By Rachel Hirschfeld, Esq.
Pets are important to your clients. Most pet owners consider their pets as part of their families. A 2001 survey by the American Animal Hospital Association found that 83 percent of pet owners refer to themselves as their pet's "mom" or "dad."
The most effective way for a pet owner to ensure continuity of care for a pet in the event of the owner's incapacity or death is to establish a pet trust.
A Pet Trust Ensures Continuity of Care and Maintains the Pet-Owner Bond if the Client Becomes Incapacitated
The benefits of a pet trust cannot be overstated: the existence of a trust can literally mean the difference between life and death for a pet whose owner has become incapacitated or died. Additionally, a pet trust helps ensure that the pet will be cared for in the manner specified by the owner (who, after all, knows the pet better than anyone else).
Establishing a pet trust also has important benefits for the pet owner, including peace of mind in knowing they have rewarded their pets for their loyalty and affection by ensuring their pet will receive proper care throughout life.
A pet owner's incapacity should not spell the end of this important relationship; this is when the owner most needs the pet's love and companionship. It's well known that pets 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, a pet can play an important role in an incapacitated owner's medical treatment and quality of life. A pet trust can establish the life plan for the pet, including instructions for pet visits with an incapacitated owner if the owner's incapacity prevents the pet and owner from living together.
A Testamentary Bequest Does Not Sufficiently Protect the Pet in the Event of the Owner's Death
Your clients may question the need for a pet trust. Many believe 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. Such a bequest may not be enforceable or sufficient to protect the pet when the owner dies; the legatee can simply take the money and dump the pet at the pound.
Who Can Establish a Pet Trust?
Statutes in 31 states expressly provide for the establishment of a trust with a pet as beneficiary. The majority of these statutes were enacted in the last ten years.1 These statutes are significant because, previously, pets were considered property and could not be beneficiaries of a trust.
Clients in the remaining 19 states are not without a solution. Pursuant to the New York Estates, Powers & Trusts law,2 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 resides, is incorporated in, or is authorized to do business in the state, or is a national bank with offices in New York. The Caretaker and other 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 who carries out the grantor's detailed directions concerning the pet's care and maintenance. The 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 he/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.
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. If an animal requires special care, however, it is wise to designate the animal by name and description.
Although it is not technically necessary to fund the pet trust, the named Caretaker may not be as willing to undertake the required 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 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 and supplemented upon the grantor's death.
Since 63 percent of U.S. households have pets, 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.
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