Morningstar has posted their top 10 list of estate planning mistakes at http://news.morningstar.com/articlenet/article.aspx?id=197757…
Of those, two really jump out:
1) Not Funding Your Trusts, and
2) Failing to Plan for the Care of Family Pets
It has amazed me over the years to see such thought and care go into word-smithing trust documents, only to then let these beautifully crafted documents sit on a shelf and never get properly “funded”.
Funding a trust may require a formal process to retitle the assets (e.g., real estate, bank or brokerage accounts, or vehicles).
On the other hand, for non-titled assets (like furnishings, jewelry, etc.), an unambiguous itemization of the assets as an attachment to the Trust document is usually all that is required.
In any case, funding a trust is a highly proactive step. Without funding (and your documentation is your evidence!), you are really undoing everything the trust was designed to do…
CARING FOR PETS POST-MORTEM
If you have animals you love, it makes sense to include their care in your estate planning. We’re not talking about making Fido the income beneficiary of your testamentary trust to try and avoid taxes…just simple provisions to name a guardian and provide monetary assistance for the well being of your loved ones after you’re gone.
Of course, if you are charitably minded and want to help fund animal causes at death, a Charitable Remainder Trust provides a significant income tax deduction for the present value of your eventual contribution to the charity, plus gives you an income stream for life (or a period of years, if you prefer not to take income for life).
This isn’t really an option if you only want to provide for a specific pet…but if you want to help fund general causes, this may be an ideal solution.
For professional investment advice on this topic contact:
Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436