It’s February! I know this month means a lot of different things to a lot of different people, but one thing I absolutely appreciate about February is how we get to celebrate African American culture and the community particularly during this time of the year.
Yep, I’m talking about February as Black History Month!
This celebration is very close to my heart, especially as a mother of two biracial children (proud and loving it!). We celebrate Black history all. the. time. But I'm ALWAYS up for a good excuse to celebrate a little bit more.
And of course, what better way to join in on the commemoration than by dedicating this post to the beautiful community!
“Is estate planning different for Black Americans?”
This isn't a simple answer. It's kind of "yes," but also kind of "no."
How it's the same: Yes, there are consistent planning documents, strategies, and goals for all Americans, regardless of race, gender, wealth, education level, and so on.
How it's different: Well, a few ways. Here are the big ones in my opinion (and I'll discuss these a bit more below).
1. The startling--and sobering--statistic is that more than 70% of Black Americans (NOT a made-up figure) do not have an will. That's right. More than 70% of Black Americans do NOT have a will (according to a 2019 Caring.com study).
2. There is a very real, very impactful history in our country that should NOT be ignored while considering and crafting an estate plan for Black individuals and families. There can even be true differences in how some Black families hold their assets (such as heirs' property). If you identify as Black (or another minority), prioritize pursuing your estate planning with a culturally competent estate planning attorney. This process can be a vulnerable one, and you want someone you feel 110% comfortable with throughout every single step.
“Why is this so important anyway?”
You could write a book on this (and, in fact, know an amazing attorney friend doing just that).
It's important to acknowledge that this--this estate planning gap--IS part of Black history. Too long, the systems that allow for growing and transfer of wealth, for protecting families when you're gone, and even for having your wishes honored in times of emergencies have been controlled by, well, those with control (read: rich, white men).
If you've been following along for a while, you'll know that I tend to have soapbox moments around my "estate planning is not exclusively for the wealthy" mantra. As long as you care about your and your family’s future and security (you should!), as well as your hard-earned assets (this, too!), then an estate plan is something you must majorly consider.
Why does wealth matter?
I will be the first person to tell you that there's more to life than money. But I am also a realist. Economic wealth helps cut away many barriers such as those associated with obtaining an education, launching a career, buying a home, starting a business, receiving quality healthcare, and on and on. Economic wealth helps disempowered become empowered as they gain a voice, influence, and entry to the places (figurative and literal) where they need to be to create change.
African Americans used to be financially powerless. Now, we’re talking about multi-generational wealth and more than a trillion dollars of Black spending power. YOU have power. YOU have assets. But there's still a gap--a wealth gap, a planning gap (and many more gaps).
Without a doubt, an estate plan can help further Black financial empowerment. Not only would estate planning protect your family and your power to transfer wealth to them and later generations, but it would also remarkably minimize costs in time to come. After all, you wouldn’t want to lose so much of your hard-earned properties to probate, taxes, and other expenses, would you? I'm not just saying this because I'm an estate planning attorney. Check out this report from the Brookings Institute. Huge takeaway---"Economists Darrick Hamilton and Sandy Darity conclude that inheritances and other intergenerational transfers 'account for more of the racial wealth gap than any other demographic and socioeconomic indicators.'" (emphasis is mine)
Translation: The biggest factor in the racial wealth gap between is inheritances.
Estate planning in the Black community is not as prevalent as it should be, and it’s time to change that.
“Estate planning is all new to me and my family–I don’t want to delve into the unknown!”
I totally get this.
Yet again, history might have a hand in this.
As this Harvard University article points out,
After the end of slavery and the failed Reconstruction, Jim Crow laws, which existed till the late 1960s, virtually ensured that Black Americans in the South would not be able to accumulate or to pass on wealth. And through the Great Migration and after, African Americans faced employment, housing, and educational discrimination across the country. After World War II many white veterans were able to take advantage of programs like the GI Bill to buy homes — the largest asset held by most American families — with low-interest loans, but lenders often unfairly turned down Black applicants, shutting those vets out of the benefit.
This is not a "the past is in the past" situation--these historical conditions (and many present day conditions!) are actively influencing and impacting Black wealth, wealth transfer, and estate planning, as we saw with the Brookings Institute report above and the Caring.com statistic (remember, more than 70% of Black Americans don't have a will!).
So how are these conditions contributing to feelings of "not knowing enough"?
If estate planning isn't something that is (statistically speaking) talked about in Black families, supported and encouraged in the Black community, and made easily accessible, these societal conditions are ENORMOUS contributors. And lack of knowledge, first-hand experience, and appropriate resources for estate planning only perpetuate this cycle!
(Let's be clear, these gaps aren't solely tied to financial resources either--the estate planning and wealth gaps persist even in higher income brackets!)
Throughout my work (this blog, my interactions with clients, sharing resources with family and friends), I'm aiming just a little bit to change this conversation--to open the dialogue, share the resources, and help build a new wave.
I would love to be with you as you start your estate planning process, but I also believe SO strongly in this that if you feel you'd be better with another attorney I'm happy to help get you there. Click here to connect with me, or go ahead and sign up for a free virtual consultation by heading to this link. If you'd simply like a referral, I'm here to help.
I am looking forward to hearing from you!