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Estate Planning for Pets

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PlANNING
eSTATe
by DONNA STIDHAM, eSQ.
FOR PeTS
For many pet owners, pets are members of the family. For some of them, a pet is the only family they have. These individuals often say that if something were to happen to them, they would be more concerned over what would become of their pets than of their children or spouses.
Whether an individual treats his or her pets as part of the family or just as animals, most do not want their pets destroyed if something should happen to them. However, without proper planning, the death of that pet is almost certain. In many Nevada counties if the owner of a pet does not properly provide for the pet, when that owner dies, if there is no family member present and willing to care for the pet, Animal Control must take the pet to the local shelter, where it will very likely be put to sleep. Some shelters euthanize animals as early as 72 hours after they arrive at the facility, making it virtually impossible for anyone else to adopt them. Understanding state law, city and county ordinances and how estates are handled by local government is the key to properly planning for pets. Without proper knowledge of the interworking of the various state and local entities, a pet can end up at the local pound, where it will likely be euthanized. In Nevada, prior to 2001, it was difficult to establish a comprehensive estate plan including people’s beloved pets. In May 2001, NRS 163.0075 was enacted; this statute established the validity of trusts providing for the care of animals. Properly executing estate plans that include pets involves more than just complying with the Nevada Revised Statutes. If an individual becomes disabled there must be clear language in any trust document establishing a named individual as temporary caregiver of the pet, without giving up ownership interest in the pet during the individual’s disability. This ensures that the terms of the trust govern the care of the pet, and allow for the owner to recover the pet once he or she is again healthy. A provision in a trust stating, “Fluffy will go to my son,” is not sufficient for many reasons: Fluffy 12 Nevada lawyer December 2011
may no longer be alive when the owner passes, new pets may have been acquired since the trust was established, or the son may simply not want to take care of Fluffy. Pet owners think a verbal agreement is enough, and don’t believe they need to include their pets in their estate plan. The easiest way to explain what it takes to create a proper estate plan that includes pets, and to explain why it is necessary, is to create a scenario and walk through the steps of what happens when a concerned pet owner passes away.
The owner of two dogs and a cat, living alone, dies at home. No one has seen the owner for a couple of days so the police are called. The police arrive at the home and eventually enter the home. They discover the owner is dead and that there are pets in the home. The police call Animal Control (which generally has jurisdiction over the situation and the ability to handle the pets), which arrives and assesses the situation. Without knowledge of the trust provisions, the Animal Control officer only has one choice: remove the animals from their home. What if a concerned neighbor tells the Animal Control officer that they will take the pets and even tells the Animal Control officer that they had promised to take the neighbor’s pets should something happen? The answer is that most Animal Control officers will not release the pets to the neighbor; the agency no more has the authority to automatically transfer ownership of a person’s pets than it does of a person’s jewelry or television set. If no family member is present, the pets are taken to the local shelter where they will immediately face the danger of euthanization. To prevent this scenario from unfolding, the first step is making sure a plan is in place so pet caregivers can be notified when an individual passes away. Generally within 30 minutes after a call to Animal Control, the agency will be ready to remove any pets from the property. So a plan must be set up to go into action within that 30-minute window. Someone who knows of and can contact your pet caregivers must be on hand; and there must be a backup plan in case those caregivers are away when the call comes in. If a short-term provision in the trust has an individual coming into the home every day to care for the animals until long-term arrangements can be made, then the pet owner needs to write another emergency backup plan in case the home has become a crime scene. The police will not let a caregiver in and out of house while a criminal investigation is ongoing; nor will they allow the pets to remain and possibly contaminate the crime scene. When determining who will care for the pets, think about whether or not that person will receive the pets outright, if they will remain property of the trust or if the owner will simply leave money for the care of the pets. If the owner leaves an outright gift of money (instead of putting it in trust) to a caretaker with the request that the caretaker care for the pet for the rest
Scenario
of the pet’s life, no one will make sure the pet is receiving the care requested by the pet owner. Once the caretaker receives the gift and the owner is gone or considered incompetent, there will be nothing to stop the caretaker from having the pet euthanized, throwing it out on the street, taking it to a local shelter or using the assets for things unrelated to the care of the pet. Also, once in the caregiver’s hands, the assets are exposed to the caregiver’s creditors and may be transferred to those creditors or to a former spouse should the caregiver divorce. I assisted in a situation in which a daughter had informed her mother that, if something happened to her, she wanted her dog to go to a specific no-kill shelter. Nothing was ever put in writing, but she did notify the shelter of her wishes. The daughter died in a car accident and had her dog with her in the car at the time. The dog survived and was taken to a different shelter by Animal Control – a shelter without a no-kill policy. The mother refused to go to the shelter to retrieve and relocate the animal to the no-kill shelter specified by her daughter. The problem is that quite a few shelters will euthanize an animal deemed “unadoptable;” others will euthanize for no reason at all. An older dog, just involved in a car accident in which he watched his beloved owner die, before being ripped away by Animal Control and taken to a shelter, would certainly be depressed, stressed and/or nervous; in this state, the dog could very easily be deemed unadoptable.
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December 2011
Nevada lawyer
13
eSTATe PlANNING FOR PeTS
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This situation could have been avoided if the daughter had provided for her dog in a trust. The trust would have given other named individuals or entities the authority to retrieve the dog from the scene of the accident or from the undesirable shelter. Having funds available in a trust for the care of a pet may not be an option for some individuals. One way to fund a pet trust is through a life insurance policy in which the named beneficiary on the life insurance policy is the trust. There are also tax issues relating to trusts to consider. We’ve all heard the stories of individuals passing away and leaving millions of dollars to their pets. According to current reports, Gunther, a German shepherd, is the richest animal in the world, with a net worth of $145 million. This is unlikely to happen in Nevada, as the Nevada Revised Statutes (NRS) limit the amount of money an individual can leave in trust for his or her pet to the amount required to care for the animal over the term of the trust. The trust must distribute any excess funds to the beneficiary(ies) who would have gotten them had there been no pet trust. The pets’ current standards of care determine the amount allowed to be placed in trust to provide for their care. Factors include: the cost of daily care (food, treats and daycare), veterinary care (yearly teeth cleanings, shots, nail trimmings and emergency care), grooming, boarding, travel expenses and pet insurance. Additional factors may apply in particular cases. Provisions can also be made to have the pets remain in the deceased individual’s home, which in some cases is the only home the pet may have known. The trust can determine who will pay for home maintenance, mortgage and property tax payments and as well as payments for utilities. Other considerations include creating a pet panel, caregiver fees and bonuses. A pet panel can offer guidance to the trustee and caregiver and can remove and replace the caregiver if necessary. It is a good idea to include a
veterinarian who can make the final decision regarding euthanasia for medical reasons and ensure that the caregiver does not prematurely euthanize the pet. The trust can pay the caregiver a monthly fee, allow the caregiver to live in the pet owner’s home rent-free, award a bonus to the caregiver at the end of the pet’s life or any combination thereof. If the pet owner decides against creation of a pet panel to determine who will be a successor caregiver, the trust should name multiple successor caregivers in case a caregiver is unwilling or unable to serve. As a final backup, the pet owner should consider requiring the trustee to give the pet to a no-kill animal sanctuary. An alternative to naming individual caregivers is naming a local charitable organization that will ensure care in exchange for a contribution upon the owner’s disability or death. An additional concern should be preventing the caregiver from replacing a pet that dies in order to continue receiving trust benefits. The pet owner should specify how to identify the pet. Micro-chipping is commonly used to verify the pet’s identity. I am often asked if the caregiver and the trustee can be the same person. Technically the answer is yes; but if the caregiver is using funds from the trust for the caregiver’s own pets or spending funds from the trust on non-pet related items, and there is no trustee supervising the funds, who is going to stop this from happening? When speaking with clients I’ve been asked if a provision can be written in the trust to euthanize any pets living when the client dies, then have the pets buried with their owner. When asked why they want to do this they’ve all said the same thing: “Because no one can care for my pets as well as I do.” Many courts have invalidated euthanasia provisions on the basis that destruction of estate property is against public policy. There are many options available to pet owners who want to ensure that their pets are treated as well as they have been during the owner’s life. Helping individuals understand all other options will show them they don’t have to consider euthanasia. Many individuals are unaware of the issues surrounding the care of their pets after their disability or death. By discussing these issues with their attorneys, pet owners can ensure that all of their loved ones are cared for when the owner is unable to care for them directly.
Donna StiDhaM practices in the area of estate planning and is the founder of her own law firm, which she founded upon her graduation from UNLV’s Boyd School of Law. 14 Nevada lawyer December 2011
This document is © 2011 by jsmith22 - all rights reserved.
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