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Estate Planning For Your Pets

Estate Planning for PetsLet’s begin with the story of a cat named Boots. In December 2011, a woman in suburban Chicago passed away leaving no next of kin. She did, however, leave a will that she had signed 20 years earlier, which stated that any cat that she owned at the time of her death shall be euthanized and the remainder of her nearly $1.4 million estate be distributed to twelve different animal charities.

It seems as though provisions to euthanize pets stem from the well-intentioned (but perhaps misguided?) belief that no one will love and provide for a pet as well as the owner. However, there are steps one can take to ensure that pets will receive TLC after the owner’s death. Plus, judges simply don’t like killing animals, and often invalidate such will provisions because they are against public policy. Thankfully for Boots, lawyers intervened and arranged for her to be transferred to a no-kill shelter.

What are your options when you want to include Fido and Fluffy in your estate plan?

  1. Leave Your Pet to a Trusted Family Member or Friend.  The simplest way to ensure for your pet’s well-being is to leave him or her to someone that you trust to be a responsible and loving pet owner. It’s easy to add a simple provision to your will. For example, in my own will I leave my cat to my sister, and if she is unable to take my cat, then to my parents. Both already have my cat’s feeding and care instructions in my in-case-of-death roadmap, so I know my cat would have a loving home if I were to die before her.
  2. Leave Your Pet to an Individual or No-Kill Shelter along with a Specific Amount of Money. What happens if your friends or family have concerns about taking your pet? Perhaps they are worried about the financial commitment that comes with pet ownership. You can minimize this risk by adding a specific sum of money to your bequest.  For example: I leave my dog to my friend, Jane Doe, along with the sum of $10,000 if she accepts my dog. A potential disadvantage to this technique is that the use of the money cannot be enforced – once the friend has the money, she can do whatever she wants with it. Nothing is stopping her from spending the money on a tropical vacation instead of saving it to pay future vet bills. Or, what happens if it’s not feasible for your friends or family to take your pet? For the no-kill shelter, there is a concern about it not accepting an older animal because of the medical cost and lower probability of adoption, but including a donation with your pet can help. Some pet organizations even have specific programs that provide lifetime care for your pet in exchange for a monetary bequest. The Guardian Angels Pet Care Program at PAWS is an example.
  3. Establish a Pet Trust. When you think of pet trusts, you likely think of Leona Helmsley, who bequeathed $12 million in trust to her dog, Trouble (later reduced to $2 million by a judge). This is an extreme example–you don’t need to be wealthy to create a pet trust. Pet trusts are valid under Illinois law, and are exactly what they sound like: money is held in trust for the benefit of your pet during the pet’s lifetime. The advantage of using a trust instead of giving a specific amount of money is that the trust can be enforced in court if the trustee is not properly expending the funds for your pet. Of course, since the court has jurisdiction over the trust, it can also reduce the amount of the trust if it finds the amount substantially exceeds what is necessary to care for the pet. After the death of your pet, the balance of the trust is distributed to whomever you name as a remainder beneficiary.

Whichever choice you prefer, be sure to raise the issue of pets with your estate planning attorney (who really should raise the issue without you prompting him or her . . .).

As for Boots, her story has a happy ending.  She was adopted by a loving family several months after arriving at the no-kill shelter.

Estate Planning As a New Year’s Resolution: An “In-Case-Of-Death” Roadmap

flesHappy New Year! Among your resolutions of losing weight, joining a gym, and being an all around better person, I encourage anyone who does not have an estate plan to make it a goal to set one up in 2014.

But what if you aren’t quite ready to call an estate planning attorney? Here’s something you can do on your own to start thinking about the process: set up an “in-case-of death” roadmap for your loved ones.

One of the more time-consuming tasks for a grieving family member or friend is getting a handle on your financial and personal affairs after you are gone. The person appointed to handle your affairs (your “representative”) will need to secure your home, forward your mail, pay utility bills, make short-term arrangements for the care of your pets, and eventually create a list of all of your accounts and assets. Often the process of creating an asset list is done in a piecemeal fashion by sorting through the deceased’s mail and files.

In conjunction with setting up an estate plan, I recommend to my clients that they create a roadmap that lists all of their assets and provides useful advice for their representatives. This starting point saves a representative time that would otherwise be spent sorting through a deceased’s papers. This roadmap can be as basic or as detailed the client wants, but some suggestions include:

  • A list of financial accounts and institutions where the accounts are held.
  • A list of utility providers and account numbers.
  • A list of credit cards.
  • Names and numbers of people to contact (one’s supervisor at work, for example).
  • Locations and numbers of safe deposit boxes.
  • A list of subscriptions to cancel.
  • Care instructions for a pet.
  • A list of passwords to email accounts and social media accounts (depending on one’s comfort level of having others access such accounts). This is a good place to leave passwords to your frequent flier mile accounts.

Here is a sample in-case-of-death roadmap to get you started >>

Remember, this roadmap is not a substitute for a properly executed will or comprehensive estate plan. Provisions that name guardians for your children or list who is to receive certain pieces of your jewelry will be given no legal effect. Creating this roadmap is simply a courtesy to your representative and a method to encourage you to think about your overall estate plan. And of course, be sure to share this roadmap with your representative, or at least advise him or her of its location so it can be found after your death.

Still not ready to consult an estate planning attorney?  Then, at the very least, perhaps you should consider making a plan to dispose of your embarrassing personal property.

Tablet Last Will and Testament Found Valid in Ohio

hptlAfter researching my last post about an iPhone will, I thought to myself: a ruling like this would never happen in the U.S., right? Not quite.

According to an article in the Chronicle-Telegram in Lorain County, Ohio, a judge upheld the validity of a will written and signed on a Samsung Galaxy tablet. The person who created the will (the “testator”) was in a local hospital, and discussed writing a will with two of his brothers. Because “they did not have any paper or a pencil”, the testator dictated his will to one of his brothers, who wrote it on the tablet using a stylus. Later that day, the testator signed the will on the tablet with his two brothers acting as witnesses. If the will had not been upheld, under Ohio law the deceased’s assets would have been distributed to his parents.

Let’s break down the issues in this case. First of all, there was no pen or paper available in the hospital. Really? I understand that northeast Ohio has suffered more than its fair share of hardships—recession, unemployment, and Cleveland sports to name a few. However, this marks the first time I’ve heard of what I will deem The Great Paper Shortage of 2013. If only there were paper mills near Lorain County.

Second, and more importantly, the brothers should not have acted as witnesses. The article doesn’t name the beneficiaries of the tablet will, but I suspect that the brothers received at least a portion of the estate. Do you see the problem? This is why the law requires two disinterested witnesses to be present when a will is signed, thereby reducing the risk of fraud or undue influence over the testator. A witness without a stake in the outcome is less likely to be dishonest. That safeguard is not effective if the witnesses are also the beneficiaries of the will. One would imagine this problem could have been avoided if the testator had been in a building where there were dozens of disinterested witnesses roaming around (say doctors and nurses, for example).

What two lessons can we take from this case?

The first lesson is the same as in the iPhone will case—this decision is an outlier, and should not be relied upon. The judge here noted that there is no provision under Ohio law regarding electronic wills, but expressed his opinion that it was time for the law to catch up to the 21st century. Until such time, you should only rely on the statute governing wills in your state.

Second, do not wait until you are lying in a hospital bed to prepare your will. Contemplating one’s own mortality can be extremely difficult, but adopting a head in the sand attitude will not change the inevitable. Being prepared for sickness or death by having an estate plan in place is an important responsibility of being an adult, just like life or health insurance. By starting the planning process early, you can carefully review how you want your assets distributed, and avoid the potential danger of any future paper shortages. And in the unfortunate event you do need to hire me for a hospital bedside will, trust that I will bring my own pen and notepad.