An estimated $68 trillion will be transferred from U.S. households to heirs and charities over the next 25 years, and Black Americans might miss out on this transfer.
According to an analysis of high net worth and ultra-high net worth markets by consulting group Cerulli Associates, by 2047 trillions will have been passed down to future generations, and due to a lag in estate planning in Black America, Blacks might not actively transfer wealth to their descendants.
While white families had a median wealth of $188,200, compared to $24,100 for Black families, according to the Federal Reserve’s 2019 Survey of Consumer Finances, what wealth Blacks do have may never get passed down.
Overall, 33 percent of U.S. adults have a will, according to Caring.com’s 2021 wills and estate planning survey. But just 27.5 percent of Black Americans have one. This means more than 70 percent of Black Americans don’t have a will or estate planning of any kind.
Experts urge more Americans, especially Black Americans, to plan for life after death.
Black Americans could miss out on the most significant wealth transfer in history, Brickson Diamond, co-founder of Black House Foundation, a nonprofit that creates new opportunities for the Black community in the film world, told CNBC.
By not having a will that indicates who should receive your property and assets, “so many families lose their family access and ownership of land,” he said.
Everyone over the age of 18 should make a plan, Portia Wood, a Los Angeles-based estate attorney who focuses on Black, Latino and LGBTQ families, told CNBC.
“The misconception that age is a factor, that you’re supposed to be old to do estate planning, or you’re supposed to be wealthy to do estate planning is just wrong,” she said.
According to Wood, it’s important to take a step toward creating a plan, which can help create generational wealth, she said.
“You can’t afford not to,” Wood said. “The economic cost is just too great to do nothing.”
Read “Not Just for the Rich: Five Estate Planning Tools Everyone Needs” here.