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.