Waking in Kansas, having survived the elements, witches, and those flying monkeys, Dorothy is frantic to provide for her beloved and faithful Toto in the event of her early demise. Tornadoes frequent Kansas after all. Dorothy rings the town solicitor, Honest Abe. After a calming discourse, attorney Abe drafts Dorothy’s Last Will & Testament, naming Aunt Em as Toto’s caretaker and leaving her ruby slippers and sizeable emeralds to her for his care. Abe’s draft is for naught, however, for once he explains to the excitable Dorothy that Toto is still unprotected in the event of her insanity or disability, Dorothy irately compares Abe to the brainless scarecrow.
Her family already once put Toto in the care of Ms. Elmira Gulch (aka ‘the bicycle lady’). Abe, eyeing the yellow brick in Dorothy’s satchel, offers an alternative plan – a Trust for Toto. If Glenda’s skilled therapeutic sessions fail to dispense with Dorothy’s debilitating poppy field flashbacks, the Toto Trust would ensure Aunt Em uses the jewels to care for Toto in accordance with Dorothy’s wishes. Dorothy could name Uncle Henry as Trustee or as Co-Trustee with Aunt Em. Dorothy, pleased as punch, signs the Trust, breaks into song and skips down Main Street with Toto in tow.
Beginning in 2006, Section 36C-4-408 of the North Carolina General Statutes validates trusts for the care of domestic animals, including dogs, cats, birds, horses, reptiles and more exotic species, whether created at death by Will or by a lifetime Trust. A court may reduce the amount of the property transferred to the Trust if the court determines that the trust principal substantially exceeds the amount required for the pets’ care. A New York court for this reason ordered a $2 million reduction of Leona Helmsley’s lavish $12 million trust for her Maltese, aptly named Trouble.
In my hometown, Gail Posner, daughter of Victor Posner, left a $3 million trust fund for her three dogs, along with a Miami Beach mansion, which recently sold for over $8 million. During the pet’s lifetime, the trustee spends the assets of the trust for the pet’s benefit. When the trust terminates on the death of the last surviving pet, the remaining assets in the trust will pass as directed in the relevant Will or Trust document. Many pet lovers are justifiably secure in naming a caretaker in their Will and possibly leaving a small sum to help defray the costs of care.
Establishing a formal pet trust in a Will, which will come into being on the pet owner’s death, makes sense for long-lived pets, with pet owners leaving detailed care instructions or designating substantial amounts for their pets’ care. A separate pet trust, created by the pet owner during her lifetime, may be preferable if the pet owner wishes to provide for their pets’ care in the event of their own disability or incompetence, or if the delay of probating the Will may harm pets with costly or unique health requirements, or if the intended principal of the trust would significantly increase probate fees, or if the pet owner wants to insulate the trust principal from paying expenses of her estate.
Keep in mind that a Trust, whether created during life or at death through a Will, incurs administrative expenses and due to compressed tax brackets, generally pays tax at higher rates than individuals.
A sympathetic estate-planning attorney, such as Abe or one of the ladies at our firm, can assist you in selecting the option that works best for your family and pets. I love our dog, Loretta, and come from a family of slightly over-the-top animal adorers. For instance, when one of our species behaved badly, my Grandma Bernice, accompanied by her stout Chihuahuas, Mitzie and Queenie, plopped a hefty check on the desk of her local Humane Society. My Uncle Harold proudly toured on his motorcycle with helmeted Yorkies riding sidecar. We do love our pets and they love us (we think).