UNUSUAL CIRCUMSTANCES REQUIRE CREATIVE SOLUTIONS
By: Sandra L. Clapp, Esq.
Every life is unique. Every situation has different variables. The distinct needs of every person justify consideration to insure a proper plan is implemented for these needs. This article touches upon some of the circumstances that warrant particular thought and consideration in the planning process.
Animals. Do you have a gaggle of geese? A herd of elk? A stable full of horses? A Pomeranian with a temperamental personality? If you have an emergency or death, who will step in and take care of the responsibilities of feeding and caring for your animals? Is money available to handle the continuing expenses of your pets? When selecting your fiduciaries, you may consider providing special instructions regarding the needs of your dependent animals. These options may include a full trust for the benefit of the animals to a designation of the “guardian” of the pets. Consider naming a succession of individuals so if the circumstances have changed for your first choice, there are alternatives to take possession of the animals. Will your animals require special food or treatment? Consider leaving a bequest to whoever takes the animal to help offset these additional costs. For many of us, animals are part of the family, but they can’t take care of themselves which justifies special consideration of their needs.
Illiquid Assets. An individual who owns a farm, significant real property, or business interest has unique considerations from an individual whose assets are in an investment portfolio, cash, or a retirement plan that are readily accessed in times of need. If a death or disability occurs, the farm or business interest is generally not in a form to generate cash that can be used to satisfy the needs of the individual or family. In addition, the business may require additional cash to hire replacement managers or advisors to keep the business operating at optimum level. It may take time to convert the business or real property to cash, and often this occurs at a “fire sale” loss or low value. One planning tool in these situations is life insurance or disability insurance to cover the cash needs of the illiquid asset. A further consideration is to develop a succession plan of internal management and procedures to handle a sudden loss of the owner or key employee.
Same Sex Relationships. It doesn’t take reading this article to understand the legal challenges of being in a same sex relationship. Very few same sex couples are recognized as legally married under the laws of our country. Idaho does not authorize same sex marriage. However, under the “full faith and credit” clause of the United States Constitution, any marriage that is recognized as legally valid in another state must be recognized as valid in Idaho. For those individuals in a same sex relationship (legally married or otherwise), legal rights and priority may need to be established and protected through powers of attorney, wills or other legal documents. If the couple has children, special consideration should be given to custody, guardianship, and legal issues surrounding these children.
Cohabitation. Similar to the issues that face a same sex relationship, cohabitation raises unique considerations in the legal arena. Without the protections of law regarding community property, divorce, spousal support, or property division, an individual may find the end of the relationship to be much less than bargained for. Although a relationship should be filled with joy and hope, the practical business factors should also be discussed and spelled out in a written document. If you are purchasing a home together, topics such as title ownership, mortgage payments, equity accumulation, liability for debt, and occupancy upon death or disability should be discussed. If you purchase other property together, records should be maintained to confirm the contributions of each party to the acquisition of the asset. Even though Idaho no longer recognizes common law marriage, other claims can arise based upon contract or other legal theories. Although not romantic, it is best to spell out these agreements so no misunderstanding arises in the future regarding these financial arrangements.
Collectibles/Art. Special assets that have been gathered for many years can pose administration problems to value, protect, sell or distribute to maintain and maximize the value of the collection. The more guidance you can provide your fiduciaries on how to handle the unique assets, the greater the possibility the value of the collection will remain intact.
This article is not intended to replace legal advice applicable to your situation and should be used only for informational purposes. Because of the complexity of the law, please consult your attorney for proper guidance.