Friday, April 29, 2011

Estate Planning for Pets

Pets are a beloved part of the family; have you thought about what will happen to them in the case of your disability or death? You probably have created a Will or Trust that provides for your family, but have not included your pets in those documents. The good news is that in addition to being able to provide for someone to receive your pet as a gift in your Will, in 2006 Pennsylvania became the thirty-second state to enact a Pet Trust statute, allowing for the creation of a Trust by Will or during lifetime to care for pets owned during your lifetime.

Because animal law is a relatively new concept, and one that is even newer to estate planning, many people are only aware of pet planning through sensational reports like the story of Leona Helmsley who left $12 Million in trust to her dog, Trouble. It may seem like only the rich would take such steps to provide for the care of their pets, but pet estate planning is gaining popularity across the United States where 44 states currently have pet trust statutes enacted.

Prior to 2006, one of the risks in leaving money outright to a beneficiary to take care of a pet was that the beneficiary could take the money, and give up or euthanize the pet. Family and friends can be very well meaning, but simply incapable or unwilling to care for the pet of a deceased friend or loved one. In Pennsylvania, a pet is considered property, and if no one is willing or able to take care of it, it becomes subject to the (sometimes very lengthy) probate of the Will, the same as a piece of furniture. Further, since a Will is only effective upon death, what would happen to the pet should its owner become disabled and no longer able to care for it? The new law may have the answers.

Pennsylvania adopted the Uniform Trust Act in 2006, and with it adopted standard provisions for establishing statutory trusts for the benefit of pets. This can be done within the owner’s Will, or as a standalone Trust. It is a very simple provision that allows for the basic funding of a Trust with only as much as is reasonably needed to care for the pet or pets, and does not require the owner to direct how the funds should be spent or what care is desired for the pet. If the court feels that the Trust has been overfunded, it will adjust the amount contributed and pass the rest through the owner’s estate according to his or her Will. The Trust may be overseen by a person named in the document, or if there is none, one may be appointed by the court. The Trust will terminate upon the death of the last pet for which the benefit of the trust was created.

Another form of the pet trust, the traditional pet trust, gives the pet to a trustee, and names a caregiver as a beneficiary to receive funds from the Trust which are to be spent for the benefit of the animal. Because the actual beneficiary is a human, he or she has power to enforce the Trust provisions, and it avoids any problems related to making gifts to non-humans. These Trusts may also provide further assurance that the owner’s wishes will be carried out as planned because they can contain more specific instructions than the typical statutory trust. Naming a trustee also further protects the animal because there will be someone to oversee the care and spending by the caregiver. Like the statutory trust, the traditional pet trust will terminate upon the death of the pet. The pet owner should designate who will receive the remaining property in the Trust at that time. Usually, the owner will select a charity and may be able to advantage of the estate’s charitable deduction at death. Naming the beneficiary caregiver as the remainder beneficiary should be avoided because the beneficiary would have little to no incentive to ensure that the pet survives.

These Trusts can be created during the life of the owner, or upon death through the owner’s Will. Creating a Trust during the owner’s life can provide that the pet remain with the owner through disability or nursing care by including a provision in the Trust that allows for payment of the remainder of the Trust property to the nursing care facilities for the privilege of allowing owner and pet to remain together.

If a Trust sounds too complicated and too expensive, an alternative is to draft an agreement which provides for care of the pet, should the owner no longer be able to take care of it. New York pet law attorney Rachel Hirschfeld has created The Pet Protection Agreement, which is a legally enforceable agreement between a pet owner and a pet guardian. It is a “check-the-box” and “fill-in-the-blanks” form to allow pet owners to specify their wishes in a comprehensive, effective and quick way.

At the very least, a pet owner should take the following steps, which can be prepared for free and without assistance. First, carry an “animal card” in your wallet. It should contain information about the type of animal, its name, where it is located, and special care instructions. Second, fill out an animal information sheet with more specific instructions on the special care and wishes for your pet. Third, place an emergency sticker on the door or window of your home, indicating the number of animals inside. All of these materials are available through the Humane Society of the United States, and should be kept updated and stored with the owners’ Will or other estate planning documents, where appropriate.

Estate planning takes care of those we love, and who loved us, after we die. Many times pets provide an unmatched amount of support and friendship, and they deserve the same preparation for our deaths as our human loved ones do. By consulting an estate planning attorney familiar with pet planning, you can make sure your trusted companion is well cared for after you are gone.