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On Why Every Black Woman Needs a Plan to Protect Her Wealth: An Interview with Lori Douglass

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Building our personal, economic and political power by getting educated and organized, that’s what we’re all about at BlackHer!

This week, we were thrilled to catch up with Lori Anne Douglass, Esq., a partner at Douglass, Rademacher & Brown, LLP.  Douglass specializes in estate planning, business succession planning, estate administration and estate litigation.

Me:  Lori, how did you develop your expertise in estate planning?

Lori: When I left the New York County District Attorney’s office in 1993, I wanted to specialize in a practice area to assist the African-American community.  I went to a session held by the New York State Bar on estate planning.  I was shocked because there were about 250 attorneys in the room but there were no Black lawyers at the training.  This was 1993, and I thought, I could build a practice in this area to serve the African-American community.  So, I did just that.

I practiced on my own until 1999 and, after separating from my husband and with a two-year-old son, I went back to working for a law firm. I became an associate in the trusts and estates department in a small firm, moved to a larger firm in 2002 and in 2007, joined Moses & Singer, LLP as a partner. I was the first Black partner since the firm opened in 1919.  By then, I was an expert in estate planning and estate administration or “the law of the dead.”  Now, after years of “Big Law” practice, including big fees for my clients, I’m back running my own firm, where we strive to provide our clients with “Big Law” quality service at “Regular People” cost.

Me: We talk a lot about the importance of building wealth at BlackHer.  Why is estate planning such an important activity for Black women, in particular?

Lori: Black women are money managers.  We’re focused on funding retirement, having savings, and owning real property.  In fact, in my experience, even with heterosexual couples who are married and both working, it’s the woman who is the most focused on and driving estate planning for three reasons.  First, men think they are immortal!  Second, the wife knows that she is likely to outlive her husband and will need to be prepared.  Finally, Black women are caretakers. Even Black women who are single are often caring for parents or siblings.

Me: I’m sure this is the question that you get asked a lot but does everyone really need an estate plan?  What if you are a young sister and are just starting out? What if you have no assets?

Lori: Every person needs an estate plan because when you die someone else must collect your assets, pay your debts and distribute out that which is left.

Me: Got it!

Lori: Everyone must have some plan even if that is only to designate a beneficiary on bank accounts, employer benefits, retirement accounts and life insurance. For example, a young woman may only have a bank account or a 401K through her employer and if she died, she may want those assets to go to a sibling or nieces or nephews. If there is no plan, the assets will automatically go to the surviving parents.

In another scenario, what if a mother wants to leave assets to her children? If the children are under 18, the children cannot collect the assets in their own right. A legal guardian would have to be appointed by a court unless there was a plan that left the minor children’s inheritance in trust.

Finally, when a person dies, her debts do not die with her. One may die with unpaid student loans but just having purchased real property. If the value of the property is in excess of the mortgage, the sole estate asset would have to be sold and the net proceeds of sale used to pay the student loans before any balance could be distributed to her loved ones. Moreover, whenever a person dies with debt, someone has to take control of her assets, pay her debts and distribute that which remains (if anything).

Me: That’s so interesting.  I think we forget that estate planning isn’t just about the distribution of wealth.  It’s also about the distribution, if you will, of debt.

Lori: Yes, and you have to think carefully about your estate planning if you don’t want to needlessly burden family members. Once the client expresses exactly what she envisions for her estate planning, we can accurately reflect her desires on paper. For example, most mothers love their children equally and often start estate planning with the idea of leaving everything in equal shares to their adult children. But once they really think about their children’s different financial needs, maturity, and perhaps, most importantly, the likelihood that an adult child might be sued (i.e., a child who is a married doctor has a greater likelihood of being sued for divorce and malpractice than a child who is a single musician), that mother often recognizes that more complex planning is needed such as the use of trusts or distributing liquid assets such as cash to some children and illiquid assets such as real property to others.

Me: Is that one of the problems you’ve encountered most?  Fighting between heirs.

Lori: Yes!

Me: So, what would you tell BlackHer readers who want to build a plan and protect their assets but don’t know where to start?

Lori: First, in addition to estate planning you need to do disability planning.  You need the proper medical and financial directives in place if you are disabled and cannot make your own medical and financial decisions.

Most every state has state-approved forms available to download, including:

  • A healthcare proxy
  • A financial power of attorney
  • A living will

Anyone can download these and execute them in accordance with her state’s law.  It’s an important first step and one that should be taken TODAY.

Also, mothers should not forget that their babies are not babies under the law once they turn 18. Make sure to have adult children execute medical and financial directives when turning 18 so that a parent can assist if the “adult” child becomes disabled (especially valuable if the child is hospitalized while in college).  Once your child is 18 or a legal adult, healthcare providers can’t tell you anything about his or her medical condition, unless you have a healthcare proxy in place.

Me: Thank you.  That is very helpful advice.  Is there anything else we should do?

Lori: Yes.  Check all your beneficiary designations and check the designations for your spouse too!  I’ve seen cases where a husband put his mom as his beneficiary years ago and has never updated it.

Once you’ve taken these steps and taken stock of what you can do on your own, you can call a lawyer who specializes in trusts and estates for additional help.

Me: Lori, it’s clear that you have a lot of passion for your work.  Where did you get it from?  Who are your Black women sheros?  Who inspires you?

Lori: Like most of your readers, I’m probably most inspired by the women (and men!) in my family.  My mother was a psychiatric social worker.  She taught me a lot about human behavior that has helped me in my practice.  And my father was a judge.  I followed in his footsteps.  Finally, both my grandmothers were smart, tough and ahead of their time.  For example, when I was in high school and told my grandmother I was not doing too well in my typing class, she told me “don’t learn to type.”

Me: Why’s that?

Lori: She said, “If you can’t type, they can’t make you the secretary!”

Me: I love it!  Smart.

Lori: I come from a long line of powerful Black women and it’s a fascinating story. My grandmother’s grandmother, Lucy Shirley, who was a slave had a will.  Her husband was abusive and she disinherited him. She left him $1 and willed the rest of her assets to her children.

Me: That’s amazing!

Lori: Yes.  I tell folks that I followed in her footsteps!

Me: Lori, let me ask you the Miracle Question.  You go to sleep tonight and wake up and it’s June 6, 2019, and a miracle has occurred for Black women. What happened?

Lori: All African Americans have done their estate planning.  I’ve seen the numbers.  If we all did that, in one generation, we’d be the wealthiest minority in the country.

And, as it relates to Black women, we’ve achieved something close to parity in the workplace. Black women are getting “jacked” in the workplace now.  Employers are happy to exploit our labor.  Achieving wage parity and properly managing and transferring our wealth, that would be the miracle.  It would be transformational for the next generation and ensure that Black folks are on our way to becoming WEALTHY in America.

Jocelyn

 

 

 

 

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