Tag Archive for: pet trusts

Why Pet Trusts Should be Part of Your Estate Plan in Maryland

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Pets are an integral part of American households. Current statistics indicate that 66% of U.S. households, translating to about 86.9 million homes, own a pet.

Our animals hold a significant place within our homes. They serve not merely as pets, but as cherished family members. They offer companionship and emotional support, and in many instances, they are nearly as entwined in our daily routines and life events as any human relative.

Despite their status within the family structure, pets often remain glaringly absent from crucial family planning discussions, specifically estate planning. This omission can lead to uncertainty for these animals’ futures in the event of their owners’ incapacitation or death.

The Importance of Pets in Our Lives

Pets occupy a variety of roles in our emotional and social lives, contributing significantly to our overall well-being. The interactions and connections we establish with our pets can alleviate stress, reduce feelings of loneliness, and even improve physical health.

Companionship is perhaps the most recognized benefit of pet ownership. Pets, with their unconditional love and constant presence, provide comfort and a sense of belonging that can be difficult to replicate in human relationships. Whether it’s the joyful greeting of a dog at the end of a long day or the soothing purr of a cat curled up on your lap, these interactions can significantly alleviate feelings of loneliness and anxiety.

Pets also offer emotional support. During times of distress, the mere presence of a pet can bring comfort. In fact, numerous studies have demonstrated that interacting with pets can reduce cortisol levels, a hormone associated with stress, and boost the production of serotonin, a hormone associated with happiness and well-being.

Pets’ roles extend beyond providing emotional support and companionship, however. For instance, they often serve in supportive and sometimes life-saving roles, such as service animals. Dogs that help lead the blind, known as “guide dogs”, are perhaps the most well-known examples. These animals undergo rigorous training to guide visually impaired individuals safely, enhancing their independence and mobility.

But the realm of service animals is not limited to guide dogs. Other types of service animals include psychiatric service dogs that help individuals with mental health disorders, seizure alert dogs that can detect and react to oncoming seizures, and mobility assistance dogs that aid individuals with physical disabilities.

Pet Trusts: Providing Peace of Mind for Pet Owners

A pet trust is a legally enforceable arrangement providing for the care and maintenance of one or more pets in the event of the owner’s disability or death. As part of an estate plan, the trust allocates specific assets to the care of the pet, details the standard of living the pet should enjoy, and designates a caregiver, also known as a trustee, who will be legally obligated to carry out the owner’s instructions.

In Maryland, pet trusts have specific legislative provisions under the Maryland Code, Estates and Trusts Section 14-112. This law allows pet owners to set aside funds for their pet’s care and to designate a caregiver who will have legal responsibility for the pet. The trust lasts for the pet’s lifetime and the designated caregiver can use the funds for the pet’s food, veterinary care, grooming, and other necessities.

The benefits of establishing a pet trust in Maryland extend beyond ensuring financial resources for the pet’s care. Pet trusts can detail the type of care the pet should receive, including instructions for the pet’s daily routine, diet, and veterinary care, and even specify how the pet should be treated in its final days. This provides a legally enforceable mechanism for ensuring that pets will receive the care their owners intend for them.

From an estate planning perspective, a pet trust is an essential tool because it offers security and peace of mind for pet owners. Knowing that their pets will be cared for and protected alleviates one of the most pressing concerns many owners face when considering their pets’ mortality. Furthermore, it can prevent pets from ending up in shelters or in undesirable living conditions. This makes including a pet trust an important addition to an estate plan, particularly for those who consider their pets to be a part of their family.

Contact Baddour Law Firm to Learn More About Pet Trusts in Maryland

The role of pets in our lives cannot be understated. They contribute significantly to our emotional well-being and are deserving of our foresight in securing their future. So, as you consider your estate plan, remember to include provisions for your furry, feathered, or scaled family members.

To learn more about pet trusts in Maryland and how to incorporate them into your estate plan, contact the Baddour Law Firm by calling (301) 494-2108 or sending us an online message. Our team is ready to ensure your pet’s future is protected in case you are not there to look after them in their later years.

 

What Is a Revocable Trust and Do I Need One?

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As you think about the future and the well-being of your beneficiaries, creating an estate plan is an essential part of protecting your assets and your loved ones. A strong estate plan has many important components, including the creation of a trust or multiple trusts. One type of trust that you may consider as part of your estate plan is a revocable trust.

At the Baddour Law Firm, our experienced estate planning attorneys in southern Maryland can guide you through your options and help to create a plan that protects your wishes and prioritize the needs of your family for generations to come. Reach out to us today to learn more.

What Is a Trust?
A trust is a type of arrangement between a grantor (the person who creates a trust) and a third-party trustee in which the grantor allows the trustee to hold and manage assets on behalf of the trust’s beneficiaries. Trusts are often used to pass assets from one generation to the next and have multiple benefits, including tax benefits in some cases and avoiding the probate process. Trusts are used to control wealth, protect legacies, secure privacy, and provide for beneficiaries. Because there are many types of trusts, knowing the differences and which type of trust is most relevant and appropriate for your situation is crucial.

What Is a Revocable Trust?
Also known as a living trust, a revocable trust is a trust where the trust can be altered or revoked per the wishes of the grantor—the originator of the trust. Another important feature of a revocable trust is that the assets held in the trust are not passed to the beneficiaries until after the death of the grantor.

In contrast, an irrevocable trust is a trust that cannot be changed once it is created. When an irrevocable trust is created and assets are placed within it, the terms of that trust are solidified at the time of creation and are virtually immutable.

Advantages and Disadvantages of Revocable Trusts
If you’re considering setting up a revocable trust, it’s important to understand the benefits and downsides of this type of trust. Some of the advantages of a revocable trust include:

  • Changes at any time. Perhaps the biggest benefit of a revocable trust—and one of the primary reasons that many grantors are much more comfortable with them when compared to other trust types—is that the provisions of the trust can be changed at any time.
  • Transfer to irrevocable at the time of death. While a revocable trust can be changed at any time throughout the grantor’s life, at the time of the grantor’s death, the truth is transferred to an irrevocable trust, which means that once the grantor dies, the terms will be fixed, and the trust cannot be altered anymore. Additionally, assets held in a revocable trust will bypass the probate process, protecting the privacy of the estate and often simplifying the process for the administrator of the estate and the trustee.

While there are certainly advantages to revocable trusts, there are also some downsides to consider as well. Disadvantages of revocable living trusts include:

  • Limited asset protection. One of the primary advantages of having a trust is that assets that are held in an irrevocable trust are generally protected from creditors. However, this is not always the case with revocable trusts.
  • Limited tax benefits. With an irrevocable trust, assets are removed from the grantor’s ownership and placed in the trust, which means that estate taxes are usually mitigated. However, with a revocable trust, assets are still in control of the grantor, so tax benefits are limited.

Which Type of Trust Is Most Appropriate for My Situation?
If you’re unsure which type of trust is most appropriate for your situation, it’s strongly recommended that you consult with a professional. A revocable trust may be recommended if you know that you will want to make changes in the future or/and your estate’s value is below the federal estate tax exemption requirements. On the other hand, if you don’t think you’ll want to make changes in the future and the value of your estate is at or above the federal tax exemption requirements, you may want to think about an irrevocable trust.

At the Baddour Law Firm, our experienced Maryland estate planning lawyers can provide the guidance and support you need. To learn more about how to get started with our law firm and the estate planning services we provide, please reach out to us in person, online, or by phone at (301) 494-2108. We are here to serve you.