The Impact of Estate Planning on Passing Down Generational Wealth in African American Communities

October 19, 2022 - Stephanie Darville

A will is a legal document used to distribute your assets or appoint guardians for minor children after your death, or in the event that you are incapacitated. Most people prefer not to think about dying; therefore, never think about writing a will. On the other hand, some people think that they have many years ahead of them; therefore, writing a will is not something on their short-term to-do list. Wills are the most frequently used method for wealth transfer. Therefore, having a will is important, because it allows you to have control over your wealth after your death–– i.e. your car, house, land, money, etc. Wills also allow you to control who will care for your children after you die. Increasing in popularity, living wills also allow you to distribute your assets and grant guardianship for your children, taking effect the moment, you become incapacitated.

Imagine your 1960 Ford Mustang, that you loved so much, probably worth hundreds of thousands, going to a distant cousin that you’ve never met? Wouldn’t you prefer that your beloved Ford Mustang go to the person that you want it to go to; someone who would love and care for it as much as you did? A will ensures that happens. Without a will, the probate court decides how to distribute your assets. In most cases that become messy, depending on the method the court uses to distribute the property. And sometimes, the last person you would give any of your property too may end up receiving a sizeable portion. Furthermore, probate courts don’t consider domestic partners, same sex marriages, or non-traditional. families to fall under surviving spouse and dependents.1 As a result, your partner, or even same-sex spouse, would not receive the assets that you would’ve wanted them to have.

In America, 68 percent of Americans die intestate –– without a will.2 Furthermore, among the small percentage of Americans who do have a will –– 32 percent; only 27.5 percent of those people who do have a will, are African American.3 Why are African Americans less inclined to have will, even those with a sizeable estate and the ability to pass along significant wealth?

Firstly, some African Americans fear death, or even the thought of death. Therefore, because the conversation naturally revolves around what happens after they die, they avoid the mere discussion of a making a will.4 However, this fear only represents a small percentage – about 12 percent, of what discourages African Americans from creating a will.5 One of the biggest reasons African Americans are discouraged from making a will is the misconception that you need to have significant assets to create a will.6 However, interestingly, even African Americans with significant assets –– Chadwick Boseman, Prince, and the likes, died intestate. This begs to question whether African Americans truly believe that they need to have significant assets to create a will or whether the real belief is a subconscious one –– wills are only for “old, rich, white men.”7 The historical precedent surrounding wills is that estates were only passed down generations to white men. This precedent has been engrained systematically, not only by denying African Americans the assets that rightly belonged to them during slavery, but also brainwashing African Americans into believing that passing down generational wealth is a process not accessible to them.8 Evidently, the mentality of slavery still haunts many African Americans, even during the probate process.

Additionally, African Americans have difficulty accessing the resources to make a will. In 2019, a survey showed that the median income of white families were $188,200 compared to black families, with a median of $24,100.9 With most estate planning attorneys charging by the hour, many black families find that the advantages of having a will cannot justify the cost for creating one. A properly drafted will that withstands a contest can cost around $10,000, an amount that is typically out of budget for many black families.10 Finally, although additional reasons can be listed, another commonly cited reason that African Americans die without a will is that they are miseducated on when a will should be made. Many African Americans maintain the position that they are either too young or that a will is something that is made during old age or on their death bed.11 This couldn’t be further from the truth, especially considering wills require a certain level of capacity to be considered valid. Waiting until the last moment, may be a little too late.

The impact of many African Americans dying intestate is the failure to develop generational wealth. So how can we encourage not only the creation of wills altogether but in the African American community?

1. Education: one must know about a will before one can create a will. What this means is, black communities need to be informed on their access to the same instruments used to distribute their assets as their counterparts, no matter how big or small. It is not necessarily knowing what a will is that creates this disproportional effect, but rather not knowing who is able to create a will.

2. Access: Creating a non-contestable will can be extremely costly, too costly to justify the benefits of having a will in the first place. Legal aid societies, law school clinics, like the Legal Access Clinic, and pro bono services, could improve access in the African American community. In the moment, it may be argued that these organizations can assist with more pressing issues, like child custody, divorce, domestic violence, or housing; however, realizing the importance of wealth distribution and asset control, and providing these services, can make a difference in reducing the disparity gap.

My experience with the Legal Access Clinic so far has made it evident that we can have a dramatic impact in the African American community by not only providing services to help with detrimental issues, but also provide an opportunity for positive actions, like wealth distribution through wills.

Notes:

1. https://theconversation.com/68-of-americans-do-not-have-a-will-137686

2. Id.

3. https://www.cnbc.com/2022/02/07/70-percent-plus-of-black-americans-dont-have-wills-why-estate-plans-are-key.html

4. https://www.consumerreports.org/money/estate-planning/why-people-of-color-are-less-likely-to-have-a-will-a6742820557/

5. Id.

6. Id.

7. https://www.justvanilla.com/blog/traditional-estate-planning-has-an-inclusivity-problem-heres-how-to-fix-it

8. Id.

9. https://www.cnbc.com/2022/02/07/70-percent-plus-of-black-americans-dont-have-wills-why-estate-plans-are-key.html

10. https://www.justvanilla.com/blog/traditional-estate-planning-has-an-inclusivity-problem-heres-how-to-fix-it

11. Id.