Estate planning is a key component of passing on generational wealth. Yet for Black Americans, the ability to pass on generational wealth has been a struggle.
Data from the U.S. Census and independent study findings reveal that Black Americans lag behind other racial groups in their ability to create and pass on wealth to future generations.
According to the Federal Reserve System’s 2019 Survey of Consumer Finances, the median wealth of white families was eight times that of Black American families.
The numbers reveal that Black Americans are not planning for future generations adequately. What can Black Americans do to begin closing the ever-growing wealth gap?
“Stop passing debt,” Martina Jimenez Sperry, executive director, market director, wealth, JPMorgan Chase Bank, N.A, said at a recent Finurah Wealth Summit. “Leave assets.”
“I see in my industry being in financial services [that] in our communities we keep passing on debt, liabilities. People die and they don’t even have enough money to be buried..we have to stop doing this,” she stressed. “No one wants to lose their loved one and inherit their liabilities, their debt.”
Money management and financial literacy were some of the issues discussed at the summit, which also included Diamond Diaspora Media CEO, Neil Nelson, CEO of Raydar LLC, Ray Daniels, and Jimenez Sperry. The event took place on April 23 at the Russell Innovation Center for Entrepreneurs in Atlanta.
Jimenez Sperry, along with other experts in the estate and financial planning industries, weighed in on how Black Americans can begin to develop wealth for future generations.
1. Purchase Adequate Individual Life Insurance
One way to ensure that you are not passing on debt to your family is to purchase a life insurance policy. Often life insurance is considered a tool to pay for a burial. Instead, it should be considered an asset that can support family members after the death of a loved one.
Read full story at Finurah here.