Episode 121: Estate Planning and Trusts

A Conversation with the Jacksonville Urban League and the NAACP

Why Estate Planning Is Lacking In African-American Households

Why Estate Planning Is Lacking In African-American Households

The lack of estate planning (or a desire to make one) among African-American households is one of the most serious and consistent issues I see as a CFP® professional, amongst both my clients and my prospects.

So why are African Americans not finding value in estate planning? This is a question that I have been struggling with my entire career. Is it because we (mistakenly) feel that only millionaires need to worry about estate planning?

Obviously not — because even when they’re millionaires, many black people avoid the topic. Aretha Franklin, Bob Marley, Jimi Hendrix, Prince, James Brown and even Martin Luther King, Jr. all died intestate.

Chances are your net worth isn’t close to the estimated $300 million dollars that Prince’s was at his untimely death. Nonetheless, I would like to pound the table and say that this topic is even more important for you.

I believe that there are three myths surrounding the topic that need debunking.

Myth #1: I’m Not Rich, So I Don’t Need An Estate Plan

This is probably the biggest myth. But in actuality, how much money you have should be one of the last reasons you sit down with an estate attorney.

Estate planning comes with a huge range of benefits, and three of the most important have nothing to do with your net worth:

  • Privacy regarding your estate’s contents
  • Agency over the decision-making processes that affect your assets and your family
  • An expedited probate, which can make things move quickly and easily for those you leave behind

Depending on your state, the average probate process takes approximately 6-9 months. That is, with a properly executed estate plan.

But without the correct documentation in place, things get dicey. Just last month, I took on two new clients, both minors dealing with an unexpected inheritance. In both cases, probate took longer than 9 months, and even though the surviving parent was named guardian, the judge appointed the law firm as a conservator. Avoid this mess by spelling it out while you can!

Myth #2: I am Not Married and I Have No Kids

This type of scenario can be deceptively tricky, but the main question you should be asking yourself is, “Do I have assets?”

If you do, rest assured: somebody in your family is going to want them. And without proper ownership titling, those folks may end up fighting over the little things you felt weren’t important. I’ve seen far too many families torn apart because heirs can’t agree — and eventually, the assets get seized anyway because the family could not agree to equal terms.

Myth #3: Cost Is Too High or Any Attorney Can Do It

How much does the average estate plan cost? The answer depends on numerous factors including location and complexity, but one can expect to pay anywhere from $800 – $3,500 or more. Unlike tax savings or investment increases, whose value is tangible, it can be difficult to convince clients that estate planning is worth spending money on. (And, of course, testimonials from folks with excellent estate plans are pretty hard to come by, since they’ve already passed away when they’re executed.)

Some respond to the estate planning sticker shock by seeking the “homeboy hook-up” — that is, having your attorney friend whip up a will for you. And sure, it might save you some change… but very few attorneys are experts in every area of the law.

Technically, your cardiothoracic surgeon could perform brain surgery. She covered it in med school. But would you let her? Estate planning is no different: you want a seasoned veteran on your side, who specializes in these tricky estate issues.

Don’t Miss Out on Crucial Financial Protection

Black Americans have overcome far too much to cheat themselves out of the final step that can assure their families live in peace and security. As a community, it’s time to step up to the plate and start taking estate planning seriously — regardless of who you are or how much money is in your bank account.

Why Black folks should normalize having an estate plan

Research shows fewer Black Americans have a will or estate plan for when they die compared to white Americans, and the high-profile estate cases of Chadwick Boseman and John Singleton  have made headlines. Attorney Lori Douglass, Esq. explains why it’s essential to plan for your family’s needs following your death.

    It’s not easy to think about life after death, but it’s essential. The high-profile estate cases of public figures like Chadwick Boseman and John Singleton show that success doesn’t prevent a legal struggle over dividing assets.

    A recent survey by Caring.com revealed that more than 70 percent of Black Americans in 2021 didn’t have an estate plan. According to CNBC’s survey analysis, more Black people had a will in 2021 than they did in 2020, which could indicate a growing awareness that wills are necessary.

    But what if you’re not rich? Is it essential to have an estate plan?

    Couple Meeting With Male Financial Advisor Relationship Counsellor In Office
    It is important that Black Americans have wills and estate plans in place, said estate attorney Lori Douglass.

    “People always say, ‘Oh, I don’t have anything.’ That’s not true,” said estate attorney Lori Douglass. “If you have a bank account, if you own tangible personal property, if you have retirement or employee benefits, if you own a home, and most importantly, if you have children, you have assets you must plan for. And if you don’t, you die and the state just takes over the plan for you.”

    Continued Douglass, “I think people have a difficult time talking about planning for their assets because we really have just started to acquire assets within the last generation or so. It’s a difficult conversation.”

    Lacking an estate plan, Douglass stressed, puts families in a position that’s more uncomfortable than just having a post-death conversation upfront. “That’s a disastrous plan because people have, you know, several children and they all have different desires or different expectations, different financial situations,” she explained.

    The recent killing of rap artist PnB Rock brought to light how significant others and children are impacted by unexpected deaths. Stephanie Sibounheuang, PnB Rock’s girlfriend and mother of his daughter, shared on an Instagram LIVE that her boyfriend had no life insurance or will.

    “We didn’t have nothing set up. We’re so young, we didn’t plan on death,” she said. “I don’t get no death benefits. I don’t get nothing.”

    If a last will or estate planning seems intimidating, there are online services such as Legal Zoom that provide easy-to-fill templates and even include legal services in the package. But Douglass cautioned that there may still be risks to a DIY estate plan.

    “I say everyone should see a lawyer for a will or trust or an estate plan,” she said. “That’s because you’re going to be dead when that will is needed. So if you’ve done it yourself or you have it in your drawer or you had friends … it may not be done properly. And now you’re not here to say what was supposed to happen.”

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