Pets as Property
Walt Disney fans and animal lovers may recall the animated film, "The Aristocats," a tale in which the elderly Madame Bonfamille changes her will to leave everything to her pampered pet, Duchess, and the cat's three kittens, drawing the ire of her trusty butler, Edgar. However, in the real world, Madame's will wouldn't have been enforceable, because it's illegal to name your beloved furry friend as a direct beneficiary in your will. By common law, pets are considered property – and simply put, you can't bequeath property to property, explains George J. Eigenhauser Jr., a Marysville California-based attorney who specializes in wills, trusts and estate planning. However, while your pet cannot inherit directly, a legal instrument known as a pet trust ensures that Fido or Tigger is provided for after you die.
What is a Trust?
Wills and trusts are not the same. "A trust is a particular way of holding title to and managing property," Eigenhauser explains. There are three parties to a trust: the "trustor," who establishes the trust, the "trustee," who holds legal title to the trust, and the "beneficiary," the party who essentially benefits from the assets in the trust – in this case, money. The trustee is legally bound to use the property and income as directed by the trust, which is generally payable to the beneficiaries, Eigenhauser says. "In some ways the trustee may be more of a manager than an owner." Pet trusts operate under the same legal premise, except that the beneficiary is the domestic pet – or pets, plural – that you specify in the trust.
Pet Trust Problems
Historically, enforcing pet trusts has been problematic. "To prevent trusts from lasting forever, they were limited in duration to the life of the human beneficiary plus 21 years," Eigenhauser notes. Therefore, trusts fail when they cannot be measured against a human life. Additionally, to enforce the trust, the beneficiary – a human beneficiary – had to appear before the court to ask for equitable relief. "Pet trusts were not allowed, because there was no person to enforce the trust, should the trustee fail to do his or her job," says Eigenhauser. As pets became recognized as cherished family members, law swayed along with public opinion. Pet trusts were first recognized under the federal Uniform Probate Code in 1990. According to Michigan State University's College of Law, 40 states now have statutory provisions that enforce pet trusts.
Setting Up a Pet Trust
Madame Bonfamille simply summoned an attorney to her home to draw up a will, but setting up a pet trust takes quite a bit more effort on your part. Eigenhauser suggests choosing a custodian for your pet, as well as trustee to provide checks and balances. "In a normal trust, there is a human beneficiary to complain if they don't receive all they expected," he explains "With a pet trust, you need someone to speak for your pet. Your trustee can oversee the care being given to your pet by the custodian." To avoid fraud, you also need to clearly identify the pet or pets that are beneficiaries to the pet trust – permanent forms of identification, such as tattooing and microchipping, are the best means of identification. A pet trust also needs one very important thing to make it enforceable: money. There's no way to calculate how much cash is needed to ensure your pet's quality of life after your death. However, take into consideration the pet's age, expected life span, current health issues and other special needs. Remember, too, that your pet's veterinary expenses increase as she grows older and her health begins to fail. Designate too little to your pet trust, and the money may run out; leave an exorbitant amount, and this invites a legal challenge from your human heirs. "Should there be money left over after your pet dies, it will go to a contingent beneficiary you have named," Eigenhauser says. "Some people believe it is better for the remainder to go to a charitable organization. That removes the potential conflict of interest, if the pet's caretaker is to receive the excess when the pet dies."
Willing your property to your pet certainly would be simpler – but absent laws that allow you to do so, you can still make sure that your furry family member is in good hands after you die. If you decide to create a pet trust, consult an attorney who knows the laws in your state, keeping in mind that the most essential aspect to setting up the trust is choosing the right trustee and/or guardian. "Make sure the person loves animals and is not just doing it as a favor to you," advises Eigenhauser. "After you are gone, the reason for the favor may be forgotten while the pet is still in need of care."