The Lack of Estate Planning In African-American Households
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.
A lack of an estate plan (or a desire to make one) is one of the most serious and consistent issues I see as a CFP® professional today, amongst both my clients and my prospects. I believe that there are three myths surrounding the topic that need debunking.
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!
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.
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.
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.
If you would like to discuss your estate planning options then we invite you to contact us. We’ll be happy to chat with you about your planning options.