Post-Mortem Pet Planning: Then and Now
Have you ever wondered what would happen to your pet if something happened
to you? Who would care for your "fur baby"? How would you ensure
that the funds set aside for that care were being used properly? For years,
the answers to those questions were nowhere to be found in Louisiana law,
which generally treats animals as a type of property.
As of August 1, 2015, however, Louisiana has taken a significant step
towards changing that approach. With the passing of Louisiana Revised
Statute 9:2263, Louisiana residents can now establish trusts for the benefit
of their pets.
How Does a Pet Trust Work?
A "Pet Trust", like all other trusts, is the creation of a relationship
(or “entity”) in which one person (the “Trustee”)
is appointed to manage funds or property for the benefit of another person
or animal (the “Beneficiary”). Unlike most other trusts, the
Pet Trust also names another party: the “Caregiver”. The Caregiver,
as the name indicates, is the person who actually takes care of your pet.
The Caregiver can also be the same person as the Trustee.
There are a couple of ways to structure your Pet Trust. The trust can
be created as a stand-alone trust (Inter Vivos Trust), meaning it exists during your lifetime and is either funded when it is
created or upon your death, through your Last Will & Testament or
through beneficiary-designated accounts (like life insurance policies).
The trust can also be placed in your Last Will & Testament (Testamentary Trust), which means it won't technically exist until you pass away. For either
option, you can revoke the trust or change any of its terms (i.e. your
Trustee and Caregiver nominations as well as your beneficiaries) during
your lifetime.
Examples of Pet Trusts in Action
Is all of this sounding a little complicated? Here are some examples that
show how a Pet Trust operates on a practical level:
Example 1: Mike the Tiger-Striped Tabby
Les wants to make sure that his beloved tabby, Mike VI, is taken care
of if something happens to him. Les wants to make sure that his co-worker,
Joe, has the legal authority to care for Mike. He also wants to create
a fund for Mike's care, which he knows Joe will use responsibly. Les
creates a stand-alone Pet Trust for Mike's benefit. He names Joe as
the Trustee, so that Joe can manage the trust funds, and he also names
Joe as Mike's Caregiver. Les then funds the Trust with enough money
to care for Mike. If something happens to Les and Mike is alive, then
Joe will take over Mike's care completely and will use the Trust funds
to pay for Mike's expenses. When Mike passes away, any funds left
in the Trust will go to his friend, Skip, per Les' wishes.
Example 2: Gingerbread the Dog
Gretel knows that her brother, Hansel, loves her dog, Gingerbread, and
would take care of him if she passed away. However, she also knows that
Gingerbread’s veterinary bills would be a financial burden to Hansel,
who isn’t the best money manager. Instead of leaving Hansel a lump-sum
in her will in the hopes that he will use it solely for Gingerbread’s
care (and that Hansel's creditors won't get to it), Gretel sets
up a trust in her will in which she appoints Hansel as Gingerbread’s
Caretaker. She appoints her financially-savvy friend, Grimm, as the Trustee
of the Trust. If Gretel passes and Gingerbread survives her, Hansel takes
care of Gingerbread and Grimm authorizes the Trust to pay for all of the
veterinary and other care costs. When Gingerbread passes, the funds left
in the trust go to Hansel, per Gretel’s wishes.
How Do I Create a Pet Trust?
A Pet Trust is a relatively straightforward document that can be prepared
by an attorney. Since a Pet Trust is a legal document that affects your
estate, it should be drafted by an attorney who focuses in the area of
Estate Planning. The attorney will meet with you to discuss your planning
goals, design a Trust designed to accomplish those goals, and then meet
with you to review and sign the document. Once signed, the document, which
is completely private and not required to be recorded in the public records,
is immediately effective.
If you'd like more information on Pet Trusts, or if you're ready
to get yours in place, call Leger Law Group, LLC at (225) 615-0532.