CELEBRITIES SECURE THEIR PETS’ FUTURES Why a Pet Trust Is the Ideal Option Oprah Winfrey
It might sound silly at first, but including pets in your will is a way to ensure your beloved animals are cared for after you’re gone. But these celebrities take it to the next level. Let’s look at three famous examples and the legal nuances behind leaving millions behind for a furry friend. Joan Rivers Joan Rivers, the legendary comedian and TV host, passed away in 2014 at 81. Rivers left a considerable portion of her $150 million fortune to her four dogs — two rescue dogs in New York City and two in Los Angeles.
Oprah Winfrey, the iconic TV legend, has proactively set aside $30 million in her will to care for her dogs once she passes. Over the years, Oprah has had over 20 dogs, and she wants to ensure her furry companions continue to live in comfort even after she is gone. Karl Lagerfeld When the iconic fashion designer for Balmain and Chanel passed away in 2019 at 85, he left a portion of his $300 million fortune to his beloved Burmese cat, Choupette. Legal Aspects of Including Pets in Wills While you may not agree, by law, a person cannot directly will their property to an animal because an animal is also considered property. Instead, you can include a provision in your will that sets aside a certain amount of money for your pet. However, this method is not typically recommended, as there is no real oversight to ensure the funds are used exclusively for the pet’s benefit. A pet trust offers a more reliable way to meet a pet’s needs after you pass. In a pet trust, the trustee delivers the money to the caretaker, who looks after the pet. Additionally, the trust has the legal right to supervise the caretaker and ensure they use the money as intended. Setting up a pet trust is a practical and legally sound solution for those who want to ensure their pets are well-cared for after they’re gone. Of course, it doesn’t have to be millions!
LOCK IN A FAIL-SAFE SAVINGS PLAN
Open a brokerage account. A regular investment account gives you access to stocks, bonds, and other instruments. Most advisors recommend a low-cost index fund as an initial investment, but if you are uncomfortable with stock market volatility, consider certificates of deposit or bonds. If you hold investments for at least one year, your earnings will be taxed at the long-term capital gains rate — far less than the tax on your ordinary income.
Budgeting and saving are skills many Americans learn late in life, if at all. Only 36 states require high schools to offer personal finance courses. While that’s a marked increase from seven states in 2000, it still leaves many Americans adrift. Many consumers benefit from setting up regular automatic deposits to each of the four key savings and investment accounts, either through paycheck withholding or via their bank. With this system, growing their savings requires no conscious effort. Start an emergency fund. Deposit 2% of your paycheck into an emergency fund, either a high-yield savings account or a money market fund. These accounts currently yield about 4% annual interest or more, so your money will be working for you. Work toward setting aside enough to cover at least three months’ expenses to avoid using high-interest credit cards. Automate retirement savings. If possible, put 10%–15% of your paycheck into a retirement account, such as a 401(k), Roth IRA, SEP-IRA, or another investment account. To help you meet this lofty goal, take full advantage of any matching program your employer offers. That’s free money!
Set up a health savings account. Health savings accounts (HSAs) are a powerful way to set aside income
tax-free to pay medical bills. They offer a triple tax advantage in that deposits, earnings, and withdrawals are tax-free if you use withdrawals for eligible medical expenses. You can sign up for these
plans through an employer or HealthCare. gov by opting for an HSA-eligible health insurance plan. To determine how much to deposit, search online for “HSA Contribution Calculator.” Unlike other tax-sheltered savings vehicles, HSAs do not have a “use-it-or-lose-it” requirement, so you can accumulate funds for the future.
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