When my daughter moved to Texas and began to build her own family, she never imagined that family would include four dogs. When she decided to move home, she and her husband packed up their vehicles – two dogs in each. The normally 16 hour trip was extended with multiple potty stops and breaks for games of rest stop catch. While I love my “granddogs,” I can’t imagine a two-day trip with a 25-pound ball of fur drooling on my lap.
However, there are plenty of people for who this is the norm! My daughter isn’t unlike many of today’s millennials – opting to care for furry friends instead of having human children. When she settled in Louisiana, she came to me about estate planning for her new family, and we discussed the worst-case scenarios, such as “If you and your husband were both to pass away unexpectedly, who would take care of Rhonda, Pringle, Lincoln, and Christmas?” (Yes, they named their dog Christmas.)
She and her husband struggled to think of one person who would be willing or capable of taking in four (or even two) dogs at a moment’s notice. Since pets can come with a long list of costly health and dietary needs, but are unable to bring themselves to the store or the vet, we discussed the use of a pet trust.
While your pet can’t sign a check or use a debit card, under Louisiana law, a trust can be created for the benefit of a pet. A trust is created when a person (the “settlor”) gives property to another person (the “trustee”) for the benefit of a person or an entity that exists and has rights under the law, such as a corporation (the “beneficiary”). Trusts normally cannot be created for a beneficiary that is not a “natural or juridical person” – a human being or an entity that exists and has rights under the law. Pet trusts are an exception to the legal requirement that a trust be created for a “natural or juridical person”.
The role of a trustee with regard to any trust is to manage, invest, and distribute trust property according to the terms of the trust, and that remains the case with a pet trust. The beneficiaries – in this case, the dogs – would receive benefits under the terms of the trust. The pet trust adds a fourth role, that of caregiver. A pet trust can designate a caregiver for each animal named as a beneficiary of the trust. The caregiver will have physical control of the animal and will be responsible for its care.
Establishing a pet trust can be as simple as including language like “I leave $10,000 to Fido, and I want my brother Joe to take care of him,” in your will or trust. In addition to money, property can also be held in a pet trust, and is to be used only for the care of each animal named. The amount of money and/or property in trust should match the anticipated needs of the pet. If Fido was kept on a chain in the backyard, trust funds can’t then be used to pay for a deluxe two-story doghouse with central heat and air. If Fido’s travel was limited to annual trips to the vet for checkups, the caregiver can’t take him to Paris and expect that the trust will cover the trip expenses. If a court determines that the amount of the trust is more than what is necessary for care of the animals and for reasonable expenses, the court can terminate the trust.
A pet trust will terminate automatically upon the death of the last surviving animal for which care is to be provided under the trust. The trust can specify who will receive any funds remaining in the trust when the pet or pets are no longer living. If the trust doesn’t give any direction as to how those funds will be distributed, they will be distributed to the settlor of the trust – the person who created it – if that person is still living, or to the people who would inherit from the settlor upon his or her death.
Establishing a pet trust is part of your estate planning, as it has an impact on how the property in your estate will be distributed. As such, it is important to consult with a qualified professional advisor to ensure that a pet trust will fit in with your overall estate planning goals. Your four-legged (or winged! or scaly!) friend will thank you.