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.
About the Author
Attorney Michael P. Pancheri is a practicing attorney and the founder and CEO of the Living Trust Network. You may contact him by email at info@livingtrustnetwork.com. You may also contact him at the Living Trust Network's web site. It's URL is http://www.livingtrustnetwork.com
Copyright 2005. LivingTrustNetwork, LLC.
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