What to Do with Your Pet After You’re Gone (Part 2)
Last week I was talking about options when considering estate planning for pets. One is to leave your pet to someone or some organization along with a sum of money to provide for the pet’s care. I leave my dog Casey to my friend George, for example, with $15,000 to care for her. But, what if I want some assurances that George won’t give Casey away and keep the money?
In that case it would be better to set up a “pet trust”. A written document establishes the purpose of the trust (ie. who it is to benefit) and how the assets held in the trust are to be administered for the beneficiary. You might remember Leona Helmsley, the hotel heiress who left $12 million to her dog. She actually left the money in trust, managed by a trustee for the life of her Maltese. The trust should also provide who receives any money left in the trust when the pet dies (a remainder beneficiary).
New Jersey law expressly allows for the creation of a trust for the care of an animal alive during the settlor’s (the person creating the trust) lifetime. The trust terminates at the death of the animal. The law requires that the assets in the trust be used only for the intended use unless a court determines that the value of the trust assets far exceed the needs of the animal. That might have been the case with Leona Helmsley’s Maltese (who certainly was accustomed to a more pampered life style than my dog, Casey). Any money remaining in the trust when the pet dies is either distributed under the terms of the trust or, if it is not specified, then passes to the settlor’s estate.
The trust alternative still requires that I leave my pet to someone. However, it does avoid the concern that the money won’t be used for the pet as intended.