As someone who grew up in a household which for the most part didn’t include pets, it took me by surprise the first few times that I met clients who had very real and serious concerns about the welfare of their pets after their death. What I quickly learned is that for many people, pets are as important to them as any other family member. With this heartwarming sentiment in mind I find it worth it to quickly review the ability under New York Law to make provisions for the care, maintenance and support of pets after their owners’ deaths.
Allow me quickly to remind many of you (or teach others) about hotel owner and real estate investor Leona Helmsley, who died in 2007 at age 87. Wisely, and in accordance with the advice that I give to both my clients and blog readers, she left no ambiguity about the distribution of her more than $4 BILLION dollar fortune once she passed on.
Prior to her death, Mrs. Helmsley created a 14-page will (which was filed in the New York County Surrogate’s Court and can be found online fairly easily) which specifically allocated her assets. Most of her assets were given to the Leona M. and Harry B. Helmsley Charitable Trust, which continues to this day to engage in worthwhile charitable contributions.
What is most interesting about her will however, is that Mrs. Helmsley designated $12 MILLION dollars of her assets to a trust for the care of her beloved 8-year-old white Maltese, Trouble. (She made separate provisions about the care of the dog itself, who she trusted the care of to her brother). Yes you read that correctly. From 2007 until his death in 2011, there was a dog in New York City who technically had a net worth of millions of dollars.
While we all can’t be fortunate enough to shower our pets with luxuries usually reserved for princes and heads of state, the question remains about how we can best take our final rest knowing that our pets will be cared for after our death.
The answer is to follow the plan of Mrs. Helmsley and her wise estate planning team, and create what is called a Pet Trust.
Like any other trusts, Pet trusts are created and used during the pet owner’s life. The benefit here is that the trust survives the death of the pet owner. A key point to be made is that owners can be assured that their pets will be cared for should he owner become incapacitated or ill. Pet trusts can also be carried out immediately because owners determine when the trust becomes effective (you can specify whether it be if you get sick, or if you die, or any other triggering event). The rules of the trust are surprisingly similar to creating a trust which would reference a human family member.
There are really two issues to consider when creating a Pet Trust:
- Who will care for the pet and be the pet guardian?
- Who will pay for caring for my pet?
If your first instinct when reading those two issues is to realize that there is such an opportunity for fraud to take place if there is money set aside for pet care, you aren’t alone.
We can put some safeguards into the trust to help decrease the possibility of anyone using the money set aside for your pet for their own personal use.
You can also be very specific about how often any funds should be dispersed, what happens if the pet has offspring, and how exactly you want the pet cared for.
A final and very important thing to consider is that the average life of a common house pet such as a cat or a dog is around 10-14 years, and many times there will be money remaining in the trust once the pet passes. You can also specify right in the trust how you want any remainder balance distributed.
Why can’t I just include the pet in a simple will document or a codicil(addition) to an existing will? Why do I need to set up a trust? It sounds complicated!
First of all, a pet trust is not a complicated document.
Secondly, astute readers of this blog know that a will only takes on ANY legal effect in terms of property distribution after death. So it is logical then that no will can address the care of pets during the owner’s lifetime. Now we have a potential issue to be dealt with, for example if the owner were to become sick or unavailable and can no longer care for their pets. Another reason wills aren’t a great option for this purpose is that there is usually a buffer period between the death of the pet owner and when the will actually get’s filed and probated. When the issue is simply distributing money and property this is not an issue. Money sitting in an account today will (god willing) be there in two months. A pet is like a child in the sense that it is living and breathing, and cannot afford to go months without receiving care, especially if the pet is sick. Most importantly, if you use only a will, there is nothing that prevents someone from using the funds intended for the pets for their own benefit. Like I said earlier, if you use a Pet Trust, there are some safeguards that can be built in.
One final note on this issue, and while I do inherently believe that people are good, we must always prepare for the chance that someone attempts to use nefarious means for their own benefit. This is why I recommend documenting everything specific and perhaps distinguishable about your pet. I’ve seen times when a pet dies and is replaced without notifying anyone to continue the receipt (and misappopriation) of Pet Trust Funds. Many people use new technology such as micro-chipping to counter this issue
I hope that this answered your questions and let me know if I can clarify anything for you!