BACKGROUND: The study quantifies the relative significance of a range of demographic, socioeconomic status (SES), health care service and access, health, and psychological factors in explaining racial and ethnic disparities in advance care planning (ACP). METHODS: Our sample included 8,416 White, Black, or Hispanic adults aged 65 or older, using the 2020 Health and Retirement Study. We applied Gelbach's decomposition method to understand the relative contribution of 37 factors in explaining White-Black and White-Hispanic disparities in ACP discussion and advance directives (AD) completion. RESULTS: The ACP disparities between White and Hispanic populations were nearly twice as large as the disparity between White and Black populations. Decomposition analyses reveal that the 37 factors collectively explained approximately 65% of the White-Hispanic ACP gaps and 37.5% and 57.1% of the Black-White gaps in ACP discussions and AD completion, respectively. Notably, demographic, SES, and health care service and access factors played substantial roles in these disparities, while health factors did not emerge as significant contributors. Education was the most important contributor across all four tested gaps. Perceptions on how often wishes were respected in healthcare uniquely accounted for 10% of the explained White-Black disparities in ACP discussions. Immigration status and living arrangements were significant contributors to explained White-Hispanic disparities but not to White-Black differences. DISCUSSIONS: Interventions targeting less educated older Black and Hispanic individuals should be prioritized to narrow the ACP disparity. Negative healthcare experiences in previous care and household dynamics should be addressed while working with Black and Hispanic older adults, respectively.