Category: The Wealth Advisor

What Is a Dynasty Trust and Why Should You Consider One?

If you have significant wealth, one of the best ways to protect your family and transfer your wealth is through a dynasty trust. However, setting one up requires considerable financial and estate planning knowledge. As experienced estate planning attorneys, we can explore all options available to protect your legacy and decide if a dynasty trust is right for you. 

Who Could Benefit from a Dynasty Trust?

If you have worked hard to grow your money, property, or business and want to create a lasting financial legacy for your family and future generations, creating a dynasty trust may be a great choice. Protecting your substantial wealth means addressing your specific concerns about taxes, potential creditors, lawsuits, or other financial risks while ensuring responsible management and distribution of money and property to your family. 

As a high-net-worth individual, you may need more complex estate planning strategies to achieve these goals. A successful estate plan is not just about transferring your wealth to the next generation. It is about sharing your vision for your family’s financial future along with setting certain guideposts for the management and distribution of wealth to ensure responsible financial stewardship.

How a Dynasty Trust Works

Creating and funding a dynasty trust should be done by an experienced estate planning attorney, often in collaboration with other professionals. Your team can guide you in deciding which cash, real estate, investments, or other valuable property should be transferred to the trust. You may be able to use your lifetime gift tax exemption to successfully transfer these items while minimizing tax consequences for yourself and your heirs in the future. Tax-efficient growth creates an even greater legacy for successive generations.

A dynasty trust is designed to be perpetual or of long duration. Unlike other trusts with limited or fixed termination dates, a dynasty trust will likely last for multiple generations and continue to accumulate and grow wealth over time.

A dynasty trust often involves appointing a professional trustee, such as a bank or trust company, to oversee the management and administration of the trust. They must follow specific terms and guidelines, ensuring responsible governance and distribution of money and property according to your wishes. These terms may include flexible distribution provisions to provide income to beneficiaries, an option for the trustee to make discretionary decisions based on specified criteria, or permitting the trustee to adjust distributions in response to changing family circumstances.

Why Would You Want a Dynasty Trust?

By placing money and property in a well-structured dynasty trust, you ensure that the wealth you have worked hard to accumulate remains protected within your family.

Life is unpredictable, and unforeseen circumstances, such as lawsuits, creditors, or divorces, can pose threats to your family’s financial stability. Since money and property are legally owned by the dynasty trust rather than any individual family member, they can be safeguarded from creditor claims and legal judgments in many cases. 

Estate taxes can significantly erode the wealth passed down to your heirs. Dynasty trusts are structured to minimize the impact of estate taxes over multiple generations. Additionally, the appreciation in value of trust resources while you are alive will occur outside your taxable estate, allowing for potential growth free from estate tax implications. 

Customized provisions in a dynasty trust can govern how money and property in the trust are managed and distributed. This level of control is particularly beneficial if you are concerned about a beneficiary’s financial acumen or spending habits. You can ensure that your wealth is managed responsibly while still providing for your family. 

If you have accumulated significant wealth and are looking for a way to create a lasting financial legacy for your family, we are available to discuss sophisticated estate planning tools, like dynasty trusts. By leveraging the benefits of perpetual duration, tax-efficient growth, asset protection, and responsible governance, you can address your family’s unique needs and goals over multiple generations. If you are interested in learning more about dynasty trusts and whether they are the right tool for you, give us a call.

Love Is in the Air: Have You Protected Your Loved Ones?

Valentine’s Day is approaching, when many people express just how much their loved ones mean to them by giving gifts and cards. But this year, you could try something different to show your love: think about your estate plan and how you can protect and provide for your loved ones. Preparation can help guide your loved ones through life’s challenges, and your love will be your legacy.

The New Year Has Begun 

The beginning of a new year is an opportune time to focus on family. A comprehensive estate plan can act as a roadmap, shielding your loved ones from uncertainties and providing peace of mind for both you and your family.

Protecting Relationships

Unmarried Partner

Today, it is common for adults to be in long-term committed relationships but be unmarried. If you have a life partner and are unmarried, it is imperative that you have an estate plan if you want your partner to receive your money or property at your death or if you want them to make financial or medical decisions on your behalf if you are alive but unable to make your own decisions. If you rely on your state’s laws, an unmarried partner will likely receive nothing at your death and will have no authority to make decisions on your behalf.

Spouse

Under most states’ laws, if a person does not have an estate plan, a judge usually chooses the spouse to make decisions for them if they cannot or to wind up their affairs when they pass away. The spouse is also typically given a large part of the person’s money and property if they die without an estate plan. However, a proactive and documented estate plan can help alleviate complications and misunderstandings among other family members. This is especially important in a blended family, where, for example, you may want your surviving spouse and children from a different relationship to receive your money and property at your death or you want an adult child to make medical decisions for you instead of your spouse. 

New Child or Grandchild

Welcoming a new family member is a joyous occasion, but it also comes with added responsibilities. Providing for a child or grandchild at your death in an estate plan involves nominating a guardian for your minor child and creating the terms for the inheritance you would like your child or grandchild to receive. By creating or revising your estate plan after the birth of a child or grandchild, you can help ensure the wellbeing and financial security and support the future aspirations of your young family members.

In-Laws

In-law relations such as a son-in-law, daughter-in-law, or parent-in-law may not typically be included in an estate plan, but you may want to leave an in-law relation something upon your passing. Alternatively, you may want your in-law to receive another family member’s inheritance if they predecease you or pass away before they have received their entire inheritance. By default, most state laws will not provide for an in-law if you pass away without an estate plan, so if this is your desire, you need to proactively plan for it. You should also reevaluate what you leave newly married family members in your will or trust, focusing on protecting their inheritance from their new spouse in the event of a divorce.

Protecting Your Family During Your Job Changes

Life is dynamic and so are your financial circumstances. It is essential that you update accounts and beneficiary designations with each job change or significant change in income. Failing to do so may have unintended consequences on life insurance policies, retirement accounts, flexible spending and health savings accounts, and more. Talk to your human resources benefits advisor to take an inventory of investments tied to your former employer and any new employer. Even if you have been at the same company for years, you should periodically check your beneficiary designations to make sure everything is up-to-date.

Estate planning is not a one-and-done task. It should evolve with changing circumstances. Regular reviews ensure that your estate plan aligns with changes in your relationships, financial situation, and life events. An estate plan is made up of documents that require accurate information to protect and provide for those you hold dear.

In February, the month of love, take the time to create or revisit your estate plan. Through thoughtful planning, you can continue to express love and care for your family, even after you are gone. If you have any questions or would like to review your existing estate plan, give us a call.

As your trusted estate planning attorney, if we do not have an immediate answer or solution for you, we can often get one by contacting another attorney or advisor who works in an area that falls outside of our expertise—a vetted professional that we have developed working relationships with or perhaps your trusted advisor who can be brought in to enhance the services provided to you. 

When this happens, we must adhere to specific ethical guidelines, including those outlined in the American Bar Association’s (ABA) Code of Professional Conduct Rule 1.6, regarding client confidentiality and obtaining informed consent before disclosing information related to your planning. According to ABA Model Code Rule 1.6, “[a] lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent.”

Attorney-Client Privilege 

You are surely familiar with attorney-client privilege—confidential communications between you and your attorney stay between you and your attorney. This is one of the oldest legal privileges, with boundaries respected by the courts. However, there are times when attorney-client privilege is waived, such as when information is shared outside of the attorney-client relationship. 

Lawyers often include other individuals as part of their “team,” specifically to provide the best and most comprehensive representation to their client. For example, lawyers may often seek out a trusted accountant, tax advisor, financial planner, or insurance agent to help translate complex financial information, tax strategies, or policy information for advanced estate planning. However, when these individuals are brought in, we want to make sure that you are informed and protected.

The Third-Party Waiver Form

In situations where nonclients, including your family members and advisors, are integral to the estate planning process, we may ask you to sign a third-party waiver form. This form serves a dual purpose:

1. It allows us to share confidential information that is otherwise protected by the attorney-client privilege with relevant third parties to complete the estate planning process.
2. It allows third parties to be present during our estate planning meetings where sensitive details are discussed. 

The third-party waiver is not only an ethical requirement but it also serves as a practical tool for permitting effective communication and collaboration among various experts. This can help to cultivate a comprehensive and transparent approach to estate planning. By seeking informed consent through the third-party waiver, we adhere to legal and ethical standards that prioritize your best interests.

Knowing What to Expect from Your Estate Planning Attorney

If you are ready to start the estate planning process and have other trusted advisors you feel would help the process, you can expect to sign a third-party waiver form. Your privacy is of the utmost importance. 

If you want to include family members or friends in your estate planning meetings, you will need to sign a waiver permitting us to share your private planning information with them as well. In some instances, we have found it helpful to include family members in a meeting once the estate plan is complete, especially if those individuals have been given a role as an executor, trustee, or agent under a financial or medical power of attorney. We will explain what their roles involve and your intentions for them in decision-making processes. We can be there to provide them with advice and support and navigate tough conversations if needed. 

We are your attorneys, and it is our responsibility to represent you and your interests. In some areas of the law, this may mean excluding people; however, in estate planning, it may be to your benefit to include outside professionals, family members, or loved ones. Regardless of the situation, we are here for you to ensure that you have an estate plan that is comprehensive and carries out your wishes.

In addition to being considered the month of love, February is International Networking Month. In today’s world, developing new relationships with people is truly important. Our social and professional interactions contribute to our overall health and mental well-being. Many people work remotely or live far away from their friends and family and often engage with others online rather than in person. This can make it hard to make new friends or find colleagues with common interests. We need to make the time and put in some effort, and that is where networking comes in.

What Is Networking?

Networking involves attending in-person and online events to find people who can offer insights, opportunities, guidance, and support for business or personal endeavors. Whether you want to find people who share your hobbies, a lunch date, a travel companion, or a professional who understands your specific challenges at work, your networking community can add value to your life. 

Networking can be a strategic business activity or a social gathering. You can plan your own event or attend someone else’s based on a personal or professional goal. Who do you want to meet and why? From LinkedIn business communities to Meetup.com, networking sites have many ways to help you find “your people” and offer opportunities to meet virtually or face-to-face.

When Do You Network?

Networking helps you expand your circle of friends or peers. You might feel lonely, want to learn something new, need a break from your routine, or simply want to be in a room with like-minded people. Search for specific events and activities that speak to you and meet your criteria for locations and times. Check the profiles of online participants and comments about the group to determine if it interests you. If you cannot find exactly what you are looking for, create a group describing the types of people you want to meet and the activities or interests you want to explore. Then set up a time and place to see if other people in your area are willing to meet. 

Online networking sites introduce you to many communities and individuals you can build relationships with over time. You can control the level of interaction you are looking for, whether it is to attend a casual cocktail hour with 50 people or schedule a meeting with one individual for coffee.

What qualities are you looking for in the people you will meet? How far do you want to travel to meet them? What interests do you want to share? Get started and work to establish connections that enhance your quality of life. You may find that you develop many lasting friendships or relationships with referral sources.

Networking Is a Worthwhile Endeavor

It takes time to find people who have the qualities you enjoy, whether in personal or business relationships. Get comfortable with introducing yourself to others. If you are a bit introverted, start with smaller networking groups, bring a friend, and spend more time listening before jumping in. Seasoned group members are often happy to introduce themselves and help new people feel comfortable. 

You may have to try multiple networking events before finding the right fit. Once you do, commit to this social exercise. Building valuable relationships requires gravitating to people you can appreciate for their personality, skills, or knowledge.

In a world where family members live in different states and most interactions are virtual or remote, we need to discover new ways to meet people and connect on a deeper level. A sense of community brings people together. Networking offers an opportunity to give and receive love and support in a variety of ways. Give networking a try!

As we begin 2024, it is crucial to review estate planning goals and strategies that may be affected by changes in the federal estate tax exemption law. At the end of 2025, the Tax Cuts and Jobs Act (TCJA) the estate tax exemption, which is $10 million, adjusted for inflation, may revert to the pre-2017 exemption amount, cutting it almost in half. Depending on the types of accounts and property you own, you may need to pay close attention to their value.

You may need a complete reevaluation of your most significant investments and property to ensure that they are protected. The following items may have steadily increased in value over time, potentially creating major estate tax issues:

• Business interests
• Life insurance
• Real estate

For people with significant wealth, each of these items alone may not put you over the estate tax limits, but the combination could. 

Your Business

With the uncertainty surrounding the estate tax exemption, developing a comprehensive business succession plan is crucial, especially if your goal is for the business to continue on after you have retired or passed away. Consider strategies such as gifting shares to the next generation or creating a family limited partnership. 

The last thing you want to do is sell your business or farm that may have been in your family for generations (if farming is your occupation) to satisfy a looming estate tax bill. Not only would this be a financial and emotional loss, but it may also result in the loss of jobs for your family and other employees. 

Your Life Insurance Policies

Life insurance policies may be an essential part of your estate plan. Review your life insurance policies to ensure that they are used effectively for your estate planning goals with the federal estate tax exemption in mind. Increasing policy values could put you over the potentially lower lifetime exemption limit. Consider the following:

• You need to determine how much life insurance to purchase. By meeting with an experienced insurance agent and financial planner, you can ensure that you have the right amount of coverage to adequately plan for your loved ones.
• The ownership of the policy can affect estate tax liability. Transferring ownership of the policy to an irrevocable life insurance trust (ILIT) may allow you to remove the value of the policy from your estate and protect the death benefit on behalf of your chosen beneficiaries.

Multiple Real Estate Properties

Real estate can pose specific challenges in estate planning. Reassess the current value of your properties to ensure accurate tax planning, keeping the potential decrease in the estate tax exemption in mind. Depending on the economic climate, your real estate may be far more valuable than when you first acquired it. You might consider using trusts, such as qualified personal residence trusts (QPRTs), to transfer real estate to heirs while minimizing estate tax exposure. You might also consider creating an entity, or multiple entities, to own the real estate. This strategy may be able to offer additional asset protection for you and your loved ones.

Stay Informed with the Help of Professionals

The estate tax landscape is evolving, and it is important that your estate plan stays up to date. We would love to collaborate with your trusted financial and tax advisors to update your comprehensive estate plan. Your situation and family dynamics are unique, and your plan must be customized to your specific circumstances to adequately protect your property and minimize potential tax liabilities well before the estate tax exemption sunsets at the end of 2025. 

If you have significant wealth, you may be exposed to future estate tax burdens that must be acted on before the Tax Cuts and Jobs Act reduces the estate tax exemption in 2026. Developing and implementing the right estate planning and tax strategies takes time. You may need to prepare regardless of whether the estate tax continues at its current level or if it is cut in half. This means strategizing to minimize your estate tax liability now.

Does This Sound Like You?

Meet the Andersons, a well-off family living in a state with a high cost of living. Robert Anderson, the father, is a successful entrepreneur who built a thriving business over the years. His wife, Sarah, is an accomplished artist, and together they have accumulated a substantial estate of $8 million each, for a total of $16 million. Their estate is primarily composed of their business assets, valuable artwork, life insurance, a family residence, a vacation home, and other lucrative investments. They have two adult children, James and Emily, both actively involved in the family business.

Their Unique Estate Tax Situation

With the generous federal estate tax exemption set at $10 million adjusted for inflation per individual in 2017, steadily increasing to $13.61 million in 2024, the Andersons have felt relatively secure about avoiding estate taxes. Their primary concern has been preserving the family legacy and ensuring a smooth transition of their assets (business, accounts, and property) to the next generation. They had taken some initial estate planning steps, such as creating a will, discussing the use of a family limited partnership, and exploring gifting strategies to transfer the assets to their children gradually.

If the estate tax exemption drops to $5 million adjusted for inflation, the Andersons may face several estate tax issues that require professional advice and assistance before the end of 2025. The Andersons need to find other ways to protect their money and property.

Business Succession Planning

The family business represents a significant portion of the Andersons’ estate, and the sunsetting of the higher exemption amount could have profound implications for its continued viability. Robert and Sarah need to develop a comprehensive business valuation and succession plan now to minimize the total estate tax burden and ensure a smooth ownership transition to James and Emily later.

Property and Investments

Given the potential changes in the estate tax landscape, the Andersons need to revisit the valuation of their financial accounts, retirement and life insurance investments, personal property, real estate, and artwork to ensure accurate assessments. Then they need to determine which items will affect the estate tax calculation and any remaining exemption they have left from prior legacy planning. Depending on their assets’ values, these items can easily put them over the potentially soon-to-be lower estate tax exemption, exposing them to a 40 percent tax rate. 

Lifetime Gifting

With the uncertainty surrounding the estate tax exemption, the Andersons may want to consider accelerated lifetime gifting strategies to reduce their taxable estate while the higher exemption is in place. The Internal Revenue Service declared in 2019 that individuals who take advantage of the increased gift tax exclusion from 2018 to 2025 will not be negatively impacted after 2025 if the exclusion amount drops. Gifting up to $13.61 million in 2024 has a zero tax liability. But gifting over $6.4 million in 2026 may have major consequences.

Life Insurance

The Andersons may want to use life insurance to ensure that their loved ones are provided for at their passing. They may want to consider creating an irrevocable life insurance trust to own the life insurance policy and be the recipient of the death benefit. This removes the value of the policy from the Andersons’ estate and protects the death benefit for their chosen beneficiaries. 

Marital Deduction Planning

The significant portfolios of high-net-worth and ultra-high-net-worth families may require advanced tax planning techniques, including an AB trust, to optimize each spouse’s estate tax exemption and potentially minimize their estate tax liability. At the client’s death, an amount equal to the current estate tax exemption amount is placed in one trust, which uses the exemption, and the remainder is placed in a second trust for the surviving spouse’s benefit, which qualifies for the unlimited marital deduction. This results in no estate tax being owed at the death of the first spouse.

Portability and the Deceased Spouse Unused Exemption Amount

Spouses are able to give an unlimited amount of money and property to each other without having to worry about estate or gift tax. Because of this, some clients may not have an estate tax issue at the first spouse’s death because everything (or a substantial portion) went to the surviving spouse. Because they are utilizing the unlimited marital deduction, the deceased spouse’s exemption is not needed. However, even if this is the case, it may be advisable to file an estate tax return at the first spouse’s death to document how much of that deceased spouse’s exemption is being used, if any, and that the remainder is going to the surviving spouse. This will allow the surviving spouse to add the deceased spouse’s unused exclusion (DSUE) to the surviving spouse’s own exemption amount and apply that combined amount against their own estate at the time of death.

Charitable Giving

If the Andersons are philanthropically inclined, another great option would be to engage in charitable giving through the use of a charitable remainder trust. Setting up this type of trust can be time-consuming—sometimes the process is fairly straightforward but often highly complex, requiring advanced planning and consideration.

Contacting a Trusted Advisor

If your situation is similar to the Andersons, expert guidance is necessary to address estate tax issues and help you evaluate the impact of the potential sunsetting of the higher estate tax exemption amount on your estate. Contact us to learn more about strategies to protect, preserve, and pass down valuable property. 

The Countdown Begins: Will We Keep the $10 Million Exemption?

The year 2026 is quickly approaching, bringing substantial changes that may affect your estate tax situation. The Tax Cuts and Jobs Act (TCJA) in 2017 significantly increased the federal estate tax exemption to $10 million adjusted for inflation. This is the amount you can gift or leave to your loved ones at your death without incurring a gift or estate tax liability. Any portion of the exemption used during lifetime reduces the total exemption amount available at death for estate tax purposes.

However, the countdown has begun for the potential sunset of this generous exemption by the end of 2025. Adjusting for inflation, the Congressional Budget Office estimates the new exemption amount will be $6.4 million in 2026. There are strong arguments for and against the changes in legislation. Whether the current exemption amount remains or is reduced to roughly $6.4 million, valuable insights from professional advisors can prepare you for either scenario. What is not taxable today might be taxable tomorrow.

History of the Estate Tax Exemption

The federal estate tax was first enacted in 1916 to generate revenue for the government. Over the years, it has undergone various changes in exemption limits and rates.

The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) gradually increased the estate tax exemption and reduced the tax rate until it reached zero in 2010. However, the estate tax was set to return to the 2001 amounts for deaths occurring in 2011 unless further legislative action was taken. In 2011, the estate tax exemption was reinstated at $5.0 million.

In 2017, the TCJA doubled the estate tax exemption from $5.49 million to nearly $11 million to stimulate economic growth and create jobs. The exemption continues to adjust for inflation, offering individuals an unprecedented opportunity to pass on substantial wealth free from federal estate tax.

The TCJA’s Sunset Provision

A sunset provision was embedded within the TCJA to limit how long the higher estate tax exemption could continue. Without legislative intervention, it will be cut in half to $5 million adjusted for inflation in 2026, creating a potential estate planning crisis for people with considerable estates on December 31, 2025. Adjusting for inflation, the Congressional Budget Office estimates the exemption amount will be $6.4 million in 2026.

If We Keep the Current Estate Tax Exemption 

Maintaining or increasing the already high estate tax exemption amount could be seen as a move that benefits the wealthy, broadening the tax burden for others. It can also be seen as maintaining the status quo. And the current law ensures that most people will not be subject to federal estate taxes.

A higher estate tax exemption was expected to foster economic growth and capital investment by allowing wealthier individuals and families to reinvest in businesses and job creation. Yet the federal government relies on estate tax revenue to fund various programs and therefore would not want to reduce a lucrative revenue source. Without the estate tax, other revenue sources would have to foot the bill for these programs and potentially face cuts in the benefits and services provided.

For the estate tax exclusion to remain at the higher amount beyond 2025, Congress will need to take action.

Why the Estate Tax Exemption May Revert Back

The TCJA was part of a short-term tax cut package. Lawmakers had to make room in the budget for the tax cuts introduced by the legislation. They did this by temporarily increasing the estate tax exemption. 

Reverting to a lower exemption amount is believed to generate more revenue by increasing the number of people who pay the tax and increasing estate tax exposure to those with net wealth above the current exemption amount. Estate tax revenues are projected to increase sharply after 2025, when the exemption amount is scheduled to drop. From 2021–2031, the combined estate and gift tax revenues are projected to total $372 billion. 

Preparing for Potential Estate Tax Changes

As we move into 2024, it is crucial to review estate planning goals and strategies that may be affected by potential changes in the federal estate tax exemption law. By working together with your other trusted advisors, we can reevaluate your current estate plan, investments, and property to ensure that you are protected and your financial legacy is preserved. 

Pets sometimes outlive their owners. If you suffer an accident or illness, it could leave your cat, dog, horse, iguana, or any other pet without a caregiver, which, without proper planning, could result in your beloved pet being sent to an animal rescue or shelter that is not of your choosing. Take a few steps to protect your beloved pet’s future and ensure they are always cared for, no matter what happens. 

1. Carefully Choose a Pet Caregiver

Talk to more than one trusted person until you find someone willing to physically care for your pet if something happens to you. If you have more than one candidate, select one as your backup in case circumstances change—a caregiver can move, change their mind, or pass away. Caregivers must have the right environment to receive your pet and accommodate their daily needs. 

1. Create a List of Emergency Contacts

Just like people, pets likely have professionals that should be called in an emergency. This can include their primary veterinarian and any specialist they may be seeing. You may also want to include the contact information for any boarding facilities you have used in the past or petsitters that come to your home when you cannot take your pet with you.

1. Create a List of Your Pet’s Medications

Like people, some animals need medications to cure a temporary illness or supplements to manage a chronic condition. It is important that you have a list of these medications and times when they are administered to make sure that whoever is caring for your pet is prepared to administer them.

1. Create a Budget for Your Pet’s Needs 

Your checklist should include monthly or annual expenses for your pet, including the following:

• Regular pet food purchases 
• Treats 
• Recommended supplements or vitamins 
• Routine veterinary checkups and vaccinations
• Preventive medications (flea, tick, heartworm)
• Dental cleanings and care
• Prescription medications for chronic conditions or illnesses
• Haircuts or professional grooming services
• Litter, litter boxes, waste bags
• Toys and enrichment items
• Pet insurance premiums
• Boarding
• Training or obedience classes
• Travel expenses
• Licensing

Developing this budget will help you estimate costs that a caregiver may have to shoulder or allow you to set aside an appropriate amount of money in your estate plan (either outright to the caretaker or in a pet trust) to cover expenses for your pet’s expected lifetime based on age, health, and breed.

1. Research Local Shelters

Although you do not want your pet to end up in a shelter if something happens to you, it is important that you plan for all contingencies. By researching local shelters and pet rescues, you can take control of your pet’s future by knowing which one would be acceptable in the event your family or friends cannot take your pet. This is a decision that we can document in your estate plan so that your trusted decision-makers know your wishes.

1. Contact an Estate Planning Attorney

Armed with a detailed list of expenses and critical information, you will be prepared to share it with potential pet caregivers if you experience a medical emergency and can no longer care for your pet. The best way to do this is with legal documentation. Take this information to an estate planning attorney to create a will or pet trust with a letter of instruction for your pet caregiver. Let your pet caregiver know you have a will naming them the beneficiary of your pet or as the trustee of a funded pet trust to help them with caretaking expenses. Give them the name and contact information of your executor, trustee, and estate planning attorney so they can access a copy of your documents when necessary.

If your pet outlives you, a trusted caretaker will have what they need to ensure a loving environment. By taking the right steps, you will be helping your family members, friends, or local pet welfare agencies provide the best possible care for your pet. If you need to update your existing estate plan or create a new one to provide for your beloved bet, give us a call to schedule an appointment.

If you have a severe illness or accident or pass away, who will you trust to look after your pet? There are many ways to ensure your pet continues to have a loving home.

Guardian of Your Minor Children

If you also have minor children, the nominated guardian of your minor children can be a good first choice to take care of the family pet. The guardian is already taking on the large responsibility of caring for your children, so they may also be willing to take care of your pet. In addition, having the beloved family pet stay with the children may comfort them during a difficult time in their lives. It is important that you discuss this with your nominated guardian to ensure that they are willing to undertake the additional responsibility.

Family or Friends

When selecting a caregiver for your pet, most people look to a trusted family member or friend who may be willing to care for them. This person has probably spent time with your pet and already knows their typical routines and behaviors, making them more comfortable taking on the responsibility. This choice may also provide your pet with a familiar environment. However, taking on a new furry family member is a big responsibility that requires some considerations:

• Does their lifestyle, home, and comfort with pets make them a good fit for caregiving? 
• Do they already have other pets? If yes, do they get along with each other?
• Do they understand the expectations and level of care that the pet requires? 
• Are there specific instructions or preferences they may not be able to accommodate?
• Can they afford the financial responsibility of supporting a pet?

Animal Welfare Organizations

In some instances, animal welfare organizations such as shelters, rescue groups, sanctuaries, or foundations can take your pet and find a suitable home. Look for reputable organizations in the area and visit them to assess their cleanliness, staff interactions with animals, and overall environment. The organization must provide a safe and comfortable space while locating a loving permanent home. You should also consider whether this organization euthanizes pets that are not adopted and whether that plays into your choice of organization. Creating a comprehensive profile of your pet, including their medical history, behavior, preferences, and any special needs, with photographs and videos of the pet, could make the adoption process easier for the organization.

Executor’s or Trustee’s Choice

Depending on your situation, you may feel more comfortable with giving the person who winds down your affairs (the executor or trustee) the authority to choose the most suitable home for your pet. Because things can change unexpectedly, providing this level of flexibility can help ensure that your pet goes to a suitable, loving home, even if it is not a home that you initially considered.

Make Your Wishes Known in Your Estate Plan

By proactively planning, you can make financial and care arrangements for your pet’s care well in advance, making the transition easier on everyone involved. 

Once everything is clearly documented for your pet’s care in either a will or trust, you must keep your legal documents and any other pertinent information easily accessible to the designated caretaker and ensure it is kept up to date. Let family members, executors, or trustees know the location of any necessary documentation to care for your pet.

Make sure you review your estate plan annually for any changes in your circumstances, your pet’s health, behavior, routines, or preferences. We are available to help you if you are having trouble selecting the right pet caretaker or want to discuss the best way to protect your pet. Give us a call to schedule a time to discuss ways we can protect your beloved pet.