Most pet owners regard their pets as part of the family; however, when doing estate planning the family dog, cat, bird, horse or other beloved animals are often overlooked. What will happen to your pet upon your death or incapacity?
Pets are considered the owner’s personal property under the law and, unless specifically addressed in your estate plan, are generally lumped in with household furnishings, artwork, jewelry, tools, etc. as part of your tangible personal property. Unlike these inanimate objects, your pets that survive you need food, water, shelter, veterinary care, and attention and cannot be stored away during the often lengthy process of probating your estate.
Fortunately, pet owners do have options to make formal arrangements to provide for the care of their beloved animals in the event that their pet outlives them. Both North Carolina and South Carolina have adopted laws that allow for the creation of trusts for the care of animals. As such, you can create a trust for the care of your pets upon your death or incapacity (commonly referred to as a “Pet Trust”). Your pet trust can be drafted as a stand-alone document but often is created as a part of your overall estate plan and included within your Last Will and Testament or Revocable Living Trust. If you are a concerned pet owner, consider including a pet trust that provides for the care of your pet as part of your estate planning.
What to include in a Pet Trust
- Trustee – In order to create a valid Pet Trust, you need a Trustee (You cannot leave money directly to your pet). The Trustee is responsible for managing and administering the money you designate to provide the intended care for your animals. Often the Trustee for your pets will be the individual who will personally care for the animals, but you could appoint a trustee who will not be the caregiver.
- Funding Amount – You should consider how much money it will take to provide for your animals for the remainder of their lives based upon the pet’s current standard of care and each animal’s specific needs. You should consider your daily costs of maintaining the pet (food, water, shelter, exercise) as well as veterinary visits, medications, and medical treatment for aging animals and unexpected ailments. How much money you designate for your pet trust is an important question to consider, because the amount must be reasonable to meet the intended use of providing for the animal’s care.
- Instructions to the Trustee – You can include instructions to the trustee within the trust document or as a separate letter of instruction to provide the trustee with important information about your animal, including breeding, daily routine, personality, diet, feeding schedule, medications, medical history, and more.
- Remainder Beneficiary – During the animal’s life, no portion of the pet trust principal or income can be used for any purpose other than the benefit of the designated animal. However, the pet trust terminates upon the death of the animal or last surviving animal and the money will be paid as directed in the trust instrument. Often times our client’s will name a specific charitable organization for the benefit of animals to receive any funds remaining after the death of their pets.
An estate planning attorney experienced drafting pet trusts can advise you on how to address these issues and recommend the best way to incorporate your pet trust into your overall estate plan.
Pet Trust Laws
The statutory provisions of South Carolina and North Carolina’s state trust codes relating to Pet Trusts are listed below:
Trust for care of animals (South Carolina Law)
South Carolina Trust Code (S.C. Code § 62-7-408)“Trust for care of animals.”
(a) A trust may be created to provide for the care of an animal or animals alive or in gestation during the settlor’s lifetime, whether or not alive at the time the trust is created. The trust terminates upon the death of the last surviving animal.
(b) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court. A person concerned for the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed.
(c) Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor’s successors in interest.
Trust for care of animals (North Carolina Law)
North Carolina Trust Code (N.C.G.S. §36C-4-408)“Trust for care of animals.”
(a) Subject to this section, a trust for the care of one or more designated domestic or pet animals alive at the time of creation of the trust is valid.
(b) Except as expressly provided otherwise in the trust instrument, no portion of the principal or income may be converted to the use of the trustee or to any use other than for the benefit of the designated animal or animals.
(c) The trust terminates at the death of the animal or last surviving animal. Upon termination, the trustee shall transfer the unexpended trust property in the following order:
(1) As directed in the trust instrument.
(2) If the trust was created in a preresiduary clause in the settlor’s will or in a codicil to the settlor’s will, under the residuary clause in the settlor’s will.
(3) If no taker is produced by the application of subdivision (1) or (2) of this subsection, to the settlor, if then living, otherwise to the settlor’s heirs determined as of the date of the settlor’s death under Chapter 29 of the General Statutes.
(d) The intended use of the principal or income can be enforced by a person designated for that purpose in the trust instrument or, if none, by a person appointed by the clerk of superior court having jurisdiction over the trust upon application to the clerk of superior court by a person.
(e) Except as ordered by the clerk of superior court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds, appointment, bond, or fee is required by reason of the existence of the fiduciary relationship of the trustee.
(f) A governing instrument shall be liberally construed to bring the transfer within this section, to presume against the merely precatory or honorary nature of the disposition, and to carry out the general intent of the settlor. Extrinsic evidence is admissible in determining the settlor’s intent.
(g) The clerk of superior court may reduce the amount of the property transferred, if the clerk of superior court determines that the amount substantially exceeds the amount required for the intended use. The amount of the reduction, if any, passes as unexpended trust property under subsection (c) of this section.
(h) If no trustee is designated or if no designated trustee agrees to serve or is able to serve, the clerk of superior court must name a trustee. The clerk of superior court may order the transfer of the property to another trustee, if required to assure that the intended use is carried out and if no successor trustee is designated in the trust instrument or if no designated successor trustee agrees to serve or is able to serve. The clerk of superior court may also make other orders and determinations as are advisable to carry out the intent of the settlor and the purpose of this section. (1995, c. 225, s. 1; 2005-192, s. 2; 2006-259, s. 13(b).)
North & South Carolina Pet Trust Lawyer
Our pet trust attorneys are experienced drafting these trust documents to address the specific concerns of our clients and the needs of their pets. Schedule a consultation with an experienced estate planning lawyer to learn how you can easily include a pet trust as part of your estate planning and have the peace of mind that your animals will be well cared for even after you are gone.