Estate Planning Bits

Pet Estate Planning in the wake of the Helmsley bequest

On August 20, 2007, Leona Helmsley, the billionaire New York City hotel operator and real estate investor, died, leaving an estate estimated at more than $4 billion. As part of a carefully drawn estate plan, Leona’s treasured dog, a Maltese named Trouble, was left $12 million in a trust fund. This bequest has caused a frenzy of commentary. As a result, many more people are seeking information about how they can protect their animals should they pass away.

Although many states, including New York, recognize trusts that name an animal as the beneficiary, unfortunately, at this time, Massachusetts does not recognize such trusts. Fortunately, there are still options for the Massachusetts animal owner to consider.

If the animal owner truly desires a trust, while it is not possible to create an enforceable trust solely for the benefit of an animal, it is possible to create an enforceable trust for the benefit of your animal’s caretaker. Should you not be inclined to establish a trust for whatever reason, an outright bequest of the animal in your Will, along with a sum of money intended to allow the recipient to provide care for your animals is another option. This option works well if you are of modest means and name a trustworthy caretaker.

There are many considerations to be addressed when planning for your animals’ ongoing care. Choosing a proper caretaker is first and foremost. It is also important to determine the caretaker’s compensation or the cost if your animals are to be surrendered to a rescue or similar facility. Providing standards of care, such as delineating the expected veterinary, exercise and grooming schedule for your animal, is recommended. In addition, the final disposition of your animals and the set of circumstances in which euthanasia would be permitted should be addressed.

When you’ve established an estate plan that addresses the issues raised above, you have taken the steps necessary to ensure the ongoing care of your animals when you pass away. Without such a plan, the fate of your animals is at best uncertain, and at worst, unspeakable.

By: Gina M. Barry, Esquire

For more information about Gina's Pet Estate Planning expertise, please click here.

Who Will Care for Your Minor Children if You Can’t?

Deciding who will care for your minor children if something happens to you is a tough decision in any circumstance, but it is a decision that you are most qualified to make in your lifetime. Without proper planning, your wishes might not be followed later.

In most cases, if you die leaving minor children, the other parent will raise and support them. Similarly, in the case of a divorce, when a custodial parent dies, the non-custodial parent has priority in seeking guardianship and custody unless unfit.

However, if the other parent is also deceased, your minor children will require a guardian. This is an individual who is appointed by the court to look after the direct physical well-being of your minor children and the assets of the estate left to them. Generally, the guardian provides whatever care would be given to children by their parents.

It is highly recommended that you assume the responsibility for this important decision, rather than leaving it to a judge who is unfamiliar with your family situation. Even though the court has the ultimate authority to appoint a guardian, your Will is the only way to convey to the court who you want to raise your children.

Designating a guardian in your Will doesn’t only help guide the court; it also helps prevent family arguments over who is better qualified. Technically, your choice as guardian is just a recommendation to the court. However, the Commonwealth of Massachusetts gives high priority to your recommendation. Typically, the court will honor your choice unless there is compelling evidence against your designee.

The greatest piece of mind that parents of minor children can have is to select and know who will take care of their children in the event that something happens to them. Scheduling a consultation with an experienced estate planning attorney is the first step to ensuring that your choice of guardian is appointed.

By: Todd C. Ratner, Esquire

Financial discipline for your kids

In raising our children to become responsible adults, part of the process is teaching them to be responsible financially. The younger generation does not appear have the same work ethic or desire to save money as the older generation. They are much more apt to spend money they don’t have, even before they know where it may be coming from.

There are certain steps that should be taken in an effort to raise a financially responsible child. Two options to consider are rewarding a child for work performed, including daily tasks in the house, or giving a child an allowance. What works for one child may not work for another, however, it is very important to have your child understand the value of money. If you are merely giving him funds and directing him how to save or spend them, then he is not making his decisions and learning financial responsibility.

A child must be given some exercise of control over at least some of his money, so that if he or she loses it, spends it frivolously or decides to save it for something special, he will deal with the consequences of his choices.

As the child gets older, he should understand the benefits of opening a checking account, as hopefully he already has a savings account. If possible, it’s also a good idea to encourage your child to open a retirement account. Although he can’t fully appreciate the benefit that will provide down the road, this exercise helps to establish good savings habits. Many adults still live for today and don’t worry about their retirement, but even a small portion of earnings placed in a Roth or traditional IRA will appreciate significantly between early working years and retirement years.

In addition, it is important to stress to your child the purpose of a savings account. These funds are either to save for a particular purpose or major expenditures. If necessary, your child could open multiple savings accounts, each to be allocated for a particular purpose. Banks have “vacation clubs” or “Christmas clubs” where deposits are scheduled, and your child would have to become disciplined to deposit a certain amount every period to attain a goal by a specified date.

I recently read a projection that a 20-year-old who saved the three dollars a day normally spent on a cup of coffee until he retired at the age of 65, could have invested it and at eight percent compounded and made $350,000.00 at age 65. However, few people consider the impact that such a minimal savings can have on their financial future. With online banking, it is easy to schedule regular withdrawals from a checking account to be automatically deposited to a money market or investment account.

Possibly one of the most important things to teach a young adult is budgeting skills. Teaching the value of budgeting includes emphasizing minimizing credit card purchases to only those that your child can afford to fully pay off when the bill comes in. This is not to say that a child should not spend any money, as there must be a reward for the effort expended on being gainfully employed. However, responsible spending is an important life lesson.

It is often difficult to have these discussions with the children, since they have their own ideas about money. If you find it difficult to speak to them directly, consider giving them a book to read. Two that I have found to be quite easy and not too long, are Rich Dad, Poor Dad and Rich Dad, Poor Dad for Teens. They're easy enough to find online.

By: Hyman G. Darling, Esquire

Special situation estate planning – a terminally ill person’s control of their own treatment

Although all people should have similar Estate Planning documents such as a Will, Healthcare Proxy and Power of Attorney, not all documents should be the same. Individuals should have special language included within their documents that apply to their particular situations.

For instance, a person with Multiple Sclerosis will have different needs than one with ALS, Chrones disease or another debilitating illness. The only commonality among these situations is that each one will have an adverse affect on a person as the illness progresses. The estate planning documents drafted to address these peoples’ needs could include additional language or possibly a side letter from the individual that explains specifically what he or she wants, needs, or does not desire respective to appropriate medical devices or procedures as their illness progresses.

For instance, a person may write their own advanced medical directives to be incorporated within their Healthcare Proxy or Living Will with instructions regarding how to handle certain stages of their medical deterioration, including whether or not they want to be kept alive by heroic means. Measures included in such directives may include use of a resuscitator or G-Tube. Each person may decide the track of his or her individual care and incorporate this within their entire estate plan.

Although a lawyer should not “play doctor” in these situations, it is important for the attorney preparing these documents to ask enough questions to ensure that their client has a good understanding of the potential adverse physical and mental effects on their body. There is no shortage of material available on the internet or from national or local societies that provide assistance to people suffering from illnesses.

Clients must be educated to know what to include or exclude from their estate planning documents. Frequently attorneys don’t ask sufficient questions to know what their clients want or present sufficient options.

Certainly, when clients are alive and competent, they may make their own decisions, including changing or revising their pre-designated healthcare options. However, a problem arises when a client becomes incapacitated or otherwise does not have cognitive ability to make intelligent decisions about his or her own healthcare. Unfortunately, when this occurs, a client often doesn’t believe that he or she has lost ability to make informed decisions, despite their family’s and medical personnel’s belief that they are no longer thinking clearly about their care.

To address this circumstance, it’s a good idea to have a “trigger” that designates when one or more individuals, usually a physician, will have the ability to declare the client incapacitated to the extent that he or she may no longer exercise control. At that point in time, a backup person or committee of individuals will be designated to take on the responsibility of making decisions for the incapacitated person.

It is important to emphasize however that with proper clarity within estate planning documents, the nominated agent should not really be making decisions at all, but rather, will be carrying out the requests of their friend or family member, who has pre-designated the specific requirements and procedures they want for their own care.

Sometimes a person has a temporary lapse in capacity due to a setback such as pneumonia, a reaction to a medication or possibly a situation such as a urinary tract infection. In these situations, it is important that the wishes of the principal are carried out to assure satisfaction when he or she regains control of their own medical care.

In any event, it is important to prepare estate planning documents while a person is competent to do so. But there should be as much specific direction included as possible, so when and if they have to be utilized, there will be no question about the procedures to be implemented at that time. If there is any specific illness, such as cancer, Alzheimer’s, Parkinson’s, ALS or other debilitating illness, there should be specific mention of the fact that this condition existed at the time the documents were prepared.

By: Hyman G. Darling, Esquire