TAKING CARE OF SKIPPY

I’m crazy about dogs. A dog is a source of boundless affection and loyalty. If at the time of my death, I were to own a dog, I’d want to ensure my pet’s continued care. I’d like to make sure that my pet can continue in the lifestyle to which he or she has become accustomed.

If I draft a Will that fails to mention my dog, let’s call him “Skippy,” Skippy will pass to the person or persons whom I named in my Will to receive my other assets. For instance, the person who inherits my house and car inherits Skippy, too. Of course, this could cause significant issues if there are multiple beneficiaries of my estate.

Who among two or more beneficiaries gets Skippy? Will my beneficiaries fight over Skippy – maybe because someone wants him or, even worse, because no one wants him. Perhaps, my executor will treat Skippy as a debt (or some form of “burden”) of my estate and use the estate’s assets to expeditiously place Skippy in a shelter that the executor believes is appropriate.

These results may be in direct opposition to results I would have intended had I thought my estate plan through. I’d want someone who cared for animals – and Skippy in particular – to take possession of him and care for him as I would have.

Of course, caring for an animal costs money. Food, toys, dog walkers, and medical bills are just some of the expenses that come with Skippy. He’s a pampered pooch, and I wouldn’t want that to change after I die.

In July of 2001, New Jersey passed legislation authorizing the establishment of “pet trusts.” Before the pet trust statute, the ability of individuals to create trusts for the care and maintenance of their pets was questionable, which means that such trusts could have been declared invalid.

The pet trust statute permits a person to establish a trust, fund the trust with an appropriate amount of money for the care and maintenance of the pet, and appoint a trustee of the trust. The trust could be established during the pet owner’s life or through the terms of his last will and testament.

So how would this work? My Will could contain a trust for my dog, Skippy. When I die, my executor would distribute a stated amount of money – let’s say, $10,000 – to the trustee of my pet trust, who may or may not be the same person who is the executor of my estate. The trustee of the pet trust may or may not be the person or organization that has physical custody of Skippy, after my death. For instance, I might leave Skippy to a dog breeder and instruct my trustee to disburse to the breeder an appropriate amount of money to provide for Skippy’s care and maintenance.

The trust will terminate when Skippy dies or within 21 years, whichever occurs first. And the trust can provide for remainder beneficiaries; in other words, if any of the $10,000 is remaining in the trust at the time Skippy passes, the money could go to other, designated beneficiaries.

The trust is subject to challenge if it is over-funded. In short, if I left $1,000,000 in the trust for Skippy’s care and that amount of money were unreasonable – Skippy might not think so, but the other beneficiaries of my estate may – those beneficiaries could challenge the trust as being excessive and a court could reduce the amount left in trust for Skippy to an amount the court thinks is appropriate.

The fact that the trust can only last 21 years may be an issue for persons who have pets that live a very long time. For instance, I have clients who own African gray parrots. Now, I’m not an expert on African gray parrots, but I’m told that they can live for 80 years.

Last November, I was invited to the birds’ first birthday party. The party was more extravagant than any wedding to which I had ever been – and a lot more fun. Hopefully, those birds will have another 79 birthdays. But that means a trust that can only last 21 years might be insufficient to provide for the birds’ care during the remainder of their lives. Other plans might have to be arranged in that instance.

A pet trust is not really about transferring assets. It is about making sure a beloved animal continues to receive care from someone who understands its needs and routines. For many owners, knowing that a pet will be protected provides a level of comfort that no financial statement can measure.