The first that I had ever heard of pet trusts was the summer I was studying for the bar exam. I laughed at the concept at first; but over the last few years through my involvement in animal law activities and my own experiences, I have realized how important it is to make sure that your companion animal(s) are properly cared for should anything happen to you. As a pet owner myself, I understand the emotional attachment to companion animals and how important it is that they have a good life. I am blessed that my farm family loves animals but not everyone is so lucky. As we approach the new year, my theme is to make sure you have up-to-date estate planning documents for one of your 2010 resolutions. When doing so, consider whether you have addressed the care for your companion animals.
There are three documents to consider to ensure your pet(s) are properly cared for: 1) Last Will and Testament, 2) Pet Trusts, and 3) Pet Protection agreement. Each of these three documents are discussed below.
Last Will and Testament. A Last Will and Testament only comes into play after death and it doesn’t mandate the care of the pet(s), only who the pet will go to. Pets are considered personal property like a car or diamond ring. It should be noted that wills are not enforced immediately; sometimes it can take years to go through the probate process. Unlike vehicles, jewelry, or monies, pets are living creatures that need cared for during the period before a will goes into effect. Perhaps for most of you, there are spouses or other family members that you know will properly care for your animals after you die; however, there are some who not in this situation. Furthermore, a will does not distribute funds over a lifetime of a pet like a pet trust or pet protection agreement. Additionally, a will does not go into effect during incapacity (e.g., hospitalization) and in ten states pet provisions in a will are only “honorary.” In other words, in these states if I had a provision in my will that gave my cat Basura to my friend Amy along with $3K for his care, it would be Amy’s discretion whether to take the $3K and spend it on Basura or pay down her truck. This is why self-help estate planning computer programs can be dangerous because they oftentimes cannot address specific state nuances or amendments to the law.
Pet Trusts. The great thing about pet trusts is that they can be enforceable during the pet owner’s life, after his/her death, or help fill in the “gap” while a will is going through the probate process. Both pet trusts and pet disbursement agreements control funds used for the pet’s care and can ensure that the pet is properly cared for if the owner become incapacitated. In the above example, my friend Amy would have to use the $3K for Basura’s maintenance expenses instead of using it for her truck payment. Pet trusts can also help fund the care of the pet while the elderly owner is in a nursing home. Interestingly, there are many documented health and psychological benefits for elderly to have companion animals and pet trusts are a mechanism to help ensure that the elderly would still be able to have their pet(s) while in a nursing home. Finally, it should be noted that a remainder beneficiary should be identified to receive the remaining monies after the pet has died. This should not be the pet guardian (or trustee) so that he/she does not have a financial incentive for your pet to die.
Pet Protection Agreements. This is a simple legal document where the pet owner and pet guardian open a small joint bank account. The pet owner would be able to draw from this joint account during his/her life to care for the pet.
Most people just assume that their family will love and care for their animals when they are unable to do so. Generally speaking, it is hard for people to confront their own mortality. Even if you have family who are willing to take on the responsibility, your pets should be a consideration during your estate planning. As always, estate planning issues (such as pet trusts) are highly state specific and you should consult a licensed attorney in your jurisdiction before creating or amending such documents with self-help computer programs.
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Connecticut recently became the 43rd state to pass a law authorizing the creation of pet trusts and giving its courts the power to intervene in them if there is an irregularity or abuse. Unfortunately, intervention can be costly—the legal fees associated with petitioning courts can be substantial—and their findings and orders cannot compete with the well thought out plan of a caring and knowledgeable owner.
For that reason, any owner concerned about the effect of his or her death or disability on a pet’s care is best served by preparing a formal trust document with the assistance of a skilled professional. The trust should name the trustee and caregiver and alternates to serve in each capacity. It should also describe the pet’s likes, dislikes and special needs. Compensation of the trustee and/or caregiver, the payment of pet expenses and end of life issues are some of the other issues which should also be addressed.
Pets are considered by most of us today to be members of our family. A pet trust provides peace of mind to its owner or “parent” who knows that he or she has done everything possible to provide four footed family members with the life they deserve.
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