Presented by Melodee Armstrong,

Attorney and Dallas Municipal Court Judge

Goals of Presentation 1. Do you need a will? 2. Contents of a Will 3. Other estate planning documents such as powers of

attorney and directives 4. Other legal factors that affect wealth such as marital

status, crime, charity 5. Basic tools to create, preserve or promote wealth

Need an Estate to Plan before you Can Plan your Estate Estimated that consumption of the $ lasts with certain

groups for a certain amount of time. Jews -30 days. Whites - 2 weeks. Blacks - 7 hours. Can’t plan an estate if no estate to plan.

Blacks as a nation George Fraser of the National Sales Network suggests

that: “Blacks contribute $920 billion to the U.S. economy. If

we were a nation, we’d be the 18th-richest. But our money goes in one direction — away from us. “

He adds, “Family net worth among blacks is about $6,000, compared with $60,000 for white families”

Do you need a will? 2007, Harris Interactive® research study

found that over a 3 year period, 55% of all adult Americans do not have a will.

2 in 3 African American adults (66% percent) do not have wills

3 in 4 Hispanic American adults (75% percent) do not have wills

Reasons for No Estate Planning Docs: 1. Fear. 2. Not a Sexy Topic. “Now, little mama, man come here to die didn’t he? That’s the contract he signed when he was born – ‘I hereby degree that one of these days I’m go’n lay down these old bones.’ Now all he can do while he’s here is do something and do that thing good.”

- Joe Pittman, “Autobiography of Miss Jane Pittman”

Other Reasons for Not Having Basic Estate Planning Documents Procrastination Don’t want to think about it. Don’t think you need it. (Too young,

won’t die soon, nothing in your estate). Cost. All about the Benjamins baby.

Begin With an Exercise 1. Write down at least 5 things you cherish most –

regardless of monetary value - things you value, worked hard for, inherited, etc.

2. Write at least 5 people or organizations you treasure, most.

3. Identify at least 3 people you think are responsible, good common sense and trustworthy, regardless if related to you.

Why the exercise? 1. Identify your bounty and assets

2. Identify potential beneficiaries

3. Identify potential executors and agents

What are your bounty and assets? Homes/condos or investment real estate Vehicles Art collection & home furnishings (maybe a special

porcelain or china piece passed down from your great or great great grandparents)

Tools that Firestone or home builders would die for NFL or Negro Leagues jersey collection Organs Royalties on an oil lease Pet family member

Some of you may have at

least 1 of these

Bounty & Assets(continued) - The Digital Estate You've heard about the digital afterlife. According to

the RocketLawyer survey, 63% of respondents do not know what happens to their digital assets when they die.

These are your online bank accounts, email accounts, iPod and all its music, blogs, photo albums, YouTube account, Instagram and foursquare account, PayPal account, e-book collection, Gilt Group subscription

How many included their Facebook , Twitter Shutterfly or Snapfish accounts in the Exercise #1?

Digital Estate Planning Tip: Make a list of your accounts and

passwords and print it out.

Keep in secure place with estate planning documents

Sanitize your accounts

Organ donation- included as part of our estates because:

Minorities are often lower on the list for bone marrow, heart, liver, other transplants

Organ donation (cont’d) African Americans, Asians and Latinos are three

times more likely than Whites to suffer from end-stage kidney disease, often because of high blood pressure, diabetes, and other conditions that can damage the kidneys.

More than 1/3 of the 80,000 people on the national waiting list for a kidney transplant are African American.

Individuals awaiting organ transplant have a better chance of receiving one if there are large numbers of donors from their racial/ethnic background.

Compatible blood types and tissue markers—critical qualities for donor/recipient matching—are more likely to be found among members of the same ethnicity

Organ donation (cont’d)

Why you need a will and basic estate planning documents 1. Do you care who gets your property if you die?

2. Do you care who gets your money if you die?

3. Do you care who is appointed guardian of your minor children if you die?

4. Did your financial planner say you needed to plan? 5. Do you personally know 30 state legislators? Default.

Examples of the hot mess created when there is no Will Jimi Hendrix died in 1970.

The battle over his estate lasted more than 30 years: Hendrix left no will.

To complicate matters, the estates of musicians and other artists often continue to generate money long after their deaths. (M Jackson, Whitney H.)

Bob Marley Like Jimi, Bob “No Woman

No Cry” Marley’s estate continues to generate significant revenue despite his death in 1981.

Also like Hendrix, Bob Marley died intestate even though he knew he had cancer and lingered for nearly 8 months.

His estate, worth a reported $30 million, had dozens of claimants.

Abraham Lincoln Abraham Lincoln, the 16th president of the US, was the first president to be assassinated (1865)

and

the first president to die intestate—despite being a lawyer himself.

Summary of Will Primer: 1. Gather documents such as: employment benefits statements,

life insurance policies, deeds to real property, partnership and business agreements , retirement plans, divorce papers, premarital agreements, last two years of income tax returns.

2. Identify your significant assets 3. Identify all immediate heirs by name or indicate no children. 4. State who inherits what and in what % or share. After you

make your first choices, choose alternate beneficiaries, in case your first choices do not survive you.

5. Name executors 6. Sign Self-proving affidavit in presence of notary and two

disinterested witnesses. Notary and witnesses sign.

Executors and Agents Every will must name an executor to carry out the terms of the

will. Be sure to let that person know you want them to serve as the executor so it's not a surprise.

“Executor” = Trusted but glorified secretary. They gather your estate and do everything your will says. If you are giving your Steve Harvey suits or the 1979 Dodge Dart to your nephew, Executor makes sure that happens and obtains a release of distribution and prepares necessary documents as proof.

Select 2 -3 as alternatives in case one should be disqualified

Agents Identify trusted and reliable decision makers to carry

out your health or financial/money choices for you if you are incapacitated.

Executors and Agents do not have to be related to you.

Use agents for General Power of Attorney and Living Will/Medical Power of Attorney

Guardians for Children: Identify a guardian for your children. If your children

are under 18, decide who you want to raise them in the event that you and their other parent can't.

Select someone who can manage your children's property.

Can be included in your Will or in a separate document.

Like Computer Software, Update

Update your Will every 2-3 years or after significant events –

Children, grandchildren, divorce, death, no longer like so and so, employment changes, etc.

Update, update, update.

Revocation and Witnesses Will and all other documents can be revoked and

revised at any time.

Witnesses and their signatures needed for all.

For your Will, notary signature also required along with self-proving affidavit.

Witnesses should be unrelated to you and not inheriting from you.

Failure to Update your Will – James Brown, an Original Pants Stuffer

Brown’s Failure to Update = Will contest James Brown died 12/25/2006. At least 9 children, 3 ex-

wives, and a woman who may or may not have been his widow.

“Widow,” Tomi Rae Hynie, was technically still married to another man when she married James Brown (although that marriage was later annulled, reportedly).

Hynie also had a child named James Brown, II, which may or may not have been fathered by Brown.

To complicate the estate, Brown never updated his will or trust during his five-year marriage to Hynie. Did he intend to include her or his new son?

Will Contest Family members often contest Wills under the legal

theories of mental incompetency or undue influence. Brown’s family members attacked his Will and trusts

with these theories. They also challenged Brown’s wishes and speculated

about his intent because he failed to update his documents: a. after his marriage and b. after the birth of his son.

Tips from The Sex Machine for Estate Planning

Plan early and while healthy to eliminate questions of incompetence or improper influence.

Update the documents right way after life events like marriages and the birth of new children

Know and identify your spouse. Identify all of your children. If necessary, call Rickey Smiley for Paternity Test Tuesday if

test is not in your budget and some question of fatherhood. Update, update, update. Like Microsoft windows or any

other operating system. Update every 2-3 years.

Other Basic Estate Planning Tools 1. General Power of Attorney – trigger now or later. Temporarily

illness or absence. Broad or narrow and all except medical. Steve Jobs.

2. Living Wills/Medical Powers of Attorney -

3. Directive To Physician – experimental or not, terminal, life sustaining measures or no. Fred Baron.

4. Anatomical Gifts – done discreetly with DPS

5. Do Not Resuscitate – done with Medical Examiner’s office

6. Guardian of Children – especially if not married

Other Legal Factors that Affect Your Estate & Your Wealth

Crime and Wealth Dissolution

Status - Married, Divorce, Single

Charity and Wealth

Crime and Wealth Dissolution 1. Jesse Jackson, Sr.

2. Kwame Kilpatrick

3. Cousin Ray Ray or Cody

4. Neighborhood and Community

Jesse Jackson, Jr. Jesse Jackson who

bought himself a gold plated $40k Rolex with $750k campaign funds. $10k in children’s furniture. He and wife plead guilty.

Jesse’s estate essentially dissolved. Forfeiture.

Despite the Mayo Clinic, things Jesse Forfeited:

Bruce Lee memorabilia Martin Luther The King Jr. memorabilia: $10k worth

purchased 2008 Football signed by American presidents: $5,000,

purchased 2/12/09 Michael Jackson memorabilia: $20,000 worth

purchased 2009

Forfeiture (cont’d): Malcolm X memorabilia: $2,200, purchased 2/8/10 Jimi Hendrix memorabilia: $2,775, purchased 3/13/10 Michael Jackson Fedora: $4,600, purchased 3/20/10 Mink cashmere cap: $800, purchased 11/14/09 Black and red cashmere cape: $1,500 purchased

11/14/09 Mink reversible parka: $1,200 purchased 11/14/09 Estate is gone. Wealth is dissolved.

Kwame Kilpatrick Convicted of federal charges including racketeering,

extortion, bid rigging, etc. Kwame’s father convicted too. Family criminal

enterprise. Kwame faces at least 20 years in prison.

Kwame Kilpatrick

Forfeit: 2008 guilty plea resulted in: pay restitution to the city of $1 million; to surrender his law license, forfeit his state pension to the city and be barred from elective office for five years; and to serve 120 days in the Wayne County jail, followed by five years’ probation.

After legal fees, seized accounts and forfeiture of assets and cash, not much of an estate left to plan.

One juror said, “It’s just a tragedy, a Detroit tragedy.”

Ray Ray or Cody – The Average Bear and Everyday Crime Crime, like the poor, will always be with us. But how do we try to eliminate it or minimize it’s

wealth dissolving effects on us?

Ray Ray or Cody The family drug abuser, crack head, thief, embezzler or

gun toter. One crime affects all. When arrested, you get the call. Bail. Get up, go to a bond company, post bail. Retain counsel. Attorney’s fees. Expert and

Investigator fees. Fees deplete the savings, the CD that was maturing, take a 2nd mortgage on property which immediately decreases your net worth.

Ray Ray or Cody (Continued) If not dismissed, either probation or deferred. Monthly

reporting, supervision fees, classes that cost $, UAs, and Community Service hours that take away from work hours.

For the family member who paid the fees or assisted Ray Ray or Cody, if you drain your account because of alleged criminal conduct that could have been avoided, what does your estate look like then?

Simple Crimes But Complex Consequences Texas - Simple Assault FV conviction – can be a threat,

shove, or fight with someone you dated, lived with or a family member.

Is nearly impossible to remove from your record, save a pardon from the Texas Governor.

Employers will see it. Lenders will see it. Apartment or homeowners will see it. It tells the world when you walk into a room, a fight might break out.

If you are a peace officer or want to be, may not be able to carry weapon or ammunition for 5 years.

Crimes to your estate Home invasions, leaving the garage up, not setting

your home alarm but you pay $40/month for it, internet hacking into financial accounts, being lax with passwords, no anti-spyware or anti-malware on your computers or personal devices

Crimes to Your Estate

If you own business or property, crime rates around the business or home affect value. Before you buy, obtain crime rates from DPD.

Lower value decreases net worth. Decreased net worth = less $ loaned by a bank to open or expand wealth creating side hustle.

If crack head breaks into your business or rental property, they steal copper lines to resell or steal the appliances.

Crime, Wealth Dissolution and Tips: Dallas’ recycling centers changed policies to sell scrap

metal.

Enforce your policies: keep garage doors closed unless you are working, lights on timers.

Set the alarm if paying $40/month and on your car, be

alert and vigilant and report crimes that occur

More tips because when does crime pay? Teach grown men to read or give skills to the

disenfranchised. Reduce their need for crime.

Do what you can for yourself, your family, friends and community and avoid crime and preserve your wealth.

OJ Simpson. Martha Stewart. Criminal Defense attorneys.

Marital Status and Wealth Marriage is a legal institution that affects wealth. Rutgers University’s 2007 State of Our Unions reports: People who are inclined to create wealth are the ones

most likely to get and stay married. How does marriage promote wealth?

“The Marriage Bonus” = two can live more cheaply than one.

One home, one mortgage payment. One set of regular living expenses, instead of two sets.

Marriage (cont’d) Married couples receive more work-related and

government-provided support, like tax breaks.

Receive help and support from two sets of in-laws Receive help from two sets of friends.

Roommate, spouse, partner, whatever you call it. Fact: One household is cheaper to maintain than two.

Each partner can specialize in his or her own skills, develop them as strengths and depend on his or her partner to cover the areas of weakness.

Individual talents of a couple complement each other,

like in finance and math, home building, or creativity and management.

Some traits of Millionaire Couples Dr. Stanley Thomas authored “The Millionaire Mind”.

Chapter 6 deals with Millionaire Couples. Millionaire husbands and wives found their spouses

physically attractive when they first met them, but were drawn to them more by: their future spouse’s intelligence, sincerity, cheerfulness, reliability and affectionate nature.

By contrast, non-millionaire men considered physical attractiveness as the overwhelming basis of attraction early in their relationships.

More traits and habits Over 80% of both spouses have college degrees or

higher. They run sensible households from a financial

perspective. Have shoes repaired or resoled rather than buy new

ones (70%) Have furniture reupholstered or refinished rather than

buying new (48%) Adjust their thermostats to save electricity costs (57%)

Traits of Millionaire Couples Use a grocery list when they shop (71%); Almonds.

Samples.

Use discount stores or coupons when shopping (49%); More than 53% have not moved in ten years.

Marriage and Wealth Creation Millionaire couples select mates with qualities that are

beneficial to wealth creation. These traits can apply to my “shackers” out there as

well as same sex couples. As same sex marriages gain US constitutional

protection, same sex couples of all races will also be in an even better position to generate greater wealth.

So, if not “boo’d” up, look around the room for a like minded wealth creator.

Single or Divorced & Wealth The same traits of married couples apply. You have one

check. Thus, side hustles, etc. Happily Divorced - rebuilding and preserving wealth.

Divorced so you could get on the wealth path.

Update and amend all policies and beneficiaries on retirement investment accounts.

Update and revise Will

Use Pre-marital agreements to preserve and sustain wealth.

Single or Divorced & Wealth Separate estates are funded with $ generated by

the Separate Estate. Create entity of LLC etc. for business or real estate

to promote asset protection. Use separate bank account for Separate property.

Once married or shacking, do not commingle. Texas is a Community Property state. Income derived or generated during marriage is

considered community.

Single or Divorced & Wealth The community will have a legal claim to tracing

any community funds that were used to enhance your Separate Property

Tracing claim applies to what Separate Property earned.

Pre-marital agreement can state that all income generated from the SP is also considered SP.

Future Income from your job or primary occupation is community and you will share some of it in the event of divorce.

Basic Tools for Single or Divorced Wealth Creators Pre-Marital Agreements

Corporate entities such as LLCs and preserving separate property status

These are great tools for divorced and single persons to preserve wealth.

Single or Divorced Wealth Creator’s Mantra: BYOB Certainly invest in and

build new enterprise, real estate or business venture with new boo.

Attitude is BYOB (business, benjamins, “Ball So Hard” attitude).

Snoop and Dre, Biggie. Regardless of zip code, it’s all about the…

Charity and Wealth Creation God could have easily distributed wealth evenly to all

people. Money is how most people measure their self-worth. Because we invest so much time, energy, and labor into

earning money, it represents the very energy of life itself.

Contributing your money to charity expresses the deepest form of giving to refine the world.

Charity, Tax Breaks and Wealth The nonpartisan Tax Policy Center and the Urban

Institute Center on Nonprofits and Philanthropy found that the fiscal cliff deal is likely to increase giving by $3.3 billion relative to the 2012 law.

Because the top marginal tax rate is going up to 39.6 percent from 36 percent on households earning more than $450,000, those households can now deduct their charitable contributions at a higher rate.

In other words, the top earners now reduce their tax liability by 39.6 cents for every dollar donated — rather than the 35 cents under the old rate.

This results in a “7 percent decrease in the after-tax cost of giving for taxpayers in that tax bracket,” according to the report.

If not in the $450,000 tax bracket, the Empower Series is trying to get you there and beyond.

Charity, Tax Breaks and Wealth

Charitable Giving Wealthy tend to leave financial legacy of giving. In

December 2011, I took a 30 day holiday to Middle East, Israel and Turkey. The Old City in Jerusalem is divided into 4 quadrants - Armenian, Christian, Jewish and Muslim.

Everyone lives peaceably in the Old City. Media. The nicest, newest, cleanest quadrant was Jewish. It

evoked affluence. The names of its benefactors from NYC and Maryland prominently displayed in building.

Millions of dollars per millionaire couple. Buffet. Gates

Locally, Klyde Warren park built with $20 million of Kelcy Warren’s $, Margaret Hunt Hill Bridge.

Charity can build wealth, particularly for middle class

income earners. When you give $, you get noticed. You get on “the list.”

People invite you more.

Charitable Giving

Charitable Board Memberships Board memberships, especially paid boards, foster

relationships that can turn into years of a business relationship for you.

Get recruited through Board involvement. Soon, Board members want to do business with you or recommend you for a position.

A Reuters analysis of the 2009 Spencer Stuart Board Index shows that at some companies, being a corporate director is pretty good work if you can get it.

According to the report, the best-paid directors are at Intuitive Surgical Ltd , a robotic health care equipment maker.

It paid its seven non-employee directors an average of $697,000 in 2008 for five corporate meetings.

Michelle Leder, the editor of Footnoted.org, a corporate watchdog web site said, “If you had a part-time job that was paying you $300,000, $400,000, $500,000 a year, and you didn't have a lot of work to do, would you rock that boat?

Charitable Board Memberships

Boards are usually comprised of the gifted and talented who volunteer services out of sense of compassion and generosity.

You will find like minded people on the board who like to be around other talented people, just like you.

Find what you like, help shape the organization, help touch lives.

Innumerable business opportunities sit at the board room table with you.

Charitable Board Memberships

Guaranteed to see them at least once/month to nurture relationship and serve as reminder of need to work together when possible. Put your hustle on and court them.

With charity comes recognition, bigger deals, deeper professional connections and access to more financial gain and wealth.

I said I would play more golf this year, but I also might

want to find me one of these good Boards.

Charitable Board Memberships

At first basic estate planning and wealth creation may seem like this: Identify your prized

assets Identify all immediate

heirs Identify executors Write how you want it to

go and to whom Identify agents to make

decisions for you via POAs

You began your Estate Planning with the Earlier Exercise Answers to the Exercise =

preparing estate documents and tools.

Use LLCs, etc., separate accounts, pre-marital agreements & the traits of the millionaire couple to create wealth.

Preparation becomes as laid back as this.

Easier to Complete and You Can Tell Your Family & Friends Now, you know why you

need a Will & how to gather info to prepare all of the docs.

Have additional tools and habits to preserve or create wealth.

You can have this relaxed attitude & share info with friends.

Thank you!