Planning for Your Pet's Future Without You...
In Maryland, legislation was recently enacted that allows pet owners to establish trusts for their pets, making it the 40th state to allow pet trusts. Previously, people could not leave gifts to pets because, at law, pets were chattels and could not inherit property.
There are some limitations to the law. To begin with, people can only leave funds for pets living at death – they are not allowed to provide for “future generations” of animals.
In addition, while the pet owner must name a trustee for a trust, it must also name a caregiver for the pet (the caregiver and trustee can be one and the same). If, after the pet owner’s death, the pet is not properly cared for or the trust funds are not being administered appropriately, the law will provide that an outside party can apply to the court to get the trustee or the caregiver replaced.
The pet owner should also specify to whom the remainder of the trust should go when the pet dies (the article suggests that the caregiver or trustee should not be left the remainder, in case it becomes a disincentive to keep the pet alive).
The law is set up so as to avoid the type of litigation that ensued after Leona Helmlsey’s death (Helmsley, as you might remember, left $12 million in trust to her dog Trouble, while leaving nothing to two of her grandchildren). While it does not specify a maximum that a pet owner can leave in trust, it does provide the funds should be sufficient to care for the pet. It also gives the court the discretion to vary the trust if a beneficiary challenges it as being excessive.
I can’t say the trend towards providing for pets in an estate plan is all that surprising, given how attached people can be to their pets.
Have a great day!
Megan F. Connolly
