Pet Trusts?

A friend has asked me to be responsible for carrying out her wishes re: her horses should anything happen to her. There are financial resources. How might we set this up? Should the owner put funds in some sort of pet trust that I could access?

The two humans will put in writing a short-term (care in the days immediately following any crisis, as the horses are kept at her home) and medium (acceptable places to board for a few weeks/months) and long-term (relocation to retirement farm/euthanasia/sale) plan.

Are there other things that we should discuss?

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I talked to a friend who does estate law and animal trusts seemed to be a niche specialty from what she was saying (she hadn’t even thought there was much interest until I brought it up to her) so I guess definitely find someone local who has experience.

We haven’t found a family/estate lawyer that we like enough yet to put ours on paper but we were debating how to address any “leftover” money from the fund being created - it’s easy with adopted animals since they can go back to the rescue and the funds can be donated in the case of adopted animals who go back to the rescue, it’s hard with privately owned animals.

Pet trusts vary under state laws, and may have tax consequences, allow court oversight, or require accountings.
Because of these administrative burdens many people instead choose to have a “discretionary trust” where you leave your animals and sum of money to a trusted friend with a request the money be used for the animal’s care but without formal requirements.

(Former estate planning attorney here - but this is not intended as legal advice and does not create any sort or attorney-client relationship!)

It is very hard to control what happens to an animal after an owner dies, even with some legal documentation, financial support and the best of intentions all around.

Some rescues will track an animal for life, once it is on their books. Even after it has an adoptive owner. That is a burden of inspection and tracking on the part of the rescue. But maybe it could also be a revenue opportunity for they could offer it as a service after the death of the owner of a non-rescue horse.

There are also a few horse farms that provide ‘sanctuary’ – the horses live out their lives at a well-maintained farm in exchange for a certain monetary donation. The intention is that the horses will never leave the farm. There are usually written parameters as to when euthanasia is done, and what vet care will and will not be offered. Such as, they will treat a colic, but will euthanize rather than perform colic surgery. Treatment for chronic and painful conditions such as laminitis has limits, and at a certain point they put the horse down. And so on.

Thank you! Is “discretionary trust” a formal term, or can we just walk into a bank and create a new account with both names on it?

You could create a joint account now - this takes a lot of trust between the two people because either can just empty the account and use the money for themselves. Also it might not be the best use of the money at present since most accounts have low or no interest.
By discretionary trust I was thinking more a testamentary gift in the will or trust, for example: I leave any of my horses living at the time of my death, plus all of their tack and equipment, to my good friend _______. In addition, [Friend] shall get $Xxxx per horse, and it is my wish that the money be used for the horse’s care.

ETA: standard disclaimer- this is not intended as legal advice and does not create any attorney client relationship. Please talk to an attorney in your jurisdiction!

You can’t set up a trust for an animal because they can’t have money. If you rely on your will there is a gap between when you die and the will is probated. Someone might say they will take your horse in the meantime, but they are under no obligation and may not have the resources to take care of him. The attorney I worked with for the last few months of mom’s life and for the estate said this is a common problem. What I intend is to set up a contract with a person, and maybe a backup, who will take care of the horse when I die. I will set up an account at the bank that will transfer immediately to the caretaker. $10,000 is common for horses, the attorney said. You also can put them into the will. I think you can probably specify what the money is for, and if you don’t spend all of it where it should go.

maybe, may be not and most likely not

we have one pony whose age is unknown but when first inspected by our vet in 2001 was said to be easily over 20 years old… pony is still around 21 years later

one horse is allergic to most of the world, his care alone costs more than the two other horses and three miniatures combined

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It could be $10,000 or more or less. That could be okay for horses stabled at home, but not boarded. The point is making a contract. The attorney’s point is that she has seen many animals over the years - horses and cats and dogs - go to someone who says, yes I’ll do that. Then it turns out they don’t have enough money, or the motivation or available resources. Putting the horse in the will doesn’t cover that gap. Some people have left with the money but not the horse. If it’s in writing the personal rep/executor has a contract not a casual verbal agreement for the care of the horse.

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Not an estate attorney but I work in adjacent field and have gone through this exercise myself. We set up a testamentary trust which is a trust that springs into being once the grantor(s) has passed away. The trust specifically benefits the horses and is meant to provide for their care during their natural life. It’s important to work with an attorney to properly set up and designate the trust- where the animals can be cared for, can they be bred, shown, ridden, etc. is there any option to sell the horses. The trustee is set up as a fiduciary to care for the health, maintenance, and support of the horses and in our trust we specified a certain percentage of our estate up to a flat dollar number would go into the trust. The trust would then be invested and care for the horses for their natural life. There are human benes that get any remainder after the horses have passed away and we did put a clause in that two vets have to agree on euthanasia prior to a horse being put down so they are not euthed because the human bene wants a pay out.

A friend set up a similar trust with her trainer as the trustee. Trainer is instructed to sell the horse after death, with the trust paying for the horses care during the sale process. Trainer gets sale proceeds and the remainder of the trust goes to the owners benes. That way trainer is motivated to sell the horses quickly- they’re also close and she wanted to leave the trainer something too.

The safest way to move money into an account now would be a revocable trust (in your name but has specifications on how it can be used after death) leaving it in individual name (like your regular checking account) is risky so I would only do that with someone you trust explicitly-Once the money is transferred to them, the gift is complete and it is an honor code of whether they use it as requested or not. The most important thing is to work with an estate attorney in your area to get the documents in place.

Quoting this just for another chance to read it again …

Can a neutral party such as an attorney or paralegal be designated with a responsibility to check on the horse periodically, and take steps to make corrective changes if things are seen to be not going well? To be billed at their usual rate (so probably not the attorney, but someone in the attorney’s office).

I care less who gets my horse than that they care for him well. Friends/relatives tend to have good intentions about these things, but not the wherewithal to follow through when the time comes. Also, it may be many years (hopefully) before the owner passes away, and things change a lot with individuals over time. The best choice now may not be the best choice when the time comes. An objective assessment at the time it is needed, and some oversight as time goes on, would both be a good thing.

Something I’ve seen work well for human children guardianship is to have a designated guardian (caretaker) and a financial fiduciary (trustee). So there’s a system of checks and balances- funds can’t be released by the trustee (financial fiduciary) without the backing of the guardian.

The beauty of a trust is you can designate the terms of it as you wish, in line with current estate laws.

Likely the least complicated way would be to leave a letter of directive of approved farms and if all else fails, someone you trust who could choose another option. Aka- Dobbin can go to farm a, b, or c. If none of the above are accepting new horses, in existence, etc. knowledgeable friend X may choose an alternative. Requirements include….etc etc.

ETA- the directive letter is what we did. The letter can be updated periodically and is kept with the will/estate plan. So there’s the formal trust then the letter to the trustees on where the horses should go and who to call if those are not viable options. In my case, the trustees are not horse people so my horsey friend is their lifeline to evaluating retirement homes, arranging transport, etc.

The law practices I’ve worked for would not accept this responsibility. Perhaps a vet practice or some sort of horse rescue might. But again, the administrative requirements and costs might not be worth it to most people. I’m not saying you shouldn’t take this seriously, but at some point you just need to trust the people you pick.

Also with requiring 2 vets, consider the possibility of the horse being in agony having to wait for a second vet to arrive. Sometimes it feels like an eternity just to get one vet to arrive on an emergency call.

ETA - coincidentally I became owner of my first horse because her owner died while I had been leasing her. She was not a particularly valuable horse, the beneficiaries didn’t want her, so the executor gave her to me.

I don’t know what I will do or should do…I know that FIL left a tiny trust to a local church and as the executor it was a real PITA in terms of filing taxes and such and dealing with it. Super limited experience, obviously, but I’m wary of trusts ever since.

This makes the most sense to me. Any gravy leftover goes to the person. I can think of who my small and large animal peeps are pretty readily

My problem is that my most trusted horse friends are as old or older than me. (that is OLD!) Hmmm… need to cultivate some younger horse friends as possible horsey recipients! Right now the horse is fairly young and sound so placement would not be too complicated. If that changes and he is not rideable, that is a different scenario.