Jan 05, 2016 02:10PM
By L. Joan Allen
Roger Caras once said, “Dogs have given us their absolute all. We are the center of their universe. We are the focus of their love and faith and trust…” But what happens to your beloved dog if he outlives you or you become disabled?
Effective October 1, 2009, the State of Maryland recognized a pet owner’s right to establish a Pet Trust, as reflected in the Estates and Trusts Article of the MD Code § 14-112, which states: A trust may be created for the care of an animal alive during the lifetime of the settlor. The trust terminates upon the death of the animal, or upon the death of the last surviving animal covered by the trust.
Put simply, a pet trust gives you control over certain aspects of your dog’s life when you can no longer take care of him. A pet trust is a document you set up with your attorney in which you choose the trustee, a successor trustee, beneficiary pet or pets, and caretaker, specifying how you want your pet cared for and funds managed.
Estate Planning Attorney Richard Gershberg of Gershberg & Associates, LLC, in Owings Mills, MD explains, “The majority of our clients who set up pet trusts are single with no children; their pets being their children, they want to ensure that their pets will be well cared for in the event of the client’s death or inability to care for the pet due to mental incapacity.
“We review with our clients a multi-page questionnaire that includes how they want their pet’s care provided in the event of their death or incapacity. In a pet trust, the trustee may not necessarily be named the caretaker. The trustee is in charge of the funds, and the caretaker cares for the animal. It can be the same person but not always. Many times clients have multiple animals and all the animals are included as beneficiaries of the trust.”
Attorney Randall Fisher, owner Fisher Office, LLC, in Annapolis suggests, “Either find someone you trust to leave some money or put money in a trust for the lifespan of the dog. Unless you have a trusted family member to take care of your dog, you want an independent trustee to handle the money and second person to be a caregiver.”
Trust vs. Will
According to Fisher, a pet trust provides better protection for your dog. He says, “The trustee is responsible for finances and care of the pet. For example, if the dog is not being taken care of properly, the trustee has the power to move the dog to a different caregiver. Let’s say you left your dog in your will and gave money to a caregiver to take care of the pet; nothing requires the caretaker actually to care for the dog, and he still gets the money. A trust can be part of a will but is still a trust.”
Fisher explains, “The advantage of setting up a trust over a will is that trusts go into effect immediately. A pet trust would specify control and care of funds available, directions on care, medical attention such as what veterinarians and specialists you would like to use and even end of life and burial.
“Will planning is inadequate for pets because wills do not address disability and because of the time lapse between the pet owner’s death and the will being admitted to probate,” says Fisher. Which means your dog may have to go to a shelter until the legal paperwork is settled.”
How to determine the cost Fisher says, “I ask the client for the pet’s average annual food bill, average vet bill, and boarding costs in the area. I factor the average life span of the dog (based on the breed) and factor all the numbers by 20% and work the amount of money that can be put aside.”
How to pay There are many creative ways to fund a pet trust if you don’t have enough money to care for your dog after your disability or death. Pet owners should consider life insurance that names a pet trust or traditional trust as a beneficiary to fund a pet’s care.
Law Professor Jerry W. Beyer, of Texas Tech University School of Law, explains, “A life insurance policy may be one you take out just to fund your pet trust, or you may have a certain portion of an existing policy payable to your pet trust. This technique is particularly useful if you do not have or anticipate having sufficient property to transfer for your pet’s care. Life insurance creates property when you die which you may then use to fund your pet trust.”
Beyer says that you may also use other assets such as pay on death accounts, annuities, and retirement to fund a pet trust. Beyer suggests that you consult with your lawyer or life insurance agent about the correct way of naming the trustee of your pet trust as a beneficiary.
What to include Beyer also suggests that you include in your pet trust specific instructions in the following categories on how you want the caregiver to care for your dog: • food and diet • daily routines • toys • socialization • preferred vet • grooming • whether the trust will pay for liability insurance if the animal injures someone • how the trustee is to monitor the caregiver’s services • how to identify the animal • how to bury the pet. • how to monitor the caregiver’s services
Other Trust options Sarah Walton, Director of Development of the Maryland SPCA, says their Legacy of Care program is a good option for pet owners who worry about the care of their pets when they can no longer care for them. Walton says, “Pets enrolled in Legacy of Care will be placed in a carefully screened, permanent home upon the owner’s death. To ensure the best placement, there is an enrollment and screening process. We also require provisions be made in your estate for your pet. This enables us to provide lifetime medical care for your pet. “This program is for pet owners who don’t have friends and family willing to take their pet. The Maryland SPCA will give their pet the quality care they deserve, and will give these pet owners peace of mind.”