Pet Trusts: the Newest Trend in Estate Planning
It may sound strange, but estate planning for companion animals is getting increasingly common. Those of us who think of our pets as family members are quickly learning that one of our responsibilities is to ensure that they are cared for long after we become incapable of doing so.
Generally, there are two types of dispositions for the care of a companion animal:
- Outright bequests to a specific caretaker (ie. family member or friend). This involves you giving your animal to someone you trust, so they can care for the animal as their own; and
- Pet trusts under a will.
What is a Pet Trust?
Until recently, most states didn’t allow trusts for animals because they were traditionally just property under the law. As of 2012, 46 states along with Tennessee have enacted pet trust laws.
A pet trust is a legally sanctioned arrangement that provides for the care and maintenance of one or more pets in the event of their owner’s disability or death. With a pet trust, you can leave money to be used for the care of your dog or other animal. Like traditional trusts, the person who creates the trust is commonly referred to as the ‘settlor’. You must appoint a trustee, the person that is legally in charge of managing and spending this money, to the set of instructions that you provide. When the time comes, the trustee will make payments on a regular basis to a designated caregiver, or alternatively, be the caregiver and use the funds to care for the animal.
An inter-vivos trust is a trust made during the settlor’s lifetime, if the owner of the animal becomes incapable of caring for an animal. A testamentary trust is a trust which arises upon the death of the testator and specified in the will. It is funded under the will.
Tenn. Annotated Code § 35-15-408
Tennessee law provides that a trust may be created to provide for the care of an animal alive during the settlor’s lifetime. While most states provide that pet trusts terminate upon the death of the animal or within 21 years, whichever comes first, T.C.A. § 35-15-408 explicitly states that a pet trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor’s lifetime, upon the death of the last surviving animal. Moreover, the statute provides that the trust can last up to 90 years.
While pet trusts are legally enforceable, animals do not have the ability to speak up or ‘complain’ that they are not being cared for according to the trust, or that they are not getting the benefits of the funds. As such, it is recommended that you make a pet trust as specific as possible. For example, list out the specific brand of dog food your dog likes, and write in scheduled vet visits for various times of the year.
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