Wednesday, March 4, 2009 11:00 AM
Attorney Peter King will explain how pet owners can use pet trusts to ensure their animals are well taken care of should they depart before their pets. King works for HAUSWIESNER KING LLP where he assists individuals and entrepreneurs with their estate planning and taxation needs. He has spoken about the use of pet trusts at several animal welfare Leagues and rescue organizations in the D.C. area.
He was online Wednesday, March 4, at 11 a.m. ET to take questions.
Please join us again Wednesday, March 11, for another discussion on pet care. And check out washingtonpost.com's pets section any time!
Peter King: Good morning everyone. I look forward to your questions regarding pet trusts. As a pet owner myself it is very important that our pets are taken care of if something happens to us.
St. Louis, Mo.: Hi. I'm writing early since I'll have to miss the first part of the chat (hate it when work gets in the way of my goofing off). I am single with two dogs. Ever since the whole Leona Helmsley episode I've been thinking about what to do in case my dogs out live me. I have a small life insurance policy through my job ($25K) and wondering should I do a trust indicating care for the dogs, or if no one wants to take them, they should go to a "no-kill" shelter with the money given to said shelter as a donation? Do I even need a trust to do this? Thanks.
Peter King: The advantage of using a pet trust is that the money would actually be used for the pet. Pets cannot be beneficiary's of life insurance but you can have the trust be the beneficiary so this assures that the money is used for the pet. Otherwise the person that receives the life insurance money would have the discretion to use the money for the pet.
You can have the remainder amount go to a no-kill shelter or they may agree to be the guardian for your pet.
Hyattsville, Md.: What's the difference between creating a pet trust and writing a Will that states who is in charge of the pet and it's belongings?
Peter King: The advantage of using a pet trust is that the money that you allocate to the pet trust must be spent on the pet (any remainder can be given to someone you select). If you do not have a pet trust then the pet would pass to your heirs under the tangible personal property clause of the will and the pet could be given away and the other heirs could keep the money that you wanted to go for the pet's care
Washington, D.C.: What are the things people typically leave their dogs in their Will?
Peter King: Generally people leave a specific amount in their trust. It is important to have the assets be liquid (bank accounts, life insurance proceeds) so that there is money to provide for the pets needs.
New South Wales: Are there any restrictions toward establishing a pet trust in the U.K.?
Peter King: That is a good question. I'd be happy to research and get back to you but I am not sure. Pet trusts are available in 39 states in the US and hopefully the rest will allow them as well soon. Feel free to contact me and I will follow up with you.
Washington, DC: Mr. King, What is the "normal" amount left for a pet's care? (I can't leave millions like Helmsley did.) Do you designate a caretaker and a back-up? If there is a pet health insurance policy, how do you make sure that policy remains paid in full? Thank you for your advice! Pets are so important to many of us.
Peter King: I have seen various amounts. Pets are defined within the trust as the pets alive when you pass so many clients have developed a formula per pet based on the lifespan of the pets and the amount of care. Some have left a few hundred thousand dollars but generally it is around $10,000-$50,000.
Bay Area, Calif.: Hi Peter, thanks for taking my question. I have several wonderful pets that I need to care for should something happen. I have put my wishes down using a software program, and I want to divide my assets to the local humane society, my vet, and a feral cat program. Is it enough that I have e-penned these wishes?
Peter King: Dividing your assets in this way are charitable gifts when you pass. A pet trust allocates money for use to take care of a pet. The remainder (after the pet dies) can be given to charitable organizations like the ones you mention. Based on what you have mentioned you have not provided for a pet just made some charitable gifts.
New York, N.Y.: What generally happens if the assets left for the care of a pet are used in total and the pet still requires care?
Peter King: At that point the guardian of the pet would have to pay. Generally, we advise clients to overfund their trust and then just leave the remainder to family members or charitable organizations
Bowie, Md.: This is a very timely subject for me as I recently adopted a Collie and worry about what will happen to him if I am suddenly out of the picture. I understand the general concept of leaving him money in a trust to take care of his physical needs. But what do I do about his need for another (human) pack member? How do I ensure his need for companionship and, honestly, love?
Peter King: This is where you should select a guardian over the pet. It is important to understand there are three actors in a pet trust. A guardian over the pet. A trustee who manages the money and an enforcer who keeps an eye on the money through yearly accountings etc. One individual can perform more than one function but it is a good idea to have a number of individuals involved.
Rockville, MD.: What's the status of the legislation in Maryland permitting pet trusts? I was surprised to learn Marylanders don't currently have the right to have a trust for their pets. Some of our legislators apparently found the idea of a trust something they could joke about.
Peter King: Maryland has recently passed the pet trust in one of their legislative bodies but the second legislative body is yet to pass it so there is currently not a pet trust in MD. 39 states so far have passed the pet trust and MD hopefully will soon join them.
Alexandria, VA.: Didn't the entire Helmsley pet trust just get ruled unconstitutional (not inconsistent with statute but literally unconstitutional) as an unenforceable grant of a property interest to a non-human?
Peter King: The Helmsley case has a myriad of issues. The pet trust offers protection that the individuals intent will be respected. However, in this case the pets could not consume the billion dollars in their lifetime. As a result the court reduced the amount that the pet would receive (still a few million dollars). Courts are going to do their best to respect the individual's intent and the amount specified but this amount was just not realistic. There is also some argument about whether the funds will go to charitable pet organizations or charitable organizations generally.
Clifton, Va.: So I can leave the proceeds from the sale of my house, my life insurance $500k+ and my FERS retirement to my dogs? Is there a limit on the trust in VA? Shame they can't get any death benefits from social security like human children!
Peter King: All of these items can be directed to the trust. The statute does not contain a limit.
St. Louis, Mo.: Is money designated in a trust protected against debts owed by an estate?
Peter King: There are ways of accomplishing this. This is a good time to point out that there are two types of pet trusts.
You can have a pet trust that takes effect during life or you can have a testamentary pet trust which takes effect when you die. The testamentary pet trust would be funded with assets from your estate. The bills would be paid and then the amount left over could fund the pet trust.
Peter King: I wanted to clarify the question where the funds ran out of the pet trust. The trustee or guardian would not be obligated to pay for the pets care and the pet could be turned over to a pet organization or euthanized. This is why it is a good idea to put adequate funds in the pet trust.
Philadelphia, Pa.: How much contingency planning do you see and recommend when setting aside funds to a certain person to care for a pet. If that person is no longer able to care for the pet, should I allow for that person or that person's designee to accept the care and the funds? Would it be better if I find and specify who that alternative should be? What should I specify should the funds run out?
Peter King: It is a good idea to have a guardian and a number of alternates. The guardian may decline to serve or be unable to serve.
Kansas City, Mo.: I'm confused. Where do you even begin with a Pet Trust? How do I even find out if they are legal in my state MO)? Do I need a lawyer to set it up? I guess I need the whole thing explained to me from the beginning and maybe here isn't the place, but can you point me in the right direction? THANKS!
Peter King: Missouri does have a pet trust statute. It is best to work with a lawyer. You would need to select a guardian to take care of the pet, a trustee for the money and an enforcer for the trust.
Reston, Va.: What if you do not know who to trust to make sure that your pet gets what it needs and more? Even if you have children, sometimes the children think it is foolish to leave money to care for a pet when the parent is gone.
Peter King: You will want to select a guardian that shares your views about treatment of the pets. The money will be allocated for the pet so that the money will be used for the pet.
Peter King: I wanted to clarify the previous answer about Federal benefits. They would not be eligible for the pet trust. Typical assets for a pet trust would be life insurance, or other proceeds from wrapping up the estate.
Peter King: Thanks so much to everyone for participating. If you have any further questions let me know.
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