No Dog House for Trouble the Maltese

Many states now provide for Pet Trusts under their laws. But, there is a right way and there is a wrong way to leave money to you pet. Here is example of how you do not want to do it.

When she died in 2007, hotel tycoon Leona Helmsley's will left most of her $5 billion estate to charity, created a $12 million trust for her Maltese dog, Trouble, and completely cut out two of her four grandchildren. The two stiffed grandkids sued her estate, claiming she wasn't mentally fit to create her will and trust. The case settled, with Trouble getting $2 million, and the two grandkids sharing $6 million plus legal fees.

If you're older and cutting out relatives, have some professional, doctor or lawyer, conduct an evaluation of your sanity to confirm your sanity when the natural object of your "bounty" is disinherited, especially in favor of an animal.

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Rethinking Your Estate Plan - Question 3

The article from Money Magazine shared 5 questions to ask when rethinking your estate. Today I share the 3rd question presented in the article.

QUESTION 3: ARE YOUR ESTATE NEEDS SIMPLE OR COMPLICATED?

"Most people need only a simple will or living trust (which helps you avoid the cost of probate). But if you want to put conditions on your bequests, you definitely need a trust. Take the example of a woman who had kids, divorced, and remarried. Through a qualified terminable interest property trust, she can make sure her spouse has enough income if she dies first but preserve the bulk of her assets for her kids." If your estate is large enough that you face taxes (either federal or state), you may need to consider one of these popular options:
"A bypass trust, also known as a credit shelter trust. It lets a couple essentially double their estate-tax exemption. Let's say you're the husband and you die first. Your assets fund an irrevocable trust for the kids, up to the estate-tax exemption level (we'll assume it's the current $3.5 million). Any remaining assets go to your widow in a separate trust. To make sure she won't run out of money, set up the trust so she can receive income from the kids' trust and tap the principal for needs such as medical costs.
The big payout: When she dies, she can pass on $3.5 million in assets tax-free, on top of the $3.5 million you passed to the kids in the bypass trust. And this arrangement ensures that your kids - rather than some guy your widow winds up marrying later - get the money.
A grantor-retained annuity trust (grat). It works like an annuity: You put money in and receive an annual payout based on the IRS-assumed interest rate at the time you set up the trust (it's currently 2.4%). At maturity any appreciation above that goes to designated beneficiaries, such as your children, tax-free.
Now that both interest rates and asset values are low, guess what? There's a good chance that the contents of the trust will grow more quickly than 2.4%, with plenty of money left over."

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Probate - Bond Requirement

I have a number of inquiries regarding the probate process. These inquiries are as simple as what does probate mean to the process to challenge probate. Well, probate means to prove a will. Does the will presented to the Register of Wills meet all of the state legal requirements? Of course, many people die without a will. One of my passions is to get people to do a will. Where there is a will there is a way! Got will? Like it or not you need a will. Here is one issue that is faced more often than not by loved ones having to probate an estate; the bond requirement. You can provide in your will that your executor does NOT have to take out a bond to handle your estate. You have picked the person to act as your executor and this person is someone you trust. In many cases, it is a family member who will inherit part if not all of your estate. Paying for a bond would be an unnecessary expense. HOWEVER, if you do not have a will or do not specify no bond requirement in your will then the Register of Wills can impose such a requirement. Generally, the Register of Wills will impose a bond requirement when the Executor (one named under the will) or the Administrator (when there is no will) is out of state. You can avoid this expense for your executor or administrator by taking the simple step of having a will done by a professional who can make sure the right terms and conditions are covered.

Have you had a probate experience that you want to share? Do you have questions about probate? Give us your comments today and we will get right back to you.