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Houston Estate Planning Law Blog

ESTATE PLANS FOR OUR CATS AND DOGS

As Texas residents know, estate plans guarantee that our loved ones are cared for. However, what are your plans for your pet? In a recent national story, a 76-year-old woman has decided to protect her cats after death. Her plan, a pet trust, surfaced after she found one of her late friend’s pets in a dire situation.

An article explains that the woman’s friend, who passed after an illness, made arrangements for one of her cats. The friend understood that her son would take her other cat. After her death, the caretaker backed out, and the son decided that he could not take more animals. Ultimately, one cat found a new home; however, the other was taken to a shelter.

Now, one lady does not want this same story to happen to her cats. To ensure that her pets are cared for, the woman has created a pet trust, which specifies that if the woman’s cats survive beyond her death, they will be taken to a local retirement community. The cats will be supported by money that she has set aside for them. According to the woman, “This way I know that they will not end up at a shelter, where they would be killed because they’re too old to be adopted.”

This type of trust elects a “guardian” who will carry out specific pet-related wishes. This ensures that the animal is cared for after the owner passes. The document includes instructions for care, and property is usually set aside for the new caretaker.

Pet trusts are not allowed in every state. However, sources note that including a pet in a will is not a good idea. Wills provide for how property should be distributed. Typically, they do not include details about caring for the animals, and pet care instructions in a will are not enforceable.

Pet owners tend to overestimate the likelihood that a relative will care for an animal. For this reason, the woman in this story has encouraged many of her friends to draw up these pet trusts.

Source: The New York Times, “The Pet Problem,” Alyson Martin and Nushin Rashidian, Feb. 3, 2012

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DOES MAN’S ADOPTION OF ADULT GIRLFRIEND REPRESENT AN ABUSE OF TRUST LAW?

The laws governing the creation and administration of wills, estates and trusts can be a bit tricky. In a lot of ways, they are fairly straightforward, but as in other areas of law, there are always those quirky little loopholes that, in some cases, can lead to surprising outcomes.

Such a loophole is behind the recent story out of Florida. It’s a story that some Houston readers might think reflects a clever and creative move and others might think shows a disregard for the intent of our laws and constitutes an abuse of the system: a 48-year-old man recently adopted his 42-year-old girlfriend so that he could move assets into a trust for his “children” and thus shield them from a pending wrongful death lawsuit against him.

The man is being sued by the parents of a college student whom he killed in February 2012 when he ran a stop sign when he was drunk. Their wrongful death suit is set to begin next month. Evidently worried that he might lose, the man apparently moved hundreds of millions of dollars into a trust set up to benefit his children. Since the assets now belong to the trust and not to the man himself, they are no longer considered “his” by a court.

By adopting his girlfriend, however, the man created a beneficiary who could access the trust, since she is now his “child.”

Naturally, the family of the deceased child has objected, and a judge called the move “surreal,” but at this point, there does not seem to be anything illegal about what the man did.

What do you think? Was the man just very savvy, or did he do something that, to you, seems underhanded and devious?

Source: ABC News, “Polo Club Found Adopts Girlfriend Amid Civil Suit Over DUI Death,” Christina Ng, Feb. 2, 2012

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WHAT TO KNOW ABOUT A SPECIAL NEEDS TRUST FOR A DISABLED DEPENDANT

When it comes to the well-being of their children, parents will do just about anything. That includes venturing into the very scary subject of planning for their own deaths. And no, not in a morbid sort of way. The sort of estate plans that readers of our blog hear so frequently about such as naming a guardian, adding beneficiaries to a will, or instructing family members about medical wishes.

But one thing we haven’t covered much on is about how parents with disabled children should plan for the future. While in some cases Social Security Disability benefits and Supplemental Security Income can provide a source of income, in most cases, children with special needs often rely on their parents to provide them with financial support. So what happens when those parents pass away?

If you’re a parent with a special needs child, one important way to make sure that they have financial stability is to establish a special needs trust. It’s worth noting that these types of trusts are not easily done without help from a skilled attorney. That’s because these types of trusts, while flexible in nature, can interfere with benefits received through government assistance programs. If not worded properly, a trust can quickly disqualify a disabled child’s benefits, leaving them in the exact financial crisis you tried to prevent.

Speaking to a lawyer is the first step to establishing the trust. But what about funding? How much money should you set aside? How much of those funds will be distributed at each time? These are all important things to speak to your attorney about because the answer will differ depending on your particular situation.

To someone unfamiliar with estate planning, establishing a special needs trust can seem like an overwhelming process. But this is where your attorney comes in. They can help you understand the complexities of the law and help you prepare financial stability for your special needs child after you’ve passed away.

Source: The Fiscal Times, “Estate Planning Guide for a Special Needs Child,” Sonya Stinson, July 10, 2013

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