September 2022

Friday, September 2nd, 2022
by Catherine Read
One of the most rewarding areas of our work is getting to know our clients and helping them to identify, beyond the things they might be thinking about when they come to us, the needs and concerns they want to provide for in their estate plan. One example is explaining to clients that, more important than providing for your death, is providing for who will help you while you are alive but incapacitated. Another example is explaining to parents of minor children the complexities of when a minor child inherits property and the importance of providing for seamless transition of control of finances when a parent dies.

Sometimes clients come to us asking on their own how to provide for their pets on their death or in the event of their incapacity. This makes perfect sense, as to so many of us pets are our family and medical and pet insurance expenses, among others, can be staggering. Often clients know right off the bat they want to set aside money and a plan for who will care for their pets on their death. Other times they think of it as we counsel them on what to be thinking about.

With that in mind, we hope to share some basic information with you here about a pet trust, so you can be thinking about whether it may be right for your situation.

For starters, you do not need to get a pet trust just because you have a pet. You can always just identify your pet on your Tangible Personal Property Memorandum that is included as part of our estate planning documents, to pass to the person named on your death. If you change your mind on who should get the pet, or if you get additional or replacement pets during your lifetime, you can just strike the old entry, make a new entry, and sign and date the memorandum each time. You can’t leave money for the pets’ care that way. But you can leave the pet to someone that way.

Another point is a pet trust need not be a standalone document. It often is included in your Revocable Living Trust or in your Will. Because a Will only becomes effective at death whereas a Revocable Living Trust is effective while you are alive and provides for seamless transition of control of your finances, it generally is better to provide for pets in a Revocable Living Trust than in a Will.

All 50 states and the District of Columbia now have a pet trust statute. The last state to pass a law was Minnesota in 2016. Delaware’s statute is located at 12 Del. C. § 3555.

Pet trusts can have as much or as little detail as appropriate. The drafter needs to be careful not to create unintended consequences.

Like we tell our clients in other aspects of estate plans, a pet trust is a good plan if you have good people to carry out the plan. To have an effective pet trust you need to designate the players in your plan. These typically are:

  1. Trustee. This is who will hold and spend the money you set aside for the pet’s care. You also should name one or more successor trustees to serve in the event a trustee dies, becomes incapacitated, resigns, or doesn’t serve. Trust assets can be used to pay expenses and hire agents and contractors to care for the animals.
  2. Caretaker. This is who will have custody of the pet and take care of it. The Trustee (who holds the money) can either give the caretaker a stipend, or pay for the services and care directly such as to the veterinarian or for pet insurance. The purpose of separating the caretaker role from the trustee role is to keep the fox from guarding the henhouse, so to speak: to ensure the caretaker uses the money only for what it is there for. You should name successor caretakers.
  3. Enforcer. You don’t have to name this person, but it is a good idea. This is someone to make sure the caretaker is caring for the pet well, also to ensure that the trustee is flowing the money to the caretaker properly. The Delaware statute provides that if a pet trust does not name a trust enforcer, a person who has an interest in the welfare of the animal other than a general public interest may petition the Court of Chancery for an order that appoints a person to enforce the terms of the trust. 12 Del. C. § 3555(c).
In addition to the players in your plan, a pet trust requires you to specify some money points including:
  1. How much money should be set aside in trust for the pets.
  2. Who gets the money remaining after the death of the last pet. Often clients name a charity or a favorite veterinary hospital as remainder beneficiary.
  3. Compensation to the caretaker, if you wish to set a rate, otherwise you can specify that compensation is to be reasonable and the Trustee can look at prevailing rates to determine an appropriate rate.

A benefit of the pet trust is that it is enforceable by a Court, rather than just a letter of wishes that is precatory and not binding.

The statutes aim to cover legal issues that might unintentionally arise. For example, under an ages-old legal rule called the Rule Against Perpetuities, a trust must have a human beneficiary against whose lifetime the duration of the trust is measured. The Delaware statute makes clear that a pet trust is not invalid because it lacks an identifiable person as beneficiary, a trust for the care of one or more specific animals living at the trustor’s death is valid, and the trust terminates upon the death of all animals living at the trustor’s death and covered by the terms of the trust. 12 Del. C. § 3555 (a), (b).

As clients think through the foregoing issues, one point often leads to the next and they find themselves thinking of things they hadn’t before concerning their pets. We work with you through these issues and help you to identify what matters to you and how best to provide for those concerns. We take the time with each client to ensure the client has the information necessary to make informed decisions.

September 19th - Our elders are our link to the past and what better way is there to honor them than on "Respect for the Aged Day,"

Published: Sep. 7, 2022

Fridley, MN (WFSB) - A 91-year-old Minnesota woman decided to take the leap of her life, and go skydiving for her birthday.

Ida Shannon says she has always liked to take risks. “Life would be pretty dull if you don’t embrace adventures.”

And this isn’t the first time she’s gone on an exhilarating adventure. When she turned 80-years-old, she went ziplining for her birthday. When someone asked her what she would do next, without hesitation Ida said “Oh, I’ll just go skydiving!”

All of her friends from Heights Church were there to support her. “I didn’t really think that it was going to happen, then they went ahead and collected enough money for me to do this.”

“She’s like the real Wonder Woman. She’s strong and she loves the people. She’s like the grandmother I wish I had,” explains Daisy May, a friend and member of the church.

And her actual granddaughter added to what a special lady Ida is to all her know her. “My grandma is super adventurous. She’s so caring and loving. I feel like everyone who is around her feels super include and feels super cared for, and she’s always the one who is going to show up for you no matter what.”

Ida got in her gear, boarded the plane, and with the applause from her friends and family, she soared all the way down to the ground below and with that completed her birthday wish!