Pet Trusts: Helping Clients Provide for Fido
More and more commonly, clients task estate planning attorneys with taking care of a pet if the unfortunate happens to the client/owner. Between 12 and 27% of people who draft wills include provisions for their pet, often in the form of pet trusts.
Pet trusts have been around for quite some time, but were made famous by some select wealthy widowers who left entire fortunes in trust for their beloved dogs and cats. Among a growing number of pet provisions and pet trusts, Leona Helmsley left her Maltese as her biggest heir, with $12 million in a very elaborate pet trust. Michael Jackson left his chimpanzee, Bubbles, $1 million. Gail Posner left $3 million to her three pet Chihuahuas, as well as an $8 million mansion.
Pet trusts have two potential uses. The first is to transfer the pet to the person who will have ownership over the pet. A pet trust is not required to include a transfer provision of the pet, but ensures the pet will go to who you, the trustor, specifically want to have control over your pet.
For those who want extra security to ensure the owner doesn’t abscond with the money without taking care of the pet, often the trustee will be someone other than the pet owner, and the pet will be transferred by some other means — either by Will, intestate succession (default government provisions for property transfer), or through a separate trust. By separating the ownership of the pet and who controls the money, you create an automatic check-and-balance system. The owner watches over the trustee, the trustee watches over the owner.
The second purpose of a pet trust is to allow a non-person to benefit from property after the owner dies. Animals cannot legally own property, thus the need for another form of ownership.
Minute detail should go into drafting a pet trust. The grantor (pet owner) should put in as much detail as possible into how the funds are to be used. Is the money only for food? What kind of food? What kind of veterinary or groom care will it cover? Should the money be used for toys? What kinds and how many? Everything you can think of should go into the trust, both to limit and expand on what expenses should be covered. With few exceptions, only your imagination limits the versatility of what you can include for your pet.
With some fairly inexpensive planning, you can ensure that your trusted and loyal companions are taken care of when you are no longer around to take care of them.