As many of our clients are pet lovers who want to provide for the care of their pets, we decided to devote this issue of the Newsletter to the subject of Pet Trusts.
According to the American Pet Products Association 2011-2012 National Pet Owners Survey, 62% of U.S. households own a pet, which equates to 72.9 million homes. There are 78.2 million owned dogs in the U.S. and 86.4 million owned cats in the U.S.
However, we have found that most pets, even the smartest ones, cannot properly handle their own financial affairs! Prior to enactment of specific California laws, it was difficult for our clients to leave money in trust for the benefit of a pet. In the past, courts have invalidated Pet Trusts because they did not have a human beneficiary, they were thought to be excessive, or were not based on a human life.
Prior to specific statutes which allow for the creation of an enforceable Pet Trust, if an individual left money to a designee, like a family member or friend, in their last will and testament, stating in the document that the bequest was solely for the purpose of caring for their pet, the family member or friend would be under no legal obligation to spend the money on their pet. In fact, they could take the pet to the pound and keep the money for themselves if they chose to do so.
California, as well as other states, has passed laws allowing pet owners to set up trusts to take care of pets after the owners have died.
California Probate Code § 15212, passed in 1991, states: A trust for the care of a designated domestic or pet animal may be performed by the trustee for the life of the animal, whether or not there is a beneficiary who can seek enforcement or termination of the trust and whether or not the terms of the trust contemplate a longer duration.
Creating a trust for a pet is not just for the wealthy or the eccentric. It is a relatively inexpensive and practical way to ensure that you can provide for a pet when you are not able because of death or incapacity.
The terms of the Pet Trust should include, but are not limited to: sufficiently identifying the pet; setting the amount of funds available for the caretaker of the pet; designating the trustee and caretakers to take care of the pet; defining the duties and responsibilities of the trustee; providing for distributions by the trustee to the caretaker; defining the standard of care for the pet; disposition of the pet’s remains; designation of remainder beneficiaries for remaining funds after the passing of the pet.
It is important to keep your trust up to date with current information and to ensure that nothing has changed in your designated trustee’s situation that might warrant changing the trustee. It is also a good idea to give a copy of the trust to your chosen trustee and to any successor trustees and family members who may be involved with the care of your pet.