ESTATE PLANNING FOR PETS
New York Estates, Powers and Trusts Law Section 7-8.1: Pet Trusts
Traditionally, upon a person's passing, they had limited options and methods to ensure their pet was cared for after the owner's death. For example, the pet owner could gift money to another person with a request that the money be used to care for the pet, however this was legally unenforceable. Or, the owner could give the pet to an animal shelter, though most pet owners do not nd such a solution satisfactory. Creating a trust to provide for the care of the pet was not an alternative at the time.
Thankfully, the laws have changed and New York Estates, Powers and Trust Law Section 7-8.1 authorizes the creation of pet Trusts. Here are some frequently asked questions about Pet Trusts.
Question: What is a Pet Trust?
Answer: A Pet Trust is created within a legal document, such as a Will or Living Trust, where money can be held to provide care for pets after their owner can no longer provide such care (e.g. in case of death or incapacity). In simple terms, a Pet Trust can be viewed as a bank account from where the money can only be used to pay for the care of the beneficiary pet(s).
Question: How does a Pet Trust work?
Answer: The Trust is typically in the owner's Will or Living Trust and can name any living pet as the beneficiary. The Trust must have a Trustee, who manages the money in the Trust and who may or may not be the same person who cares for the pet(s). The Trustee is responsible for enforcing the terms of the Trust & using the funds to pay for the care of the pet(s).
Question: What are the limits of Pet Trusts?
Answer: The Trust will benefit the pets named in the Trust, which can be any pets alive at the time the Trust is created, either during lifetime or at the owner's death.
The Trust would be funded with property that will be used to cover the costs of caring for the pet(s). The amount of property that can be placed in a Pet Trust is limited by a reasonableness standard, as it cannot substantially exceed the amount required for the maintenance of the pet. Generally, up to $20,000 is allowable, but pets with more expensive care may be allowed higher amounts.
Finally, the Trust must be used solely for the benefit of the pet(s). The Trustee cannot benefit from the principal or the income of the Trust. (However, the Trustee will be entitled to a commission set by New York State law).
Question: What if I have pets other than dogs or cats?
Answer: Pet Trusts can be used to care for any designated pets or domestic animals.This can include animals such as dogs, cats, horses, rabbits, exotic birds, etc.
Question: How long will this take care of my pet?
Answer: New York State law allows the Trust to last until the death of the last living pet.
Question: What happens to the remaining money when my pet dies?
Answer: Any property still remaining in the Trust when it terminates will generally pass according to the terms of the Trust. Thus, the creator of the Trust has the ability to dictate where the Trust property will go after it is no longer needed to care for the pet (i.e., family or charity). That means that you decide where the money goes when you create the Trust.
Question: How can I be sure that the money is used to take care of my pet?
Answer: The court retains the authority to carry out the intent of the Trust creator and the purpose of the Pet Trust. For example, the court has the power to compel the Trustee to use the Trust property only to care for the pet. Thus, you can be assured that even after you are gone, your beloved pets will be cared for.
If you have any questions about any of these planning opportunities for your pets, please contact any attorney of our Firm at 585-730-4773, or visit this link to learn more about our Trusts & Estates practice.
This Legal Briefing is intended for general informational and educational purposes only and should not be considered legal advice or counsel. The substance of this Legal Briefing is not intended to cover all legal issues or developments regarding the matter. Please consult with an attorney to ascertain how these new developments may relate to you or your business.
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