Estate Planning for Black Millennials - What, Why and How

Estate planning does not have any minimum age and wealth requirement. As a millennial, estate planning is probably so far down in your priority list now, if it made it to the list in the first place. But if you want to continue to cultivate black wealth into future generations, there’s no better time to consider estate planning than now.

What is Estate Planning?

To put it simply, estate planning is the process of arranging and planning in advance who gets your estate if you get into an accident or die. It’s not enough to tell a person “hey man, have my car if ever something happens to me.” Your estate plan has to be legal.

There are three common reasons why most millennials don't have estate plans yet.

1. They think they don't have sufficient assets. Again, there’s no wealth requirement when it comes to estate planning. Everyone has sufficient asset – your gadgets, savings account, house, insurances and/or other personal possessions.

2. They don't wanna think about death or being disabled. Nobody wants to think of death, especially at such a young age. But in this world, there are only three inevitable things – death, change, and taxes. Whether you want to think about it or not, it happens.

3. They are not sure who to talk to and how they can get one. Estate planning is more common to established Generation X adults or the baby boomers. It is still uncommon for the millennials that there might be some who don’t have any idea about it at all.

So, let’s discuss what estate plan is, why you black millennials need to consider it and how do you get one.

So what does an estate plan entail?

A basic estate plan should include a will, power of attorney, life insurance, and disability insurance.

• A will is a written testament or a legal document that set forth your wishes on who get to take your properties upon your death.

Here are some assets that you may want to include in your will.

Tangible property – This includes your house, car, gadgets, furniture/appliances, art pieces, jewelry, and other possessions.

Savings, insurances, and online accounts – Who will be able to access your bank account? Who gets your account details for your online banking or other financial apps?

Your children – You have to choose someone who can take care of your child or children in case you’re not available, especially if they’re still minors.

Health – Specify someone you can trust with your life to make medical and matter-of-life decisions for you should you be unable to do so.

Social media accounts – Yes, you can and should designate a person who can deactivate or keep your social media accounts as well.

• A power of attorney allows you to legally appoint a person to manage your legal or financial affairs in case you’re unable to do so.
• Your life insurance ensures there will still be a sum of money left to your loved ones in case of death. It serves as a protection against financial loss.
• A disability insurance provides you with a fixed sum of income in case of illness or disability caused by an accident that leaves you unable to work.

When it comes to personal finance growth, you should plan for these events and get all these necessary documents regardless of how old you are and how much stuff you have.

Why Black Millenials Need to Consider Estate Planning

When you die without an estate plan, not you or anyone from your family gets to decide how your assets are distributed. The intestacy (dying without a will) laws of your state get to determine who earns your property. And what if the only available heir happens to be someone you would have not chosen if you had the chance?

There are also rare cases when you have no living relatives who can be a legal heir, your properties will go to the state. This includes every cent and property you were able to accumulate through the years. Do you want to allocate funds to friends or specific communities and charities? Friends-- and even cousins-- are nowhere near the intestacy laws.

More than 50% of the African American population die without a will. Majority of black Americans die without properly distributing their wealth to the next generation. According to a recent study, the wealth of black Americans will fall to zero by 2053. If we don’t do anything to help our generational wealth, falling to zero might not be too far from being a possibility.

Estate Planning How-To:

For an estate plan, it is best to reach out to your legal advisor or an attorney on how you can get one. But here’s the gist of how you can get a basic estate plan.

• Start by making a list of your current assets, including all your tangible property, savings accounts, digital assets, investments, and insurance policies.
• Draft your will and hire an attorney to make things legal. Your attorney will also provide all other necessary documents.
• Name an executor, a family member or friend you trust to be in charge of distributing your wealth. You may also choose this person to have the power of attorney.
• Update your will at least once every year. Keep it up-to-date in case of major changes in your life – marriage, birth, death, if you have new assets you want to add or if you just want to replace someone or something from your will.

 

When you consider estate planning, it is inevitable to think of death or accidents. I get it, nobody really wants to think of their own mortality. The context of death is hardly a go-to topic of conversations. But when it comes to your personal finance and the growth of wealth of the next generation, death should not be a taboo topic anymore.

You are never too young to consider estate planning. For more information on this topic, join the Black Abundance Community now and let’s start a discussion!