Funding Options for Your Pet Trust
We recently discussed, in an answer to Nathan Gene from Mississippi, the need to initially fund your Pet Trust for it to be effective.
The bigger issue is when we talk about the final funding of the Trust for the benefit of your pet.
There are number of ways that you can ultimately transfer assets into the Trust.
The most obvious way is simply to have a certain cash amount transferred to the Trust while you are alive. The Trust is funded and will grow with accumulated interest.
The down side is that the use of the money is gone from your individual control until your death (assuming that you do not revoke the Trust).
You may also add funds to the Trust with a “pour over provision” in your will and designate specific source of the funds.
Another alternative can be the use of a Payable on Death Account.
This account is in your name individually and also in the name of the Trustee. Upon your death, without any probate process, the money should transfer to the Trustee for the benefit of your Pet Trust.
You can also purchase a life insurance policy and name the Trustee as the beneficiary of the proceeds.
This beneficiary method can also be successfully used with other forms of personal property, Individual Retirement Accounts, annuities, 401 (k)’s, corporate stock (both private and public), limited liability memberships and bonds of all types. Even rarely, in some circumstance, real estate may be used.
Remember that most, if not all of these actions, involve some type of tax implication and you need to discuss this with your financial adviser and accountant before choosing the proper course of action.
Then, of course, you will need to follow up with your estate attorney or insurance and stock brokers to verify the correct language that will be needed to be used for all of these avenues to secure the results that you require.
You have a number of options to fund your Pet Trust… make sure that you have a Trust to fund.
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