Estate planning can be a sensitive and daunting process. I know it was for my partner and me when we finalized our legacy plan this year. I felt a flood of emotions thinking about potentially not being in my 2-year-old daughter’s life and having everything I’ve worked for in my 35 years be redistributed.
When we think of establishing generational wealth, we may think about things like investing, real estate, building a family business, and life insurance. But estate planning is critical to accumulating this wealth as well because it establishes a clear and concrete plan about what happens to your assets.
Making these decisions can feel heavy and morbid. Nevertheless, estate planning is essential, especially for Black households to build and grow their wealth through generations.
[Estate planning is] a solid way for us to pass our assets on to our child and end the cycle of systemic inequalities for this generation of our family—and beyond.
White households have 10 times the average net worth than Black households, and nearly 1 in 5 Black families have zero or negative net worth.
The vast majority of Black households haven’t been able to build wealth like their white counterparts for several reasons—the most prominent reason being structural racism. This staggering wealth gap only continues to contribute to the racial economic disparities that Black and brown households endure.
That’s why my wife and I are so committed to estate planning: It’s a solid way for us to pass our assets on to our child and end the cycle of systemic inequalities for this generation of our family—and beyond.
Do I Qualify for Estate Planning?
Now, you may be questioning whether you even have an estate to plan for, and the answer is yes.
No matter how modest your wealth may be, it’s important to have a plan to protect your loved ones should you be incapacitated or die.
That may sound overwhelming, but it can be easy when you have guidance and support from the right estate planning lawyer or advisor.
What Is Estate Planning?
An estate characterizes the sum or net worth of an individual. This includes all your possessions, properties, land, cash, investments, and more.
It’s crucial to develop a plan for your assets to maintain absolute control over them while ensuring they’re taxed as little as possible. That’s where estate planning comes in.
Estate planning is the process of making plans for your estate by establishing a legal financial plan for your assets ahead of your death or incapacitation. This can look like:
- naming beneficiaries,
- leaving detailed instructions about the care you wish to receive if you’re not able to make decisions for yourself, and
- naming a guardian for your children and pets.
Who Needs Estate Planning?
Estate planning is for everyone, whether you’re married or single, with or without children, straight or LGBTQIA+, old or young.
If you’re ever unable to make decisions for yourself, a solid estate plan will clearly lay out your desires in a legal format.
Having an estate plan can also potentially reduce or eliminate the taxes and legal fees that come with passing on your belongings to a designated beneficiary like a child or partner.
In fact, if you don’t have a plan in place, your state’s probate laws will dictate how your property and wealth are managed in court, which, trust me, you don’t want. (Large portions of your estate can be skimmed off to pay legal fees for this process.)
Why Is Estate Planning Key to Generational Wealth?
When it comes to building generational wealth, estate planning offers a streamlined way to ensure your loved ones inherit the wealth you’ve built over your lifetime.
It clearly defines your final wishes, and allows you the flexibility to set up a financial plan for generations to come.
And again, estate planning is especially necessary for our community. As estate-planning lawyer Lori Anne Douglass told mater mea, “We used to be the assets. Now we have assets.” And those assets need to be protected.
Due to the legacy of discrimination we’ve experienced, we’ve been less likely to undertake estate planning for generations. Our family’s homes and land have been stolen from us, and our hold on wealth has been shaky—we or someone we know could be one emergency away from living paycheck to paycheck.
By creating an estate plan, Black families can begin to participate in the accumulation of wealth and build wealth for generations to come.
How Do You Do Estate Planning and What Does it Cost?
Estate planning doesn’t have to be complicated, especially when you work with a company that has simplified the task and made it affordable.
Many people think that you have to pay thousands of dollars and hire a law firm to draw up the relevant documents for you. However, working with an online estate planning company like Trust & Will will yield the same results at a much more affordable rate. Some plans start at as low as $39.
Of course, it will take some work on your end. You’ll need to:
- take inventory of all of your assets,
- establish your beneficiaries and/or identify who will direct your estate, and
- think about tough topics, like end-of-life planning and healthcare directives.
But once you have that in order, Trust & Will will take it from there. With Trust & Will, you can also opt to work one-on-one with a lawyer to iron out the details of your individual estate plan.
How Long Does It Take?
Depending on the size of your estate and the specifications you’d like to take, legacy planning can vary from individual to individual.
When working with a lawyer’s office, it typically takes 3-6 weeks. (And their time is your money.) With Trust & Will, it typically takes no more than a few hours from start to finish, once you’ve compiled all the essential information you need.
Without an estate plan, it may be up to the courts to decide how to redistribute your wealth or who will act as guardians of your children. This can lengthen the process of reassigning your wealth to your loved ones and giving your child a sense of stability. In fact, without an established estate plan, it could take months to years depending on the circumstance of your estate, the state you reside in, and any challenges brought to your property and wealth.
Family estate planning is an absolute necessity for Black and brown families. Through this process of building wealth and making a plan for it when we’re gone, we can begin to heal from the disproportionate economic inequalities that we face.
Do you have additional questions about building generational wealth? Need more guidance in planning your estate? You can connect with someone from Trust & Will here—use the offer code MATERMEA to get 10% off any estate plan at checkout.