Prudential and GoodTrust Unite: Empowering Black Families for Generational Wealth

Mar-01 2024

The impact that estate planning has on generational wealth within Black communities cannot be overstated. Although 33% of Black adults recognize the importance of having a will, less than half of that group has taken the step to create one. This hesitancy contributes to the broader trend that Black families are less likely to engage in estate planning compared to their White counterparts. Consumer Reports highlights this gap showing that 77% of Black Americans lack a will as opposed to 61% of White Americans. This disparity may be due to several factors including misconceptions surrounding the importance of estate planning, a historical mistrust toward institutional systems, and a lack of estate planning discussion among family members.

Similarly, while 56% of Black Americans own life insurance, according to a 2021 study by LIMRA the coverage is often less than their White counterparts, leaving a considerable protection gap. This gap is even more concerning given the higher health risks and economic challenges faced by the Black community.

GoodTrust’s Founder/CEO Rikard Steiber states “I believe everyone should be entitled to estate planning, regardless of wealth or status. Prudential's commitment to financial wellness aligns perfectly with our mission and GoodTrust is proud to work alongside them. Together, we will help families protect what matters most to them”.

The disparity in estate planning and life insurance coverage within Black communities underscores a broader issue of financial wellness and preparedness. Recognizing this critical need, Prudential and GoodTrust have come together with a united mission to democratize estate planning.

“Prudential shares Good Trust’s passion for helping families protect their loved ones and making estate planning simple and easy to understand,” says Prudential Individual Life Insurance president, Salene Hitchcock-Gear. “This partnership demonstrates our deep commitment to expanding access to financial security and protection for all.”

Here’s How This Partnership Can Help Build Generational Wealth:

1 - Wealth Preservation

One of the first steps to building generational wealth is, of course, preserving it. By selecting a beneficiary, you can detail exactly what you own and who you’d like to leave it to. Otherwise, the beneficiary decision is in the hands of the state in which you live, and it may not go to those you wish.

2 - Seamless Asset Transfer

A common misconception of estate planning is that you need to have a lot of assets and property to need a plan. All of your assets are valuable and worthy of being passed down to future generations and having a comprehensive plan can make the difference between complicated family disputes and a smooth transfer of assets.

3 - Heir Education

Part of building generational wealth is educating existing and future generations on how to make, keep, and transfer wealth. As you develop your estate plan or designate beneficiaries for your life insurance, you provide your heirs with a foundation for financial literacy, setting them on the path to a secure future.

4 - Safeguarding Real Estate

Misconceptions about asset inheritance can lead to significant losses, as seen in the 20th century when African Americans lost around 90% of their farmland due to unclear regulations and lack of planning (ProPublica). In reality, not having a will can put your property’s ownership in jeopardy. Ensure your biggest asset, your home, passes down to your family without complications, create a plan.

5 - Health Care Directive

Estate planning isn’t just about assets, it also involves indicating your wishes should a medical emergency arise. Having a Health Care Directive helps take the decision-making pressure of your loved ones and can avoid unnecessary expenses based on your preferences.

Choosing the Right Estate Plan:

A comprehensive estate plan might include a will and/or trust, and directives such as a Power of Attorney and a Health Care Directive. Understanding the differences and benefits of each component is crucial.

Learn more about the difference between a will and trust, here.

Learn more about the benefits of a trust, here.

The Prudential Insurance Company of America, Newark, NJ and its affiliates.