Financial wellness benefits have become a hot button topic in the last two years, as the pandemic forced many workers to rethink how they manage their money and assets for an uncertain future. Yet, it seems many employers have left out a critical piece to their
Estate planning allows people to define how they want their assets distributed once they have passed away or become incapacitated. According to Wealth.com, an estate planning platform that launched this month, only 13% of workers have estate planning included as an employer-provided benefit, despite 72% being interested in using these services.
“If something happens to me, how would my family know what I have?” says Rafael Loureiro, CEO of Wealth.com. “The mission of our company is to make estate planning accessible to all because it’s not just for those who are white and wealthy.”
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If someone has a house, kids, pets or heirlooms like a wedding ring or baseball collection, they should have estate planning, explains Loureiro. However, estate planning has often been inaccessible to those in lower financial classes, like people of color and people residing in rural communities. According to Wealth.com, people of color are 21% less likely to say they’re knowledgeable about estate planning, and only 27% of rural respondents claimed to be knowledgeable.
“People see it as a complicated process, where you need a lawyer and lawyers take money,” says Loureiro. “That’s very antiquated. We’re trying to bring estate planning into the digital 21st century, and employee benefits is the right channel to do it.”
For Loureiro, the workplace comes only second to family, where estate planning knowledge is often shared and passed down. In fact, those with parents who have estate plans are nearly five times more likely to have one too, according to Wealth.com. The workplace represents a secondary community where financial education can be presented and circulated, says Loureiro.
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Wealth.com’s digital estate planning services are now made available through an employers’ benefit plan, operating as a one-stop shop for setting up and managing one’s assets. Wealth.com assesses what the user owns, then provides state-specific documentation so users can set up and authenticate legal documents, such as a will and testament, guardianship nominations, durable power of attorney and an advanced healthcare directive. The platform stores this documentation along with proof of assets, whether that’s a deed to a home, the location of their mother’s wedding ring or a letter to a loved one. The user can update this information at any time, and if new state laws come into play, Wealth.com will notify the user and guide them through the changes.
“This is a holistic view of your legacy,” says Loureiro. “As your life progresses and things change, we will help you keep your digital vault up to date so you know what you’re leaving behind.”
Without estate planning, one’s death or incapacitation could mean loved ones will spend 18 months in probation court as the state decides what to do with their assets, costing anywhere between 3% and 7% of said asset value by the end of the process, explains Loureiro. This is even more concerning in light of the generational transfer of wealth that is predicted in the next 25 years. Financial intelligence company Cerulli Associates projected that 45 million U.S. households will transfer nearly $70 trillion to heirs and charities. And yet, according to LegalZoom, a legal services company, most estimates state that 50% to 60% of Americans do not have a will.
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“Estate planning is a highly valuable benefit that has been wrongly overlooked by employers,” says Loureiro. “We need the workplace to be a place where people can learn about and access estate planning. This will help get rid of the misconception that estate planning isn’t for everyone.”
As employers look for new ways to distinguish themselves in the fight for talent, estate planning may be a good benefit to consider as workers look to protect themselves and their families in an era of unprecedented health risks and financial challenges.
“This can’t wait until next year — you need estate planning now,” says Loureiro. “In the face of your legacy and family, estate planning is an act of love.”
