Planning for the Pets We Love- Hilton Head Monthly August 2010
“Our perfect companions never have fewer than four feet.”
We love our pets, and we aren’t afraid to lavish money and care on them. According to the American Pet Product Association, Americans are projected to spend an estimated $45.4 billion in 2009-2010 on their pets, up from $34.4 billion dollars in 2004. The trouble is, they sometimes outlive us.
Publicity surrounds the embattled estates and the unusually large trusts created for the furry companions of Leona Helmsley and Miami heiress Gail Posner. For some, it is difficult to imagine and somewhat frivolous to leave a $12 million trust for a dog named Trouble or even a $3 million trust and an $8.3 million mansion for Conchita the Chihuahua. That said, many faithful companions, often elderly animals difficult to adopt, end up being taken to the pound or abandoned by heirs. It is possible, and important to make arrangements for care of your pet, should something happen to you.
The concept of estate planning for pets is not just for the ultra-wealthy or ultra-eccentric; it is well established and should be an important part of your overall estate plan. One option is to leave money to a friend to care for your dog or cat. According to South Carolina attorney, Suellen Mazurowski, who has helped pet owners in the past, a verbal agreement to care for an animal upon the death or incapacity of its owner is at best an “honorary” trust, and it may be difficult to prove the existence and terms of such a trust.
The law, of course, does not allow animals to inherit assets; however, it does allow a special “pet trust” to be set up to provide for their ongoing care. According to Attorney Mazurowski, in most cases these trusts, which specify caretakers and alternate caretakers for your animal and specialized provisions for the care of your animal, can be a better alternative than relying upon a friend or family. The friend or family member may be overwhelmed with his or her or own issues at the time of your death or incapacity and be unable to physically or financially provide for your pet. If you have a properly funded pet trust you need not pass away in order for the trust to become effective. It can be utilized to provide for your pet if you become incapacitated and unable to care for her.
It is important that the trust designate in plain English the circumstances in which the funds are to be used and that the trustee is obligated by law to use these funds for your pet(s). Equally significant is the detail attached to your wishes and desires in the trust to be upheld by the caretaker. Pet owners can leave pet welfare up to the discretion of the trustee; alternatively, some pet owners include provisions in the trust specifying preferred food and treats, treatments and medications, frequency of veterinary appointments, and burial or cremation arrangements. Many trusts also indicate to what lengths the caretaker should go in medical treatments to save the life of your pet. The trust should also specify a beneficiary for the distribution of remaining funds once your pet passes.
Kibble for Thought
If you are considering a trust for your pet, here are some important items to be aware of , according to attorney Mazurowski.
Consult with an attorney who is licensed in the state of residence of the animal owner - the new South Carolina Trust Code in section 62-7-408 clearly permits a person to establish a “Trust for Care of an Animal.” This code section provides that the animal need not be alive at the time of the creation of the trust. However, the animal must be alive (or in gestation) during the life of the settler of the trust.
There are also online sites that allow you to set up a pet trust yourself. They are inexpensive, but come with some risks as well. One of the most prominent sellers of do-it-yourself legal products in the United States is now being sued by a potential heir. An on-line trust was created and the trust was not honored by the financial entities involved. Similar suits alleging unauthorized practice of law and fraudulent practices have been brought frequently by state bar associations against do-it-yourself entities.
Your attorney should be a person who likes animals and is sensitive to your desire to protect your animal. It helps if the attorney has a personal history of animal ownership as well.
The attorney may advise you as to how much money to place in the trust since placing excess funds in the trust may lead to post mortem litigation. In SC, funds that are not needed for the care of the animal can be distributed to the trust makers “successors in interest’.
Our pets provide us with a lifetime of joy; with a little planning, we can assure them protection and security as they age.