Diversity, Equity & Inclusion in Estate & Financial Planning

In a recent Trusts & Estates magazine forum, speakers said it’s critical that professional advisors with clients from diverse backgrounds consider culture and religion in estate and financial planning.

Importance of Diversity in Client Planning
As a demographic shift results in America being a minority-majority country by 2045, one-size-fits-all planning no longer works. Various ethnic groups and faiths view charitable giving and estate and financial planning differently. So advisors those who prepare for change will reap the benefits.

Despite the reluctance of many professional advisors to address religious and other personal issues, the speakers in the forum encouraged them to do so because it will create bonds of trust that will take relationships beyond being a mere consultant to being a close family advisor.

Demographic Data Changes
When it comes to charitable giving, the donor universe looks more like the racial and ethnic makeup of 1990 America, according to the Blackbaud Institute. But it’s time to expand access to legal and financial services and educational content to Black and Latino people and other ethnic groups.

The forum speakers noted the widening wealth gap is further perpetuated by lack of estate and financial planning. White families are five times more likely to inherit assets than Black families. The speakers also pointed to a lack of diversity in fundraising and financial and legal services. For examples:

  • About 93% of gift planners are white.
  • Among 88,635 CFPs, only 1.7% are Black and 2.5% are Hispanic.
  • Only 5% of lawyers are Black, 5% are Hispanic and 2% are Asian.

Increasing diversity in our professions is also key because people tend to connect with those who look like them and have similar cultural backgrounds and experiences. 

Family Structure
The structure of the family is steadily evolving. About 5% of the U.S. population identifies as LGBTQ. And LGBTQ families and those with interracial, mixed religious and other types of marriages face unique planning challenges. So, it’s important to learn about various components in mixed marriages. 

Regarding cultural competency, the speakers encouraged advisors to take impactful steps that can have positive effects, such as:

  • Understanding important holidays and traditions
  • Ordering food from restaurants with different faith and cultural traditions when hosting events for clients
  • Using pronouns in emails to signify an understanding that clients may use different ones
  • Realizing, for example, that Asian Americans and Pacific Islanders aren’t a homogenous group

Also, the speakers encouraged practitioners in all disciplines to take affirmative steps to incorporate diversity, equity and inclusion into their lives and practices.

We know estate and financial planning conversations can be a sensitive topic to bring up in any culture, but tailored legacy planning can help. Talk to your clients about their faith, beliefs and values and show them how their philanthropic planning and legacy can be as unique as they are.

Request our Impact Guide and use it as a road map with your clients as you talk to them about their options.

About the Author

Carl Wayne 

Carl Wayne, JD (He, His, Him)

Senior Advisor, Charitable Estate Planning
American Heart Association
888-919-5556
Carl.Wayne@heart.org 
Heart.org/Network

Carl specializes in charitable estate planning utilizing contributions of appreciated non-cash assets, such as real estate, stocks, mutual funds, life insurance, etc., to fund bequests, donor-advised funds, charitable gift annuities, charitable remainder and lead trusts.