Tax Issues With Pet Trusts
Are there any tax concerns to address with estate planning for animal owners?
Dottie Piqua, Ohio
Dottie, indeed there are…
We always recommend that you involve your CPA or tax adviser when you are planning for your pets.
Depending upon the type of trust or will clause that you use and the state where you reside, there may be gift, income, inheritance or estate tax consequences involved with this estate planning.
These various taxes may be assessed against either the Settlor of the Trust, the Trustee, the Caregiver or the Estate, via the Executor.
Careful tax planning is essential with any form of estate planning.
How Many Pet Owners Actually Prepare Pet Trusts?
How many pet owners actually prepare and actually implement pet trusts?
Pam Atlanta, Georgia
Pam, this is a good question that is a little difficult to answer, as most people do not want to appear to be unprepared or dilatory and may not respond truthfully when questioned about these issues.
However, the best estimates are that only approximately twenty percent of all individuals under the age of fifty have prepared estate plans for their business and families.
Moreover, the same surveys indicate that approximate twenty to twenty–five percent of all pet owners have established pet trusts.
Not an especially high percentage, but it appears that pet owners may be more proactive in this area.
Our Blog Featured in Upcoming Story on www.Bankrate.com
I had an interview this morning with Sheyna Steiner, a staff writer for www.Bankrate.com.
This site is all about financial information for everyday life.
She is preparing a story for Bankrate.com on pets and finances and is going to include a section on estate planning for pets.
Mr. Steiner advised that she located me via my blog and contacted me to discuss various issues regarding pet trusts. We discussed the role of the trustee and caregiver, the various funding options for the trust, the changing attitude of pet owners regarding the use of a trust and the education of estate planning attorneys and the role of pet trusts in their overall estate planning packages.
She was unsure as to the schedule of the printing of the article, as day-to-day economic hot flashes tend to dictate priorities.
I will provide access to the final article…assuming, of course, that she makes me sound good.
Tips for Caring For Your Pet In Their Final Days
The main focus of our writing about estate planning for pet owners is to assist them in the preparation of a new home and caregiver for their pets, after the death of the owner.
Pet trusts, pet power of attorneys and clauses in wills to provide for pets, are all basic parts of the planning process.
However, not all pets obviously survive their owners.
Are you prepared of the premature death of your pet?
What can you do to prepare for this event?
What are your responsibilities to your pet?
The ASPCA guides pet parents in the care of an animal companion as she approaches her passing. Some of their tips include:
• Minimize your pet's discomfort or pain by having her examined by a vet and treating any health problems she's experiencing.
• Keep track of your pet's quality of life by asking your veterinarian to inform you of symptoms associated with your pet’s condition.
• Keep a daily record of your pet’s behavior, noticing if she seems confused, has lost her appetite or seeks out unusual places to hide.
• Make an elderly pet feel secure by surrounding her with her favorite things, like a warm blanket or special squeaky toy.
You can visit their website here for more information and tips on handling this delicate and unfortunate situation.
Update on The Newly Proposed Connecticut Pet Trust Legislation
John O’Brien is an experienced estate-planning and probate attorney in Wethersfield, Connecticut.
He is an active advocate of the newly proposed legislation regarding the passage of language to provide for Pet Trusts and has been keeping us apprised of the pending bill in that state,
In a recent post on his blog, the Connecticut Estate Planning Report, he wrote that there are actually two different bills that have been offered for adoption.
He also questions the real motive for the passage of one of the bills.
He wrote:
In large measure, the two Bills are similar. There is one significant difference from the perspective of a client that wants to establish such a trust -- any trust must be approved by the Probate Court. Apparently the Legislature sees this as an opportunity to generate revenue for the Probate Court because the Probate Courts will charge a fee of between $50-$750 to review the trust. This change creates all kinds of logistical problems for the implementation of these type of trusts, albeit ones that can be overcome, but certainly ones that are better avoided...."
You should go to his blog to view his entire article.
We will look to Mr. O’Brien to keep us in the loop as this law progresses…or not.
Visit Us At The FloridaPet.Net Newsletter
We wrote in March that our home link had been added to one of our favorite websites, FloridaPets.Net and we recommended that you sign up for their informative newsletter.
Even non-Floridians will find a wealth of valuable and entertaining information for safe travel, welcome lodging and easy dining with your family pets.
Now, we are very pleased to be included as a contributor to their latest newsletter.
Click here to read our article on Pet Trusts and return to their site often for good information.
Thanks to Patricia Collier and her entire staff for allowing us to work with their on line publication.
You Think That Your Dog Has it Good?
The central concern of any estate planning for animal owners is to provide for the continued care of their pets, after the owners are gone.
Care requires money for boarding, vets, food, medicine and essentials, like new toys.
Perhaps the most famous story of animal wealth involves Leona Helmsley’s dog, named Trouble, who received millions of dollars from his owner upon her death.
We know that if the amount of money that is left to the pet is unreasonable or unrealistic, the trust may be challenged. The larger the amount left for your pet, the higher the percentage of a challenge, especially, by a disgruntled relative.
I have also noted that many individuals find the whole concept absurd and a waste of money.
Well recently, I was alerted to a website, called bankling.com, by my friend Stacey.
Bankling states that it is your guide to the intersection of three topics: money, the Web and life.
Bankling has a story by Miranda Marquit that reviews the world’s richest dogs.
Moreover, we are talking RICH dogs, beginning with Gunther IV, a German Sheppard commanding a wealth of over $350 Million.
You can read the whole article here, but I must warn you, it might make your take home pay stub look very small.
Additional Comments on Proposed Pet Trust Legislation In Connecticut
I recently posted a story concerning proposed new legislation for a statutory Pet Trust in the state of Connecticut.
I continue to receive responses from readers that are both for and against the bill.
Here is one of the recent responses.
"Pets have been proven to have positive mental and physical health benefits for the elderly. But often senior citizens forgo this benefit for fear their pets will be killed upon the owner's death. Pet trusts give peace of mind to the elderly and also help reduce the number of homeless animals. Getting old is hard enough. Why deny this comfort to the elderly? Maybe those who disagree are greedy relatives who hope to get something for nothing."
What do you think?
We will post your thoughts and attitudes as they are received.
Pet Trusts in Tough Times
Yesterday, a reader responded to a previous post that had expressed opposition to the newly offered statutory pet trust in the state of Connecticut.
The new response to the legislation is below:
"The economy is a major reason why people should be worrying about things like the care of their pets after they are gone. If everyone else is hurting financially then they cannot depend on friends and family to just willingly care for their animals. As I understand it, a pet trust will pay for the care of the animal instead of adding an additional burden on another person. Whether or not the statute is a priority at this time. It needs to be done. It is part of the whole picture."
Let us know your thoughts on this subject…do these tough economic times change your comfort level for your pet’s future?
What Happens When the Pet Trust Goes Bust?
What happens if the money that I set aside for my dog Lenny in a pet trust runs out before Lenny dies? Does the Trustee or Caregiver have to pay monies out of their own pocket?
Gina Las Vegas, Nevada
If that happens, Lenny will probably, unfortunately be turned over to a pet organization or euthanized, unless someone volunteers to adopt him.
Fortunately, at least, the trustee or caregiver would not be obligated to pay for any of Lenny’s expenses. An adequately funded trust will avoid this problem.
Maryland Legislature Tries Pet Trust Again
The majority of States that allow for Statutory Pet Trusts may soon increase their number by one.
Currently, 39 states and the District of Columbia recognize some type of pet trust authorized by the legislature.
Recently, A. Wade Kach, a Baltimore County Republican, introduced legislation that would provide for pet trusts in Maryland.
The financial trust that has been proposed could be set up for the lifetime of the animal if the owner dies before their pet.
In light of history, this legislation may or may not pass. A previous bill introduced in the Maryland Senate in January of 2006 (Senate Bill 235) failed to pass.
Maybe this time, the politicians will get it right.
We will keep you advised.
More Good Reasons to Have a Pet Trust
San Diego Estate Planning Lawyer, Roy M. Doppelt's has a good post on Seven Reasons to Have a Pet Trust.
The first two reasons are here:
"1. You have pets with a long life expectancy. Some pets are almost sure to outlive you. Birds and reptiles have exceptionally long lives. Some turtles can live almost 100 years. A macaw for example can live to be 80. Horses have a life expectancy of twenty to thirty years.
2. You live alone. If you live alone with your pet, you need to consider who would step in and care for your pet if something happened unexpectantly to you."
Go to his website to read the rest of his reasoning.
If one of his ideas will move you to act on these issues, you and your pets will be much better off for your actions.
You Cannot Leave Cash To Your Pet
Why do I need to go to the expense of establishing a pet trust for my cat Erica? I should be able to just leave her X amount of dollars in my will. Right?
Betty Lou Pine Island, FL
Betty Lou, the answer to your question is very simple.
Although the attitudes of judges and juries in many states are slowly changing, the basic law is still that your pet is a piece of personal property.
Therefore, since Erica is still legally personal property, it is clear that personal property cannot own other personal property.
If you tried to give cash directly to Erica the result would be a legal impossibility and the gift would therefor be void.
Your Pet Trust Needs Liability Insurance
When you set up your Pet Trust, you need to consider the total amount of money that you will need to adequately fund the trust.
This will include calculations for yearly food, supplies and veternarian bills.
Alternatively, there may be costs for boarding, for pet insurance or to pay the caregiver or the Trustee.
Do not forget the possible costs of liability insurance.
This insurance should be purchased by the Trustee to protect the Trust assets, the Trustee, and the caretaker from potential liability for money damages that may be caused by your pet.
Whether accidental or by design, your pet may cause harm to property or to individuals.
Plan ahead and protect the Trust that you have established to protect your pet.
Give Your Pet Caregiver Some Guidance
When you establish your Pet Trust, you should be clear and provide very specific information about your pet to your caregiver.
Even if the new caregiver knows your pet very well, they still need as much information as possible to make a new and happy home for your pet.
At the very least, the following information should be provided;
Identify any specific behavior or habits of your Pet,
Is your pet basically an indoor or outdoor Pet,
Identity the Breeder of your Pet (if applicable),
Identify the brand of food that you feed this Pet,
What are the usual feeding time schedules and the amount of food for each meal,
Identify any special medications, supplements or other dietary needs,
Identify the location of all medical records, inoculation and spay/neuter certificates,
Identify the daily routine for your Pet including the specific (if any) location for sleeping, eating, baths, grooming, walking or exercise locations and interaction with other local animals, special play activities, how to calm your pet when it is disturbed or in fear and adaptations to travel, and
Identify the favorite toys or play objects for your Pet.
The more information given to the caregiver, the smoother the transfer for all parties.
Continuing Education for Professionals
Many of our active readers are also avid supporters of their local Humane Society or other similar community organization.
They support these facilities with their time and their money.
In addition to providing care and medicine for local animals, a vital part of the many programs of the various entities is education.
This applies not only to the public, but also to the professional groups, such as attorneys, financial planners and estate planners.
I have been working with the Humane Society of Naples to assist in the education process of pet trusts and estate planning for pet owners, to present to the public and the professionals.
To that end, we have been successful in preparing a Continuing Legal Education program that has received approval by the Florida Bar. The program is entitled Estate Planning For Animal Owners.
If you believe that your organization could benefit from a similar program, I will do whatever I can to assist.
Have your organization’s representative contact me directly.
This could be a long range planning strategy that benefits your pet community.
Talk With Your Attorney
I was told by a lawyer (not my lawyer) that a pet trust and a living trust are one in the same. He said they both have the same provisions.
He said by slightly changing the words in a few paragraphs, 95% of the trust articles and the length of both trust are nearly the same.
I am writing to get your opinion, not to try and prove anyone wrong.
1. If the lawyer is correct, and I already have a living trust, could I use that same document as a template, and have my lawyer draw up a pet trust for my pet?
2. Do I need a living trust and a pet trust or can I amend my living trust to take care of my pet?
3. If I can protect my pet by adding an amendment to my trust, what would you charge to draw up the amendment?
4. Can I provide for the care of my pet in my durable power of attorney, or should I have a separate document for that?
Thanks
Billie
Billie, I am not trying to avoid any of your questions or issues, but I cannot begin to answer your inquiries.
Each individual’s estate plan, financial needs and family situation varies tremendously.
A living trust, a trust, a statutory pet trust and a common law trust are very different entities.
You should discuss all of these issues with your attorney after he or she has had the opportunity to secure the necessary information and background to give the proper advice and guidance.
Idle conversation with an attorney unfamiliar with your situation is like securing medical advice on how to set your own broken bone from the internet.
What Is the Cost of a Pet Trust?
How much would a Pet Trust typically cost?
Billie Bob Crothersville, Indiana
Billie Bob, that is a question that I really cannot answer.
It will depend upon a number of issues.
Will you provide for the trust in a clause of a new will that you are writing?
Will it be a completely new simple trust of five or six pages or one of twenty to thirty pages for numerous animals?
If you already have your estate plan in place, is this a new document or a codicil (addition) to those documents?
Are you establishing numerous specific rules for the caretaker, or allowing a great deal of latitude?
If you are leaving your pet to an institution, do they have guidelines for your documents, do they prepare form documents or will they accept those of your counsel?
The needs and desires of each individual is different and therefore each estate plan will be different.
A competent professional legal advisor will be open and clear about the costs of the Pet Trust and how it interacts with the totality of your specific estate plan.
Just ask!
Seperate the Caregiver and the Trustee in Your Pet Trust
I want to appoint my accountant as the Trustee for my Pet Trust because she has a full background and understanding of my financial condition. However, the accountant insists that she should also be the caregiver for Moxy, my terrier, so that she can combine duties to save time. Is this a good idea?
Rex Lavergne, Tennessee
The animal caregiver, custodian or guardian is an important component in the Pet Trust.
Usually a family member or close friend is appointed to this position. Someone who knows and cares for the pet. Perhaps, someone who has a history with your animal.
Professor Gerry W. Beyer has taken this position on the appointment of the Trustee as the caregiver. In 2008, he wrote:
"This is the most important decision because this person will provide the pet’s care. The pet, the prospective caregiver, and the caregiver’s family (human and nonhuman) should make sure they get along. It is important to name alternates in case the designated person is unable to care for the pet. The trustee may be given the ability to select a good home for the pet if none of the named beneficiaries can care for the animal. But the trustee must not be permitted to appoint him- or herself, as this would eliminate the checks-and-balances aspect of separating the caregiver from the money provider."
Heed the words of the experts in this field.
Separate the powers, duties and appointment of the caregiver and the Trustee in your pet trust.
New Pet Projects Amid Tropical Storm Fay
We have a couple of things happening in the world of the pet owner at this time that are generating some excitement.
Last week, I spoke with Andrea Levine, the Associate Producer of the television show ,“Animal Planet”.
Check it out here, if you have not been viewing the programs.
Ms. Levine has asked me to assist her, if I can, with some background information for a future show segment.
I am please that she thought of us in this area and look forward to working with her.
In addition, I am going to meet with some entrepreneurial pet lovers to discuss a novel idea for the use of pet trusts and an expanded role for caretakers.
I do not mean to be secretive, but there currently is a confidentiality issued involved.
I will provide further information of this project when given the opportunity.
Finally, as I write this, Tropical Storm Fay is just leaving Cuba and heading toward south Florida.
Floridians have been warned to keep a close eye on this possible weather problem for the next 48 hours.
We are preparing to do whatever becomes necessary, if we are forced to react to adverse weather.
We have been here before and know the drill and routine.
Hope to contact you soon.
Nice Words from The San Francisco Chronicle
Ms. Pender was kind enough to mention our blog in her column on Sunday July 27, 2008.
The article contains some varied views as to the necessity of estate planning and the use of pet trusts.
It also sheds a different light on some type of pet owners and their attitude toward their pets.
You may review the entire article here.
Let me know your thoughts and reactions.
Rhode Island Pet Trusts
Can you provide any additional information for Estate Planning for Pets in my state?
Peggy Scituate, Rhode Island
Peggy, Rhode Island has had a statutory Pet Trust since 2005.
Animallawinfo.com, provides a summary of the law:
"This law represents the state's pet trust law. The law provides that a trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal, or if the trust was created to provided for the care of more than one animal alive during the settlor's lifetime upon the death of the last surviving animal. The statute lists a distribution schedule for any remaining trust property and also states that such trusts are to be liberally construed to carry out the transferor's intent."
The Rhode Island State statute reads in full as follows:
(a) A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal, or if the trust was created to provided for the care of more than one animal alive during the settlor's lifetime upon the death of the last surviving animal.
(b) Except as provided in this section, the provisions of the general laws which govern the creation and administration of express trusts applies to the trust for the care of an animal.
(c) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court. A person having interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove the appointed person. The appointed person shall have the rights of a trust beneficiary for the purpose of enforcing the trust, including receiving accountings, notices, and other information from the trustee and providing consents.
(d) Property of a trust appointed by this person may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Property not required for the intended use, including the trust property remaining upon its termination, shall be distributed in the following order of priority:
1) As directed by the terms of the trust;
(2) To the settlor, if then living;
(3) Pursuant to the residuary clause of the settlor's will;
(4) To the settlor's heirs in accordance with the Rhode Island general laws on descent and distribution.
(e) A governing instrument shall be liberally construed in order to presume against the merely precatory or honorary nature of the disposition and to carry out the general intent of the transferor. Extrinsic evidence is admissible in determining the transferor's intent.
(f) If a trustee is not designated or designated trustee is not willing or able to serve, the probate court shall name a trustee; a court may order the transfer of the property to another trustee, if the court makes a factual finding that it is necessary to assure the intended use is carried out and if a successor trustee is not designated in the trust instrument or if a designated trustee does not agree to serve or is unable to serve.
The Rhode Island format follows the majority of States with pet trusts.
Discuss this with your team of professional advisors, take advantage of this statute and prepare to plan for you and your pets.
Pet Trusts Are Available In Iowa
We recently received a phone message from an unidentified caller that asked about the availability of a Pet Trust for the state of Iowa.
Since 2000, Iowa has had a Statutory Trust available for use by pet owners.
The Iowa Code provides as follows:
633A.2105 Honorary trusts — trusts for pets.
1. A trust for a lawful noncharitable purpose for which there is no definite or definitely ascertainable beneficiary is valid but may be performed by the trustee for only twenty–one years, whether or not the terms of the trust contemplate a longer duration.
2. A trust for the care of an animal living at the settlor’s death is valid. The trust terminates when no living animal is covered by its terms.
3. A portion of the property of a trust authorized by this section shall not be converted to any use other than its intended use unless the terms of the trust so provide or the court determines that the value of the trust property substantially exceeds the amount required.
4. The intended use of a trust authorized by this section may be enforced by a person designated for that purpose in the terms of the trust or, if none, by a person appointed by the court.
The law is fairly simple and straight forward.
Contact you professional team for more assistance.
Hawkeyes have tools at their disposal for estate planning for their pets.
Put them to use…
How Much Is Too Much For Your Pet?
We have written extensively about the role of the Trustee and the Caretaker in your pet’s estate planning process, here here here and here.
The more written information and clarification that you can provide for them will only assist the process of caring for your pet after you have gone.
We have also discussed Leona Helmsley’s will and the millions of dollars that she left to her dog, Trouble.
A recent article in the New York Times now reports that the “mission statement” of Ms. Helmsley specifically states that her entire estate, of some $8 billion, is to be used for the care and welfare of animals.
With this much money at stake, we can be assured that the litigation in this probate process is set to continue for years, If not decades, to come.
You can read the entire article, here .
We fully encourage estate and emergency planning for owners of pets and companion animals.
But, we also urge you to use good sense in your planning.
Perhaps, just perhaps, that $8 billion, or a part of it, could be used for a different need or cause.
Just a thought.
Plan well for your pets and plan now.
Trust Protector-A Good or A Bad Thing?
Denise of Merlin, Oregon, had posed a question regarding the definition of a Trust Protector. We turned to Senior Counsel Sharon C. Nelson of Foley & Lardner, LLP, here and here to help us with these issues.
...In the right circumstances, the use of a trust protector can be invaluable in giving the grantor the peace of mind that his intent will be carried out even if the laws or circumstances of named beneficiaries change. On the other hand, granting broad powers to a trust protector can cause unintended results and change beneficial interests that the grantor never intended. Before including a trust protector in any trust document, the grantor should have the opportunity to carefully consider the possible consequences of giving someone the powers he or she is contemplating. Most importantly, if a grantor does decide to add a trust protector to a trust document, the drafting attorney should carefully define and specify the powers of the trust protector, the limitations placed on the trust protector and the intent of the grantor in naming the protector.
When you meet with your attorney and other consultants to discuss your estate planning for your pet, do not forget to talk about a Trust Protector.
Who Should Serve as A Trust Protector?
Denise of Merlin, Oregon, had posed a question regarding the definition of Trust Protector. We turned to Senior Counsel Sharon C. Nelson of Foley & Lardner, LLP, to help us with these issues.
...Technically, anyone can serve as a trust protector. However, in order to avoid adverse tax consequences (for both the grantor and the trust protector), it is generally advisable to name an independent third party as the trust protector. Trustees, beneficiaries or members of the donor’s immediate family are not independent parties and thus, should generally not be named as trust
protectors. Lawyers, accountants, unrelated business-minded friends, brothers, sisters, aunts and uncles of the grantor are often a good choice for the trust protector role. Corporate fiduciaries are not necessarily the best choice due to the conservative view of many corporate fiduciaries which may make it difficult for them to exercise the authority they are granted...
....While there is no set list of powers that should be granted to a trust protector, there are some powers that would be helpful in most situations that the grantor should consider. For example, the trust protector could be given the power to amend the trust to comply with new tax laws or to address any changes in the law or circumstances of a trust or its beneficiaries that would significantly change the tax treatment of the trust or its beneficiaries. In addition, the trust protector could be given the power to terminate the trust or to remove, add or replace the trustee. Other powers could include the ability to change the governing law or to expand or limit the powers of the Trustee. Some powers, however, such as the power to grant, expand, reduce or eliminate a power of appointment, the power to change, eliminate or add provisions regarding the disposition of income and principal or the power to change beneficiaries should be looked at more closely before including them because beneficial interests could be completely altered. Care should be taken to clearly define the purposes of the trust and to give the trust protector ample guidance as to what is expected and allowed and what is not...
We will conclude this review tomorrow.
What is A Trust Protector?
I mentioned the possible use of a pet trust to my insurance broker and she asked if I had considered a Trust Protector. What is this and what does it do?
Denise Merlin, Oregon
Senior Counsel Sharon C. Nelson of Foley & Lardner, LLP, wrote a very clear understanding of this issue
"The use of trust protectors in trust documents is becoming more and more popular in today’s estate planning environment. The purpose of a trust protector is to provide flexibility to an irrevocable trust. However, before adding a trust protector to any documents, the grantor should carefully weigh the advantages and disadvantages inherent in the role of trust protector...
The trust protector holds a power to direct the trustee in matters relating to the trust. The role of the trust protector and the ability of the trust protector to direct the trustee will vary from trust to trust depending on specific drafting. The greatest advantage of having a trust protector named in a trust document is that it adds flexibility to the trust and allows the grantor to delegate someone to deal with almost every conceivable future circumstance. This is very attractive in today’s changing estate planning environment where the tax law is in flux. Use of a trust protector can allow amendment of the trust document to achieve positive tax results and allow administration consistent with the grantor’s intent when circumstances change...
The greatest disadvantage to the use of the trust protector is that the grantor is vesting significant power in one person. In addition, because the trust protector is often given the power to amend the trust to take into account the changes in the tax laws, beneficial interests may be altered. Finally, a common complaint of naming a trust protector is that it adds another level of administration and administration expenses..."
Next we will look at her discussion of who should serve as a Trust protector.
No Will in North Dakota
Jon Stady, North Dakota
Jon, unless you have provided for Caroline in your will or a Pet Trust, statutorily or otherwise, you may have concerns. In most states, generally speaking, companion animals are treated exactly like chattel or personal property when you die. You therefore need to look to the laws of your state to see exactly who would receive your assets if you were to die without a will (intestate).
In North Dakota, the statues are found here;
"CHAPTER 30.1-04 INTESTATE SUCCESSION
30.1-04-01. (2-101) Intestate estate.
1. Any part of a decedent's estate not effectively disposed of by will passes by intestate succession to the decedent's heirs as prescribed in this title, except as modified by the decedent's will.
2. A decedent, by will, may expressly exclude or limit the right of an individual or class to succeed to property of the decedent passing by intestate succession. If that individual or a member of that class survives the decedent, the share of the decedent's intestate estate to which that individual or class would have succeeded passes as if that individual or each member of that class had disclaimed the intestate share.
30.1-04-02. (2-102) Share of spouse. The intestate share of a decedent's surviving spouse is:
1. The entire intestate estate if:
a. No descendant or parent of the decedent survives the decedent; or
b. All of the decedent's surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent.
2. The first two hundred thousand dollars, plus three-fourths of any balance of the intestate estate, if no descendant of the decedent survives the decedent, but a parent of the decedent survives the decedent.
3. The first one hundred fifty thousand dollars, plus one-half of any balance of the intestate, if all of the decedent's surviving descendants are also descendants of the surviving spouse and the surviving spouse has one or more surviving descendants who are not descendants of the decedent.
4. The first one hundred thousand dollars, plus one-half of any balance of the intestate estate, if one or more of the decedent's surviving descendants are not descendants of the surviving spouse.
30.1-04-03. (2-103) Share of heirs other than surviving spouse. Any part of the intestate estate not passing to the decedent's surviving spouse under section 30.1-04-02, or the entire intestate estate if there is no surviving spouse, passes in the following order to the individuals designated below who survive the decedent:
1. To the decedent's descendants by representation.
2. If there is no surviving descendant, to the decedent's parents equally if both survive, or to the surviving parent.
3. If there is no surviving descendant or parent, to the descendants of the decedent's parents or either of them by representation.
4. If there is no surviving descendant, parent, or descendant of a parent, but the decedent is survived by one or more grandparents or descendants of grandparents, half of the estate passes to the decedent's paternal grandparents equally if both survive, or to the surviving paternal grandparent, or to the descendants of the decedent's paternal grandparents or either of them if both are deceased, the descendant's taking by representation; and the other half passes to the decedent's maternal relatives in the same manner; but if there is no surviving grandparent or descendant of a grandparent on either the paternal or the maternal side, the entire estate passes to the decedent's relatives on the other side in the same manner as the half.
30.1-04-03.1. Individuals related to decedent through two lines. An individual who is related to the decedent through two lines of relationship is entitled to only a single share based on the relationship that would entitle the individual to the larger share…
30.1-04-05. (2-105) No taker. If there is no taker under the provisions of this title, the intestate estate passes to the state for the support of the common schools and an action for the recovery of such property and to reduce it into the possession of the state or for its sale and conveyance may be brought by the attorney general or by the state's attorney in the district court of the county in which the property is situated..."
Confused, well many people think that that is exactly what the legislature intended.
In general terms, is means; to your spouse and children then your parents then more distant relatives.
In none of these are around, it goes back to the state of North Dakota.
Don’t leave Caroline to the dictates of the state. Plan for your pet now…
Remember The Guidelines For Your Pet Trust
If that amount is unreasonable or unrealistic, the Trust may be challenged. The larger the amount left for your pet, the higher the percentage of a challenge. Especially, by a disgruntled relative.
Many of you will recall that hotel heiress, Leona Helmsley, who died last year, left a $12 million Trust to her 9 year old Maltese, Trouble.
Well, Trouble, who now lives in Florida, has trouble now!
A New York Judge and the State Attorney General have signed off an agreement that reduces Trouble’s share to $2 million.
Not all of the facts have been revealed as to agreement of the parties or their reasoning, but certainly some of the heirs that were omitted from Helmsley’s will stand to see a substantial increase in their fortunes.
It appears as though the Trustee of Trouble was not opposed to the reduction of the amount.
You can see the update on the story here.
Remember these common issues when establishing you Pet Trust:
The appointment of the trustee and successor;
The appointment of the caretaker and successor;
The need to adequately identify your pets in order to prevent fraud;
A description of your pet’s standard of living and care in detail;
A requirement that the trustee ensures the caregiver is providing the pet with regular, thorough veterinary check-ups;
The need to determine the amount of cash or assets needed to adequately cover the expenses for your pet’s care;
The need to determine the amount of cash or assets needed to adequately cover the expenses of administering the pet trust;
Choosing a beneficiary who will receive any remaining funds that were not used by the pet trust; and
Providing directions for your pet’s burial or cremation.
But, do not forget to…establish your Pet Trust.
Can A Pet Trustee Receive Payment?
I saw your recent explanation of the duties of a Trustee for a Pet Trust. I have been asked by my brother Rex to serve as the trustee for his three dogs, Bingo, Bango and Bongo (very cute eh!) If I agree to do this, can I get paid for my time?
Zachary Palm Island, Florida
Zachary, unless the Trust Instrument has some type of specific prohibition, you are entitled to "reasonable compensation" for your services as a Trustee.
What is reasonable compensation?
That is a good question and is usually based upon an hourly rate or a percentage fee of the total amount of the Trust.
Bank trust departments will customarily charge an annual fee equal to approximately one percent (1%) of the current value of the trust's assets. They may charge a lower fee, but then add on transaction charges for every action.
If the Trust Instrument provides for specific compensation, you should follow the dictates of that document. If you feel that the compensation provided for in the trust is unreasonable or unduly burdensome, you can either resign as the Trustee or petition the court for additional compensation.
The trustee’s fee is normally paid on a quarterly basis. Remember, compensation (but not expense reimbursements) that you receive as a Trustee, is taxable to you, usually as self employment income.
Some Trustees want to waive the compensation because of their love for the family or animals involved. If you want to do this, make sure that you consult with your accountant about how to document this compensation in the correct manner. Otherwise you may have taxable income imputed to you even though you do not actually receive it.
The duties and responsibilities of a Pet Trustee are serious and legally binding. Receiving reasonable compensation for the performance of this role is fair and anticipated.
What Are the Duties of a Pet Trustee?
I want to appoint my cousin Sully as the Trustee for my Pet Trust. He said that he would consider doing it, but wanted to know exactly what that means. How do I explain this to him?
Bianca Pawley’s Island , South Carolina
Bianca, generally the Trustee is considered to have four major areas of duties or responsibilities.
He or she must collect all of the assets that belong to the trust, manage and invest the trust assets, pay all of the applicable debts and taxes as required in the trust document and then distribute the remaining trust assets to the designated beneficiaries as set out in the Trust.
The collection of the assets should be a fairly simple task in that most Pet Trusts have specific source of easily identifiable funds to be placed into the Trust.
The investments must be in a prudent and reasonable manner, with no self-dealings or commingling (mixing) of personal and trust funds.
Accurate records of all income and expense of the Trust funds must be kept by the Trustee.
The Trustee is usually empowered to hire legal counsel or accounting help to assist in the legal and/or financial affairs of the Trust, to be sure that they are in full compliance with state and federal rules and regulations.
When the Trust ends, the remaining assets are turned over to the named beneficiary and the duties of the Trustee are ended.
Tell your cousin Sully, there is no reason for him not to help you and your pet with your estate planning.
Funding Options for Your Pet Trust
The bigger issue is when we talk about the final funding of the Trust for the benefit of your pet.
There are number of ways that you can ultimately transfer assets into the Trust.
The most obvious way is simply to have a certain cash amount transferred to the Trust while you are alive. The Trust is funded and will grow with accumulated interest.
The down side is that the use of the money is gone from your individual control until your death (assuming that you do not revoke the Trust).
You may also add funds to the Trust with a “pour over provision” in your will and designate specific source of the funds.
Another alternative can be the use of a Payable on Death Account.
This account is in your name individually and also in the name of the Trustee. Upon your death, without any probate process, the money should transfer to the Trustee for the benefit of your Pet Trust.
You can also purchase a life insurance policy and name the Trustee as the beneficiary of the proceeds.
This beneficiary method can also be successfully used with other forms of personal property, Individual Retirement Accounts, annuities, 401 (k)’s, corporate stock (both private and public), limited liability memberships and bonds of all types. Even rarely, in some circumstance, real estate may be used.
Remember that most, if not all of these actions, involve some type of tax implication and you need to discuss this with your financial adviser and accountant before choosing the proper course of action.
Then, of course, you will need to follow up with your estate attorney or insurance and stock brokers to verify the correct language that will be needed to be used for all of these avenues to secure the results that you require.
You have a number of options to fund your Pet Trust… make sure that you have a Trust to fund.
Include your Veterinarian in your Estate Plans for Your Pet
Certainly, your own family members, the potential trustee and the potential caretakers of your pet must all be in accord with your plans and wishes.
Your estate attorney and financial planer also need to be involved to make sure that your documents conform to the legal and financial standards.
But, don’t forget to meet with your Veterinarian.
Very few individuals have the same insight about the health and well being of your animal as your pet’s own Vet.
A discussion with him or her during your estate planning process can assist greatly.
Medical records and the future potential needs of your pets can be outlined for the caretakers.
Special dietary schedules or exercise or medication routines can be easily established for future reference.
You and your Vet can discuss the potential time line for the duration of the life of your pet. This can provide some guidelines for the total costs that will be necessary for the care of your pet and the necessary funding of the Pet Trust.
Your Vet can also play an integral role in the transfer of physical custody of your pet to the caretaker on a temporary or permanent basis and is indispensable when the final arrangements must be made for inevitable death of your pet.
Talk to your Vet on behalf of your pet.
It is a necessary part of your overall estate plan..
Don't Forget to Fund Your Pet Trust
Nathan Gene Stone, Mississippi
Nathan, once you have set up your Pet Trust you need to at least fund it with a minimal amount of money.
For the Trust to take effect, some assets must be transferred into the Trust.
Not everyone understands that the grantor (you as the pet owner) must take some affirmative steps to transfer at least some assets and fund the Trust. Merely executing the Trust itself will not cause the Trust to become funded. You must actually transfer legal title to the Trust.
The transfer is from you as an individual to the Trustee, even if you are also the Trustee.
You need to be clear that any activity that you take is as, “Nathan Gene, Trustee of the Annika the Afghan Hound Trust,” or whatever is the correct designation.
These actions, whether money transfers or whatever needs to be completed on behalf of the Trust and should be by the Trustee and not you as an individual.
You need to discuss all aspects of correctly funding your Pet Trust with your legal counsel to ensure complete accuracy.
The first step is draw up the Trust...then you are on your way to protecting your pet's future.
Burial, Cremation or Alkaline Hydrolysis for Your Pet?
We have discussed before, here, that one issue to consider as a key component of your Pet Trust drafting is the final disposition of your pet.
After you are long gone, eventually your pet will also die and someone or some entity will be responsible for following the final directives that you have set out in your Pet Trust or will.
We usually talk about two options after death; burial or cremation.
However, recently the web is a buzz about a new option…dissolving bodies in lye and flushing the brownish, syrupy residue down a drain.
BioSAFE Engineering LLC, located in the small town of Brownsburg, Indiana, is producing cylinders for a process called alkaline hydrolysis.
According to the BioSAFE website…
...Alkaline hydrolysis is a process of an elevated temperature and pressure to convert the proteins, nucleic acids, and lipids of all cells and tissues, as well as infectious microorganisms, to a sterile aqueous solution of small peptides, amino acids, sugars, soaps, and electrolytes. The alkali itself is consumed in the process by generating the salts of the hydrolysis products. The only byproducts of the process are the mineral constituents (ash) of the bones and teeth of vertebrates. These are soft enough after the organic matter has been degraded to be easily crushed (even by bare hands) and recovered as calcium phosphate powder (sterile bone meal).
The WR2 Tissue Digestor™ consists of an insulated stainless steel pressure vessel with a manually or hydraulically clamped lid. The unit is supplied with a basket to contain bone remnants. All wetted parts are 316-L stainless steel alloy, and all vessels are ASME pressure rated and certified. All electrical components are built according to NEMA standards. The system is fully automated; allowing unattended operation after the unit is loaded...
What does this mean?
The equipment that they manufacture provides the access for a process that converts animal, human, and microbial tissues into a sterile, neutral, aqueous solution suitable for disposal to a sanitary sewer.
Apparently the time and cost for this procedure depends on the size and weight of the human or animal being processed.
The Associated Press recently reported in a story by reporter Norma Love that
..."No funeral homes in the U.S. — or anywhere else in the world, as far as the equipment manufacturer knows — offer it. In fact, only two U.S. medical centers use it on human bodies, and only on cadavers donated for research.
But because of its environmental advantages, some in the funeral industry say it could someday rival burial and cremation.
"It's not often that a truly game-changing technology comes along in the funeral service," the newsletter Funeral Service Insider said in September. But "we might have gotten a hold of one."
Currently, only the states of Minnesota and New Hampshire have legalized this process for humans.
Apparently, some 40 to 50 facilities use the cylinders developed by BioSAFE on human medical waste, animal carcasses or both. The users include veterinary schools, universities, such as the University of Florida (for cadavers) pharmaceutical companies and even the U.S. government.
The liquid residue from human tissue and animal carcasses can simple be poured down the drain.
I am not, in any manner, advocating the use of the process.
The thought of pouring my pet down the drain is a little appalling.
However, many people retain the ashes from a cremation of both humans and pets and place them on the mantle or a shelf.
I am not sure how much different this would be…a little decorative bottle, rather than an urn.
I don’t know…
It is your choice.
I am just presenting another viable option for your consideration.
Estate planning for your pet. Think about it, discuss it, make some decisions and then act on your plan.
Yes Virginia, there is a state Pet Trust
Does Virginia have pet a trust law? I am concerned about my little dog, Alice, who is an Affenpinscher.
Maybelle, Manassas, Virginia
Yes, Virginia…sorry I could not resist…yes, Maybelle, Virginia does have a Pet Trust Statute. However, I have to admit that I knew that, but I had no idea what an Affenpinscher was until I looked it up.
The Animal Welfare League of Arlington Virginia reported that in 2006,
“Virginia proudly joined 37 other states with a pet trust statute. This means that Virginia is also a little late to the game, but at least now Virginians can rest assured that their furry friends will be taken care of in case something ever happens to the pet's guardian. Pet owners may now designate a caretaker for their pet(s) and a trustee who ensures that the money is spent on the pet. Previously, if a pet's guardian passed away and left money in their will to take care of the pet, anyone could contest the provision and the pet could find himself in the shelter -- no cash, no home, no guardian. This statute puts an end to this injustice."
In its 2005 Session, the Virginia General Assembly enacted Senate Bill 891, the Uniform Trust Code (“UTC”), with modifications.
It provides that a trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, upon the death of the last surviving animal.
The instrument creating the trust shall be liberally construed to bring the transfer within the scope of trusts governed by this section, to presume against the merely precatory or honorary nature of the disposition, and to carry out the general intent of the transferor.
A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court.
Except as ordered by a court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds, appointment, or surety bond shall be required by reason of the existence of the fiduciary relationship of the trustee.
Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use.
Except as otherwise provided in the terms of the trust, property not required for the intended use shall be distributed to the settlor, if then living. If the settlor is deceased, such property shall be distributed pursuant to the residuary clause of the settlor's will if the trust for the animal was created in a preresiduary clause in the will or pursuant to the residuary provisions of the inter vivos trust if the trust for the animal was created in a preresiduary clause in the trust instrument; otherwise, such property shall be distributed to the settlor's successors in interest.
Those of you that are regular readers of this Blog will certainly note that the Virginia Pet Statute outline is very similar if not identical to other state Pet Statutes.
A Pet Trust can be Inter Vivos or Testamentary
A pet trust can be established thorough a testamentary trust or with an inter vivos trust.
An inter vivos trust is one that takes place immediately upon the completion and execution of the document. We generally think of this type of trust as a living trust and it is usually revocable by the trust grantor, creator or settlor (all of these terms are used interchangeably).
The living trust can be used to plan for unforeseen circumstances such as incapacity, disability and eventually the death of the grantor.
The grantor also usually serves as the original trustee or co-trustee. In the case where two or more co-trustees serve, the trust instrument can provide that either trustee may act alone on behalf of the trust or require both co-trustees to actor sign.
The trust may never actually be needed or used until the death of the grantor, but it is always available if necessary. It can be changed or altered or even revoked by the grantor at any time.
In a pet trust, this provides that there will be no lapse of care or treatment for your pet and no delay because of any probate process.
On the other hand, a testamentary trust is one that is created in a will.
Since a will is an ambulatory instrument, in that it never is effective until the testator (the one who writes the will) actually dies, this trust will not spring to use until the pet owner is no longer around.
Additionally, a will must go through the probate process, see here, and there may well be some time delays.
This delay may cause issues for the ability of your pet caretaker to secure the means and authority to take care of your pet.
One advantage of this type of trust is that is may be less expensive than the living trust. The trust clauses can be incorporated into the will of the pet owner and thus, become an integral part of the overall estate planning process.
Issues to Consider for Your Pet Trust Planning
The American Society for the Prevention of Cruelty to Animals ( ASPCA) is another invaluable site to reference estate planning needs for your pet.
Kim Bressant-Kibwe, Esq. the ASPCA Trusts & Estates Counsel offers assistance to attorneys, financial advisers and executors on all aspects of planning.
Ms. Bressant-Kibwe writes,
“…A pet trust is a legally sanctioned arrangement that provides for the care and maintenance of one or more pets in the event of their owner’s disability or death. The person who creates the trust is commonly referred to as the ‘settlor’. The person who is entrusted with the funds is called the ‘trustee’. A trust can take effect either during a person’s lifetime or after their death. Typically, a trustee will hold property (cash, for example) “in trust” for the settlor’s pet or pets. When the time comes, the trustee will make payments on a regular basis to a designated caregiver. In some states, the trust may continue for the rest of the animal’s life or for 21 years, whichever comes first. Other states allow a pet trust to continue for the rest of the animal’s life without regard to the 21-year limitation. This is especially advantageous when planning for companion animals such as horses and parrots, who have longer life expectancies than cats and dogs.”
She suggests that you contact your attorney to discuss the needs and future estate plans for your pets to establish a pet trust.
Additional areas of concern that she notes that you, your family and your attorney need to consider include;
The appointment of the trustee and successor;
The appointment of the caretaker and successor;
The need to adequately identify your pets in order to prevent fraud;
A description of your pet’s standard of living and care in detail;
A requirement that the trustee ensures the caregiver is providing the pet with regular, thorough veterinary check-ups;
The need to determine the amount of cash or assets needed to adequately cover the expenses for your pet’s care;
The need to determine the amount of cash or assets needed to adequately cover the expenses of administering the pet trust;
Choosing a beneficiary who will receive any remaining funds that were not used by the pet trust; and
Providing directions for your pet’s burial or cremation.
The ASPCA is on one of the many valuable sources of information available to the public regarding the estate planning process for your pets.
If your advisers need assistance or direction, you can help show them the way.
Be proactive in your life. Make your choices, plan and then proceed,
Responsibilities of a Pet Trustee
The Uniform Trust Code, adopted by a majority of the states since its initial draft inception in 2000, has been the underlying strength of the new growth phase of Pet Trusts.
We have previously minimally defined the role of the Trustee.
Generally speaking, the duties and responsibilities of a Trustee for a Pet Trust are no more or less than any other Trustee.
The Trust Agreement itself will set out the specific role of the Trustee and set the parameters of the powers of the Trustee.
The Uniform Trust Code also defines in detail, the duties and powers of the Trustee that have been accumulated as established by the courts and the legislatures throughout the years.
Beginning with Section 801, DUTY TO ADMINISTER TRUST, which states…
Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries, and in accordance with this [Code].
The Code sets out in great detail the expectations of the Trustee, including definitions and explanations of the needed loyalty and impartiality of the Trustee as well as the accumulation, control and accounting of the Trust property.
Your choice of a Trustee for your Pet Trust, whether an organization or an individual should not be taken lightly. Although their responsibilities are set high and can be closely monitored by your Pet Caretaker, you will be out of the picture and the decisions will be made by someone else
You will no longer have control of the property that you have set aside for the care and protection of your pet.
Chose your Pet Trustee wisely.
What about Crabby?
I am in the early stages of my future planning for my cockatiel, Crabby, who is three years old. I am told the she may well live until her late twenties and I am in my late sixties. Although I love her dearly, like most cockatiels, Crabby is very messy and requires a lot of “hands on” time and I don’t think that she will be easily placed after I am gone. Any suggestions?
Adalina, Ocate, New Mexico
Adalina…we have discussed in this blog on numerous occasions that many individuals choose to have a pet sanctuary or pet retirement center take care of their pets after they pass away.
Perhaps they have no family or friends that are willing or capable of caring for the pets.
One of the downsides of this choice is the cost involved.
We recently spoke with a pet sanctuary and recovery center representative who works for one of the largest sanctuaries in the United States. He advised that the fee for them to take in one pet is $10,000.00 and then an additional $5,000.00 for each successive pet.
In addition, the personal representative of the estate or a family member is responsible for the costs of transferring the pet to the center.
The fee can be paid through a trust or a clause in the will of the pet owner or by a life insurance policy with the center as the beneficiary or obviously, by a straight cash payment.
Arrangements for the pet and the transfer and payment for the services are agreed to in advance.
In exchange for the fee, the center will provide for the shelter and feeding of the animal as well as all medical care that will be needed. They will also attempt to place the pet into a new home as soon as possible.
If you have no other choice, a professional center may be one option for the care of your pet after you are gone.
An expensive option.
How did you become involved with estate planning for pet owners?
I am curious as to how and why you became involved in estate planning for pet owners. I have been a practicing attorney for over thirty years and although it was in the corporate field, I have never met another attorney who even talked about this area of the law.
Mike, Atlanta, Georgia
Mike…my initial interest in this area actually began about seven years ago. Our firm was representing a very wealthy family on all of their business matters and I had been trying for a long time to meet with them to discuss and combine strategic business and estate planning.
They finally agreed and at the initial estate planning consultation conference, the wife, Pam, mentioned that they had two Abyssinian cats and asked what they could do to provide for them in their estate planning.
A young associate who was a part of the conference, burst out laughing and said,” You want to leave a bunch of money to some cats? ”
With that comment, both clients stated that they considered the cats a part of their family and that they would be more comfortable with counsel who understood their feelings…and that they had no interest in continuing with the meeting.
I then began to ask other attorneys if they regularly included pets as a part of their estate planning. Even though many of them were pet owners, not a one of them had even discussed pets with their clients.
With an estimated 65%-75% of all homes in the United States having pets, it was not hard for me to determine that estate planning for pet owners would be an area of growth and future interest for attorneys.
Finally, you might be interested to know that Georgia is one of the few states that does not yet have a Statutory Pet Trust. However, there are other legal methods available to provide for your pets in Georgia and, if you request, we can provide additional information in those matters.
Nobody has a better pet than you
Nobody has a better pet than you.
Nobody has a cuter pet than you, whether it is a big ugly pooch or a small little kitty.
It is your pet, your companion…and your friend.
Unfortunately the law, in most instances, still views this beloved creature as a piece of personal property, not much different than a couch or your car.
Many pet owners are using a Pet Trust to provide for the future plans of their pets. However, some owners are uncomfortable with this document and are looking to protect their pets the old fashioned way- via their wills.
If you are in the process of preparing a will for you or you and your spouse, you can certainly include clauses that reference your pets.
If you already have a will, you can add and a codicil (a change or addition to a will) to that document. Generally, there are a number of different types of clauses that refer to your pet and your estate planning.
One clause simply gives your animal to another individual upon your death and asks that the individual treat your pet as their companion animal. You direct that you executor give a certain amount of money to that individual and request that the funds be used for the care of your pet. You can also set out specific instructions for the care of your pet.
However, the downside of using a will for estate planning for your pets is that because they are still considered an asset or property by the Courts, the clause may not be enforceable.
The Trust and Estate Highlights of the law firm of Williams Mullen suggest that one solution is to leave the money to the individual (caretaker). They point out, however... that the individual has no legal obligation to use the money on behalf of the pet, so the owner must trust this person unequivocally. Moreover, if too much money is left to the caretaker, relatives and other interested parties may challenge the pet care bequest. In addition, pet owners must consider that the caretaker might accept the money but refuse the pet. Using a conditional bequest, this leaves the money contingent on the caretaker taking the pet, guards against this problem. This does not, however, prevent the caretaker from accepting the pet and then disposing of it.
In addition, the individual cannot be held accountable for the use of the funds if they decide to spend the money or other things (like a trip to the Bahamas) and remember, your will only becomes effective upon your death. If there is an emergency situation regarding your pet, the will is of no use.
The choice of a pet caretaker is an important decision
One of the key decisions that you need to make when you set up a trust for your pet is who should serve as the caretaker and the alternate caretaker, if your original choice is unable, for whatever reason, to perform their duties.
The most obvious choices for a caretaker are a friend that is familiar with your pet or another family member. Secondary options may include a local breeder, an animal sanctuary , a pet retirement center or even your pet’s veterinarian. You should be aware that many animal sanctuaries or retirement centers may be cost prohibitive or require a specific donation amount before they will accept your pet.
Your pet trust will direct the Trustee to distribute monies to the caretaker on a regularly scheduled basis to provide for the payment of all of the necessary expenses for your pet. Most pet trusts also provide for a payment to the caretaker for their time and services. You can specify the normal costs required to maintain the standard of living for your pet that include housing, food, veterinary and grooming bills, insurance and cremation or burial expenses.
One of the duties of the Trustee should be the power to demand a regular inspection of your pets to ensure that they are being properly maintained by the caretaker. The Trustee should be allowed to visit the animals in their home environment with the caretaker. The inspections should also be permitted to be made randomly and without prior notice to the caretaker.
Whoever is your choice as the caretaker, it is extremely important that you discuss your expectations of their duties and functions, to ensure that that they are willing to accept this responsibility. You need to be clearly comfortable with your choice, as it may determine the future well being of your family pet.
Got dogs?
- There are approximately 74.8 million dogs that are owned in the United States
- Thirty-nine percent (39%) of U.S. homeowners have at least one dog
- Most owners (63 percent) own one dog
- Twenty-five percent (25%) of owners own two dogs
- Twelve percent (12%) of owners own three or more dogs
- On average, owners have almost two dogs (1.7)
- The proportion of male to female dogs is even
- Ten percent of owned dogs were adopted from an animal shelter
- On average, dog owners spent $219 on veterinary visits (vaccine, well visits) annually
- Seventy-five percent (75%) of owned dogs are spayed or neutered
Unfortunately, it is also estimated that less than 2 out or every 10 dog owners have taken the time to provide for the future well being of their favorite pooch.
- Who will take care of your Pet when you are unable to do so?
- Do you have a Pet Trust or does your Will provide for your companion?
- Should the need arise, do you have a Medical Power of Attorney for your Pet in place?
What is a pet trust?
I was at a dog park the other day with my Golden Retriever, Mulligan, who was enjoying his romp in the daily rain. I overheard two ladies talking about something called a pet trust. I have heard of this from other pet owners, but do not know what this is? Can you explain the idea of a pet trust?
Dono, Seattle, WA
Dono, sure… a pet trust is a legally binding document that you can create that sets aside specific funds to take care of your pet. It can be set up to take effect immediately or automatically upon your death. The trust would specify a caretaker to physically provide for your pet and a trustee to monitor and control the funds. Under the common law such trusts were unenforceable by the courts in your state. However, the State of Washington has a statutory pet trust that has been approved by your legislature. The purpose of this law is to recognize and validate certain trusts that are established for the benefit of animals. These trusts will be recognized as valid and fully enforceable in Washington.
Contact us for more information or questions on a Washington statutory pet trust.
