By: Rachel Hirschfeld

Pets are important to your clients. Most pet owners consider their pets as part of their families. In fact, a recent survey by the American Animal Hospital Association found that 83 percent of pet owners refer to themselves as their pet’s “mom” or “dad.”

Since 1990, when the Uniform Probate Code §2-907 validated pet trusts, states from New York to Alaska have passed laws that allow pet owners to set up trust funds to take care of pets after the owner has become incapacitated or dies, just as if the animals were minor children.

$36.3 billion annual amount spent on pets
$14.7 billion amount spent on food for pets in 2005
$8.7 billion amount spent on vet care in 2005
$100 average amount pet owners spent on holiday pet gifts
43.5 million homes with a dog
37.7 million homes with cats
14.7 million homes with a fish
6.4 million homes with a bird
79% of pet owners whose pet sleeps with them
37% of pet owners who carry pictures of their pets in their wallet
31% of pet owners who have taken off work to be with ailing pets
20% of pet owners who admit breaking up a romance over a pet dispute

More Than Friends
The most effective way for a pet owner to ensure continuity of care for a beloved pet in the event of the owner’s incapacity or death is to establish a pet trust. For some, a pet is not only family, a pet is their best friend. The owner knows his pet’s personality, likes dislikes and particularities, and wants the transition to be smooth in case something happens and the owner is unable to care for his animal companion. Your clients want to ensure that their pets, who have given them love and loyalty, will continually be cared for. Thus the ultimate question; what happens to pets when their human becomes incapacitated or dies?

Pet Trusts Ensure Continuity Of Care And Help Maintain The Pet-Owner Bond In The Event Of The Client’s Incapacity
The benefits of a pet trust cannot be overstated. A trust can literally mean the difference between life and death for a pet whose owner has become incapacitated or dies. Additionally, a pet trust helps ensure that the pet will be cared for in the manner specified by the owner.

A pet trust can mean the difference between getting a pet, and not getting one, for some elderly people who fear that their animal companions may outlive them.

A pet owner’s incapacity should not spell the end of this important relationship, just when the owner most needs the pet’s love and companionship. It is a well documented fact that pets can have a significant impact on a person’s physical and mental health. Whether playing a game of “catch” to help a stroke patient improve muscle tone or just being a calm, familiar presence for an owner suffering from Alzheimer’s, pet’s can play an important role in an incapacitated owner’s medical treatment. Pet trusts can help, by including instructions that require the naming caretaker to bring the pet for visits with an incapacitated owner, in the event that the owner’s incapacity prevents the pet and owner from living together.

Pets Born With A Silver Collar Started The Trend
Tobacco heiress Doris Duke left $100,000 in trust for her dog.
Actress Betty White, who played Rose on TV’s “Golden Girls,” is leaving her estimated $5 million estate to her animals.
And British singer Dusty Springfield, who scored on the pop charts with such hits as “You Don’t Have to Say You Love Me” and “Wishin’ and Hopin’,” stipulated that her cat Nicolas was to listen to her recordings each night at bedtime, to have his sleeping area lined with Dusty’s nightgown and to be fed only imported baby food.
Today, pet trusts are an affordable planning tool.

A Testamentary Bequest Does Not Sufficiently Protect Pets In The Event Of The Owner’s Death
Your clients may question the necessity of establishing a pet trust, believing that a testamentary bequest to a caretaker with directions to use the bequest to care for the client’s pet will achieve the same goals of ensuring the pet’s comfort and continuity of care. However, such a bequest may not be enforceable and is not sufficient to protect the pet when the owner dies; the legatee can simply take the money and dump the pet at the pound.

Protecting your clients’ animal companions is thus, a two step process. The first is to protect the pets by establishing a pet trust. The second is to include an article in the will naming the pet trust, and giving specific instructions for how it is to be funded.

Who Can Establish A Pet Trust?
Statutes in 38 states expressly allow the establishment of a trust with a pet as beneficiary; the majority of these statutes were enacted in the last ten years. These statutes are significant because pets are considered property and, as such, can not inherit. Clients in the remaining states are not without a solution: pursuant to the New York Estates, Powers & Trusts law, a grantor who is not a New York domiciliary can create a trust—including a pet trust—that is governed by New York law, as long as the trustee or grantor resides, is incorporated in, or is authorized to do business in the state, or is a national bank with offices in the state. The caretaker and any co-trustees can be located in any state—including a state that does not have a pet trust statute.

Pet trusts are not limited to dogs and cats, but may be established for all kinds of companion animals, including birds, horses, reptiles, rodents (hamsters, rabbits, gerbils, guinea pigs, ferrets, etc.), and even fish.

Elements Of A Pet Trust
The elements of a pet trust are the same regardless of the state where the trust is established. Every pet trust must, of course, name a trustee. The trustee disburses funds to the caretaker(s), who shall carry out that the grantor’s detailed directions concerning the pet’s care and maintenance. Trust instrument may also designate a trust protector to disburse funds to the caretaker.

The more specific the instructions, the easier it will be for the caretaker to care for the pet. The pet trust should include specific instructions about all aspects of the pet’s care, from the brand of food the pet prefers, to the park where she likes to walk, to the grantor’s preferred veterinarian and groomer. A client with more than one pet can direct that the pets must live together, and it is not necessary to execute a new trust instrument each time a new animal joins the family. The trust may cover all animals that the grantor owns at the time of incapacity or death. However, if an animal requires special care, it is wise to designate the animal by name and description.

All pet trusts must name a caretaker. It’s important to name a caretaker who will take care of your pet(s) the same way the owner would. The caretaker should know your animals and should be comfortable with them. It is absolutely imperative to have a substitute caretaker or caretaker not-for-profit organization. Some not-for-profit organizations exist who have perpetual care programs where for a nominal sum you can be assured that your animal will have a place of eternal life care. A variety of programs exist at the North Shore Animal League, Animal Haven, and The American Society for the Prevention of Cruelty to Animals (ASPCA). Many clients are combining a detailed pet trust with a not-for-profit to assist in finding a caretaker when all named caretakers have failed.

Although it is not technically necessary to fund the pet trust, the named caretaker(s) may not be as willing to undertake their responsibilities if funds have not been set aside for the pet’s care. It is possible to fund a pet trust with a portion or all of the proceeds of a life insurance policy, other retirement funds, or any other property. As pet trusts will play an important role if the owner becomes incapacitated, it’s recommended that the trust be funded during the grantor’s lifetime as well as upon the grantor’s death.

Another key element in establishing a pet trust is the appointment of a trust protector. The trust protector has the power to enforce the trust and to ensure that the trust funds are being spent for the benefit of the pet(s). The trust protector has the power to remove the trustee or caretaker in the event that the trust protector in his or her sole discretion determines that caretaker is not caring for the pets as directed in the pet trust in the event the trustee ceases to administer the trust for the benefit of the pet(s) or otherwise violates his or her fiduciary duties. The pet trust should be drafted to provide that no person may act in more than one role at a time, and should require the trustee to provide yearly accountings to the trust protector, and keep books or records showing all transactions relating to the trust fund held by the trustee under this pet trust agreement.
In a USA newspaper article, Gerry Beyer is quoted as saying “You must keep in mind that Pet trusts are not without drawbacks. Animals can’t complain to a probate judge if their trustee is shortchanging them on food or accommodations. And a dishonest trustee could fraudulently extend the life of the trust to continue receiving a trustee stipend.

A San Francisco maid who was appointed trustee for an ordinary looking black cat. When the cat died, the woman adopted a look-alike to keep the trust fees flowing. She was on her second replacement cat before she was detected.
But pet laws do take into account one key fact of modern life: Surviving adult children may be reluctant to carry out a parent’s final wishes.
If it was just you and your pet, and you weren’t so sure that your kids halfway across the country would take them, the only way you might get peace of mind is by setting up a pet trust.”

The Hirschfeld
Pet Trust™
Caring For Your Animal Companions
When You No Longer Can

All Hirschfeld Pet Trusts™ begin with a photo of my dog, Soupbone, a poodle Bichon mix from the city pound, and his best friend, Harley. The first sentence of The Hirschfeld Pet Trust™ is: The Grantor, has established the Trust for the benefit of his or her beloved pets.

Ask your client this question; “If you were leaving your eight month old baby with a sitter for the next six months, how detailed would your list of instructions be?” The Hirschfeld Pet Trust™ is a detailed, legally binding instruction manual with articles covering microchips and tattoos, veterinarians, groomers, walkers, insurance, trust income, trustee duties, termination of duties, DNA, autopsy and cremation, distribution of property upon trust termination and many more.

Conclusion
63% of U.S. households have pets. As a concerned practitioner, therefore, it is important to include pet-related questions in your client intake process. When you help your clients establish a pet trust to ensure that their furry, feathered and finned family members will receive on-going proper care in the event of the client’s death or incapacity, you demonstrate that you understand and care about all of the relationships which are important to your clients.

Rachel Hirschfeld is an attorney who concentrates in pet trusts, elder law, Medicaid planning, and trusts and estates. She may be reached at rhirschfeld@aol.com or at 212-353-8456. www.pet-trust.net.

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