Pet Trusts

If you're worried about what might happen to your much-loved pet after your death, it's possible to create a pet trust to provide for the continuing care and well-being of a particular animal or animals.

Pet trusts are now legal in some form in Arizona, California, Colorado, Hawaii, Missouri, Montana, New Mexico, New York, Nevada, North Carolina, Oregon, Tennessee, Utah and Wisconsin. Check with your state attorney general (link) or your local Humane Society to find out the status of the law in your state.

You can choose for a pet trust to take effect upon your death or any disability that prevents you from caring properly for your pet.

As the "grantor" of the trust, you fund the trust with enough property or cash to care for your pet for his or her expected lifetime. The "trustee" can make payments on a regular basis to your pet's caregiver, and pay for your pet's miscellaneous expenses as they come up.

If your pet is expected to live longer than 21 years, there may be a problem with what's called the "rule against perpetuities," which forbids trusts that last forever (or beyond the lifetime of a specifically-identified human being). The Uniform Trust Act, which has now been enacted in over a dozen states, allows for trusts for the care of an animal, regardless of how long the animal is expected to live.

Drafting A Trust

It's important to be as specific as possible in drafting a trust for your pet. You'll want to include:

• The name and address of a trustee and alternate trustee (in case the original trustee is unavailable or unable to serve)
• The name and address of a caregiver and alternate caregiver
• Detailed information identifying your pet (such as microchip or DNA info)
• Instructions for the trustee to regularly inspect the pet to prevent identity fraud
• The standard of living and care you wish for your pet
• A detailed description of the property that will fund the trust
• Information on how the remainder of the trust should be distributed once your pet dies
• Instructions on the final disposition of your pet's body

If you fund the trust with much more property than is likely to be necessary to care for your pet, a court may step in and declare the trust "excessive" and invalid after your death.

How specific should you get in describing your pet's care and maintenance? You know your pet's habits and preferences better than anyone, so be as detailed as possible to insure that your pet gets the care he or she is accustomed to. You'll probably want to include such details as:

• The type of food your pet prefers
• Exercise routines, such as walks in the park
• How often your pet visits the vet, and vet maintenance routines
• Any chronic health conditions for which your pet must take medication or receive regular health treatment

Tax Issues

A trust is usually taxed on any generated income. Internal Revenue Service rules provide that in states where pet trusts are enforceable, the trust won't be taxed with distributions, but is liable for distributions as if the distribution wasn't made. The good news is that a pet trust is taxed at a rate much lower than most trusts.

Alternatives To Pet Trusts

In states where pet trusts aren't yet legal, you may be forced to provide for your pet in some other way. State laws vary greatly, but you might consider:

• Conditional Bequests. You may be able to give money to a specific person, with the condition that the money be spent for the care of your pet.
• Bequeathing your pet to a specific person, along with money to care for the pet

As all states have different laws and interpret trust provisions differently, it's important to contact an experienced local trust and probate attorney to discuss the appropriate way to plan for a continuing comfortable life for your pet.

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