Single Parents: Helpful Trust Provisions.
1. Pet Trusts.Make sure that your children aren’t separated from pets. After the loss of a parent, a child relies on all that is familiar. This includes family members, friends, teachers and pets. If your child is attached to your family pets, you may want to ensure your pets will still be in his or her life after you are gone. Since many people feel as close to pets as other family members, being separate from a pet after the loss of a parent can traumatize your child.
A pet trust is an estate planning instrument in which the owner, called the trustor or grantor, places money or property in trust to be held and managed by another person or institution, called the trustee, to pay for the care and maintenance of the owner’s animals. A pet trust is used when a pet owner wants to leave or set aside funds, in a legally enforceable estate planning document, to ensure his pets receive food, shelter, veterinary care, boarding, and grooming for the remainder of their lives.
When you establish a pet trust, you leave your pet and money or property to the trust. You appoint a trustee to manage the trust and pay expenses for your pet’s care. You also appoint a pet guardian or caregiver. The caregiver is to provide shelter, food, and other care for your animals and should be reimbursed by the trustee for these expenses.
The State of Tennessee recognizes pet trusts. Codified at T.C.A. § 35-15-408, a pet trust may be created for the care of an animal or animals alive during the settlor’s lifetime. The trust terminates upon the death of the animal, or upon the death of the last surviving animal covered by the trust. However, the trust is not valid for more than 90 years.
2. Children with Special NeedsA child with special needs should not own assets in his or her own name, as assets held in a child's name can disqualify that child from governmental benefits. If a child does own assets in his or her own name, one option is to transfer the assets to a first-party special needs trust for that child's benefit. This type of trust allows the money to be used for the child's benefit and does not disqualify him or her from governmental benefits. However, unlike a third-party special needs trust, in a first-party special needs trust, at the child's death, Medicaid must be paid back from the trust assets.
Single parents of children with special needs or disability should plan for their continued involvement after the child reaches the age of 18. If a child is not able to handle his or her own medical or financial decisions as a result of his or her special needs, a parent should petition the court to become conservator of the child. Absent a conservatorship, the parent will have no legal right to make decisions on behalf of the child.