Even your pet has an estate plan

Aug 13

In 2007, Leona Helmsley, a real estate billionaire, famously left her dog, “Trouble,” $12 million dollars in trust. Trouble was placed in the care of the general manager of Helmsley's Sandcastle hotel in Sarasota and had full-time security to ensure the Maltese’s well-being after the death of Helmsley (apparently the dog was getting death threats). Interestingly enough, Trouble is far from the wealthiest animal on the planet - to date, that award goes to Gunther III, a German Shepherd, who was left $106 million by Countess Karlotta Liebenstein.

But you don’t need millions to have a pet trust…

It’s estimated that between 100,000 - 500,000 pets go to shelters each year after their owners die so it’s no surprise that estate planning for pets has become a thing. In fact, in 2011 Massachusetts created a law centered around “pet trusts,” which is a legally binding document that ensures the care of your pets long after you are gone. In other words, if the person you place in charge of your pet trust (the trustee) fails to follow your instructions then legal consequences can follow.

So what does a pet trust generally consist of?

Name the caregiver
Provide specific instructions as to the pet’s care and preferences, and what should happen if the caregiver fails to follow such instructions
Gives a budget or cost estimate of how the money should be spent and managed
Provide alternate caregivers in the event that your first choice doesn’t work out
Name remainder beneficiaries (often charities) who will inherit the remaining assets after the pet’s death

What are my other options?

For those of you that think the trust may go a bit too far for your Labrador - there are simpler methods. The most common being to name a person in your Will to care for your pet and gifting that person a lump sum amount intended to be used for the pet’s care and upkeep. The main difference between the Will approach and the Trust approach is that the Will approach won’t be monitored and therefore doesn’t have continuing obligations - it’s more like a one-time gift type of transaction. There’s no caregiver plan and when and how the money is actually spent is really up to the new owner of your pet. In other words, there is no guarantee with a Will, it’s just a matter of giving your pet to a person and hoping they do the right thing.

If you don’t have the right person to name as the caregiver of your pet, then you can also check out professional caregiver organizations like the following:

Peace of Mind Program, School of Veterinary Medicine, Purdue University, 800-830-0104
Perpetual Pet Care Program, Kansas State University School of Veterinary Medicine, 785-532-4378
Stevenson Companion Animal Life-Care Center, College of Veterinary Medicine, Texas A&M University, 979-845-1188

Many of these programs require a large gift (somewhere between $10,000 to $25,000) to care for your pet for the remainder of their lives. For pets with longer lifespan or higher upkeep costs (e.g., horses or certain farm animals), you can expect to pay a lot more.

Some states, like Massachusetts, place certain limits on pet trusts. For example, An Act Relative to Trusts for the Care of Animals states in section (b) that the court “may reduce the amount of property held by the trust if that amount substantially exceeds the amount required for the intended use and the court finds that there will be no substantial adverse impact in the care, maintenance, health, or appearance of the animal or animals.” Meaning, if you leave $12 million to a dog, then don’t be surprised if the court decides to intervene in some way. In the case of Trouble, the court found the amount to be excessive and redirected millions to Helmsley’s heirs (primarily her two grandchildren that were previously cut out of her Will and her brother).

This goes back to the point that you should clearly outline the expected financial costs of caring for a pet and fund the trust according to those realistic assumptions. While such a budget can vary drastically, the typical range is between $10,000 to $20,000 depending on the pet’s expected life expectancy and daily maintenance requirements.

While pet trusts may be a farfetched solution for many, it’s just another thing to take into mind when planning your own estate. If you have any questions about your own estate planning, then feel free to give me a call at (781) 202 6368 or email me at jlento@perennialtrust.com

Always happy to help!

Sincerely,

Joseph M. Lento, J.D.

Estate Planning Attorney

Perennial Estate Planning

Wills & Trusts to protect your family’s future and give you peace of mind.

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