Protecting Poochie

January 26, 2010 by  
Filed under Estate Planning

After Leona Helmsley died in 2007, her $12 million trust for her dog, “Trouble”, was big news.  The trust was upheld (New York has a pet trust law), although the amount was   019reduced to $2 million, with the rest going directly to charitable organizations, the contingent beneficiaries of the trust.

Why would a little dog need so much money?  Pet trusts can allow for the costs of a caretaker living in the former home of the dog owner.  Sometimes the trust might direct that a smaller, less expensive place be purchased to house the pets and the caretakers.  These trusts can and do fund care for pets after the death of their owner that is as expensive as 24/7/365 at-home nursing care for an elderly persons.

Over the years, a number of clients have asked me to put in provisions in their wills with an aim to protect their dear pets after their timely or untimely demise.  I have balked at this request for a number of reasons.  First of all, Massachusetts does not currently have a “pet trust” law, and it is unlikely that a “pet trust” would be upheld under current probate practice.  In addition, writing into a will the allocation of money to a person to benefit a pet makes the provision a “testamentary trust”.  This results in complications and ongoing and expensive monitoring by the probate courts, including filing of annual accounts.  All this trouble, expense, and uncertainty was surely not intended by the future testator.

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Another reservation I have in drafting will or trust provisions to care for pets is that my client is essentially asking me to write a trust for tangible personal property.  Yes, Poochie is a “thing” according to the law, not a living being filled with love and emotion as we (me included) believe our pets are.  The idea of a trust for tangible property or a “thing” rubs me the wrong way.  I would not write a trust for a lamp.  Why would I write one for a dog?

Provisions for pets in wills and trusts also raise problematic factual issues.  Does Dorothy keep the $10,000 if she takes beloved Poochie, keeps it for two days, then gets rid of him?  What if Dorothy decides to bring Poochie to a kill center one year after Dorothy gets her money?  Does it matter whether the trip to the kill center is motivated by Poochie’s incontinence or incessant barking?

Luckily, our Massachusetts legislators have been burning the midnight oil thinking about this issue.  Perhaps the emphasis is on pets because they are one of the few things the legislators can agree on.  They have decided to put forward a “pet trust” law like the one that has been enacted by 40 or so other states.

House Bill No. 1467 was filed on January 14, 2009.  “An Act Relative to Trusts for the Care of Animals” would put to rest the question of whether a trust for a pet is valid.  It is clear that one would have to be a person of fairly significant wealth to have a trust drafted and then have it operated after death by trustees for the benefit of Poochie.

I imagine that in many cases the trustee’s fees will be greater than the cost of poochie’s food and medical bills.  Will the trustee pay a person to take care of the dog in the keeper’s own home?  Would there be a premium if the dog can sleep on the caretaker’s couch or bed?  The possibilities are endless.   (Note to President Obama – new job descriptions:  pet trustee, pet trust dog caretaker.)

The House Bill gives the probate court the duty to name a trustee if no one is named as 035trustee of the trust, or if the named trustees are not willing to serve.   This will give pet-loving lawyers and others an exciting opportunity to serve as court-ordered trustees of a pet trust.  I may look into this opportunity as soon as the bill becomes law.  Perhaps the court will need to appoint guardians ad litem for dogs or counsel for dog  if something adverse happens in the trust arrangement or caretaking.    (Second note to President Obama:  new job opportunities as court-appointed pet guardian ad litem and counsel-for-the-dog.)

You will be able to designate life insurance to the pet trust, but make sure you don’t name your cat or dog as beneficiary.  Do not name the beneficiary as, “Sally (a cat).”  That is not OK.  Sally is tangible property and cannot take the money to the bank and open a bank account.   Name the trust or the trustee as beneficiary.

But, wait until House Bill No. 1467 passes before changing your beneficiary designations and estate plan in favor of your cat or dog.

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