Prince, Aretha Franklin, and Chadwick Boseman are all well-known Black Americans who died without wills. Today, 70% of Black Americans also don’t have wills in place, reports CNBC.
This can cause a loss of land, assets, and so much more for Black individuals and communities, and is causing the greatest detriment to wealth transfer in history, according to Brickson Diamond, co-founder of Black House Foundation, a nonprofit that works to create new opportunities for the Black community in film.
There is set to be a wealth transfer of $68 trillion within the U.S. over the course of the next 25 years as wealth is passed to heirs and charities, reports Cerulli Associates. A lack of a plan can mean costs of between 3%-8% in probate alone if the inheritance is uncontested, while costs can soar if it is contested.
It’s an alarming issue, particularly considering the fact that the median wealth of Black Americans is less than 15% of that of white Americans; white families had a median wealth of $188,200 versus $24,100 for Black families, as reported in a 2019 Survey of Consumer Finances. The median wealth of Black households was estimated to hit zero by 2053, but because of the impacts of the pandemic, the decline is happening now.
“We are in a state of emergency now,” said Portia Wood, an estate attorney that focuses on Black, Latino, and LGBTQ families in California. “It is not a 2053 number anymore; it is here.”
Aside from a will, Black Americans need to decide their powers of attorney and how their assets will be distributed upon death. This can be done either directly or in trusts, which hold onto assets for a beneficiary. A trust is something that Diamond recommends for those with complex financial situations or higher asset levels.
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