Pets play an incredible role in many people's lives. The companionship and affection they provide is not only valuable in its own right. It also is remarkably beneficial in reducing stress and providing emotional support in an often-lonely world.
What happens, however, when a dog, cat or other cherished pet is likely to outlive its owner? If that is the case, it is time to consider creating a pet trust.
In 2011, Massachusetts became one of the more recent states to authorize such trusts. Nationwide, there are now 46 states that have specific legislation on pet trusts and the procedures that should be followed in setting them up.
David S. Favre, a Michigan professor who teaches animal law, calls the movement of so many states to adopt such laws a "quiet revolution." For centuries, the tradition-bound law of trusts and estates resisted developments that would have promoted the creation of pet trusts. Now, however, these trusts can put in place the legal structures to take care of pets after their owners have passed away.
To be sure, there are important differences between a pet trust and a trust set up for the benefit of a person. For example, pets cannot inherit money directly from their owners. But that is where pet trust comes in. It creates a mechanism by which a trust can use funds to care for the pet, with a trustee overseeing its operation.
Even if legislation to allow pet trusts is on the books, courts may sometimes act to set some limits on transfers. The highest-profile case is still that of Leona Helmsley, the hotel businesswoman who tried to transfer $12 million of her estate into a trust for her Maltese dog.
The dog was named Trouble and there turned out to be legal trouble with that arrangement. A court eventually reduced the amount from $12 million to $2 million.
Source: "Trusts provide safety net for pets," News Telegram, 2-19-13
Our firm handles situations similar to those discussed in this post. To learn more about our practice, please visit our page on trusts in Massachusetts.