When should you start planning?
Estate planning is not necessarily for the old who are preparing for their last days. On the contrary, estate planning is for those who have amassed a considerable amount of wealth over their long or short stay on earth, property which they would invariably have to leave someday. And as a rich person whether young or old, not planning your estate or writing a will stating how you want your property to be disposed, is tantamount to giving your property over to the state to do whatever they deem appropriate. Assuming you have sweated for and acquired $200,000 to your name, and then all this has to go to the state when you accidentally die untimely because you procrastinated planning your estate. Would that be what you want? The bottom line is, as soon as you have acquired significant assets, it’s time to write a will as no one knows when death will knock. Also, you have to consider your healthcare directives and appoint a trusted and competent person who would manage your finances in the event you become incapacitated due to a sudden illness or accident. All possible contingencies should be planned for and properly documented in your estate plan.
Opting for a donor-advised fund
Whether one is young and childless or not, the reason most people avoid estate planning is because they find it unappealing or inappropriate to talk about their death. It worsens when they do not have any blood heir of their own, and they just avoid the topic of esatte planning altogether.
However, the best way to make this process easier is to obtain a donor-advised fund provided by brokerage firms like Vanguard, Fidelity, E*Trade, amongst other charitable organizations. These provisions enable donors to partake in a one-time or continuous contribution to their generation through these institutions, while reducing the amount of stress and paperwork involved. The advantage with this is that donors have the authority to direct grants at anytime should they later have someone in mind to give possessions to, or authorize the brokerage firm to commence distribution of their donations right away. According to Amy Danforth of Fidelity Charitable, most donors chose to grant their funds within a 10-year span. This option of a donor-advised fund was chosen by Kolesky after he watched friends undergo a lot of tiring paperwork to create their own charitable structure after an IPO (initial public offering). His reason for doing so was because setting up the donor-advised fund was much easier compared to other options, and it gave him a lot of flexibility to make grants whenever he is ready, while getting tax benefits as he can claim his donations as soon as he makes them and not having to wait till they are granted. According to Kolesky, with the donor-advised fund he could easily put away a lot of money without necessarily worrying about where exactly that money will go to.
Now, people can give any property of monetary value to these organizations. Art works, bitcoins, stock, and any other kind of property you could think of are now donated to charity through a donor-advised fund. This gives young tech entrepreneurs the opportunity to dispose part of what they presently have, in accordance with the Giving Pledge made by the world’s wealthiest personalities in the likes of Bill Gates and Warren Buffet.
In conclusion, there is no more need to wait till one ages before thinking about what property to leave to whom or where. With the flexibility of the donor-advised fund, young, childless individuals can now easily distribute property whenever they want by making donations today to charitable firms, and making grants whenever they are ready in the future. However, every step you take is important so long it has to do with your possessions. To ensure you get everything right and to be on a safer side, ensure you consult the professional services of an estate planning lawyer for their esteemed estate planning know-how.
