Who Will Take Care of Your Pet? A Pet Trust is the Answer

People love their pets. I know from my own experience that my dog Kirby is a very important member of my family. I believe most pet parents feel the same way. What happens when you die, and you leave your poor pet all alone? Are you confident that someone will step in and care for him and love him? Well, unless you have included a pet trust in your estate planning, there is no guarantee that he will be taken care of after you are gone. It is not unreasonable to believe that your pet may outlive you. Some animals have a long life span. For example, a tortoise’s average life span is 75 years, a parrot’s average life span is 22 years, and a horse’s average life span is 18 years.

It may be hard for an animal lover to fathom, but New York law considers animals as personal property. Because they are property, you cannot leave money directly to your pet through a will. However, New York’s Estates, Powers and Trust Law § 7-8.1 was specifically designed to allow a pet owner to set up a trust for the care of a pet. Under this statute, the pet becomes a beneficiary of a trust and a legally visible being who can claim equitable title in the income and assets of the trust. Of course, your pet cannot assert his rights on his own or hire an attorney, therefore the law allows the pet parent to designate an individual to enforce the trust, or if no one is designated, the court is authorized to appoint someone to enforce the trust.

A pet trust is a contract between the pet owner and a trustee. The pet owner agrees to fund the trust and specify its terms, and the trustee agrees to carry out those terms. Those terms may include:

• designating the animal(s) who are the beneficiaries of the trust, including a detailed description of the pet(s) – such as photos, microchips, and even DNA samples;
• designating a custodian to physically care for your pet;
• designating the trustee and successor trustee;
• designating an enforcer who can bring the custodian or trustee to court to force him to carry out the terms of the trust for the benefit of the pets;
• detailed instructions for the care of the pet, such as,
• name of the veterinarian to care for the pet
• any medical conditions or allergies
• specify in detail the standard of living and care to be given to your pet
 brand name of pet food and snacks
 grooming instructions
 boarding instructions;
• instructions for the final disposition of your pet (for example, burial or cremation); and
• how the unexpended trust property is to be distributed after the death of the pet.

Under the statute, the trust will terminate only when all the animal beneficiaries of the trust are no longer alive. This provision creates an exception to the rule against perpetuities which would have limited the life of the pet trust to 21 years. Upon termination of the trust, the trustee will be required to transfer the unexpended trust property as directed in the trust.

Now, pet parents can be assured that their pets are going to be well cared for even after they are gone by setting up a pet trust.

Contributed by Jacque K. Vincent, J.D.

Trust Funds for Pets: It’s Not All Doggie Bones and Biscuits

Estate and trust litigation can occur for a variety of reasons. A trust fund dog named ‘Winnie the Pooh’ experienced this first hand. There, the trust manager and the pet’s new caretaking fought over the frequency and amount of money distributed from the trust.

The dog’s owner had set up a trust for $100,000 for the dog with the remainder for an animal hospital. The dog’s caretaker reportedly ended up having to sue the estate’s executor after he allegedly failed to make trust payments for the dog’s care. The caretaker further alleged that the executor had refused to provide records relating to the trust and the pet’s medical history, and that the executor was favoring the remainder beneficiary. The executor denied the allegations and blamed the caretaker for the confusion.

The merits of a case like this will depend largely on the fiduciary’s legal obligations under the law and the specific terms of the trust. Of importance would be the degree of discretion afforded to the trustee in the trust instrument for making payments. The parties should retain records to support their position, including copies of letters, payments, receipts, demands, refusals, and bank records. Relying on ‘he said, she said’ evidence will end up costing both sides a lot in legal fees, and it may even significantly reduce the trust if the judge awards attorney’s fees out of it.

Family members or remainder beneficiaries may also attempt to challenge a pet trust that leaves a large sum of money to a pet. Leona Helmsley left twelve million dollars in trust to her “beloved Maltese, Trouble.” The court held that twelve million dollars was excessive and reduced the amount to only two million dollars.

Another owner reportedly left $4,761,346 in trust for two cats (see Matter of Abels, 44 Misc 3d 485 [Sur Ct, Westchester County 2014]). The executor of the will argued that based on the cats’ life expectancy and estimated costs, the amount of the trust should be reduced to $440,000. The executor also argued that by selling the mansion and relocating the cats to a smaller residence, the tax liability could be reduced and the charities could receive more.

The judge denied the executor’s request to reduce the trust. The judge held that the decedent’s intent was clear and should be followed. The judge reasoned that the pet owner wanted the cats to live in the house they were comfortable in and made specific arrangements for this.  The judge concluded that it was not the court’s place to “rewrite the decedent’s will” and to give more to the charities than the decedent intended. 

Luckily, justice prevailed for these cats. They were able to stay in their mansion and enjoy their lives in luxury.

Trust Funds for Pets – What’s Next? Dogs in Tuxedos?

Historically, New York hindered pet owners from providing for their pets after death. If money was left to a pet in a will or trust, the courts would simply ignore it. A pet owner could only request that the money be used for the pet’s care. The problem was that the person designated to help the pet could decide to disregard the decedent’s wishes and instead discard the animal.

In 1996, New York finally recognized pet trusts. This meant that a trust could now be used to protect a pet from being abandoned or left at a shelter. Better yet, a trust could be used to continue a pet’s standard of living and provide it with treats and toys for the rest of its life.

Pet trusts operate largely like any other trust. A person is named as a trustee to act as a manager and distribute the trust funds. The trust has a beneficiary. The trust also contains terms for the trustee to follow. Such terms may include the brand name of pet food, the type of snacks, a schedule for eating and grooming, the name of the boarding facility to place the pet if the custodian goes on vacation, pet medications, and end-of-life care.

There are however two unique components to pet trusts. First, unlike human beneficiaries, pets cannot assert their own rights or hire counsel. The pet trust law (NY EPTL § 7-8.1) therefore provides for an enforcer to enforce the trust terms. Second, the courts may reduce the size of the trust if it is excessive.

So, now that pet trusts are valid, what’s next? Tax deductions for doggie day care? Hamsters with checking accounts? Turtles with charge cards? Cats on deeds? Marriage certificates? Well, that just sounds crazy! But only time will tell. Until then, we will have to settle for make-believe, dressing up our pets in silly little outfits like mini-tuxedos and treating them like children.