Pet Trusts - Do You Have One For Your Pets?
It is no secret that people get excited about their pets. And,
that feeling does not go away when it comes time to doing some
estate planning for the family - because pets are part of the
family too!
Unfortunately, until recently, there just wasn't a whole lot
that could be done for pets. In most cases, a loving family
member would just take over after the owner's death. That worked
in many cases, but not always. In fact, in far too many cases
there were no loving family members willing or able to step up
to the plate and take on that responsibility. The end result -
the pets ended up on the street or in local animal shelters.
Many times, an owner would sweeten the offer by leaving some
money for the pet's care under his or her will. However, since
there was no legal obligation to use the money for the pets, you
can guess what happened. In many cases, the family member or
friend took the money and put the pet in the shelter.
One way that pet owners tried to solve the problem was to place
money in trust for the care of the pet, with the family member
or friend acting as the trustee. While this technique looked
official, there was a real problem with it - pets are not
people, and the law only recognized trusts when people were the
beneficiaries. The legal effect of these so-called honorary
trusts was not very satisfactory. Since no one was able to
enforce these trusts (i.e., the pets couldn't defend
themselves), the trustees were free to do as they pleased. If a
trustee was also named as the beneficiary of any money left over
after the pets died, guess what happened. The Trustee took the
money - and put the pets in the shelter.
In 1991, the Uniform Probate Code was adopted by the National
Conference of Commissioners on Uniform State Laws (ULC). Section
2-907 of that Uniform Probate Code provided that a "pet trust"
could be enforced if an individual was designated for that
purpose in the trust instrument or if an individual was so
appointed for that purpose by the court. In 2000, the National
Conference of Commissioners on Uniform State Laws adopted the
Uniform Trust Code, Section 408 of which authorizes pet trusts
under a provision very similar to the Uniform Probate Code.
The breakthrough with these two pieces of model legislation was
that, for the first time, there was legal authority for the
existence of a pet trust and there was a mechanism to enforce
the provisions of the trust if the trustee did not carry them
out as instructed. In other words, the trustee could now be
forced to actually use the money for the care and protection of
the pets!
While this was great news for pet owners, these two pieces of
model legislation are not governing law. Instead, they are
simply models that may be considered for legislative enactment,
in one form or another, by each of the 50 states. The intent, of
course, is that all 50 states will adopt the model legislation
so that all states will have identical laws.
As of this date, close to half of the states and the District of
Columbia have enacted legislation authorizing pet trusts, based
in whole or in part on the Uniform Probate Code and the Uniform
Trust Code, and at least 6 states have similar legislation
pending.
If you happen to live in any of the states that have authorized
pet trusts, you may want to expand your estate planning horizons
to include a provision for your pets. That's what more and more
people are doing now that there is legal authority for pet
trusts.