Historically, marginalized communities did not have the privilege of being educated on asset protection or generational wealth. This history plays a critical role in why less than ONE THIRD of Black and Hispanic American Households have an estate plan.
According to the 2021 Wills and Estate Planning Study from caring.com, the most common reason these communities have neglected estate planning is that they feel like, “I don’t have enough assets to leave anyone”. This misconception has left many estates vulnerable to asset value dissipation and has contributed to the loss of family generational wealth. In other words, not planning hurts those you would like to benefit.
A comprehensive estate plan will ensure that your loved ones benefit fully from your life time of hard work. It ensures that upon your death, the people you designate receive your wealth.
There are four essential estate plan documents:
- The Last Will and Testament
- Durable Power of Attorney
- Health Care Power of Attorney
- Advanced Directive
The Last Will and Testament describes how you would like your assets distributed upon your death. This document is the one we all tend to think about when we talk about an estate plan. It lays out that $100 can go to Aunt Jackie, the house can go to the children equally, etc. The Last Will and Testament can also provide Guardianship and Trust protection for minor children (under the age of 18).
The Durable Power of Attorney identifies the person you trust to make legal and financial decisions if you are unable to do so due to advanced age, dementia, medical condition, mental illness, or a life altering injury or accident. You should pick a financially savvy adult that you trust to make decisions. The Durable Power of Attorney can be triggered upon any of these incidents, or it can be effective immediately.
The Healthcare Power of Attorney allows you to choose a person you trust to make decisions about your health, medical, and residential needs should you be unable to do so due to advanced age, dementia, medical condition, mental illness, a life altering injury or accident. The person selected will have this power upon the occurrence of any of the conditions named.
The Advanced Directive or Living Will states your desire to not have your life prolonged by extraordinary measure if you have a terminal or incurable illness or if you are in a persistent vegetative state. This document is not a “Do Not Resuscitate”, which is done by your medical provider.
Remember, it is extremely important for ALL adults to have these four essential documents in place. It is also important to note that Estate Planning is not a “one and done” situation. Every few years you will want to review and update your estate planning documents; especially if life events have changed the nature of your assets such as buying a new home, getting married, having children, or getting divorced.
Most families’ greatest asset and largest piece of generational wealth is their home. Estate Planning is vital to the proper and efficient transfer of generational wealth. Failure to have a proper legal estate plan in place could result in a loss of 40%-50% of your estate value, i.e. generational wealth. While the number of Blacks and Hispanics with estate plans is slowly trending in the right direction, there is more work to be done.
Schedule a consultation with an Estate Planning Attorney who can help you protect what is yours and see that your wishes are fulfilled.
Cameron Crump, Estate Planning Attorney
The McIntosh Law Firm, P.C.