Pets are a beloved member of 68 percent of American households and rising because many couples without children have pets and the use of comfort and emotional support animals is growing. Leaving pets out of estate planning, however, could lead to the unintended euthanizing of the pet or its placement into a shelter. Pet trusts are an effective measure to help assure the pet's future well-being.
Creating an estate plan requires formal legal documents, such as a trust, power of attorney, health care proxy and living will. However, effective trust planning should also include a letter of instruction containing information or guidance.
A trustee has the important duty of managing property for another person's benefit. Because this is an important position of trust and an obvious target in family disputes over trusts and estates, a trustee may face the risk of accusations of mismanagement or theft.
A will is an invaluable part of estate planning. However, trusts can take care of financial matters even before death and have other benefits such as faster distribution of assets, prompt payment of bills and confidentiality.
Pet care is a lifetime responsibility that does not end with the death of their owners. The Humane Society, however, claims that 100,000 are left homeless each year after their owners died. Planning and the creation of well-drafted trusts helps assure that a trusted family member or friend will care for pets and can prevent the situations where pets were sent to shelters or even euthanized.
Considering and drafting documents for trusts should include tax planning. However, changes to the tax code passed by the U.S. Senate may place family-owned businesses at a disadvantage because trusts may be excluded from deductions and face higher tax rates.
Anyone with substantial property must consider how their assets such as home, brokerage account, retirement plan or savings account will be distributed after their death. Heirs who squander their inheritance or court battles are more likely without solid estate planning.