"We say to people: 'If you do nothing, your money will go to the state. Is that what you want?' That's enough to make them want to consider something else," says Andrew Russell, a certified financial planner in San Diego.
If you have an estate to leave behind when you pass away, but no heirs to leave it to ... where should your money go?
A recent Reuters article, titled "Estate planning for the young, rich and childless," reports that there are 17 million unmarried Americans over age 65 who are readying for retirement and that charitable foundations and financial advisers report that a growing number of young people now have these same decisions to make before they marry or have children. This is especially true, the article says, for tech entrepreneurs who can see a large amount of money from stock options or the sale of a start-up business.
When it comes to charitable planning, financial experts say it's not about how old you are but how rich. If you have saved more than $100,000, you do not want to die without a will or estate plan—this can leave the distribution of your assets up to a court-appointed executor and state law. If you do nothing, your money may go to the state. Is that what you want?
You also need to prepare healthcare directives and determine who should manage your affairs should you become incapacitated in the event of an accident or illness. What usually prevents individuals, with or without children, from estate planning is that they don't want to face their mortality.
The article suggests considering establishing a donor-advised fund, which operates similar to mutual funds designated for charitable giving. The funds allow an individual to make a one-time or ongoing contribution through the donor-advised fund, which reduces fees and paperwork. Donors can designate the funds to one or more charities.
Ask your estate planning attorney about these strategies.
Reference: Reuters (June 2, 2014) "Estate planning for the young, rich and childless"