LEGAL
We are not lawyers and
do not provide legal advice.
However, we do make recommendations on topics
we believe Pet Owners and their Attorneys should discuss
The legal framework of the Pet Trust must be sound and enforceable. A standard Trust template is not sufficient. There are unique challenges that can arise because the beneficiary is a live animal that cannot speak on its own behalf. The following recommendations are important to consider and implement when planning a Pet Trust.
Words Matter
The attorney is well-versed in legal jargon, which will be evident throughout the Pet Trust document. During the process, there will be questions to answer and decisions to be made. Discuss these openly so you are both well-informed and can act in the best interest of the pets and the people who will be caring for them.
There are also parts of the Trust that the pet owner may need to initiate with their attorney. Together, you can decide on the details, so the final document can be written with the appropriate legal terminology. This is vital to help ensure the pet owner's wishes will be upheld if they are ever challenged in court.
Each attorney drafting a Pet Trust has their own method of preparation, but through experience, knows the legal sections that should be included. Initiate conversations and make suggestions on what is important to you to include based on your knowledge and preferences.
Define Roles and Responsibilities
Once the composition (positions) of the Care Team is decided, the pet owner should describe their expectations. What are the responsibilities of the Foster, Caretaker, and Trustee? Will there be a Trust Protector? Who makes the decisions? How should conflicts be resolved? Setting these standards helps the team to work together more efficiently.
Include a System of Oversight and Enforcement
Simply put, what is the chain of command? Who will watch over each person? What course of action should be taken if someone does not fulfill their responsibilities, misuses funds, or neglects the animal in their care?
This part of the Trust empowers each individual. Oversight is imperative. Without it, even the best-drafted Trust could fail due to neglect, fraud, or a simple misunderstanding!
Make Plans for Funding
The Trust's bank account is based on the pet owner's budget and method of funding. Remember that, in addition to lawyer's fees, there will be other administrative costs, especially if third-party personnel will be hired to provide Trustee, Accountant, or Bookkeeping services.
Most Pet Trusts also include a "Caretaker Stipend." This small monthly payment, based on the relationship of the Caretaker to the Pet Owner, and the pet's needs, generally increase as the pet ages and medical conditions develop. The stipend is not considered a salary and can be spent however the Caretaker wishes, but must be reported to the IRS as income.
Pet Trust funds also cover administrative fees, Caretaker stipends, emergencies, & potential lawsuits. A low balance or de minimis helps set the guideline for a Pet Trust that is no longer able to support itself. Any remaining money gets distributed to a residual beneficiary.
End-of-Life Decisions and Final Disposition
As the pet ages, its health status may change. The Pet Owner should decide to what extent they would want their pet treated if it experienced a severe condition or illness. Would they allow surgery, radiation, or experimental methods? Where would they draw the line? They should also state the circumstances or guidelines under which they would agree to have their pet euthanized. What are the pet owner's wishes once their pet passes away? Do they prefer burial or cremation? Have they chosen a specific place? What do they want done with the pet's ashes? Who will be making the decisions that the pet owner did not address?
De Minimis and Trust Termination
Everyone hopes that the Pet Trust and the accompanying funds will remain until the last pet named in the Trust document, dies. After the pet's death, the Trust reaches its natural end. Unfortunately, due to unforeseen circumstances, the money can run out. Severe medical conditions, litigation against the Trust, medical emergencies, or a poor investment, can all contribute to the end of the Pet Trust. Before any of this happens, the pet owner must set the dollar amount that the Pet Trust, including the roles and responsibilities of the Care Team, will be terminated. Is it $10,000 or less? What will happen to their pet? Will some of that money be donated to whoever will care for their pet once the Trust is terminated? After the bills are paid, who will get the remaining money?
Show Me the Money
Once the pet passes away or the trust is terminated, there may be money remaining in the Trust account. It should sit there a while until you can be certain that all outstanding bills have been paid and all accounts are up-to-date. At this point, the remaining money can be distributed to the person(s) or organization(s) the Pet Owner named in the Trust document as the Residual Beneficiary.
The Final Word Counts
The attorney's words must clearly express the client's wishes. There should be a reciprocal understanding of the needs and preferences of the attorney and client. The Trust document is the Pet Owner's final word on how they want their pet cared for when they are not able to provide that care themselves. However, someone might disagree with their decisions & challenge them in court. The way the Trust is written could be the key to their victory or loss.
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