You may have heard, back in 2007, of a pet Maltese pup named “Trouble” whose human, hotel heiress Leona Helmsley, left a trust fund of $12 million to pay for Trouble’s care. Unfortunately, pet inheritances ever since have enjoyed a dubious reputation.
For those who care about the well-being of their animals or livestock, animal trusts can play an important role in ensuring that the animals get the care they need after the principal caregiver passes. After all, estate planning is about providing for family, and many of us consider animals as part of the family. Trusts can ensure that money is put aside to care for animals when the animal’s primary human is no longer there. This is especially important for long-lived animals like parrots, horses, or tortoises.
Because trusts avoid the probate process, there is no delay in continuity of care. Trusts also surmount another obstacle by creating a legal entity to receive money. This is necessary because money or life insurance proceeds cannot be left directly to an animal.
A trust can appoint a caregiver to provide a home, name a trustee to manage the money, and state instructions for the animal’s care. These instructions may supply important information about the animal’s diet, preferred veterinarian, and, for example, farrier.
Here are the elements that go into a good trust.
- Carefully consider whom to appoint as caregiver. Ideally name several people as backups, with whom you have discussed the proposal beforehand. Leona Helmsley unwisely named unwilling family members.
- Describe your animals as a “class” if you own several, or you can specify your animals by name or photo or microchip number.
- Provide details for the care the animals need, including diet, medical attention, and maintenance schedule.
- Allocate reasonable funds to pay for your pet’s care. “Reasonable” doesn’t mean $12 million. The Helmsley judge reduced that amount to a paltry $2 million, to maintain Trouble in the manner to which she had become accustomed until she went to her final reward in 2011 at age 12.
- Itemize bloodlines for prize livestock or horses. Valuing them properly can make a big difference in the worth of an estate.
- If you have taken out loans to finance the purchase of a herd, identify whether you got credit for specific purchases or blanket financing for all stock purchases. Those debts will need to be settled before any of your human heirs can inherit.
- Provide instructions for the disposition of your pet’s remains.
- Designate where funds should go if there is money left over after the animal passes.
When drafted properly with the help of an attorney, pet trusts can save significant money and time. And, your estate plan will provide the care you want for everybody you leave behind – your family and your animals.
If you’re interested in learning more about pet trusts or in discussing your estate planning needs, please don’t hesitate to reach out. We would be happy to help give us a call at (207)848-5600 or reach out on our CONTACT page.