Friday, July 29, 2011
Successfully leaving behind money to pets or posthumously conceived children is a growing request among individuals today. Often times these requests are accomplished through the creation of a trust or by including specific instructions in an estate plan.
Estate planners typically recommend setting up a formal trust to ensure that a pet is properly cared for after the owner’s death. Two types of pet trusts exist, a traditional trust (effective in all states) and a statutory trust (effective in forty-six states plus the District of Columbia). The pet trust can be a living or testamentary trust.Though a living trust can cost between $1,500 and $6,000 to set up, it provides additional protection by ensuring that a pet is cared for in the event the owner is disabled.
When it comes to leaving money to a posthumously conceived child, many estate planners turn to Social Security survivor-benefits cases for guidance on the inheritance rights of these children. The intent of the deceased parent whose genetic material is used posthumously to conceive the child plays a large role in a court’s decision of the child’s inheritance rights. The best way to ensure that a posthumously conceived child will receive his or her inheritance is to specifically state the inheritance and include specific instructions in the estate plan.
See Saabira Chaudhuri, When Estate Plans Fail: Many People Overlook Arcane Issues, from Pets to the Unborn, The Weekend Investor, Jul. 23, 2011.
For more information on planning for your pets, see Gerry W. Beyer & Barry Seltzer, Fat Cats & Lucky Dogs – How to Leave (Some of) Your Estate to Your Pets (2010).
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.