Estate and trust planning by financial advisors on behalf of Black Americans can tear down the historical barriers that have led to persistent racial disparities today, according to a new study.

The weight of personal or historical trauma related to wealth, low rates of representation for Black advisors and other minority professionals and daily signs that America is giving up on efforts to acknowledge and confront systemic racism could prove exhausting to anyone in wealth management seeking to lift up historically excluded groups through their work. And those come on top of the difficulty of breaking into the profession and running a successful business.

That’s why Lynne Marie Kohm, a professor of family law at Regent University School of Law in Virginia Beach, Virginia, and Peyton Farley, a 2022 graduate of the school — the co-authors of a published academic study titled, “Strategic Use of Trusts to Dismantle Racism: Building Trust through Trusts to Preserve and Empower Black Wealth,” used the analogy of a starfish to describe the importance of estate planning for Black Americans. Advisors cannot change political and financial systems on their own, but they can aid clients and their families.

“When professionals feel this fatigue, a good strategy for coping is to see that the help he or she can give just one client or just one family can and does make a tremendous difference,” Kohm and Farley said in an email interview. “Throwing one back into the sea may not make a difference to the beach loaded with thousands of starfish, but it makes all the difference to that one. Every client is worthy of attention, and serving just that one client can bring the joy of making a difference in a sea of challenge. Wealth building provides empowerment. And that client’s family wealth building will make a difference for the next generation.”

READ MORE: A plan to build Black wealth in one community — and nationwide

Personal and historical contexts

The study in the Dec. 1 issue of the Thurgood Marshall Law Review followed the researchers’ prior 2021 paper on how the wealth implications of the Tulsa Race Massacre of 1921 demonstrated the need for “wise financial and estate planning” for Black Americans. Other research has found, for example, that eliminating the so-called racial will gap between white and Black Americans would alone slash the wealth gap between the races by 10% over three generations. More generally, experts have pointed out how advisors can add value for clients of any background with estate advice ranging from a nudge toward a plan or revision, the idea of arranging a trust or a number of sophisticated generational transfer methods that protect their family’s wealth for the future.

Kohm and Farley’s paper traces the history of systemic racism in finance before exposing several myths that further impede Black generational wealth transfers. In all, they compiled a compelling case that estate and trust planning with advisors, attorneys, tax professionals or experts from any part of the fields touching wealth management alters the course of history.

“Trusts protect wealth and allow for family wealth growth and transfer, and having a transfer plan for wealth also works to protect wealth from waste and amelioration, effectively increasing wealth,” Kohm and Farley wrote. “Without changes deeper economic divides will be created in American society, leading to more extreme inequalities. Examining what role wealth has and can have in individual lives and families may be a key to beginning to dismantle racism one estate plan at a time to minimize or even extinguish this racial divide in the larger society.”

As they take on that work, though, advisors must also win over clients who have valid personal or historical reasons for avoiding professionals in fields like finance and medicine, according to Pat Brown, a wealth manager in the Lawrence, Kansas-based office of Creative Planning. The research paper made “a lot of great points” in seeking to explain how estate and trust planning act as “a tool against antiracism,” Brown said in an email. 

It prompted him to think of the idea of Black Americans from young to middle-aged households buying insurance policies and establishing a trust to collect the assets and other means of passing down wealth, he said. However, professionals like advisors and doctors have to navigate some distrust in the process.

“There are Black folks even today that don’t think they should go to doctors in 2025 because of the beliefs their parents and grandparents had that got taught to them,” Brown said. “Some of the simple strategies of establishing a trust and funding a trust are a great way of creating wealth and getting it passed down to generation after generation.”

READ MORE: The impact of the ‘racial will gap’ on wealth

Key takeaways

Kohm and Farley cover hundreds of years of history in the first section of the paper, with discussions of race massacres in Tulsa and elsewhere, vagrancy laws, the Freedman’s Savings Bank, redlining and housing segregation, and the legacy of racism in patents. Then they proceed to address six myths about trusts and estate planning: It’s only for the rich; the family already understands the older members’ wishes upon death; it’s too challenging; lawyers aren’t trustworthy; it’s too expensive; and the clients don’t care about what happens to “my stuff” when they pass away, the authors write. 

Trusts may pose varying degrees of complexity, but they offer a solution to many of those problems — especially when there is a fiduciary professional putting the clients’ interests first in all their advice and work on behalf of the entity. At their root, trusts offer a means of preserving wealth between generations for the settlor, trustor, grantor or donor who creates them.

“A settlor is simply the property owner who chooses to manage that property with a trust,” Kohm and Farley wrote. “That trust settlor has all power and authority to make the highest and best use of his or her wealth through accountable management of the assets in that trust — which can include anything from the family farm to the family innovations. Using that power and vesting it in a trusted individual or family member is wiser than leaving it to memory or a conversation that is hoped to be remembered, or to the default intestate succession rules of a state government, which could take years, and result in tremendous asset waste.”

To illustrate the specific importance among Black Americans, they include the examples of family farms that have failed to reach another generation after the original owners’ deaths or even celebrity cases such as the costly legal wrangling after Prince’s death in 2016. Instruments such as a special needs trust, a supplemental needs trust or a spendthrift trust, provision or clause prove highly beneficial.

On the other hand, Kohm and Farley point out that many Black families may avoid these key questions entirely if they involve working with a professional who doesn’t understand their cultural experience. Similar to the field of planning in which fewer than 2% of certified financial planners are Black, the dearth of Black estate lawyers poses a challenge to convincing many prospective clients of the benefits of trust and estate planning.

“Clients want to be served by lawyers with whom they have things in common. Naturally, this is important with race, culture, ethnicity, faith, etc,” Kohm and Farley said. “Overcoming fear and distrust of lawyers and decades of distrust of the law is not an insignificant hurdle, but can be well-bridged by black lawyers serving black families.”

READ MORE: To shrink the wealth gap, reframe money as an everyday topic 

Finding the encouragement in difficult work

While that area speaks to the continuing problem of underrepresentation of Black and Hispanic professionals, it further displays the essential nature of the tough and daily effort to confront the historical legacies of wealth in America — one client at a time — the researchers added.

“It was really not only instructive for us, but encouraging,” Kohm and Farley said of their study. “Every moment of work we spent on it was often upsetting, sometimes therapeutic, but in the end encouraging, and creating in us a desire to continue to work to make a difference. In many ways we sensed that our work was to honor those whose stories were critical to this research.”

The Public Company Accounting Oversight Board has censured nine firms in KPMG’s global network and imposed a total of $3.375 million in fines on firms in Australia, Brazil, Canada, Israel, Italy, Mexico, South Korea, Switzerland and the United Kingdom, charging them with violations of PCAOB quality control standards and failing to disclose who performed the audits.

The fines and sanctions were levied on KPMG Auditores Independentes Ltda. in Brazil, KPMG LLP in Canada, KPMG S.p.A. in Italy, Somekh Chaikin in Israel, KPMG LLP in the U.K., KPMG Cárdenas Dosal, S.C.  in Mexico, KPMG Samjong Accounting Corp. in South Korea, KPMG AG in Switzerland, and KPMG in Australia.

“It is essential that investors and audit committees know where issuers’ audits are being conducted and by whom so that they can make informed selection and ratification decisions. These violations prevent investors and audit committees from obtaining important information,” said PCAOB chair Erica Williams in a statement Tuesday. “Firms must take these obligations seriously and ensure their required communications and reporting are complete and accurate.”

The PCAOB found that each firm violated quality control standards related to meeting professional standards, regulatory requirements, as well as each firm’s own standards of quality; and monitoring procedures.

Each of the nine firms were also found to have violated PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants, by failing to accurately disclose on PCAOB Form AP the participation in firm audits of other accounting firms, such as component auditors, shared service centers and critical audit matter hubs. The PCAOB noted that such disclosures are particularly significant in multi-country audits, where it’s even more likely that multiple parties worked on an audit. 

Four of the firms — KPMG Australia, KPMG Brazil, KPMG Canada and KPMG UK — also failed to communicate to audit committees the name, location and planned responsibilities of one or more other accounting firms, as required by AS 1301, Communications with Audit Committees, potentially hindering the audit committees’ ability to supervise their auditors.

KPMG Brazil also violated PCAOB Rule 2200, Annual Report, by failing to report on Form 2 certain audit reports or consents issued by the firm.

KPMG acknowledged the penalties and said it had corrected the errors on the forms.

“Several KPMG member firms have received financial penalties from the PCAOB in regard to errors made on PCAOB Forms,” said a KPMG spokesperson. “These have now been corrected and the firms accept the issued penalties. The form errors had no impact on any financial statements of entities audited or the audit opinions issued on those statements.” 

Without admitting or denying the findings, each of the firms agreed to a PCAOB order censuring the firm and imposing penalties totaling $3.375 million.

Each firm also agreed to undertake remedial actions to improve their quality control policies and procedures in the areas where the failures occurred.

“These enforcement actions demonstrate that we will hold firms accountable for violating PCAOB rules and standards regarding communications and reporting,” said Robert Rice, director of the PCAOB’s Division of Enforcement and Investigations, in a statement.

Intuit QuickBooks announced a new Recurring Payments feature to enhance invoicing management for small and mid-market businesses. Users can put their payments on “auto-pilot” by setting a schedule and an amount and then sharing that with the client. Payments are deposited automatically, making it easier to plan and predict cash flows. 

Recurring Payments, according to Intuit, allow business owners to get a clearer picture of their finances, eliminating the need for repeated invoices or payment requests and reminders. The feature helps clients avoid service disruptions and avoid past-due bills, and provides streamlined bookkeeping where transactions are automatically updated with each payment with no need for matching. It offers extra security as users do not need to ask for payment information directly since clients can just input their information once and manage it through a secure online portal. Users also get access to Intuit Assist, which can detect repeat invoices that are sent to the same clients on a regular cadence, and create a suggested recurring payment and schedule for the business owner to review and approve.

“The addition of recurring payments gives our customers the power to not only maintain and accelerate their cash flow, but also increase client satisfaction and loyalty,” said David Hahn, senior vice president of the QuickBooks Money Platform. “Our data shows that more than half of small business owners have invoices that are overdue by more than 30 days, so we’re always focused on finding a way to help increase the likelihood of our customers getting paid on time. Recurring payments directly addresses this challenge, streamlining the end-to-end payments experience for the business owner and their clients, and providing confidence that invoices will be paid on time and cash flow will remain consistent. This feature, along with the many ‘done-for-you’ experiences across our AI-powered platform, empowers businesses to streamline operations and fuel their growth and success.”

Recurring payments are now available for QuickBooks Online customers in the U.S. who have a QuickBooks Payments plan added to their subscription.