Bonding Issues in Pet Trusts
I recently received a question at a Continuing Legal Education presentation on Estate Planning for Animal Owners about bonds in pet trusts.
Obviously, in almost all will and trust documents there is a requirement for the purchase of a monetary bond.
Usually the executor of an estate must purchase a bond when the estate is open. The purpose of this bond is to protect the creditors and more importantly, the intended beneficiaries.
If the executor fails to pay a bill, claim, or distribute any monies under the will as required, the bonding company will be forced to step up and pay the aggrieved parties.
In a pet trust, the Trustee is controlling the money and generally pays the bills on behalf of the caregiver.
The caregiver is generally never directly involved with the funds or the disbursement of monies from the trust and therefore is not in a position to abscond with the money.
The trustee, who is generally bonded or is a commercial financial institution, is the responsible party.
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