MT. DIABLO TRUST
Serving Northern California Since 1994
What is a
A pet trust is a legally sanctioned arrangement providing for the care and maintenance of one or more companion animals in the event of a trustor disability or death. The “trustor” (also called a settlor or grantor in some states) is the person who creates the trust, which may take effect during a person’s lifetime or at death. Typically, a trustee will hold property (cash, for example) “in trust” for the benefit of the grantor’s pets. Payments to a designated caregiver(s) can be made on a regular basis. The trust, depending upon the state in which it is established, will continue for the life of the pet or 21 years, whichever occurs first. Some states allow a pet trust to continue for the life of the pet without regard to a maximum duration of 21 years. This is particularly advantageous for companion animals that have longer life expectancies than cats and dogs, such as horses and parrots.
How Does It Work?
You, the trustor name one or more persons to act as a trustee, that is, the person who will use the money or property you put in the trust for your pet's benefit. A caregiver you have chosen will care for your pet and those expenses will be paid by the trustee. The trustee will check periodically on your pet to make sure it is receiving the level of care specified in the trust instrument.
Why a Pet Trust?
Legally, pets are classified as property. But to their owners, they often mean more than the couch or the desk—they are best friends, companions, and family (sometimes the owners’ only friends, companions, or family). When a person begins the estate planning process and classifies property and beneficiaries, the pets can be addressed as well.
Because most trusts are legally enforceable arrangements, pet owners can be assured that their directions regarding their companion animal(s) will be carried out. A trust can be very specific. For example, if your cat only likes a particular brand of food or your dog looks forward to daily romps in the park, this can be specified in a trust agreement. If you want your pet to visit the veterinarian four times a year, this can also be included. A trust that takes effect during the life of the pet owner can provide instructions for the care of the animal(s) in the event the pet owner becomes incapacitated (sick, injured, comatose, etc.) Since pet owners know the particular habits of their companion animals better than anyone else, they can describe the kind of care their pets should have and list the person(s) who would be willing to provide that care.
Won’t My Will Take Care of My Pets?
The belief that pets can be adequately protected if they are mentioned in a will is a myth. Consider the following pitfalls of a will:
• Instructions in a will are written in invisible ink; that is, instructions in a will are not enforceable.
• Wills disburse property: Jane gets the house and cat.
• Wills cannot enforce demands that every year Jane paint the house she now owns. Nor must Jane care for the cat.
• Wills are not enacted immediately. There will be a waiting period before the will is read and the property changes
hands. Ask yourself who owns and cares for the pet before the will is probated? Where will the pet be held during this
waiting period? And if legal disputes arise, the final settlement of property can be prolonged even further.
• Wills do not allow disbursement over a pet’s lifetime. In a will, the owner cannot distribute funds over time, which can
be achieved with a free-standing traditional pet trust or pet protection agreement.
• Changes to the will are in the court’s discretion. Who do you want deciding the fate of your clients’ pets: your
client or a judge?
The presence of these pitfalls does not mean that wills should never include a provision for pets. Rather, it means that such a provision should be supplemented by a pet trust and/or pet protection agreement.
How Much Money Should I Put Into The Trust?
Set aside the amount of money to be used for the animal’s care over the expected lifetime of the pet. Do the best you can to estimate how much the caretaker will need to take care of your dog. The appropriate amount varies widely depending on the pet’s age and condition. Be aware that if you set aside an amount that’s unreasonably high, family members could challenge it in court, and a judge will likely reduce it. For example, a New York man set up a trust that in 1978 made $45,000 to $55,000 a year available for the care of five horses and three dogs and two cats. The court ruled that as long as the animals were well taken care of, the trustee was free to give the surplus money to the alternate beneficiaries named in the will.
It’s Just A Matter Of Time