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Sunday, June 14, 2009

Where There's an Inheritance: Stories from Inside the World of Two Wills Lawyers

I have not personally read the book Where There's an Inheritance: Stories from Inside the World of Two Wills Lawyers by Barry Fish and Les Kotzer, but it looks worthwhile. I located a review in Deseret News. Here is one of the funny stories outlined in the review:

He was a widower with no children, but he was blessed with money, many nieces and nephews — and a unique plan for deciding who should benefit from his generosity.

By the time he was in his mid-80s, his nieces and nephews believed the impression he gave that he had trouble hearing. They gathered often for holidays and family events, and they talked about how much they liked — or disliked — their uncle.

At his 90th birthday party, he stood to say a few words of thanks. "I've been waiting to say these words for the last few years: I can hear perfectly. I have always had perfect hearing, and I have heard everything you have ever said to me and about me."

As a stunned silence swept the room, he proceeded to tell them what he had heard — and later used that information as he prepared his will.
And also a touching story – something in the hustle and bustle of life, I can certainly learn from:
Les says one that touched him personally was the story of a woman named Rachel. She called Les and asked him to help her write a will, but said she had not been out of the hospital for more than a year and likely would die soon. Rachel agreed to find someone to drive her to his office for the appointment — and probably her last trip outside.
The day of the appointment was windy, cold and rainy. Les was swamped with work, got caught in an accident over his lunch hour and was not having a good day. When Rachel arrived, he went out to the van she traveled in and saw her looking out the window, beaming, as she watched the rain.
"Then she turns to me and says to me, 'Mr. Kotzer, isn't it a beautiful day?' Here I was hating that day, and here's a woman who's dying telling me, 'Isn't it a beautiful day?' I thought, if people hear a story like that, it may change their lives, and help them appreciate the days that they have," Les says.

Wednesday, June 10, 2009

Pet Trusts for the Non-Rich

It’s true that my Depression-era grandparents would not have thought much of a pet trust (“Such a waste,” they would almost certainly have said). Yet, pets have become important to the well-being of young and old. As such, it is only natural that owners want to ensure that their furry loved ones are cared for once they pass away.

There has been a lot of media attention over Leona Helmsley’s $12 million pet trust for her dog, Trouble. In a circular argument, one legal writer recently suggested that the $12 million gift was worth “the Trouble” (sorry…I couldn’t resist) because all of the press attention has created a bevy of death and dog-napping threats. Frances Carlisle wrote:

After the publicity, it was reported that more than 40 death and dognapping threats were received, and that the dog was in such danger that she was taken out of her Connecticut home and flown under an assumed name to a secret location. Round-the-clock security is needed for the dog, which costs between $100,000 and $200,000 a year, and that amount is much more than any other expense for the care of the dog. Since security costs are so high, $2 million is a reasonable amount to fund the trust for Trouble.

Maybe I am overthinking this, but he seems to be arguing in a circle: That a pet trust for $2 million is justified, because Leona Helmsley made a $12 million trust?

Well, there are pet trusts for Trouble – and there are pet trusts for the rest of us. Most of us don’t have $2 million (let alone $12 million) to put into a pet trust. Still, we worry about our little friends when we are gone. Here are some things to think about if you are considering such a trust:

Make it worth the “Trouble” for the trustee (sorry again): If you go to the expense of a pet trust, don’t “go cheap” on your trustee. You obviously want the trustee to take care of your pet, so give the trustee enough of a trustee fee – but not too much or too little. If you give your trustee too little, he or she would have an incentive to get rid of the pet; too much, and the pet might be kept alive longer is good for the pet’s comfort and well being.

Consider a trust protector. Pets are obviously very helpless. Generally, they will not have the wherewithal to file a petition in court to replace the trustee in case of abuse. Have a family member oversee the trustee. Under the new pet trust statute in California, (under Probate Code Section 15212) any person having an interest in the animal, or a charitable organization having as its principal activity the care of animals may enforce the trust.

Don’t give the trustee a large remainder interest in the trust. Again, you don’t want the trustee to have an incentive to “off” your pet to collect what is left in the trust. Giving a small gift after your pet dies is fine, but give the rest to the local ASPCA, or someone else not associated with your trustee.

Actually place the pet in the trust as a part of trust property. Animals are considered property. By placing the pet in the trust as part of the trust's property, you are requiring the trustee to use his or her fiduciary obligation of care, in caring for your pet. Of course, there are no guarantees. However, you should line up your legal "ducks in order."

These are just a few rules to consider. If you have an interest in a pet trust, you should contact your local estate planning attorney for assistance.