What are Pet Trusts?
Some animals are undoubtedly beloved pets. They provide us with love and companionship, while there are other animals that are more than pets. For example, horses are an investment, they are a partner in exercise, they help some children with therapy and a comrade to see the world with if you ever had the distinct pleasure of exploring the wilderness on horseback. Seeing eye dogs or other therapeutically trained animals are literal life savers in some cases. All of these animals are deserving of the full legal protections that you can provide to them. Pet trusts are not tools reserved for the rich and eccentric. As of 2012, 46 states (and the District of Columbia) have laws in effect that allow for pet trusts. In 1996, the New York legislature enacted NY EPTL § 7-8.1, which allows for the care of any pet or animal by way of a trust, which terminates when the beneficiary animal dies. In fact, pet trusts are so popular and well ingrained in the law, that there is a model, uniform law, found at Uniform Trust Code 402. Pet trusts are now practically commonplace.
WILL VERSUS TRUST
There are some distinct issues that you will need to address if planning for your pet. The first is whether you want to plan for your pet in your will or create a trust. If you address the matter in your will, it is generally more inexpensive and easier to plan for. Wills, however, dispose of property, they do not impose enforceable promises upon the caretaker. Wills are more likely to be invalidated by a Court and wills only fund for the caretaking of the pet one time. If you have an expensive animal, such as a horse, you may need to insure continued funding and care. Trusts generally require more planning and involvement in its creation, but allow a greater degree of peace of mind and assurance that your wishes will be carried out. Trusts allow for a stream of income over time. If the trustee or caretaker is unable to fulfill their obligation the law allows for a Court to appoint another trustee or caretaker. In addition, you do not need to wait for the trust to be administered as you do a will.
ISSUES TO ADDRESS
There are several issues that best practice dictate you should address, whether you choose a will or trust.
Ownership: Pets are property, hence the need for an owner. A trust document can still control even with a third party owning the pet.
Financing: Paying for a pet rabbit is easy. This issue rears itself for more expensive animals such as a horse or exotic animals. You should also take into account the medical care for the pet. Horse owners know that horses even have their own dentists. If you have an large animal, transportation is necessary. Additional insurance costs may be incurred to transport them. The caretaker’s homeowners policy may increase or require a separate liability policy.
Remainder beneficiary: If there is money left in the trust when the animal passes, who gets that money?
Income generated: If the pet is also an investment, such as allowing for stud fees, who receives the income?
Whatever your decision, it will require legal counsel to guide your decision every step of the way. Only an experienced estate planning attorney should be considered for these decisions.