How The Estate Planning Industry Is Evolving — And What Still Needs To Change

I get it. Estate planning isn’t an inherently sexy topic. In fact, if you look at it through the lens that not much has really changed over the past several centuries, it may even come off as boring. The reality, though, is nothing could be further from the truth.

Some people view the mundane as an opportunity for real change. Too often, when industries are long-stagnant and without reinvention or innovation, a mindset is created that resists any change at all. That’s how you know it’s time for serious disruption.

So, where does our industry go from here? First, a quick look back to see how it even got here in the first place.

A Brief Look At Estate Planning Through The Ages

Wills have been used since ancient times. In ancient Greece and Rome, a simple document served to ensure possessions were passed down to the appropriate heir (typically a male). The process was remarkably similar to how it is now: witnesses and signatures, and the creator had to be of sound mind.

Beyond a history clearly traced back to Greece and Rome, there have been other examples of “wills” from early times. There are even ancient religious texts defining and laying out succession plans.

Fast forward to the past couple hundred years, and there was, shamefully, a time in our country when the very idea of even being able to have an estate to pass down legally was a right reserved for only a group of select, elite people. Historically, the right to own property was denied to Black, Indigenous and People of Color (BIPOC), and the very idea of access to estate planning wasn’t even a consideration.

A Fundamental Lack Of Education And Awareness

Unfortunately, the ripple effect of that long-standing inequality reached far past the time of laws simply changing. What remained glaringly lacking for a large part of society — even until just recently — was easy access to education and information about the importance of estate planning. Underserved communities, particularly those who haven’t had equitable access to property and other basic rights in the past, should have the same opportunities and awareness about creating a powerful estate plan that protects both them and their families.

It’s easy to call out the stigma that’s associated with who needs estate planning. And it’s an unfortunate (not to mention wildly untrue) assumption that only a small, well-defined, well-off group of society actually needs to build and maintain an estate plan. This misconception is incredibly detrimental.

Where Does Estate Planning Go From Here?

As the cofounder of an online estate planning company, I believe the industry is ready for new life. It needs more exposure. The goal should be to change the way people view estate planning to make it accessible, understandable and, above all, affordable. To do that, we must work to reframe the estate planning conversation:

It’s not boring; it’s essential.

It’s not a chore; it’s a responsibility.

It’s not stressful; it’s empowering.

It’s not financially untouchable; it’s within your reach.

But it’s not just about how people see it. It’s also about who should invest in it. The category of who needs to take the time to create a solid estate plan includes any adult with a job or career, parents raising children, person who has bought property or real estate, and person who owns assets or has savings.

Why Has Change Been So Slow To Arrive?

Unfortunately, there really isn’t one answer to why estate planning hasn’t progressed more over the years (or centuries). It could be that people don’t want to spend time planning for the inevitable, so it might be easier just to accept the system that’s been in place forever.

Maybe it’s denial. Facing our own mortality is hard. Some people want to avoid the topic entirely. They may refuse to put a plan in place. It might, in fact, even be a coping mechanism.

Maybe it’s fear of change within the industry. The traditional system of estate planning through attorneys and complex plans is expensive. Is there a sector that wants to keep it that way? Perhaps.

Maybe it’s a lack of motivation or fear. Let’s face it; there’s a perception out there that estate planning is going to cost you, both in time and in money. That can be scary. But in my experience, what most people think they know about estate planning is actually inaccurate.

These days, innovative, creative, effective and affordable planning is a real option. These changes have been driven by online estate planning, which reinvents how people think, talk and go about estate planning.

Closing The Gap

Of the many ways estate planning can be beneficial, perhaps one of the biggest opportunities it offers is the potential to close or drastically reduce the millennial generation’s overwhelming wealth gap. This gap is something that certain studies show is directly related to ethnic and racial disparities. One study in particular by the Federal Reserve Bank of St. Louis found some pretty outrageous stats on the median wealth of older millennials in 2019:

• White families: $88,000

• Hispanic families: $22,000

• Black families: $5,000

These numbers don’t just reflect the difficulty some families face in terms of covering the cost of basic, fundamental day-to-day needs, either. They also can shed light on the challenges of planning for long-term financial sustainability. Add in the fact that there wasn’t a large disparity in terms of income when looking at these three groups, and it suggests something else is at play.

When it comes to estate planning, education is key. Everyone deserves to have a deep understanding of why and how estate planning is so crucial. And if enough people are educated and therefore take steps to create an estate plan that works? We may just take a few more steps toward closing the wealth gap that’s crippling a huge portion of our society. I think that’s pretty well worth the effort.

Source: https://www.forbes.com/sites/forbesfinancecouncil/2021/05/04/how-the-estate-planning-industry-is-evolving—and-what-still-needs-to-change/?sh=32c3bcf1caa3

Stafford Thorpe provides financial services to clients so we can protect and grow their wealth over time.

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