Estate Planning for Pets--Potential for "Trouble"
When hotel baroness Leona Helmsley died in August of 2007, she left a $12 million trust fund for her beloved white Maltese named Trouble.
Despite being the largest beneficiary of Ms. Helmsley's estate, Trouble may need every bit of her inheritance. Trouble's luxurious lifestyle reportedly costs $300,000 a year for security, grooming and chef prepared meals served on a silver tray. Additionally, Mrs. Helmsley's former housekeeper has filed suit against Trouble (or rather Trouble's trust fund) and Trouble has moved to Sarasota to escape death threats that dogged her life back in Connecticut.
While this may sound like the plot for a new sitcom, estate planning attorneys say that this gift to a beloved pet, aside from the amount, is not unusual.
A growing number of Americans are setting aside significant portions of their estates to make sure their pets are able to live comfortably, many times with a professional caretaker, rather than be given to a relative or even a complete stranger.
This process has become much easier as states are enacting laws allowing for the creation of trusts for the purpose of caring for pets after the death of their owners.
FLORIDA'S PET TRUST LAW
In Florida, a new law became effective on January 1, 2003, which allows pet owners to establish enforceable "pet trusts" to provide for animals after their owners die or become incapacitated. Prior to this law, Floridians could set up arrangements for the care of their pet, but the courts could not enforce those arrangements. Now, if the pet's caretakers try to use the pet's money for themselves, any person having an interest in the pet's welfare can petition the court to enforce the trust.
HOW IT WORKS
Under the Florida pet trust law, you can set up independently, or as a part of your personal revocable trust, a separate fund to provide for the care of your pet.
You would specify the amount of funds, either a set dollar amount or a percentage of your estate, and the pets that will receive the benefits. You can specify a particular pet by name or include all pets owned by you at the time of your death. This will allow it to apply to any pets you acquire after setting up the trust. You can only provide for the care of pets alive at the time of your death. The trust cannot apply to the later born offspring of your pets.
Under the terms of the trust, you would appoint a trustee to manage the money in the fund. This trustee may but does not need to be the same person you name as the pet's caretaker. You can set up the trust to give the Trustee discretion to apply the funds to veterinary expenses, food, shelter and toys. After the pet passes away, any money remaining in the trust can be distributed to your heirs or to a charity.
You may also consider adding provisions to your Designation of Health Care Surrogate conveying your wishes that your pet remain at home with you as long as it is medically advisable and, if you must be moved to a new residence, that your pet be permitted to stay with you, if allowable, or that regular visits be arranged.