May 2008 - the Basics of Pet Trusts for Estate Planning Attorneys

• Publication year: 2008
• Pages: 49
• Citation: Vol. 37 No. 5 Pg. 49

37 Colo.Law. 49 Colorado Lawyer 2008.

2008, May, Pg. 49. May 2008 - The Basics of Pet Trusts for Estate Planning Attorneys

The Colorado Lawyer
May 2008
Vol. 37, No. 5 [Page 49]

Articles
Trust and Estate law
The Basics of Pet Trusts for Estate Planning Attorneys

by Gabriela N. Sandoval

Trust and Estate articles are sponsored by the CBA Trust and Estate Section. Topics include trust and estate planning and administration, probate litigation guardianships and conservatorships, and tax planning.

Article Editors

David W. Kirch, of David W. Kirch, P.C., Aurora - (303) 671-7726, dkirch@qwest.net; Constance D. Smith, of Rothgerber Johnson & Lyons LLP - (303) 623-9000 csmith@rothgerber.com

About the Author

This month's article was written by Gabriela N Sandoval, Denver, of The Rocky Mountain Legal Center for Child & Animal Welfare - (303) 954-4580, gns@childandanimalaw.com. She specializes in legal issues that affect children and animals, including guardianships, custody, estate planning for pets, veterinary malpractice, animal-related housing disputes, and companion animals and domestic violence.

Pet trusts, which are intended to provide funds to care for companion animals after the death or incapacity of their owners, are becoming increasingly popular in the United States. Thus, estate planning attorneys should become familiar with the history, purpose, functionality, and limitations of pet trusts, in an effort to effectively counsel clients interested in establishing such trusts.

People have attempted to bequeath property to their companion animals for many years, often by setting up a pet trust. A pet trust may be either a provision in an already established trust or its own separate trust.

This article provides an overview of the basics of pet trusts, including history and drafting considerations. Although the fundamental elements of a pet trust are essentially the same as for any type of trust, the attorney must be aware of questions to ask and circumstances to consider during the drafting process. Thoughtful planning and drafting will help provide for the future protection of a client's pets, also commonly referred to as "companion animals."

History of Pet Trusts

Pet trusts gained nationwide exposure in August 2007, when the story of Leona Helmsley leaving a $12 million trust fund to her dog, Trouble, hit the papers.(fn1) However, she was not the first to leave funds to care for an animal.

The following is a provision, taken in part, from a 1932 will:

I authorize and empower my Executor or the successor Trustee of my estate to retain any part or portion of my estate as long as he or she shall consider it to be for the benefit of my estate to do so and to provide for the care of my pet animals while they live.(fn2)

Historically, such bequests may have failed, despite a clear intent by the testator to provide for the companion animals. These bequests failed for several reasons. Animals are classified as personal property and thus cannot be beneficiaries. The measuring lives used to validate bequests where the rule against perpetuities applies must be human lives.(fn3) Finally, a trust must have a human designated to enforce it.

In 1932, a New York court stated:

It is primary that a portion of a human life is to be considered as a life in computing "lives in being" within the terminology of the statute, wherefore, the argument which has been advanced that the lives of cats and dogs are commonly known to be of shorter duration than those of human beings, possesses no relevancy to the determination. It is a matter of common knowledge that such domestic animals frequently live to ages of ten or beyond, and it would be absurd to assert that any measuring life which might extend for a period of ten years beyond the death of the testator, or even for an appreciable fraction thereof, was an inconsequential limitation.(fn4)

Twenty years later, another New York court reached a similar result, concluding

the provision for the care of the testatrix's companion animals was a condition subsequent, which could not operate to disturb the vested interests of the beneficiary . . . [and] . . . since the condition is based on the lives of several animals, it clearly is void under the statute against unlawful suspension of the power of...