Estate Planning for Special Assets

            There are often particular assets in
one’s estate which may require special consideration either due to its nature,
value, or significance.  Let us 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.  The trustee can allow for the guns to be
shared amongst the various beneficiaries and 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.
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
pre-deceased 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 Medi-Cal 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?