Fri, 09/17/2021 - 12:56am

Will I Or Will I Not?

Vincent Indeglia explains the pitfalls of estate planning for pets

MAID: “Oh, these dogs! They are just ruining the furniture!”

DORIS DUKE: “They live here, you don’t.”

Several years ago, my friend Matthew Stander asked if I would write articles for Dog News touching on legal issues that might be of interest to those of us in the fancy of purposefully bred dogs.

I fully agreed – not knowing that he would dub me or the column the “Legal Beagle” – but I told him at the time that there were only so many legal matters of interest to the dog world. To that end, I have hopefully imparted some insight about slandering and libeling our compatriots in the sport; serving as a voluntary club officer or director – and the pitfalls those good intentions can bring; hammering home the need for handlers to have insurance; contracting properly in co-ownership and breeding relationships; zoning matters in your local hometown that could prohibit you from participating in your hobby, and several other matters, including recent legislation at the local level aimed at stopping the breeding of purebred purposefully bred dogs. I then kind of retreated, partially because shows terminated for almost a full year, and also because I was running out of topics.

Recently, however, I was sitting in a courtroom waiting for my case to be heard by a judge. The case before me involved children, their mother’s executor and others disputing the validity of money being spent for the care of certain horses. As I listened I became rather concerned, because I could hear that the judge was going to be forced to rule that the money set aside for the horses and the mother’s breeding program was going to instead be turned over to her children, who clearly were going to sell the horses and disregard the mother’s intentions. I remembered the famous trust case involving Doris Duke, the tobacco heiress who had left a good deal of money to her pets, being the subject of protracted litigation in Newport, Rhode Island. That case identified all the flaws of creating a trust for pets after you die.

First, pets are property, and you can’t leave money to property. Second, if you leave money in a trust for your pets for their lifetimes, such a gift can be invalidated. The logic is that since the pet is “property,” its “lifetime” is not truly measurable in the law because property cannot have a measurable lifetime. Therefore, any gift to a piece of property for its lifetime is invalid under the law. Third, even if a trust is created for the benefit of the pet, the pet cannot enforce the gift or force the trustee to properly account for her deeds and actions. Why? Because “property” has no such rights, and as a practical matter a dog cannot go to court.

There are, however, ways to use the law properly in your estate planning, and there are ways to ensure that your goals and desires for your pets are achieved after your death. It takes time, effort, attention and a little money. In our practice, our estate planners insist that our clients review pet gifts every two years or we ask the client to take their account to another firm. We are adamant that estate plans be under constant review in order to ensure that the client’s wishes are reviewed in light of the times.

Over the years I have learned that many people don’t necessarily plan properly for their pets in their estate planning. Note that I use the term “pets.” As my mentor and lifelong family friend Pat Trotter recently pointed out, “Not all pets are show dogs, but all show dogs are pets.”

And so how do we take care of our pets in our estate planning?

First and foremost, we must keep in mind that under the eyes of the law, our dogs are personal property; while they live and breathe, they are not human.

Most estate planners develop wills so that all personal property you have not specifically identified as passing to a specifically identified beneficiary will pass through what is called a “residuary clause.” That is the part of a will that says, “All the rest and residue of my estate shall pass to” – as an example – “my three children to share and share alike.” It’s the clause that says to the world, “Hey! I have given very specific gifts to certain people. All the rest of my ‘stuff’ that I haven’t identified specifically goes to the following people in equal shares.”

The residue, or leftover assets of your estate, passes through the residuary clause. This includes your personal property. Your dogs, if not otherwise accounted for, are your personal property.

So how do you best plan for your animal’s care? Much of this depends on your status in life. No one knows when their day will come, but as one of our Founding Fathers said, “… in this world, nothing is certain except death and taxes.”

For those who are healthy octogenarians, one option to consider is putting your registered dogs into the name of the person you suspect will be ready, willing and able to take care of them. This should be a person you have consulted in advance who understands that upon your death, he or she is expected to take full ownership and care of those dogs. If that person should even hesitate at the suggestion, you ought to consider another, for once you are gone the ownership and hence the decision of the new owner as to care is irrevocable. Joint ownership, universally in the United States, means that once one owner dies, the other automatically inherits your interest in the property, or in this case your pet. Of course, many of us also own our dogs with more than one person. Our interest then passes equally to the number of co-owners. Again, we can all envision both the drawbacks and the benefits to this type of arrangement.

Another option is to specifically identify your pets as gifts in your will. For example, if your wife, life partner, spouse or children are part of your “breeding program,” you can specifically state that “All dogs, unborn but gestated puppies, frozen semen or embryos, and all records and breeding plans of which I am possessed, I give, devise and bequeath to my son, Junior Dog Owner, free and clear of all liens, encumbrances and claims of others.”

If for some reason in the future your son should indicate he does not want that responsibility, or that he only wants it if he is sharing it with you, then in that event you can amend your will to name another. Ensure that whomever you name understands that he or she is being named and understands your intention. You should also review this estate planning every few years, as we all know that our dogs leave us more often than we leave them. Identifying certain animals that have passed and not naming new ones creates a void and confusion for those left to administer your estate.

Sometimes when you decide to leave your animals to a particular person, you consider that you want that person to have money for the care and comfort of the animals. Do not fall into the mistaken belief that leaving a power of attorney to a person to take care of the money for your dog is sufficient.

A power of attorney expires when you do. Once you die, it is of no further force or effect. In addition, you cannot leave money to your pet. Remember, your dogs are personal property. Stating that you leave $100,000 for your show dogs is no different than saying that you leave the money to your lawn mower.

It is a defective gift, and that money will instead be distributed in the infamous “residuary clause.” You can, however, leave the money to your identified pet caretaker and hope that the caretaker will use the money as you have instructed.

There is, however, risk that the caretaker does not use the money as instructed, and there is no way to enforce the use for the proper intention.

Alternately, of course, you can establish a trust. A trust is different from a will in that it can be created during your lifetime, and it can become effective before you die or after you die. It identifies a specific trustee who is tasked to care for the money you have left for a particular purpose. It is more complex and costs more to establish, but it can ensure the goals you have for your animals.

In creating trusts for pets, we normally name a caretaker for the pet and a person to serve as trustee who is not the caretaker. The trustee is obligated to grow the money for the benefit of the living pets you have transferred to the caretaker, and pays the money to the caretaker for the specific purpose of caring for the pet.

You can identify the specific methods of care as well. For example, you could state that the funds are to be used to ensure biannual medical visits to a specific veterinarian, that the funds must be used for heartworm testing, surgical procedures to prolong the life of the pet (or not), or the proper grooming at the ABC Grooming Parlor every other week, among other things.

In order to enforce the trustee to perform the obligations, you can identify the caregiver as the living beneficiary who has the right to enforce the terms and conditions of the trust. Once the last of the pets specifically identified to be given to the caretaker dies, you can identify a beneficiary to take the remaining funds, if any.

If you consult a local estate planner, you should inquire about what state’s law should be applied to the trust. For example, the Commonwealth of Pennsylvania harshly interprets gifts for the benefit of pets. To the contrary, the Commonwealth of Kentucky (perhaps because of its history of thoroughbred horse breeding) and the State of Florida favorably treat pet trusts and gifts. You can create trusts in states where you are not a resident, and you can have other state laws apply to trusts.

Who likes to think about dying? An undertaker, I suppose. Other than that, most of us don’t find it to be the ice breaker to a conversation. However, you have an obligation to your pets to think about. Do something about it at least every other year or at the outside every three years. Find a professional estate-planning attorney and explain your life in purposefully bred dogs. While many attorneys who practice estate planning understand the basic concepts of pet trusts, almost none of them understands the world of purebred purposefully bred dogs and our generations of breeding programs. As they must educate you, you too must educate them on the very specific goals you are trying to accomplish.

Vincent Indeglia was born with a show dog in his bedroom. (The dog probably

thought his bedroom was invaded by a baby). He has been showing dogs since

he could walk into a show ring. He currently owns and breeds German

Shepherd Dogs and Pembroke Welsh Corgis. He is the senior partner in the law

firm of Indeglia Lutrario Attorneys at Law, with offices in Naples, Florida, and

Providence, Rhode Island. He judges and loves to go to dog shows, but he is happiest at home with his wife and dogs.

 

 

 

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