Estate Planning

September 20, 2012

Estate Tax Changes Can Effect New York Estate Planning

As 2012 is coming to an end, so are the many provisions of the tax laws that are set to expire on December 31, 2012. Among the laws that will change in 2013 is the Federal Estate Tax. At present, a New York Estate Attorney is aware that the federal estate tax exclusion is $5,000,000. When the estate tax laws change in a few months, only $1,000,000 will be protected from taxation.

The impending dramatic change in federal estate tax protection has created uncertainty and confusion for individuals and estate planners. This is especially so since neither Congress or the President have shown any indication that a definitive new law is being seriously considered.

For example, a Manhattan Estate Lawyer or Brooklyn Trust and Estates Attorney can prepare a Last Will for a client with precise provisions regarding the disposition of assets such as real estate, bank accounts, brokerage accounts and retirement funds. The Will can be probated in the Surrogate’s Court according to set procedures and requirements. However, the provisions in the Last Will dealing with estate tax planning must be flexible enough to accommodate the uncertainty in the tax laws that are going to change but in an unknown manner.

The variations in recent years in estate taxes due to the changing tax code and the failure of the government to provide long term certainty has resulted in unwanted and unexpected estate settlement and estate administration problems. For example a recent article in Business Financial News by Amy Feldman on July 31, 2012 recounted how a tax savings clause in a Will resulted in litigation to prevent an apparent aberration in the decedent’s estate plan. Essentially, a formula tax savings clause that was intended when drafted in 2008 to provide a sum of money to the decedent’s children of only about $2,000,000 would have given the children all of their mother’s $100 million dollar estate in 2010 when the estate tax had been eliminated. The problem was that the decedent’s husband would not have received any portion of the estate. When the Will was originally written it was not expected that there would be no estate tax in 2010 resulting in an unlimited bequest to the children.

The New York State estate tax law currently provides for a $1,000,000 exclusion. Because of the uncertainty surrounding the Federal Estate tax exclusion during the past years and in the coming months, questions continue to be raised regarding the need for the tax. An article appearing in The Daily Caller on September 4, 2012 discussed a report by the congressional Joint Economic Committee that the cost to enforce the estate tax is greater than the benefits it produces.

As a New York Trusts and Estates Lawyer, I am involved with potential estate tax issues with regard to Will preparation, estate planning and probate and estate administration. The initial concern is whether or not a person’s estate is subject to possible taxation based upon its value. If so, other issues such as the use of deductions, credits and gifts must be considered to minimize the impact of the tax. These considerations can be quite complex and require the cooperative efforts of the client and his or her tax advisors.

September 5, 2012

New York Estates are Controlled by Appropriate State Statutes

by Jules M. Haas

The Administration of the estate of a decedent requires the immediate determination as to the State law that controls estate settlement. Usually the domicile of a decedent determines which State laws (i.e., New York or New Jersey) will be applied to many of the issues concerning the estate. The determination of domicile can be a complicated matter that involves a review of which State the decedent considered to be his or her home and the contacts the decedent had with the State such as filing of tax returns or the issuance of a driver’s license.

Determining a decedent’s domicile and the proper State law to be applied can be important since the rules regarding Will execution, spousal rights, kinship, estate litigation and other substantive matters can vary from state to state. In this regard it is generally the rule that a Last Will can only be filed for probate in the State and locality where the decedent was domiciled at the time of death.

It should be noted that domicile may not only determine the proper State law to be applied in estate settlement but that it may be that a person’s domicile might be in a country other than the United States. In such cases, the laws of the country of domicile may need to be utilized to settle an estate.

New York Estate Lawyers are aware of the many issues that may arise where there is uncertainty or a potential conflict concerning the proper law to be used regarding an estate or beneficiary rights.

The New York Probate Lawyer Blog has had recent posts regarding disputes involving celebrity estates such as Adam Yauch of the Beastie Boys and the co-creator of the Superman character.

Celebrity estate problems can also arise regarding domicile and residence. With regard to domicile and the selection of appropriate State law, a United States Court of Appeals in California on August 30, 2012 ruled that heirs to the estate of Marilyn Monroe could not inherit rights to her publicity because she was domiciled in New York at the time of her death and such posthumous rights are not recognized by that State. As noted in an article in the Daily Report by Amanda Bronstad on September 5, 2012, the heirs unsuccessfully claimed that Marilyn Monroe was a resident of California.

The estate planning and probate and administration of a New York Estate requires that domicile and residency be reviewed very carefully. Individuals may have homes in many States or even countries. When a person dies, the Surrogate’s Court for Queens Probate, Manhattan Probate, Long Island Probate or Brooklyn Probate, as well as all other State counties, is going to review the decedent’s domicile and residency very carefully even before accepting any papers for filing. As can be seen from the Marilyn Monroe case, very significant rights can be affected by a determination of domicile.

Additionally, domicile can determine whether an estate is subject to State estate taxes. States such as New York impose an estate tax on local residents while other States do not have an estate tax. The cost to an estate for taxes alone is an important reason to investigate and determine a person’s domicile as part of the estate planning process.

August 22, 2012

Late Beastie Boy’s Will Offers Estate Planning Lessons for New York Public Figures

by Jules M. Haas

On May 4, 2012, Adam Yauch lost his battle with cancer at the young age of forty-seven. Sadly, this type of thing is not uncommon in New York, where cancer claims many lives each year. What makes this case more notable than most in an estate planning context is that Adam Yauch lived an alter ego for most of his life, where he was better known as “MCA,” a founding member of the Beastie Boys. The hip-hop trio sold millions of records over the years and amassed a small fortune from record royalties, tour proceeds, and other sources.

Adam Yauch had the foresight to consult an estate planning attorney about drafting a Will. Yauch named his wife, Dechen, as Executor, and the Will was filed in the Manhattan Surrogate’s Court earlier this month. The Will contained many standard provisions about how to distribute Yauch’s assets.

As reported by Deborah L. Jacobs in Forbes.com on August 13, 2012, Part of Beastie Boy Adam Yauch’s Will, Banning Use of Music in Ads, May Not Be Valid, Yauch’s Will differs from most ordinary Wills since it directed that his image or name could not be used for advertisements. Yauch added language by hand to the Will after it was signed to provide: “in no event may my image or name or any music or artistic property created by me be used for advertising purposes.” Celebrities and other public figures may want to prevent others from capitalizing on their fame after they die. Advertising professionals recognize that a public figure’s death often creates a resurgence in public interest surrounding the individual. A recent example is Michael Jackson’s estate which has made millions of dollars by promoting his image and music after his death. However, there are instances where fame can be exploited to the extreme. All else being equal, Yauch’s inclusion of the above provision appears intended to prevent any such behavior.

The problem with the particular provision in Yauch’s Will is that it is handwritten. New York frowns upon handwritten Will provisions because of the view that a handwritten Will provision is more likely to be forged, altered, or otherwise fraudulent. Yauch’s Will is made even more problematic by the fact that the majority of the document is properly typewritten and executed, while the above posthumous advertising provision was added in pen after the execution of the rest of the document. The validity of the handwritten provision may result in Estate Litigation that may prolong the probate of the Will. The estate law in New York provides that handwritten additions to a Will after it has been signed are invalid. Estates, Powers and Trusts Law Section 3-2.1 entitled “Execution and attestation of wills; formal requirements: “provides in paragraph (a)(1)(B) that “No effect shall be given to any matter, other than the attestation clause, which follows the signature of the testator, or to any matter preceeding such signature which was added subsequently to the execution of the will.”

Additionally, as pointed out in the Forbes article, the additional handwritten language created confusion in interpreting the extent of the restriction on advertising. In many cases where Will provisions are Contested, a proceeding for construction or interpretation of Will language is required. New York Estate and Trust attorneys are familiar with these proceedings but they may require extensive Court process.

The lesson to take away from the Yauch case is that New York and its boroughs are home to countless celebrities and other public figures, perhaps second only to Hollywood. As such, estate planning attorneys in New York’s boroughs are more accustomed than most to drafting special Will provisions designed to protect a person’s likeness, ideas, or other artistic property. The same attorneys know that the needs of their public figure clientele are constantly changing and intensely private, requiring the highest degree of confidentiality and legal skill.

Had Adam Yauch thought to investigate the integrity of his Will before his death, his Manhattan estate attorney may have discovered the dangers of including handwritten provisions and explained to Yauch that these provisions might end up having effects that he did not intend. If you are a public figure or celebrity who intends to have a Will executed in New York, or even if you are as far from the spotlight as possible, it is always a good idea to make sure your estate planning papers clearly reflect your intentions.

August 15, 2012

New York Wills and Trusts Require Careful Selection of Executors and Trustees

by Jules M. Haas

Executors, Trustees and Administrators in New York are commonly referred to as fiduciaries. Fiduciaries are the representatives of a trust or estate that are authorized by their appointment to act on behalf of the trust or estate.

The New York Probate Lawyer Blog has had many posts discussing actions of fiduciaries such as collecting assets, paying bills and taxes and making distributions of property. Whenever a Queens Executor or Manhattan Trustee or a fiduciary in any New York county performs his or her duties, they are required to follow and adhere to certain statutes and guidelines. New York Estates, Powers and Trusts Law (EPTL) Section 11-1.1 is entitled “Fiduciaries’ powers”. This statute sets forth many of the powers that are given to fiduciaries which include powers to: invest estate or trust property, manage or sell real estate, repair property and contest or settle claims. Generally, the powers provided by statute are quite extensive and a fiduciary is entrusted with using his or her judgment to exercise these powers in good faith. The statute also provides in paragraph (b) that the Court or the Will or Trust document can limit or provide contrary provisions to those stated in the statute.

As a New York Estate Lawyer, I have found that it is important for fiduciaries to fully understand and appreciate the responsibility that goes along with their appointment. Similarly, Estate Planning must include a thorough consideration of the qualifications of fiduciaries who are to be named by a Last Will, Living Trust or other document.

Acting as a fiduciary is not always easy and can involve the necessity of having to make difficult business decisions regarding an estate or trust asset. For example, issues may arise as to whether or not to sell shares of stock or real estate and at what price to sell. Investing assets, particularly in today’s volatile economic climate, is filled with uncertainty. The recent case of Matter of Boyer, decided by Surrogate James Pagones of the Dutchess County Surrogate’s Court on May 31, 2012 and reported in the New York Law Journal on June 26, 2012, shows some of the problems faced by fiduciaries.

In Boyer there were 3 trustees of a trust created under a decedent’s Last Will. Two of the three trustees desired to sell the decedent’s real estate which consisted of a farm. The 2 trustees also desired to evict the decedent’s friend from the property. Rather than move forward with these plans on their own, the trustees petitioned the Surrogate’s Court pursuant to Surrogate’s Court Procedure Act (“SCPA”) Section 2107, for direction from the Court.

SCPA 2107 is entitled “Court may direct as to value, manner and time of sale of property and give advice and direction in extraordinary circumstances.” Court’s are typically reluctant to substitute the Court’s judgment for that of a duly appointed fiduciary. Therefore, the Court in Boyer declined to advise the trustees as to whether and at what price the property should be sold and, instead, found that it was the trustees’ duty to exercise their own business judgment in deciding these issues.

Selecting the proper fiduciaries that will protect trust and estate property and beneficiaries’ interests is an important goal in estate planning. Trust and estate attorneys in New York help their clients in the process of selecting fiduciaries as well as providing guidance for fiduciaries who face tough administrative and estate settlement decisions.

August 9, 2012

New Yorkers Have Options When Leaving Gifts to Minors

by Jules M. Haas

New York estate planning lawyers are routinely consulted for advice as to the best way to give property or substantial sums of money to minor children. The trouble with such a gift is that a minor child typically cannot fully enjoy it until he or she reaches the age of majority. In New York, as in many jurisdictions, that magic age is 18.

To say that a minor child cannot fully enjoy such a gift is to say, essentially, that the world was not designed for minor children to be in control of valuable property or substantial sums of money. For example, banks and investment brokerages usually will not allow minors to have the autonomy to administer account funds as they wish. Similarly, minors cannot enter into a real estate contract should they wish to sell a piece of real property left to them as a gift.

Most gifts to minors are subject to implicit limitations on access and use because they are accomplished by way of a trust. The problem with a trust in New York is that it is subject to oversight by the Surrogate’s Court. Additionally, a trust can create a number of tax, accounting, and legal side effects that may dissuade the gift donor from making the gift in the first place.

Fortunately, New Yorkers have options when they consult a Manhattan estate planning attorney. One such option is to make a gift under the Uniform Transfers to Minors Act (UTMA). The Act, codified in the New York Estates, Powers and Trusts Article §7-6.1 – 7-6.26, sets out a system in which the intending donor makes an irrevocable gift to a Custodian for the child. In practice, the custodianship arrangement is accomplished with language transferring property or money to any adult or trust company “as Custodian for” [the named minor] “under the New York Uniform Transfers to Minors Act.” The gift should spell out that language so as to distinguish the gift from the creation of a trust or any other type of arrangement, and also to direct all interested parties to the particular body of law that governs the arrangement.

Donors should take care to designate a prudent and responsible entity to carry out the custodial duties. Custodians under the Uniform Transfers to Minors Act are not merely guardians of the property or assets, but rather are active participants in managing and growing the gift assets for the benefit of the named minor child. Custodians may invest the liquid gift assets or decide to sell the real or personal property entrusted to them if the Custodian decides that doing so would be in the best interest of the minor. Custodians are held to a reasonable prudence standard; they must exercise a standard of care “as would be observed by a prudent person dealing with property of another.” Further, Custodians are entitled to reasonable compensation and reimbursement for expenses. They may be required to account for the gifted assets in court proceedings, and so the Custodian must keep accurate and detailed records of all transactions.

On its face, a donor’s gift to a Custodian for the benefit of a minor child may appear to have many of the same characteristics of a trust. However, a Bronx trusts and estates attorney can explain the fine nuances and help evaluate whether a gift under the Uniform Transfers to Minors Act is the best way to see that your property and assets are distributed to the persons you wish in the manner you wish.

July 19, 2012

New York Business Owners Need Special Estate Advice

by Jules M. Haas

Most New Yorkers spend a significant portion of their adult lives figuring out ways to accumulate wealth. At a certain age, the focus tends to shift from the accumulation of wealth to wealth protection. At a certain age beyond that, the focus shifts to how to utilize that wealth in order to ensure a secure retirement. Around the same time, the secondary focus is what will happen to any leftover assets once you are gone.

As complicated as this process is for any New Yorker, the process can be even more complicated for a New Yorker who operates his or her own small business. The primary trouble for an aging New York business owner is that his or her wealth is much harder to calculate, as much of his or her assets are likely tied up in the operation of the business.

As a result, aging business owners have two primary choices when it comes to estate planning. On one hand, they can plan to sell the business for its fair market value. This option puts the full value of the business assets in the owner’s proverbial pocket, from which he or she can set aside retirement money and carve out a plan for what happens to any leftovers at death.

In many cases, however, the state of affairs is not as cut-and-dry. Small businesses in New York are very often family affairs, passed down among multiple generations in some cases. A long-time pizzeria owner may employ some of his own children and even grandchildren, for example. When family livelihoods revolve around the family business, an estate plan that would sell the business for its proceeds just would not make much sense.

Instead, many New York small business owners choose to craft estate plans that transfer ownership interests in the business rather than a defined monetary value. After all, an ownership interest in a business can have a potentially unlimited value, even if its present interest is difficult to calculate. Additionally, the preservation of your business amongst your family members can give you the flexibility to transfer ownership subject to as many or as few conditions as you wish. Hands-on owners may wish to set out long term plans for the business even after they are gone, while others may wish to entrust the direction of the business wholly to a son or daughter.

These cases may be further complicated if some, but not all, of the business owner’s family members intend to carry on the business. For those that do, an interest in the business may be an appropriate testamentary gift. For those who wish to pursue careers outside the family business, other gifts may be appropriate. No two estate plans are exactly the same, especially ones involving the transfer of a business.

For these reasons, an experienced New York estate planning attorney can be an essential ally. Don’t entrust your personal and business assets to the laws of New York when your time comes. Make sure your assets pass precisely how you intended.
Business owners and their New York estate lawyers must be fully familiar with all of the documents and agreements that can effect an estate plan. These items include, shareholder agreements, partnership agreements, real estate deeds, commercial leases, life insurance policies and various types of retirement and pension plans. All of these papers must be fully understood so that their provisions and beneficiaries can be incorporated into the overall estate and lifetime gifting plan that is being developed.

In many instances estate administration and estate settlement can be disrupted where the terms of an estate planning document such as a trust or Last Will contradicts or is not otherwise in harmony with provisions in business papers such as shareholder agreements. A shareholder agreement may provide for the transfer of a business interest upon the death of a shareholder that is contrary to provisions put into a Last Will. Provisions in these documents that contradict one another can ultimately lead to Surrogate’s Court litigation such as Will contests or construction proceedings. Not only can a lack of good planning result in estate litigation, the operation of a profitable family business may be disrupted where there is uncertainty as to whom the new owners will be and who has the present right to make crucial business decisions.

July 18, 2012

Giving Estate Assets to Charity

by Jules M. Haas

These days, New York estate planning attorneys are finding it far more common for New Yorkers to give a portion of their estate to charity. They can do this because the law recognizes charitable organizations as legal entities in the same category as ordinary persons. As a result of this characterization, a charitable organization is free to receive testamentary gifts – i.e. gifts from a person’s estate – as if it were merely a transfer from one person to another.

Unlike gifts to ordinary persons though, lawmakers typically want to encourage charitable giving. Charitable giving tends to distribute the wealth across a broader spectrum of people or causes, rather than keeping assets tied up within a single family. As a result of these public policy theories, lawmakers have created tax incentives designed to encourage people to write charitable gifts into their wills.

A typical testamentary gift to charity can be achieved in several different ways. One of the most common ways to do it is to leave the charity a percentage of one’s estate. A gift of this sort would read something to the effect of: “I give ___% of my estate to X Charity.” The only trouble with this kind of gift is that its value is uncertain. The value of one’s estate is a function of how much of one’s assets remain at the end of one’s life. Therefore, it is not until one dies that the charity will learn of the value of its gift.

Another common way to leave a gift to charity is to give a fixed amount or a particular piece of property. A gift of this sort would read: “I give $____ to X Charity” or “I give my property located at [address] to X Charity.” This kind of gift is far more certain because in the first instance a fixed dollar amount is gifted. In the second instance, a property of a certain current value is promised, and the charity can reasonably predict its future value.

Another way is to grant the charity a remainder of one’s estate once other beneficiaries are gone. Charities are potentially infinite in duration, unlike people. It is possible to leave certain loved ones your assets once you are gone, and for the charity to take the remainder of those assets (if any) once your loved ones are deceased.

Still another common way to leave a charitable gift is by making a charity the beneficiary of a life insurance policy. Because charities are “people” in the eyes of the law, a charity can be designated as a beneficiary to be paid upon the death of the policyholder, just like any ordinary person can. Similarly, charities can be named the beneficiaries of any retirement plan.
This is by no means an exhaustive list. A New York estate lawyer is best equipped to explain the nuances of each of these variations and to explain the other variations of charitable giving. In cases where the client wants to bequeath some or all of his or her assets to charity, there is no one-size-fits-all solution.

June 27, 2012

Same-Sex Married Couples Still Need New York Estate Planning Help

by Jules M. Haas

A year ago, the State of New York joined a growing number of states by legalizing same-sex marriage. The LGBT community rejoiced in their victory, claiming equal status in their marriages and all the legal benefits that go along with it.

The legally-minded members of the LGBT community had long argued that sexual orientation discrimination was a considerable problem in medical emergencies and end-of-life scenarios. After all, in a marriage each spouse holds the power to make decisions on behalf of the other when the other is experiencing a medical emergency or is close to death. Absent a living will or alternative health care proxy, the heterosexual spouse is presumed to know what medical directives are appropriate, including whether to terminate life support measures.

It is not surprising that, before the same-sex marriage bill, disputes arose as to whether a same-sex partner could be entrusted with these decisions when no documentation existed. It was not uncommon for life-long partners to be left out of the decision-making process altogether, or even denied hospital visitation privileges because they were not the “spouse.” It is not difficult to imagine a hypothetical scenario in which young heterosexual newlyweds could be entrusted with these decisions for one another, while the 30-year monogamous homosexual partner of another patient could be denied access altogether.

The same-sex marriage bill has alleviated some of this concern. Once the bill was signed, LGBT couples gained the power to decide emergency and end-of-life scenarios for their partner if their partner did not have documentation drafted for that purpose. That being said, New York estate planning attorneys strongly caution against LGBT couples being lulled into a sense of security since the passage of the state marriage law. Living wills and a health care proxy are still essential documents, even if the LGBT couple is married.

Here’s why. Each state has its own stance on same-sex marriage. While New York has been part of the growing minority of same-sex marriage states for a year now, many states have not followed suit. As a result, if a same-sex married couple were to travel to another state in which same-sex marriage is not recognized, the emergency and end-of-life privileges that normally would attach at home may go unrecognized. That means that if there was an emergency situation, the same-sex spouse may be denied the spousal privilege to make the important medical and end-of-life decisions.

For this reason, New York City estate planners strongly encourage same-sex married couples to craft living wills and a health care proxy in spite of any spousal privilege they may enjoy within their own state. The living will can take the uncertainty out of the ailing person’s wishes in the event of a life-threatening medical emergency. The health care proxy can explicitly assign the healthy spouse as the decision-making authority if unforeseen circumstances occur.

Both documents are essential tools for the LGBT couple, even in spite of the civil rights advancements of the last several years. Take the fear and uncertainty out of an emergency or end-of-life scenario, and make sure power to decide remains in the rightful hands.

In addition to these issues, married New York same-sex couples are still denied a myriad of federal benefits. The Defense of Marriage Act defines marriage as between a man and a woman for federal purposes, creating a cascade of estate planning issues for married same-sex couples in our state. A full set of estate planning documents including a Last Will, Durable Power of Attorney and Living Trust should be considered and implemented so that all uncertainty regarding personal and property decisions are eliminated.

A qualified New York Trusts and Estate Lawyer can assist with reviewing and creating these documents as well as examining any additional issues regarding possible estate tax planning and Article 81 Guardianship for incapacity.

June 13, 2012

New York Title to Real Estate Often Complicates Estate Administration

by Jules M. Haas

New York estate settlement is not an easy task. While estate lawyers assist their clients with probating New York Wills as well as finding and collecting estate assets, paying estate taxes and other debts and obligations, these procedures can be extremely complex.

The ownership of estate assets such as real estate or bank accounts is often the subject of estate litigation. When drafting a Last Will or beginning estate planning, it is fundamentally important to obtain all information regarding the ownership of the testator’s assets. Without full and complete information, the estate plan and Will and Trust papers that are prepared can turn a simple estate into one filled with litigation in the Surrogate’s Courts.

Real estate ownership typically is the center of many controversies because of its high value and the different ways title can be owned. For example, real estate that is jointly owned with rights of survivorship or by spouses, known as tenants by the entirety, passes automatically from one owner to the other upon death. However, realty that is owned as tenants in common is basically owned in separate shares by the tenant in common owners and does not automatically pass to the other owners upon death. The decedent’s estate is entitled to receive the interest of the deceased tenant in common owner.

After a person dies, it is often startling to discover that real estate that had been assumed to be owned as, tenants in common, was really owned as a joint tenancy and the decedent’s estate and beneficiaries receive no interest in the property which passes automatically to the joint owner. Moreover, the ownership of property can be even more complicated based upon other variables such as real estate contracts, divorces or marriage separations and agreements that relate to the real estate ownership.

Such was the case in The Matter of Scola, which was decided by Surrogate Peter J. Kelly, Queens Surrogate’s Court, on May 9, 2012 and reported in the New York Law Journal on May 18, 2012. In Scola, the decedent and his wife had owned a residence as tenants by the entirety. The parties had signed a Separation Agreement but were still married at the time of the husband’s death. The Court found that the Separation Agreement did not provide an adequate expression of intent to prevent the entire property from passing automatically to the wife upon the husband’s death.

Given an opportunity to fully analyze and understand the results that would transpire upon the death of either party, perhaps the husband and wife in Scola would have changed the title on the property prior to the husband’s death to prevent this automatic transfer.

June 11, 2012

New York Estate Planners Can Help Protect Pets

by Jules M. Haas

Many New Yorkers worry about the possibility that their pets will outlive them. Many more make the mistake of thinking that a standard Last Will is sufficient to look after their pets’ interests when they die. Any New York estate planning attorney would caution that this is not necessarily the case.

Pets & The Standard Will
The assumption that a standard Will is enough to look after Fido once his owner is gone is based on sound legal principle. At common law, pets are treated as chattel, meaning that they are moveable items of property, not unlike livestock, your car, or the computer from which you read this article. Whatever sentimental attachment we give to pets has no bearing on their ability to be treated like any other item of property, whose owners are free to devise to their beneficiaries in a Will.

But when is a Will insufficient to look after your pet? You may have carefully selected which of your friends or relatives was most appropriate for the job. You may even have discussed the care of your pet with this person and drafted a corresponding Will provision to cover the expense of the pet’s care. What you may not have thought about, however, is what might happen to your pet during the probate process. It can take months or even years to effectively administer your Will, especially if the Will is contested. During this lengthy process, your pet may be left in a state of limbo at best or perhaps given away to a shelter at worst.

The Pet Trust
A better alternative is becoming more popular in a growing number of jurisdictions. The majority of states, including New York, allow for the creation of what is commonly termed a “pet trust.” A New York pet trust is a legal instrument in which a pet’s owner sets aside a sum of money exclusively for the pet’s future care. Like in a normal trust, the creator of a pet trust names a trustee or trustees whose responsibility will be to use the funds from the trust to care for the pet.

If you love your pet, selecting a pet trustee should be a solemn consideration for your pet’s well-being. If you own a dog, your pet trustee should be the type of person who has the room and capacity to care for a dog. In selecting a pet trustee, the pet owner should give careful consideration to things like the trustee’s home environment, including their children, their other pets, and any potential allergy issues. You owe it to your furry friend to provide a comfortable and happy environment, and you owe it to your trustees to ensure that the care for your pet is something they are happy to do – not forced to do.

A New York trust and estate lawyer can explain the requirements and limitations of a New York pet trust and help you evaluate whether a pet trust should be your last gift to man’s best friend.