Estate Planning for Special Assets

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25th Apr 2016

There are often particular assets in one’s estate which may require special consideration either due to its nature, value, or significance.  Consider some types of special assets and how they might be handled.

Businesses that require a license or special expertise will require that a special trustee (in trust administration) or special administrator (in probate) be appointed to administer the asset.  For example, a doctor’s living trust would nominate another doctor to act as special trustee to manage the professional corporation that owns the medical practice during periods of incapacity. At the doctor’s death, the special trustee would wind up the affairs and transfer the net proceeds to the general trustee, typically the doctor’s surviving spouse or child.

Guns require a firearm’s license. A gun collection can be held in a special gun trust managed by a trustee who has a firearm’s license.  We have designed special gun trusts for the general public, and with the changes in gun laws rapidly approaching, now is the time to establish a gun trust if you are so inclined.  The trustee of a gun trust can allow for the guns to be shared among the various beneficiaries, and provide for the guns to be stored and managed by designated individuals.

Pets depend totally on their owners and continue to need care during their owner’s disability and perhaps a new home after their owner dies.  A pet owner’s trust and power of attorney can provide instructions to use the owner’s resources to pay for veterinary visits, boarding, and money to place the pet after the owner dies.  Further instructions as to using specific organizations that accept and place pets can be provided.

Valuable and/or sentimental jewelry needs to be itemized (listed on a schedule) and kept in a secure location (such as a safe).  If these items are not given away during the owner’s lifetime then a trustworthy person needs to be in charge after the owner dies. This person could be a trustee or special trustee and should have access to the safe where the jewelry is kept.

A special home or lodge or other special residence that has been in the family a long time may be an item that the owner wants to keep in the family.  Special trusts are available for this situation. In order to provide a way for the property to be enjoyed by multiple beneficiaries and to avoid the real property being sold, subject to the beneficiary’s creditor claims, keeping the residence in a house trust may provide a solution.  The trust would provide for the sharing of use and expenses amongst the beneficiaries and their families and guests. It will also provide for how the property may eventually be sold.

Heirlooms that a surviving spouse wishes, at his or her own passing, to distribute to the family of a predeceased spouse can be transferred (at the surviving spouse’s death) to the care of a special trustee, who belongs to the deceased spouse’s own family, for distribution.  It is better to have a member of the deceased spouse’s family in charge of the division rather than someone from the surviving spouse’s family.

One may say that any assets left to a beneficiary receiving SSI or Medicare become special assets in the sense that such assets may impact the beneficiary’s eligibility for such needs based government assistance, or else become subject to estate recovery claims at the beneficiary’s death.  Alternatives to outright bequests, including gifts to special needs trusts, should be considered.

The foregoing is not an exhaustive list of special assets, but should help one consider what special assets exist within his or her own estate and what will become of these assets in the events of incapacity or death.

What special assets do you have? How do you want them handled?  Make a call to our attorneys and ask for a free consultation.  (866) 861-3333 or ((801) 676-6447