Trusting Trusts:
Debunking Misconceptions and Recognizing Challenges to Trust Creations for People of Color By Mika Domingo There are many misconceptions about wills and trusts that prevent people, especially people of color, from seeking estate planning advice. Some people think trusts are only for the wealthy or for people with children. Others think trusts are cost-prohibitive. These misconceptions account for why many people of color fail to create trusts for asset distribution upon their passing. In this article, I’ll debunk these misconceptions and highlight additional barriers to creating trusts for people of color. I’ll also explore how lack of familiarity and trustworthiness account for why many people of color do not take advantage of our trust laws.
Debunking Misconceptions about Trusts
Trusts are a useful tool for all people with assets to protect.1 Trusts are not limited to the wealthy or people with many assets. In fact, a trust can be created for the distribution of a single asset, which is often the case with one’s home property. Trusts also manage the distribution 10
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of personal and/or financial assets, regardless of their economic worth. Trusts can be established to achieve a variety of goals. For example, trusts are often created to avoid the distribution of assets in probate court. Probate court is costly and delays the distribution of one’s assets. Similarly, trusts instruct to whom assets are distributed, rather than having assets automatically distributed to one’s heirs, per the laws of intestacy. Trusts also work to minimize estate taxes upon the trustor’s death, thereby making sure beneficiaries receive as much of your money as possible.
Moreover, the legal fees associated with trust creation are often much less than the expense of probate court. As an estate planner, I provide free consultations. I explain the benefits and values of estate planning and how important it is for overall future planning.
Cultural Barriers to Trust Creation for People of Color
In the United States, far too many immigrants and people of color die without a trust.2
Trusts are not limited to people with children. While a majority of trusts disburse assets to children or other family members, a great number of trusts instruct assets be distributed to charitable organizations.
Trusts can be traced back to 13th century England, when the Magna Carta was created, and is rooted in common law. Only one-third of the world’s population live in common law jurisdictions or in countries where common law is mixed with civil law.3
Trusts should not be cost-prohibitive to create. While complex estates tend to be more time consuming, and thus increase the legal fees, the majority of trusts are straightforward and do not break the bank.
In the United States, the majority of immigrants come from countries that do not practice Common Law.4 The graph below shows the
