Attorney & Mediator
Attorney & Mediator

Providing for our Pets

Who will care when you’re not there?

When doing estate planning, one issue often overlooked is the care of our beloved pets.  It’s not something that is on the typical information questionnaire that clients fill out at their estate planning attorney’s office.  If your consultation with counsel doesn’t touch on the issue of your pet, it make end up overlooked.

Many of us feel that our beloved pets are a member of our family.  They d

cat 1

epend on us.

So, what would happen to our furry friends waiting at our homes if something happens to us.  While we would like to think that our family members would step in and take care of our friend for his or her lifetime, it may be best not to leave it to chance.

Family members may not want to take in a pet, or additional pets.  Annually many animals end up at animal shelters when the owner passes away.  If you love your friend, this is not the future you want for him or her.

Reaching out from the grave to protect pets used to be for eccentric rich people like Leona Helmsley who famously left $12 million to her pampered pooch Trouble.

Now ordinary animal lovers are taking action to care for their furry loved ones.  Funds for Muffin’s lifetime care may be as small as $5,000, or be much more.

The idea of leaving a substantial sum for a pet may not appeal to the other members of the family, especially if they think that it is money they should rightfully be inheriting.  Legal battles may be fought when parents leave substantial money to their pets instead of the money going to their children. Accordingly, it may be better not to tell your kids in advance because you will endure an endless stream of complaining and lobbying.

To avoid court challenges, or to avoid a judge from altering the terms of your estate plan, it is best to keep the amount left for your pets modest.

In setting the amount, estimate how much your furry friend will require by adding up the annual expenses for food, vet visits, grooming and toys.  Multiply that by your pet’s life expectancy.  Then adjust.  Be realistic and consider what a prudent person would spend on their pets.

Chesapeake Bay Retriever Puppy in corn stalks

This amount can be left by Will or by Trust to the individual that will care for the pet.  If it is by your Will, you will need to update your Will frequently to take into account the changing amount that will be required.  Alternatively, Pet Trusts are legal arrangements that set money aside for a pet’s care and designate a trustee to fulfill an owner’s wishes. In this way, you may leave an annual amount to be distributed during the lifetime of the pet.

You may want to invest in a life insurance policy to fund this expense.  Such a policy will assure your children that the amount of their inheritance is not being diminished in order to take care of your cat or dog.

You will also name a guardian or custodian for your pets when you are no longer present to care for them.  It goes without saying that you must have a realistic conversation with the proposed pet guardian to assure that he or she is genuinely interested in caring for your pets.

This, as with many other estate planning issues, is something that we would prefer not to think about.  It is, none the less, very important.  Once you have made these arrangements for your furry family member, you will feel a sense of relief, knowing that your beloved friend will be well cared for during the remainder of his or her life if you are not there to do so.

Make sure that someone will be there, to care, when you’re not there.

Special Needs Planning

Parents with special needs children live with the daily challenge of caring for this special child – both emotional and financial.  Unfortunately, many parents believe that they must disinherit the child in order to preserve government benefits. 

This places the child at peril and/or places the other children in the family with a significant burden. With appropriate planning, the special needs child can be provided for without risking his or her governmental benefits.

The first question that a parent will ask is, “Who will care for my child when something happens to me?” Most parents assume a sibling will provide the emotional and financial support for their special needs child. A family member can, in all likelihood, provide the love and emotional support for the special needs child.  It can be a heavy financial burden to expect that family member to provide financial support as well.

Creating a Special Needs Trust (SNT) is a solution.  This can provide the special needs child with the amount of care and support that the parents find appropriate after the parents are gone. This Trust can provide financial resources for the child that will not affect his or her eligibility for the all‑important government benefits such as Social Security Supplemental Income (SSI), Medicaid, and housing subsidy benefits.

The Special Needs Trust provides support for the child as long as this support does duplicate that provided by government benefits. So assets from a Special Needs Trust may be used to purchase items that will enhance the child’s quality of life, such as entertainment, family vacations, etc.

A Special Needs Trust must be carefully crafted to achieve these goals and to conform to federal guidelines and state requirements.  A properly and carefully crafted Special Needs Trust, however, will allow your child to receive the benefits of inheritances from you and other loved ones all without jeopardizing the child’s government benefits.

Planning for the Young Family

 

Most young families don’t do estate planning.  They believe that since they are young and healthy they don’t need to.  Or, they think they can’t affording it. 

Unfortunately, illness and death can strike the young as well as the old.  While it is less common for a young person to have such a tragedy, it can happen.  How would this affect your family?  Your spouse?  Your young children?

Estate planning does not have to be expensive.  The young family can start with basic estate planning documents: Wills, Durable Power of Attorneys and Patient Advocate Designations.  It is a good time to look at affordable term insurance.  As your family situation and wealth change, you can update and/or upgrade your estate plan to meet your needs.

What you will need to consider:

 

  • Who will be your Personal Representative (Executor)?  This individual will be responsible for handling all of your final financial affairs.  He or she should be trustworthy, capable and willing to take on this responsibility.  Also, if you are naming your spouse, you need a back-up person.  We travel together and the same accident could affect both of you. 
  • Who will be the Guardian for your Children?  This is the most difficult question that parents confront and what often prevents them from finishing an estate plan.  If you don’t appoint someone, the Court would be forced to do it in your absence, without your input and without knowing much about your life or your children. 
  • How should your assets be distributed and/or used?   If your spouse survives, this is not an issue; however, if both parents die, the children need to be provided for. 
  • Who would be the Conservator for the Children?  While the Guardian is the individual who raise the children, someone needs to manage the assets for them.  This might not be the same individual.  It must be someone who is financially savvy and willing to do this for a number of years. 
  • Do you need insurance?  Do you have life insurance through your employer(s)?  Would it be enough?  If one parent is a “stay-at-home” parent, insurance is definitely needed.  While there is no salary to replace, there will be significant costs to take over his or her responsibilities.

 

If you are a young family, with children, it is important to plan for the “what if”.  A basic estate plan can set your mind at ease by setting up the financial framework and individuals to care for your family if you are not there.

Planning for the Young Family

Most young families don’t do estate planning.  They believe that since they are young and healthy they don’t need to.  Or, they think they can’t affording it. 

Unfortunately, illness and death can strike the young as well as the old.  While it is less common for a young person to have such a tragedy, it can happen.  How would this affect your family?  Your spouse?  Your young children?

Estate planning does not have to be expensive.  The young family can start with basic estate planning documents: Wills, Durable Power of Attorneys and Patient Advocate Designations.  It is a good time to look at affordable term insurance.  As your family situation and wealth change, you can update and/or upgrade your estate plan to meet your needs.

What you will need to consider:

  • Who will be your Personal Representative (Executor)?  This individual will be responsible for handling all of your final financial affairs.  He or she should be trustworthy, capable and willing to take on this responsibility.  Also, if you are naming your spouse, you need a back-up person.  We travel together and the same accident could affect both of you.
  • Who will be the Guardian for your Children?  This is the most difficult question that parents confront and what often prevents them from finishing an estate plan.  If you don’t appoint someone, the Court would be forced to do it in your absence, without your input and without knowing much about your life or your children.
  • How should your assets be distributed and/or used?   If your spouse survives, this is not an issue; however, if both parents die, the children need to be provided for.
  • Who would be the Conservator for the Children?  While the Guardian is the individual who raise the children, someone needs to manage the assets for them.  This might not be the same individual.  It must be someone who is financially savvy and willing to do this for a number of years.
  • Do you need insurance?  Do you have life insurance through your employer(s)?  Would it be enough?  If one parent is a “stay-at-home” parent, insurance is definitely needed.  While there is no salary to replace, there will be significant costs to take over his or her responsibilities.

If you are a young family, with children, it is important to plan for the “what if”.  A basic estate plan can set your mind at ease by setting up the financial framework and individuals to care for your family if you are not there.

You’re Going to Have a Baby!

If you are about to be a parent, it is time to get serious about planning for your child.  Lots of plans will get made about baby clothes, strollers, and the color of the nursery.  Often left out is planning for the future – is something unexpected should happen.

First, you need to sign a Will.  This is where you name a Guardian to raise your child if you are unable to be there to do so.  If you don’t, a Court will decide the child’s fate. 

While Probate Court Judges take this very seriously and want to make the “right” decision, they will never have enough information available.  They don’t know your family and friends the way you do.  Imagine the dilemma for a judge when a bunch of seemingly nice relatives all come rushing into court to be the Guardian of your child.  Who to choose?  His sister?  Her mother? 

This is often a difficult decision for the parents themselves to make and is frequently the reason that this does not get done.  Mom thinks her family should raise the child and Dad thinks his should.  As difficult as it is, you need to decide and put it in your Will.  In the event that both parents will to die in an automobile accident, someone needs to raise the child or children.

Next, unless your prospective guardian is wealthy, you will need life insurance to cover the cost of raising your child.  When you are young, this is relatively inexpensive.  You should purchase enough coverage to make sure that your child or children can be raised appropriately and have a little extra for college.

What if only one of you dies?  You still need that life insurance.  If the primary earner dies, the money will be required to continue the family in the home and at the same level of living.  If the parent who is primarily handling the child rearing tasks dies, it will cost a bundle to replace all of the services that he or she provided.

Two important steps to take before the new baby arrives – every bit as important as deciding on furniture for the nursery.

The Problem of the Unfunded Trust

Carol and Jim had been married for 25 years – their children were grown. Jim took the steps to have an estate plan made – he had trusts made for himself and his wife with pour-over wills. Carol went in to sign the documents though she really didn’t pay any attention to what they were for – she trusted her husband to do the right thing.

Jim was only 52 when he unexpectedly died from a massive coronary. Carol came to me to see if she needed to do anything – after all, Jim had set up these trusts that should take care of everything.

What he had failed to do was to fund the trusts. Their real property had not been transferred into the trust. None of their bank accounts, brokerage accounts, or other assets had been transferred.

Since a number of assets were in Jim’s name alone, it was necessary to commence a Probate proceeding in order to get the assets into his trust. This cost Carol not only the filing and attorney fees but the inventory fees as well.

Additionally, real property had to be transferred requiring that deeds be prepared and recorded.

How could this have been avoided? At the time the trusts were prepared, all real property should have been transferred into the trusts. Additionally, all bank accounts, brokerage accounts and other assets should have been transferred as well. This follow up is critical to having a revocable trust work smoothly upon the death or disability of the grantor.