Was reading a trade publication today called Trusts and Estates Magazine, I LOVE this magazine – it is a wealth of information written by tax professionals for tax professionals. Most of the info in there is not approprioate for a personal finance blog…not because it is not interesting, but rather, it is written for those who work for people with net worth into the 7 figures. Well today I read an article that reminded me of something that I learned in law school which I felt the need to share with everyone.
The aticle was titled, “Trust Fund Puppies” by M. Katherine Davidson. A perfect summation of the article is provided by Ms. Davidson,
Naturally, many worry about what’ll happen, when they die, to their pets. And they do have cause for concern. Too often, these pets end up in animal shelters; some never make it out to new homes. Owners try to provide for their pets in wills. But without proper legal guidance, such bequests often fail — because animals are not valid beneficiaries under a will.
So don’t wait for your clients to raise the issue. You’re the lawyer planning for their estate’s holdings and the future of all of their loved ones. Ask what they intend to do about their pets. There may be, after the owner is gone, no family member or friend to take care of the animals. The legislation and interpretation of pet laws is inconsistent among states. So be aware of the legal options.
While you, the reader may not an attorney, I find that most readers of personal finance blogs are usually the kind that want to be informed if for no other reason than to double check their professional. As such, you should know your options when it comes to this niche area of estate planning. I have talked about how EVERYONE NEEDS A WILL REGARDLESS OF NET WORTH and I firmly believe this is yet another reason to get a Will.
The most recent and famous case that I am aware of involves the always colorful Leona Helmsley who funded a $12,000,000 Trust (later reduced by a judge) for the benefit of her dog, Trouble, while disinheriting her granddaughters (a good recap found HERE).
Ms. Davidson does a great job giving you thinking points when creating this kind of trust (however most of the items listed are important regardless of the type of trust you are considering),
- Nominating a trustee
- Designating a caregiver
- Appointing a trust protector
- Funding the trust
- Setting a standard of living for the pet
- Establishing the trust’s duration
- Designating a remainder beneficiary
- Identifying the pet
- Fashioning the final goodbye
With all this information out there you have to check if your State has a Pet Trust. When I use the word “has” I mean a legally enforceable type of trust which acknowledges a Pet as a beneficiary.
State Statutes Regarding Pet Care after One Dies
From the article:
- Alabama Code Section 19-3B-408
- Alaska Statute Section 13.12.907
- Arizona Res. Statute Section 14-2907
- Arkansas Code. Ann. Section 28-73-408
- California Prob. Code Section 15212
- Colorado Rev. Stat. Section 15-11-901
- Delaware Code. Ann. tit. 12, Section 3555
- D.C. Code Ann. Section 19-1304.08
- Florida Stat. Ann. Section 736.0408
- Hawaii Rev. Stat. Ann. Section 560.7-501
- Idaho Code Section 15-7-601
- Illinois Comp. Stat. Ann. 760 ILCS 5/15.2
- Indiana Code Ann. Section 30-4-2-18
- Iowa Code Ann. Section 633A.2 I 05
- Kansas Stat. Ann. Section 58a-408
- Maine Rev. Stat. Ann. tit. 18-B, Section 408
- Michigan Compiled Laws Ann. Section 700.2722
- Missouri Stat. Section 456.4-408
- Montana Code Ann. Section 72-2-1017
- Nebraska Rev. Stat. Section 30-3834
- Nevada Rev. Stat. Ann. Section 163.0075
- New Hampshire Rev. Stat. Section 564-B:4-408
- New Jersey Stat. Ann. Section 3B:1 1-38
- New Mexico Stat. Ann. Section 46A-4-408
- New York Est. Powers & Trusts Law, Section 7-8.1
- North Carolina Gen. Stat. Section 36C-4-408
- North Dakota Cent. Ann. Code Section 59-12-08
- Ohio Rev. Code Ann. Section 5804.08
- Oregon Rev. Stat. Section 130.185
- Pennsylvania 20 Pa. Cons. Stat. Ann. v 7738
- Rhode Island Gen. Laws Section 423-1
- South Carolina Code Ann. Section 62-7-408
- South Dakota Codified Laws Section 55-1-21
- Tennessee Tenn. Code Ann. Section 35-15-408
- Texas Prop. Code Ann. Section 112.037
- Utah Code Ann. Section 75-2-1001
- Virginia Code Ann. Section 55-544.08
- Washington Rev. Code Ann. Section 11.18.020
- Wisconsin Stat. Ann. Section 701.11
- Wyoming Stat. Ann. Section 4-10-409
I think it is important to have the statutes because there may be a practioner out there who says that you don’t know what you are talking about or that you are wrong…well now you have the proof.
I want to put an extra disclaimer in addition to my normal disclaimer – THIS IS NOT LEGAL ADVICE NOR SHOULD YOU GO OUT AND TRY TO DRAFT YOUR OWN PET TRUST!