FREQUENTLY ASKED QUESTIONS:
Can’t I just provide for my pets in my will?
Yes, traditionally, you have always had the opportunity to provide for your pets in your will. You can bequeath your pets to another person you trust, hoping that person will take care of them. However, we do not recommend this approach as it may leave your pets in limbo or even abandoned. First, the person named in a will has no legal obligation to actually care for your pets. Second, all wills need to go through probate before they become effective. This can leave your pet in limbo for the duration of probate. Finally, a will can be contested for reasons that are entirely unrelated to your pets. This can further delay the implementation of you will, sometimes by years, or void the will entirely.
What provisions should a pet trust include?
A pet trust must name a trustee, i.e., the person who will administer the pet trust and act as its legal representative. Further, the trust must name a caretaker, i.e. the person who will look after your pets. The trustee and caretaker could be the same person. However, this leaves the trust vulnerable to mismanagement. Additionally, you may name trust protector, i.e. a person who can supervise the trustee and ensure he or she follows your wishes.
Keep in mind that you should always name alternative persons for all functions in case a person becomes unavailable. Otherwise, the court would have to appoint a replacement.
Finally, the trust should include provisions concerning your pets’ grooming, diet, routines, veterinary care, end-of-life care, and any other details you might think of. Don’t forget to discuss compensation for the caretaker, accounting instructions to the trustee, and how to identify your pets clearly.
How long are pet trusts valid?
Initially when New York first introduced “Honorary Trusts for Pets,” NY Est Pow & Trusts L § 7-8.1, these trusts expired after the death of the companion animal or after 21 years, whichever came first. However, despite many websites still claiming otherwise, the 21-year limitation has since been repealed. In New York, your pet trust remains in effect for the life of your pet or pets.
When should I create a pet trust?
You have two options: an inter-vivos (living) trust, and a testamentary trust.
You create an inter-vivos trust now, during your lifetime. Also called a living trust, it provides greater security because it bypasses the lengthy probate process. Furthermore, it can even provide for your pets during your lifetime should you become incapacitated. On the other hand, you must fund this trust during your lifetime and might incur additional fees.
You include trust provisions in your will to create a testamentary trust. A testamentary trust is a simpler alternative but relies on a valid will. This means that it does not become effective until your will passes through probate and survives any potential will contests. Additionally, it cannot provide for your pets during your lifetime if you became sick.
How do I fund a trust?
For testamentary trusts, the answer is simple: you set aside assets in your will. For inter-vivos trusts, you have several options. First, you can fund it by setting aside property during its creation. Second, you can fund it through life insurance policies or payment on death accounts by naming the trustee as an additional beneficiary. (Don’t worry, you do not need a new life insurance policy – an existing one that allows you to add beneficiaries will work.) Finally, you can include a pour-over provision in your will, taking money from your estate and adding it to the pet trust.
How much money should I set aside?
This is an important question as the amount of money set aside must match the trust’s financial needs. In other words, you need to set aside enough money for your trust to perform its functions, but not significantly more. If you do not leave enough assets, your trust will run out of money and collapse. If you leave too many assets, a court might intervene and reduce the total amount. Therefore, you have to carefully consider your pets’ needs and any other expenses the trust might incur. This requires you to be as specific as possible when drafting your trust, assuring sufficient funding and preempting court challenges.
Keep in mind that you can set aside as much money as you want, as long as you allocate it properly. Setting aside millions for pet food would be excessive and struck down by the courts. Setting aside millions to give your pets their own salaried staff, a mansion to live in, and chef-prepared meals would not be excessive. See, in re Copland, 44 Misc. 3d 485, 486, 988 N.Y.S.2d 458 (Sur. 2014). If this leaves you puzzled, remember that the court will not review how you wish to spend your money; that is entirely up to you. The court will intervene if you leave money on the table.
How much does a pet trust cost?
We can draft a simple standalone pet trust starting at $399, which includes up to two hours of attorney fees. Alternatively, we can also include simple testamentary pet trust provisions in your will at no extra charge. Our fees are low because most clients simply want to provide for their pets in a straightforward manner. That being said, complicated pet trusts involving real estate, investments, tax considerations, or paid staff would cost considerably more.
Are there any additional fees?
Any additional costs and fees will depend on your individual situation. Besides attorney fees to create the trust, you might have to pay additional fees to fund and administer the trust. For simple pet trusts, you may be able to avoid these fees by finding a person who will take care of your pets at no charge and another person willing to serve as the trustee. Oftentimes, family relatives or friends are willing to perform these functions at no cost. Alternatively, you could appoint a professional trustee for a fee. Professional trustees usually charge 1-2% of the trust balance per year for their services.
Additionally, if you choose to fund your trust through a life insurance policy or payment-on-death accounts, those accounts might incur their usual fees. The good news is that you do not need to create separate policies or accounts for your pets. You can simply include the pet trust’s trustee as an additional beneficiary.
What happens to any remaining funds after my pets pass away?
As with any other trust, you would name a remainder beneficiary to receive any money left over. This could be a friend, family member, or a charity. Moreover, you can name multiple remainder beneficiaries. However, keep in mind that remainder beneficiaries are the ones most likely to sue a trust if they believe the trustee is squandering away “their” money. Therefore, choose the remainder beneficiaries carefully.