Bob Marley, Prince and Aretha Franklin are just a few examples of celebrities who famously died without a will, leaving close family members and some family members they didn’t know they had to fight it out for the assets they left behind. And although millions of dollars may not be involved, there are plenty of cases of average Americans who have left their loved ones in similar situations. According to a 2021 survey by Caring.com, only 27 percent of African Americans have a will, which is lower than the 33 percent overall average. “I haven’t gotten around to it,” was cited as the most common reason for not having legal end-of-life documents in place.
You may not think you have enough worth putting in a legal document, but wills are not just for the rich and famous. In fact, not having a clear end-of-life plan can have an even more devastating impact on average American families. Establishing your plan can prevent surviving friends and family members from getting into nasty disputes over assets that are left behind. And it can keep you from losing property that has been in the family for generations. “If you haven’t prepared to pay the taxes and get the mortgage covered... the home will at best fall into disrepair and at worst fall out of the hands of the family,” said Brickson Diamond who is on the board of Gentreo, an online estate-planning platform.
If you think you can wait until you’re retired to start planning for what happens to your belongings after you’re gone, think again. It’s never too early to start putting your plan on paper. “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,” said Portia Wood, a Los Angeles estate attorney who focuses on Black, Latino and LGBTQ families. She advises families to get help from an attorney who understands the unique issues Black people face.
Your final will and testament will outline how you want your assets distributed when you die and assign guardians to children you have who are under 18. But advisors suggest people also have written documentation of power of attorney to establish who will make medical and financial decisions in the event you are unable to make them yourself. There should also be an advanced directive that clearly states your wishes on whether or not you would want medical treatments such as intubation used to keep you alive. You can also have a trust which allows a third party to hold assets for your beneficiaries rather than distributing them directly.
Wood favors trusts over wills as the best way to build generational wealth, because they protect your assets and potentially save time and court fees. But says it’s important to have some clear plan in place. “No matter the route you chose, it’s important to take a step toward creating a plan, which can help create generational wealth. You can’t afford not to,” she said. “The economic cost is just too great to do nothing.”