Drafting a will or figuring out end-of-life plans aren’t usually high up on everyone’s to-do list.
In fact, a recent Caring.com survey noted that nearly six in 10 Americans have forgone planning a will altogether.
But a new startup founded by two Stanford Graduate School of Business grads is working to reframe the thinking around end-of-life planning from something morose and depressing into something uplifting by bringing charitable donations to the forefront and removing financial burdens. The aptly named FreeWill lets users draft a will for free and instead charges participating nonprofits an annual subscription fee, ranging from a few thousand dollars to over $50,000 depending on the size of the organization. FreeWill works with more than 70 nonprofits, including the American Red Cross and United Way, which hope to gain from users’ donations.
Since launching in early 2017, the company has already topped $220 million in committed contributions to charities through over 19,000 wills filed by users, according to co-founder Jenny Xia. Users decide how much they want to give to a charity of their choice.
“The biggest barrier to getting people started is just this conception that planning a will is so complicated and hard, and so by basically removing that initial barrier and offering it for free we’ve really given this opportunity for people to give it a try,” she told Yahoo Finance.
Of course, there are competitors offering the ability to create wills online like Rocket Lawyer and LegalZoom. However, equivalent services provided by those companies aren’t free. LegalZoom’s services start at $69 while Rocket Lawyer sells a subscription bundle that includes will planning along with other legal needs at about $40 a month. And those companies don’t lead off with questions about charitable donations — something FreeWill co-founder Patrick Schmitt credits for attracting millennial users.
“We’ve seen users from [ages] 19 to 90,” Schmitt said. “A big part of this is shifting [thinking.] Don’t do it for yourself, do it for the people and causes you love.”
But bringing the focus of charitable giving to estate planning also could substantially increase the windfall for nonprofits. The average bequest for middle-class Americans ranged from $35,000 to $70,000, according to fundraising software company Blackbaud. Schmitt noted that charitable bequests are generally larger than a donor’s total lifetime charitable giving by an average of 275%.
Zack Guzman is a reporter for Yahoo Finance. Follow him on Twitter @zGuz.