So, you have been named as a trustee of a trust, and this comes with “powers.” What exactly does that entail? In this blog post, I will review the basics of the role of a trustee.

What are Trustee Powers?

The powers of a trustee of a trust can vary depending on the specific terms of the trust instrument and the laws governing the trust. Generally, the trustee has a range of powers and responsibilities related to managing the assets held in the trust and ensuring that the trust’s purposes and objectives are carried out.

Some of the typical powers of a trustee may include:

• Managing trust assets: The trustee has the power to manage, invest, and sell the assets held in the trust. This includes making decisions about when and how to buy and sell investments, as well as deciding how to distribute the income and principal of the trust to beneficiaries.
• Distributing trust assets: The trustee has the power to distribute trust assets to beneficiaries according to the terms of the trust. This may involve making regular distributions of income to beneficiaries or making one-time distributions of principal.
• Making decisions about the trust: The trustee has the power to make decisions about the trust, such as hiring professionals to assist with trust administration, making decisions about legal or tax matters, and determining how to respond to requests or challenges from beneficiaries.
• Protecting trust assets: The trustee has a duty to protect the assets held in the trust from loss or damage, which may involve taking steps to insure or safeguard those assets.
• Accounting and recordkeeping: The trustee has a duty to maintain accurate records of trust transactions and to provide regular reports to beneficiaries regarding the status of the trust.

The powers of a trustee are generally used to fulfill the trustee’s fiduciary duty to act in the best interests of the trust and its beneficiaries. The trustee must carefully balance the competing interests of different beneficiaries, and make decisions that are consistent with the terms of the trust instrument and applicable law.

The trustee is a fiduciary role, not to be taken lightly. Often, a trustee will seek advice from professionals, such as attorneys or accountants, to ensure that they are making informed decisions about the trust.

To learn more about your duties as a Trustee, contact Attorney Jill M. Santiago by clicking below.

Starting a business can have significant implications for your estate plan, as it will likely affect your assets and liabilities, and potentially impact your family’s financial security in the future.

Here are a few ways that starting a business could affect your estate plan:

1. Reassess your assets: Starting a business may change your financial situation and the value of your estate. It is important to reassess your assets and determine how your business will fit into your estate plan. You may need to adjust your estate planning documents to account for any changes in your assets, liabilities, and income.

2. Consider business succession planning: If you plan to pass your business on to your heirs, you will need to consider how to structure your business succession plan. This may involve establishing a trust or creating a buy-sell agreement to transfer ownership of the business in the event of your death.

3. Update your will: Your will should reflect your current wishes for the distribution of your assets, including any business interests you may have. If you have not yet created a will, starting a business may make it even more important to do so.

4. Review your life insurance policies: If you have life insurance policies, you may need to review them to ensure that they provide sufficient coverage to protect your family’s financial future in the event of your death. You may also want to consider adding a business continuation rider to your policy to ensure that your business can continue to operate in the event of your death.

5. Consider the tax implications: Starting a business may have tax implications that you need to consider as part of your estate plan. Depending on the structure of your business, you may be subject to estate and gift taxes, as well as income taxes. You may want to consult with a tax professional to determine the best approach for minimizing your tax liability.

It is important to work with an experienced estate planning attorney to ensure that your estate plan reflects your wishes and protects your family’s financial future, taking into account any changes resulting from your business.

Today’s financial and estate planning tools give us lots of options when it comes to looking after our human loved ones postmortem, such as life insurance, wills, trusts, holding property jointly, etc. But what about our other loved ones—our pets?

Introducing the Pet Trust!

What is a pet trust?

A pet trust is a legal arrangement providing for the care and maintenance of your pets should they outlive you. Pet trusts are created to ensure that your animal is cared for, and you have peace of mind knowing your faithful companion will be in good hands.

How is a pet trust created?

The pet trust can be created in a few different ways. For instance, you can create a pet trust within your own living trust, or you can create a testamentary pet trust in your will. You could also create a stand alone trust for your pet, but it is more cost effective to include it in your own estate plan.

How does the pet trust work?

You choose a caregiver (the trustee) and leave instructions about which type of food you prefer your pets eat, which veterinarian should be responsible for managing their health, and how they should be groomed. You also set aside funds to pay for your pet’s care and maintenance.

For example: You have a cat and a dog. Together they have an average life expectancy of 15 years. Their care costs, including vet visits, food, boarding, grooming, and costs you around $5,000 a year. You could create a pet trust and fund it with $75,000, which would cover the costs of the pets for up to 15 years. You could include instructions for the trustee that if any funds are left over when the trust expires, they should be donated to your local ASPCA or pet rescue organization.

All 50 states have laws that recognize pet trusts, though the wording may vary from state to state, and not all are enforceable.

For example, Alaska’s law specifies that pet trusts are allowed for designated domestic or pet animals. Other states, including Arizona and California, only mention “animals” in the wording of their pet trust statutes.

For those states with enforceable pet trust laws, people are allowed to petition the court if they have reason to believe that the animals’ welfare is not being properly maintained.

I would not counsel all my pet owning clients to include a Pet Trust in their estate plan. But for those who keep pets with exceptionally long life spans—such as parrots 70 years, horses 35 years, box turtles 30 years, or clients who run animal rescues, should consider creating a trust to look after their animals when they are gone.

Some of the pet trust pros….

Pet trusts create a legal obligation to care for your pet in accordance with your wishes,

• It provides accountability for the funds you leave to the caretaker, and
• It allows you to set up a care plan that will take effect if you become incapacitated and are no longer able to care for your pets.

And the cons….

They are inflexible if circumstances change after your death

• They are not always enforceable
• They can be altered by the court. For example, Leona Helmsley left a hefty portion of her estate to her dog while disinheriting grandchildren. The court however reduced the amount of money in trust for the dog and distributed a portion to the disinherited grandkids.

Pets are treated like family members these days, but it wasn’t always so. Just a few decades ago dogs slept outside in dog houses, cats were kept outside and expected to sustain on whatever they could hunt and catch. Now we pamper our pet. But if don’t make arrangements for your pet in your estate plan, the care your pet gets depends upon what arrangements you’ve made, or not made. For instance, if you have no estate plan, your possessions will pass according to state law, and your pets are considered property for these purposes. Thus, you should consult with an experienced estate planning attorney to ensure your pets are properly cared for when you are no longer able to.

Estate planning involves the creation of legal documents that provide for the disposition of your estate when you pass away or become incapacitated. Your estate includes all of your possessions—your real estate, automobiles, bank accounts, investments, life insurance and personal belongings. Having an estate plan gives you control over how your affairs are arranged. You must make these decisions while you are alive and have all of your mental faculties. If you wait, you risk placing these decisions in the hands of the state and probate court.

1. Estate planning is more than just a will

It is super easy to make a will these days. Several online providers offer do-it-yourself wills and trusts for little money. Most people think they are all set once they have executed a will. However, there are other considerations, including:

Durable powers of attorney appointing individuals to make financial and/or medical decisions if you are unable to make these decisions yourself. Health care proxies, also known as living wills, these state the kinds of medical treatment you want and don’t want if you become incapacitated. Trusts which pass property to your selected beneficiaries that provide tax benefits for both you and your loved ones

2. Proper estate planning saves time and money

When a person dies without a will it is known as dying “intestate.” In this situation, state law dictates what happens to your estate. If you have made no plan, a case must be filed with the probate court in order to appoint a person to be the administrator of your estate. All of your debts, which now belong to your estate, must be paid first before property passes to your heirs. Probate is a lengthy process and can be very expensive.

3. Avoids hefty taxes

Maybe you have heard of the “death tax.” This is just a term used to describe taxes your estate will owe to the federal and/or state government. While right now, in 2022, the federal estate tax exemption is a little over $12,000,000, that is slated to drop significantly in 2026. In addition, many states have much lower exemptions. For example, Massachusetts is set at $1,000,000. This means if your estate is worth even a dollar more, estate tax will be owed.

4. Protects children and special needs dependents

If you have minor children, you must ask yourself who will have custody of them if I die before they reach majority? What if there is no other custodial parent? Without an estate plan you are leaving this in the hands of the state. Planning ahead gives you control over who will raise your children if you die while they are still under 18. You may appoint a grandparent, aunt or uncle, or a close friend. If you care for an adult with special needs, you are able to secure housing and funds for that person’s future care.

5. Takes care of your future needs

An estate plan not only arranges your affairs at the time of your death, it can also provide for you if you become incapacitated. A durable power of attorney will ensure a trusted individual will look after your financial and medical affairs. A living will ensures you will not be given medical treatment you would otherwise refuse. A well-written trust can provide for you financially before and after incapacitation, and distribute your assets to your chosen beneficiaries—all in one document.

Now Its Your Turn

Estate planning is not just for elderly and/or wealthy people. Make an appointment today with an experienced estate planning attorney by clicking below, and take control of your future.