How to leave stocks and securities for your pet's care
Dec 06 2016

How to leave stocks and securities for your pet's care


How to leave stocks and securities for your pet's care

Funding your PetWill Pet Trust can be a great experience because you know your pets wil be taken care of. Establishing a trust is one of the most important things you can do for your own life and of course for your pets. A trust is simply a legal agreement to transfer assets between parties. A trust appoints a trustee who is empowered to direct the trust assets s to the beneficiaries of the trust, in accordance of the wishes of the person who has created the trust. A PetWill Pet Trust is a type of standalone trust designed specifically to benefit the pets of the Trustmaker (the person creating the Trust).

After the creation of your PetWill Pet Trust, the trust must be properly executed by having two witnesses present and signing in front of a Notary Public and then you will need to transfer, or retitle, assets into your newly-created trust. Sometimes this process is referred to as “funding” or “asset integration.”

The process of retitling assets into your PetWill Pet Trust sounds complicated, but in reality, it’s a fairly clear cut procedure. Most Americans maintain their assets with a custodian, a company that holds stocks, bonds or mutual funds on behalf of their clients. Most large custodians, like Fidelity, Charles Schwab or Bank of America have a standard procedure to transfer or retitle assets into a trust.

If you hold assets in a Brokerage account, you can move some or all of those assets into your PetWill Pet Trust with a few signatures. With your executed trust in hand, you’ll open up a new account in the name of the trust, using your custodian’s trust-specific account application. You can plan on submitting a copy of the trust with the new account application. Once the new trust account is open, your custodian will provide paperwork to move assets from your existing brokerage account to your Pet Will Pet Trust account. This process is sometimes referred to as a “journal transaction.” Once the transfer is complete, the trust has been funded.

Assets held in an Individual Retirement Account (IRA) or 401(k) can’t be transferred into a trust directly. In order to fund a trust with IRA or 401(k) dollars, you’ll first need to take a distribution and pay taxes on whatever dollars you are placing in the trust. Oftentimes, it makes sense to take these distributions over several years to lessen the tax burden. Once the dollars are outside of the IRA or 401(k), they can be treated like the brokerage account example above. It is also possible to name your trust as the beneficiary to your IRA or 401(k), but this scenario should be discussed carefully with your estate planner beforehand.

While the majority of assets are held at custodians, there are still a wide variety of physical stock and bond certificates floating around safety deposit boxes across the country. The process to retitle physical paper certificates is slightly more involved than shares held at a brokerage. The retitling process begins with a call to the transfer agent listed on the front of the stock certificate. The transfer agent will require a form to be completed, and most require a medallion guarantee to validate your identity. A medallion guarantee, sometimes referred to as a “super notary,” can be obtained at most banks or brokerage firms. With the completed paperwork and certificates in hand, you’ll mail these documents to the transfer agent, who will then re-issue the shares in the name of the trust. We recommend overnight or priority mail when sending certificates to a transfer agent.

Establishing and funding your PetWill Pet Trust doesn’t need to be a big deal. MyPetWill.com makes the creation of your Pet Trust, pet identification tags and Online Pet Profile easy. As for funding, most financial firms have a well-established process to handle these common transactions. Your trusted financial advisors are an excellent resource. You can and should ask your legal or financial advisor for help if you have an execution or paperwork-related question.