In Florida, where the community development nonprofit Wealth Watchers is based, a Lady Bird Deed – a deed that says who will inherit the property if the owner dies but where the owner retains full rights (including sales rights) while living – is a legal way to transfer wealth. One state over in Georgia, which Wealth Watchers also serves, this type of deed is not legal. The discrepancy illustrates just how hard it can be to get a handle on transferring wealth to the next generation, a subject that’s a priority for Wealth Watchers, NeighborWorks® America and other network organizations.
Building Coalitions for Generational Wealth will be the subject of a symposium where experts and practitioners will examine ways to preserve financial wealth and pass it on to the next generation. The symposium takes place Aug. 27 in New Orleans during the NeighborWorks Training Institute. Carrie Davis, executive director of Wealth Watchers, will serve on one of the panels at the symposium, which
is sponsored by JPMorganChase.
“Estate planning has always been on our radar because it relates to heirs’ property,” Davis said recently, referring to the term given to what can happen to a property when the owner dies without a will and would-be heirs have informal ownership without an official title.
That leaves the property and related wealth in jeopardy, something Davis sees over and over again, especially in times of crisis. If there’s a disaster, for instance, FEMA can’t help without proof of ownership, she explained. If an unofficial owner needs to refinance or wants to borrow equity, the bank that holds the mortgage can’t do it.
“Property is one of the most significant wealth builders,” Davis said. And heirs’ property is one of the most significant ways families can be stripped of that wealth.
The solutions, Davis said, are twofold. One solution is prevention, which means making sure families have an estate plan in place.
August, which is National Make-A-Will Month, brings attention to the need for that essential part of the planning, something Wealth Watchers has done for years. The organization has a program called Wills on Wheels, where staff go into the communities with a small RV to provide assistance creating wills.
It can be a difficult subject to broach, but Davis said it can be easier to bring up when you frame it: You’re not talking about death, she said. You’re talking about leaving a legacy. And that’s something people want no matter what their income level.
“How do you build wealth for future generations? How do you ensure you create a legacy for your family? Using a home as vehicle to build wealth for now and for future generations – the way you protect it is by having an estate plan.”
The other part solution is mitigation, which for Davis means working with organizations that clear titles, with other nonprofits, with legal aid and law schools and more. “We can’t do this work alone. It requires partnerships,” Davis said.
Heirs’ property challenges often require legal expertise, says Laura Ospina Jaramillo, NeighborWorks’ senior manager of Financial Capability. Housing organizations and nonprofits frequently carry much of the work of helping families through estate planning, and connecting them with that expertise. “Financial coaches and housing counselors are uniquely positioned to guide families through difficult but necessary conversations about preserving their legacy and to stress the importance of planning ahead, before it is too late.”
Wealth Watchers’ focus has been in Jacksonville, where data shows more of an heirs’ property issue than in other locations in their coverage area. “Over the years we’re making a dent,” Davis said. “We focus on estate planning in our counseling and education program. When we talk about closing on a property, we also make sure they speak to an attorney about estate planning.”
Wealth Watchers was also part of a NeighborWorks cohort that met, with support from TD Bank, to advance property inheritance solutions. Some of the organizations were in the planning stages; others were experts.
Peer learning will continue at the NeighborWorks Training Institute symposium, addressing and exploring different strategies, which can be key even when states have different practices governing property inheritance.
“It’s important to hear what’s going on across the country,” Davis said. Molly Barackman-Eder, director of Financial Capability for the NeighborWorks network, has been listening to the nationwide conversation. “One of the most exciting parts of the peer learning process is watching people rapidly replicate great ideas from across the country,” she said. “We had several people who heard about Philadelphia’s approach say ‘we need to get a version of the Pew study for our city!’ and others taking note of Massachusetts’ Consumer Alerts for homeowners from their Registry of Deeds. Our network organizations take that information and run with it in their communities.”
The daylong symposium will be held at 8:30 a.m. CT during the NeighborWorks Training Institute.
