A pet trust should be included as part of any good estate plan, just as a will, POS, HCP, and LW are the minimums everyone should have. The Helmsley debacle outlined some problems in her Pet Trust and will. Good drafting goes a long way.
Your clients don’t have to be rich to care for your pet(s) after passing away. Almost all states have enacted pet trust statutes authorizing the creation of trusts for pets. The New York Legislature passed its pet trust statute in 1996 to permit persons to create enforceable trusts for the care of domestic or pet animals in the Estates, Powers and Trust Law Article 7. Additionally, the Uniform Probate Code and the Uniform Trust Code each have sections authorizing pet trusts. Like Helmsley’s attorneys, I practice in NY, but very differently.
I have seen MANY MANY dogs and cats brought to the shelter (I am an animal rescuer and an attorney) after their owner died, and they were dying of heartbreak themselves. Going from a warm, loving, clean, quiet home, regular walks and/or a yard, a deck to sun on, etc. to a smelly, dirty, noisy shelter and being stuck in a cage 24/7 is torture for them, and looking into their eyes, you cannot help but cry. Many of these pets end up euthanized, too old, and too scared looking when potential adopters show up, to be adopted.
We all know that wills have to be drafted a certain way so that bequeaths are definite, not a “wish, hope, mission statement” etc. Additionally, leaving discretion to the executors for donating money with freedom to choose any charity is not the right way either, if the testator wants to make sure the bequeath goes to a particular group of charities, such as animal charities. So far, very little, if any, of the Helmsley bequeath to charities has gone to animal charities, despite her wishes. The executors chose other charities but that is not what she wished for. This was in Fortune magazine’s “101 Dumbest Moments in Business of 2007.” For instance, in a statement issued in Feb 2009, Howard J. Rubenstein, a spokesman for the trustees, said they planned to begin making grants from the trust the next month. “In the hope that this would be the court’s decision, the trustees have been diligently working to identify potential grantees so that the trust’s funds would be put to optimal use as soon as possible in such areas as health care, medical research, human services, education and various other areas,” Mr. Rubenstein said, pointedly avoiding the mention of dogs.
Learn from others’ mistakes. With Pet Trusts, that part of the estate plan should be drafted with the same idea in mind. Leaving too much for the pet, “hoping” the remainder goes to animal charities, is also to be avoided. The executors can petition the NY Surrogate’s Court for permission to reduce the amount passing to the pet trust (Helmsley’s executors dropped the $13 mil to $2 mil).
Your clients don’t have to be rich. We know this and how to take care of your pet(s) properly. There are ways to give your pets the best life possible after you are gone (well, best life possible without you there). Additionally, the client can save money and actually plan for their pet(s) without creating a “trust” if they have the right kind of people in their lives (although as an attorney, I recommend legally binding plans).
A pet trust can be an inter vivos trust, created during the life of the pet owner. Or it can be a testamentary trust under a will, effective after death.
An inter vivos trust has the advantage of being immediately available for the care of an animal if the pet owner becomes incapacitated. The inter vivos trust has the disadvantages of being more expensive to create, and in some cases, of not being adequately funded (or not funded at all) at the time of death of the pet owner. If the pet owner wants an inter vivos trust, it is wise to have back-up funding of the pet trust in the will, to avoid the risk of having an unfunded, and thus useless, trust at the time of death. Mrs. Helmsley’s pet trust was an inter vivos trust, but was funded from her will.
A testamentary pet trust is funded under the will. The disadvantage of a testamentary trust is that it will not be in effect during periods of disability, so pet owners should have their attorney execute a power of attorney appointing an attorney-in-fact to handle the owner’s financial matters, (including a specific provision authorizing the payment of the costs of care of the pet owner’s animals) to be used if the pet owner becomes incapacitated. We recommend a power of attorney anyway as one of the 4 essential documents everybody should have (will, living will, and health care proxy, with a 5th, the Pet Trust, for pet owners. )The attorney should also be a plan for the care of the pet during the period from death to the admission of the will to probate.
As with many situations (such as guardianships for mentally challenged humans) there should be several alternates (back-ups).
If you do not know anyone suitable, there are many animal rescue groups that can take your pet into a foster home and let the pet live out his/her life span. Of course, you want to leave them $10K, $15K.
You may wish to prepay a high-coverage veterinary insurance policy for the pet, and I recommend this to older clients, even if normally they would not do so in life (I have it for some dogs of mine, but not others). This is especially true if the pet(s) has a medical condition(s), and the client is the type of person who would not balk at $1,700 for knee surgery for the pet. Some trustees may decide it is too expensive and neglect to give the pet care while she suffers (let’s say, from a torn ligament (torn knee in one of my dogs currently) or euthanize.
If there are a large # of pets, the testator can leave someone the house and pets so the pets don’t have to move, especially effective if there are a large # of pets. The testator should also leave sufficient money for upkeep of the house and pets (Long Island has very high property taxes-could be $15K a year on a $600-$900K house)
Write something like Mrs. Jane Smith’s Animals” not “Lucy, Money, Molly…” in the documents since animals change (death, adding pets, etc.) so the document lives.
What matters is that the testators choose an attorney who not only knows the law but is an animal lover and animal rescuer and sees all the ramification of other attorneys’ mistakes.