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Entries in Trustee (5)

Wednesday
Dec212016

5 Tragic Mistakes People Make When Leaving Assets to Their Pets

A pet trust is an excellent way to make sure your beloved pet will receive proper care after you pass on. The problem, of course, is that you won’t be there to see that your wishes are carried out. It’s critical to set up a pet trust correctly to ensure there are no loopholes or unforeseen situations that could make your plans go awry. Here are 5 tragic mistakes people often make when leaving their assets to their pets.

1. Appropriating more than the pet could ever need:

The gossip stories about such-and-such celebrity who left his or her entire fortune to a pet are the exception rather than the rule. Leaving millions of dollars, houses, and cars to your pet is not only unreasonable, but it’s more likely to be contested in court by family members who might feel neglected. To avoid this pitfall, leave a reasonable sum of money that will give your pet the same quality of life that she enjoys now.

2. Providing vague or unenforceable instructions:

Too many pets don’t receive the care their owners intended because they weren’t specific enough in their instructions or because they did not use a trust to make the instructions legally binding. Luckily, a pet trust can clarify your instructions and make them legally valid.

If you leave money to a caretaker without a pet trust in place, hoping it will be used for the pet’s care for example, nothing stops the caretaker from living very well on the pet’s money. But when you use a pet trust to designate how much the caretaker receives and how much goes for the pet’s care, you’ve provided a legal structure to protect your furry family member. You can be as specific about your wishes as you’d like, from how much is to be spent on food, veterinary care, and grooming. You can even include detailed care instructions, such as how often the dog should be walked.

3. Failing to keep information updated:

Bill sets up a pet trust for his dog Sadie, but what happens if Sadie passes away? If Bill gets a new dog and names her Gypsy, but he doesn’t update this information before he dies, Gypsy could easily wind up in a shelter or euthanized because she’s not mentioned in the trust. This is a common yet tragic mistake that can be easily avoided by performing regular reviews with your estate planning attorney to ensure that your estate plan works for your entire family.

4. Not having a contingency plan:

You might have a trusted friend or loved one designated as a caretaker in your pet trust, but what happens if that person is unable or unwilling to take that role when the time comes? If you haven’t named a contingent caretaker, your pet might not receive the care you intended. Always have a “Plan B” in place, and spell it out in the trust.

5. Not engaging a professional to help:

Too many people make the mistake of trying to set up a pet trust themselves, assuming that a form downloaded from a do-it-yourself legal website will automatically work in their circumstances. Only an experienced estate planning attorney should help you set it up to help ensure that everything works exactly the way you want.

When attempting to leave assets to your pet, the good news is that with professional help, all these mistakes are preventable. Talk with us today about your options for setting up a new pet trust or adding a pet trust to your current estate plan. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

Friday
Dec162016

3 Famous Pet Trust Cases and The Lessons Learned

Not long ago, pet trusts were thought of as little more than eccentric things that famous people did for their pets when they had too much money. These days, pet trusts are considered mainstream. For example: in May 2016, Minnesota became the 50th (and final) state to recognize pet trusts. But not every pet trust is enacted exactly per the owner’s wishes. Let’s look at 3 famous pet trust cases and consider the lessons we can take away from them so your furry family member can be protected through your plan.

Leona Helmsley and Trouble:

Achieving notoriety in the 1980s as the “Queen of Mean,” famed hotelier and convicted tax evader Leona Helmsley passed away in 2007. True to form, her will left two of her grandchildren bereft and awarded her Maltese dog Trouble a trust fund valued at $12 million. The probate judge didn’t think much of Helmsley’s logic, however, knocking Trouble’s portion down to a paltry $2 million, awarding $6 million to the two ignored grandchildren and giving the remainder of the trust to charity. Furthermore, when Trouble died, she was supposed to be buried in the family mausoleum, but instead she was cremated when the cemetery refused to accept a dog.

Lessons learned: Leaving an extravagant sum to a pet may not be honored in a lawsuit and can cause family conflict. It’s best to leave a reasonable amount to provide for the care and lifestyle your pet is used to, for the rest of his or her life. If you are looking to disinherit one or more family members, make sure to specifically talk with your attorney so you can have a game plan to make the disinheritance as legally solid as possible.

Michael Jackson and Bubbles:

Most Michael Jackson fans will remember his pet chimpanzee Bubbles, who was the King of Pop’s constant companion. Jackson reportedly left Bubbles $2 million. After the singer’s death, Bubbles’ whereabouts became a point of speculation amid allegations that Jackson had abused the pet while he was alive. The good news is that Bubbles is alive and well, living out his years in a shelter in Florida. The bad news is that if he was left $2 million, he never received it; and he is being supported by public donations.

Lessons learned: Always be clear about your intentions and work with your attorney to put them in writing so your furry family member is cared for and doesn’t wind up in a shelter.

Karla Liebenstein and Gunther III (and IV):

Liebenstein, a German countess, left her entire fortune to her German Shepherd, Gunther III, valued at approximately $65 million. Tragically, Gunther III passed away a week later. However, the dog’s inheritance passed on to his son, Gunther IV; the fortune also increased in value over time to more than $373 million, making Gunther IV the richest pet in the world.

Lesson learned: It’s possible for pet trust benefits to be passed generationally, so make sure your estate plan reflects your actual wishes and intentions.

If your estate plan has not already made arrangements for your beloved pet, we’re here to help. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

Thursday
Jul212016

Do You Update Your Resume More Often Than Your Estate Plan?

A resume is really just a snapshot of your experience, skill set, and education. It provides prospective employers insight into who you are and how you will perform. Imagine not updating that resume for 5, 10, or even 15 years.

Would it accurately reflect who you are? Would it do what you want it to do? Likely not.

Estate plans are similar in that they need to be updated on a regular basis to reflect changes in your life so they can do what you want them to do.

Outdated estate plans—like outdated resumes—simply don’t work.

Take a Moment to Reflect:

Think back for a moment. Consider all of the changes in your life. What’s changed since you signed your will, trust, and other estate planning documents? If something has changed that affects you, your trusted helpers, or your beneficiaries, your estate plan probably needs to reflect that change.

Here are examples of changes that are significant enough to warrant an estate plan review and, likely, updates:

1. Birth

2. Adoption

3. Marriage

4. Divorce or separation

5. Death

6. Addictions

7. Incapacity/disability

8. Health challenges

9. Financial status changes—whether good or bad

10. Tax law changes

11. Move to a new state

12. Family circumstances changes—whether good or bad

13. Business circumstances changes—whether good or bad

Procrastination:

If you’re like most people, if updating your estate plan is on the calendar, you’ll make it happen. Just as you update your resume on a regular basis and just like you meet with the doctor, dentist, CPA, or financial advisor on a regular basis, you need to meet with your estate planning attorney on a regular basis as well.

Our office can help to ensure that your estate plan reflects your current needs and those of the people you love. Updating is the best way to make sure your estate plan will actually do what you want it to do.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.


 

Friday
Mar042016

Trusting Your Trustee—Doris Duke’s Trustee Bilked Estate for $1Million

Choosing a trustee is a very personal matter and should never be left to chance. Doris Duke, heiress of Duke’s energy and tobacco fortunes, didn’t seem to know her trustee very well at all.  After Duke passed in 1992, her trustee bilked the estate for over $1 million. It begs the question:  How well do you know your trustee?

In our experience, choosing the people to nominate as fiduciaries through your estate plan is one of the hardest tasks that our clients’ face. That is why we work with each client to help them decide the best people to name in the all important roles that fiduciaries must take on when named in an estate plan.

The Butler Did It:

That old saying certainly fits in this situation because Doris Duke had her butler appointed as her estate’s trustee. The estate was reportedly worth $1.3 billion at the time of her death. Perhaps all that money was too much temptation for Bernard Lafferty, an Irish immigrant with only a grade school education. 

After Duke’s death in 1992, Lafferty went on a bit of a spending spree. It was reported that he spent over $1 million on himself, including:

  1. Charging hundreds of thousands of dollars on luxury store items onto estate charge cards
  2. Traveling all over the world, whenever he felt the urge
  3. Redecorating Doris Duke’s old bedroom for himself

Lafferty apparently had very expensive taste as he spent over $60 thousand on the bedroom redecoration alone. 

The final straw was when he borrowed more than $825,000 from the U.S. Trust Company, the estate's co-executor, apparently without having to pay interest. He was removed as the trustee three years later.

5 Characteristics of a Good Trustee:

Your trustee will ultimately manage your financial future as well as the disposition of your estate. While it’s tempting to choose a family, friend, or say – your butler – it might be wiser to treat your choice as a strict business decision. 

Trustees have a “fiduciary” responsibility toward the trust. That means they owe the highest duty of care, good faith, honesty and diligence when it comes to managing it. Five characteristics of a good trustee include someone who is:

  1. Organized
  2. Dependable
  3. Detail-oriented
  4. Experienced in business matters
  5. Confident in their understanding of your intentions

Whomever you choose, keep in mind that anyone who is dissatisfied with the terms of your trust might try to influence your trustee. In many cases, family relationships are wrought with various types of emotion. Those close bonds could put your trustee in the middle of a situation they can’t handle – especially when it involves someone where saying no simply isn’t an option. Therefore, let’s talk about whether a professional trustee would be appropriate.

Protect Your Assets, Heirs & Wishes:

Whether it’s choosing a trustee, creating a will, or coming up with a comprehensive estate plan, we can help you make the right choices. Protect your assets, your heirs, and your wishes. We can show you how to select the best trustee for your individual situation.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.


 

Tuesday
Jan202015

The Wrong Successor Trustee Can Derail Your Final Wishes

Today many estate plans contain irrevocable trusts that will continue for the benefit of a surviving spouse’s lifetime and then for the benefit of several generations. Since these trusts are designed to span multiple decades, it is crucial to choose the right succession of trustees.

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