Honorary Trust
In some states, a trust for the benefit of a pet
animal is considered an “honorary trust” – i.e., the
caretaker who receives caretaking funds (the
“trustee”) may either: (a) honor the terms of the
trust by using the funds for the care of the pet;
or (b) relinquish the funds to the beneficiary (or
beneficiaries) of your estate who would have received
the funds if your pet had predeceased you (the “remainder
beneficiary”). The problem with this arrangement is
that the remainder beneficiary is the only party
entitled to enforce the honorary trust. If the
caretaker-trustee is also a remainder beneficiary,
then the honorary trust accomplishes nothing
legally.
Even if there are other remainder beneficiaries, they
would very likely have no financial interest in ensuring that your
caretaker-trustee spends as much as is necessary to
spoil your pet in the way you did during your
lifetime.
Statutory Pet Trust
In a growing number of states, special statutes have
been enacted to impose an enforceable “pet trust” by
allowing virtually any third party designated by the
terms of the trust or a court to compel the
caretaker-trustee to use the caretaking funds solely
for the benefit of your pet. Indeed, many of these
statutes are so broadly worded that any gift of
funds to a beneficiary that is conditioned on caring
for a pet would probably be construed creating a
statutory pet trust. Although a statutory
pet trust offers a level of protection for the pet
that is not present with an honorary trust,
there are a number of limitations. For example, the
court always has the option of reducing the
amount of caretaking funds to what it deems is
reasonable for the care of the pet. Furthermore, you
must still consider the practical issue of who
would be willing and able to step forward to bring an
action against the caretaker-trustee.
Traditional Legal Trust
In any state, you can always establish a traditional
trust for the care of a pet that is carefully-drafted
to avoid the legal pitfalls. The trick is to transfer
the pet itself and the caretaking funds into the
trust, as trust property, name the caretaker who takes
care of the pet as a beneficiary of the trust, and
designate the party who will watch over the caretaker
and the caretaking funds as the trustee of the trust.
This type of “pet trust” affords much more flexibility
and practical enforceability than the previous two
alternatives above.
For a more detailed discussion of the law of pet
trusts, the pet trust statutes, or sample language for such trusts, see the
Legal Resources section. |
