you. You are not personally liable for that debt. So if someone has life insurance and they have debt, technically the credit can go after that?

Bomopregha: Yes

Bomopregha: Estate planning means at some point in your lifetime you have acquired some kind of assets. Estate planning helps you to determine how exactly will these assets be divided upon your death. An estate is formed automatically upon death, so you need to tell the law whether you want something different because the law has a default plan.

Bomopregha: If you have an idea of how you want your assets to be divided then you need estate planning. If you don’t care, then the law will determine that. There are reasons why you should not let that happen.

Bomopregha: I thought it was law for rich people. But the reality of it is, a lot of that part of the law does affect poverty. It affects people in certain ways that they don’t realize. Rich people, this is a part of their culture, so they have a larger plan for their assets period.

Dyalekt: Things that should be requisite for every living person, and yet I came up the same way. Yeah, that’s just stuff that rich people do. I just knew that it wasn’t for me.

Bomopregha: It just comes from the background. If you are impoverished, if you are just trying to get by, if you are trying to survive, it’s very hard to think of future anything. Wills, trusts and estates is future in its most deepest sense. Like, what happens to me after I die? So, you can’t think about that because you’re just trying to survive. But honestly, its harder for people who are poor because court cost money, lawyers cost money. If I am trying to figure out past your funeral how to divide everything, or who wants what, I need to have some kind of plan. That plan is how you build wealth.

Bompregha: When we think about estate planning, truly the thought should be, ok I can’t use this up before I die so I shouldn’t leave it to the wind. You don’t need to think of it as a big concept, it’s just that people shouldn’t have to wonder what to do after you die. That is the crux of poverty. We need to build a foundation and look forward for all communities. There are aspects of building the community that includes what happens when I die and what the plan is to leave something for the community to build upon.

Dyalekt: Wealth is a measurement of time. It is the amount of time you have before you need to find other ways to bring in money. Generational wealth is when you are able to pass that amount of time on.

Bomopregha: Exactly, and have that next generation not start from scratch. Always starting from scratch means always living in poverty. Somehow, if I am socially conscious and an activist in that sense, somehow, we have to break the cyclic aspect of being impoverished. Yes, we can’t fight policy and those large social issues all the time. But there are individual ways of dealing with how we build wealth for our communities generationally and how do we look to fighting against these issues that are fighting us. You do that individually; you can’t leave caution to the wind in that way. If you are not a protestor, you are not on the picket line, this is another way you can help move our community forward as people.

Pam: This is empowering, you can make your life live beyond you. When you build that wealth and you maintain it you are building it to buy them time , so they don’t have to start from scratch, so they can take risks and are not just surviving anymore. What are the things that everybody needs to matter how much they have in their estate?

Bomopregha: One, designated beneficiaries. Transfer upon death is the best way to get rid of assets. Second, a health care proxy. If you don’t want to be resuscitated, if you do, if you don’t want your family making decisions for you, whatever the case may be, you need a healthcare proxy for that reason. It is a real decision and so many people have had to make that decision and its unfair to them, just say what you want them to do. Last, a power of attorney. If you have significant assets this is great for you. It tells whoever you designate as your agent, they have the power to act on your behalf. Health care proxy and POA go hand in hand and you need both of them.

Pam: When do you need a will then?

Bomopregha: Wills are perfect if you have a lot of personal property and assets that you can’t transfer upon death. Like a car, or your great Aunt’s antique bowl, these things that have value but you can’t designate.

Pam: What happens if you have kids?

Bomopregha: If you are a parent or you’re thinking about being a parent, the only way to designate a guardian before you die is through a will. It is a good way to tell the court who you suggest to be a guardian for your children. That is essentially what a God Parent is supposed to be, however, you have to legally do that. The only way to do that is through a will. It is very important to do that if you have children under the age of 18 because the court will have to find a guardian for them. If you want your friends to be guardians, you definitely need a will because the court doesn’t recognize friends as next of kin.

Bomopregha: Start off small. Try to make your parents make a list of accounts. Why do I have to play scavenger hunt after you die? That’s not nice. Second, have slight conversations. Whether you want to be buried here? Back home? This is a way of getting them to see you’re not trying to kill them off, you’re trying to find a way to make them comfortable and respect their wishes.

Bomopregha: You have to have these conversations with your parents, especially aging parents. There are multiple plans in place, especially if your parents do have property, that you should look into.