I am proud to share about the Deeds of Faith initiative of the Association of Black Estate Planning Professionals, Inc., (ABEPP). ABEPP is a nonprofit with the mission to bridge the racial wealth gap. ABEPP is a collaborative economic empowerment organization with strategic partners also committed to building wealth in the Black community. Some of the partners include National Bankers Association, National African American Insurance Association, Association of Black Foundation Executives, U.S. Black Chambers, National Association of Black Accountants among others.
The Deeds of Faith initiative recognizes the loss of wealth and land that the Black community experiences through the probate process. While strategically planning the transfer can build wealth from one generation to the next, the lack of planning creates a hemorrhage of assets from one generation to the next.
The Deeds of Faith initiative underscores that when we know better we do better. Statistics represent that only 30% of Black adults have a last will and testament. That means 70% of the people who pass away require the court system to determine who will be the beneficiary of their assets. The greater amount of assets passing through the court system the lesser amount the family will receive as an inheritance because court costs are based upon the value of the assets that are being passed.
The Deeds of Faith initiative works with houses of faith committed to economic empowerment by providing monthly webinar education and resources on estate planning and financial information. The collaboration between ABEPP and the house of faith is focused on inverting the statistic from 30% to 70% with intentionality. The sessions will provide information on Money Management, Investing, Real Estate Investing, Entrepreneurship, Credit Repair, Charitable Giving and many others.
It is exciting that the Maryland Volunteer Lawyers and the DC Legal Services for the Elderly are partnering to support this important initiative. The commitment for low-income residents to preserve their legacies is strong.
The impact of this initiative is powerful. With a community base of congregants of 5,000 people in the house of faith. Strategically moving from 30% of congregants with a plan to 70% creates a 2,000 family impact. 2,000 additional families will be able to give to their faith-based and community organizations.
The community legacy impact is staggering. The median property value in Washington, D.C., in 2021 is $210,000. If 2,000 families are able to pass on this asset strategically within their families, the net worth of the community impact would be $420,000,000!
Just as the impact is amazing for positive net worth growth and retention, the impact is definitely negatively affecting the asset and wealth growth for the Black community. The result on real property is significant. There is substantial land loss in the community as a result of lack of planning.
Many Black families have ownership interest in “heir property.” Heir property is land that has been owned by a family but not probated when the named owner has passed away. As a result, the law provides ownership interest to those who would be able to inherit based upon the laws of “intestacy,” the formula that is applied when there is no will. There are many cases when there are houses with dozens of interested parties from previous generations. This creates a property with many owners.
Multiple owners can cause significant issues. In order to do major renovations on the property all owners would have to sign. In order to apply for any grants or relief in case of damage, all owners would have to sign. Property taxes still would have to be paid. This creates the frustration for those people who take the burden of paying taxes without the true benefit of ownership for the property. As a result, land is sold at tax auctions and the asset is lost to the family.
Strategic planning and follow-through may be challenging. Of course, prevention is better than rehabilitation.