Abstract

Excerpted From: Peyton Farley and Lynne Marie Kohm, Strategic Use of Trusts to Dismantle Racism: Building Trust Through Trusts to Preserve and Empower Black Wealth, 48 Thurgood Marshall Law Review 269 (2024) (168 Footnotes) (Full Document)

How can the use of a trust be an intentional tool of antiracism? Could the strategic use of a trust for wealth preservation be a significant avenue to dismantling racial prejudice? This article attempts to answer those questions by proffering that the strategic use of trusts could and should be a key aspect of wealth preservation and transfer for people of color.

Estate planning has never been a popular ordeal for most Americans, as just “33 percent of U.S. adults have a will.” In this context, an even lower “27.5 percent of Black Americans have one.” That may not seem like a tremendous disparity, but it is incongruous even if by mere numbers. Analysts are concerned that this dearth in having a wealth transfer strategy or an estate plan may result in Black Americans missing out on the largest wealth transfer in history that will take place over the next few decades. Assets can be lost or wasted by a lack of financial planning to protect and grow those assets, or by relying by default on government rules for transfer of that wealth. Estate planning for Black wealth transfer is essential.

Using a family trust to preserve and transfer wealth over generations could, in our view, be a perfect tool for everyone, particularly people of color, to build and protect family wealth. And along the way this article asserts that it just might also build personal trust in a legal system that has not been wholly trustworthy. Building on previous work in empowering and preserving Black wealth, this article tackles the important cultural and legal question of why people of color generally do not plan for their wealth preservation and transfer, and how remedying that problem can build wealth and help to end racism.

Section I considers the depth of this problem over American history tracing the often systematic and intentional demise of Black wealth over the decades. Section II examines the myths that many people, including people of color, offer for not pursuing estate planning, and the reasons why a plan never materializes. Section III then busts those myths by offering solutions specifically focused on the strategic use of trusts for building, preserving, and empowering black wealth particularly.

Because preservation, protection, growth, and transfer of wealth empowers individuals and families, remedying the problem of Black wealth transfer with the strategic use of family trusts just may be a proving ground for dismantling racism.

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In addition to creating the plan, and having all the knowledge and access this article argues for, working the plan is essential. A trust is the most strategic method for achieving the goal of “an orderly arrangement of parts of an overall design or objective.” The strategic use of a family trust is the key to creating, preserving, and transferring wealth.

Using a trust can be an intentional tool of antiracism. This article proffered that the strategic use of a trust for wealth preservation can indeed be a significant avenue to dismantling racial prejudice. Strategically using a family trust protects Black family wealth for generational transfer and is a tremendous start to dismantling racism.

J.D. Regent 2022; B.A. Hampton U. 2017.

Professor, and John Brown McCarty Professor of Family Law, Regent University School of Law; J.D. Syracuse, B.A. Albany.