Financial Literacy

Estate Planning is Financial Planning

April is Financial Literacy Month. On behalf of all estate planning attorneys, I am proclaiming that we are standing up to be counted as a vital part of financial literacy. We are often overlooked and excluded when the discussion of financial literacy is presented. Typically, there is a cursory discussion that says get a will.

The financial literacy courses spend substantial instructions regarding creating a budget, reducing debt, savings, investing and homeownership. The end of the course typically says, “and complete a will to have your affairs in order.”

I agree with the importance of living with intentionality financially. I agree that it is necessary to have a budget road map that creates a strategy for living and spending. A budget allows your money to have an assignment. That is one of the key statements of estate planning. There is no reason to change the philosophy of how your money is treated after you pass away. Estate planning is about being strategic in planning for the future, including the use of resources.

I agree with reducing debt and investing as a focused strategic plan. We are all aware of the many GoFundMe pages we see when people have passed away without life insurance. The presumption that I have is there was not only any money to provide resources to be laid to rest, there is no money to pass on. We should indeed have a strategic plan not to burden our family with our passing.

The Black community has been subjected to hundreds of years of discrimination and exploitation financially by banks and insurance companies. We have been overcharged and undervalued such that we were denied access to insurance for our lives but allowed just to pay for our death policies, in many cases costing more than that would be paid out.

One guaranteed bet we can make is that we won’t leave this life alive. We can invest in ourselves and our families by securing life insurance that offers a benefit that can support our families when needed by providing a platform for stabilization or a platform for jumping to a higher position. Life insurance has a great capacity for impact if we choose to make the investment on ourselves for our families or loved ones. Yet, we know that money without instructions often will simply evaporate.

Estate planning provides the opportunity to give the money that is left behind instructions. We want our loved ones to be prudent with the resources that are left behind. Grief and greed are two of the strongest emotions that we deal with during highly emotional times. Strategically planning allows for planning that will guard against the devastation that can occur and manipulation that may be employed.

I agree that homeownership is one of the best ways in which we can increase net worth. We all have to live somewhere. Homeownership allows us to make an investment that enables us to continue to live where we choose, control the costs and simultaneously creating an appreciating asset. It also provides a home for our children and our children’s children that will provide a base of financial and emotional support. Yet, we have seen what happens when there is no strategic plan. We have seen family houses that are sold because one of the heirs wants his or her portion. We have seen abandonment because everyone was responsible but no one took responsibility.

Estate planning is such a significant part of financial planning. Wisdom is the application of knowledge. When we know better, we do better. It’s not just enough to learn the distinctive components of financial literacy. It’s vital to create a comprehensive plan to build for the future. Let’s leave an inheritance to our children’s children.

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