For years our family has had dachshunds. Recently we added a chocolate beagle. As with most pet owners, we are concerned about what will happen to our pets if there is no one alive to take care of them. Prior to the new South Carolina Trust Code, it was difficult and maybe not possible to set up a trust to take care of pets.
Now, under the new Trust Code, a trust for animals (i.e., a Pet Trust) may be created to provide for the care of an animal or animals that are alive or in gestation during your lifetime, whether or not the pet is alive at the time the trust is created. The trust must terminate upon the death of the last surviving animal.
Thus although the animal need not be alive at the time the trust is created, the animal must be born during your lifetime or be in gestation at the time of your death to benefit from the trust. Since, the trust must terminate when the last animal to benefit dies, as a practical matter for dogs and cats the trust may have a limited duration.
A Pet Trust may be enforced by a person appointed by the terms of the trust or, if no person is appointed, then by a person appointed by the court, which is likely to be the probate court. A person concerned about the welfare of the animal may also request that the court appoint a person to enforce the trust or to remove a person appointed.
Normally, the trust carefully spells out who the trustee and successor trustees are and who can question on behalf of the animal the actions taken by the trustee. If you think about it animals unlike humans are not able to complain about their treatment nor are the mechanisms necessarily in place to force the trustee to do their job, which is why such authority to enforce the trust for the animal’s benefit needs to be clearly spelled out in the trust agreement and is often vested in someone other than the trustee.
Under our Trust Code, the property of the Pet Trust 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. This means that if excessive amounts are placed into a Pet Trust, the court can cause the distribution of the excess.
Except as otherwise provided in the terms of the trust, property that is not required for the intended use must be distributed to the settlor who is the person who creates the trust; otherwise to the settlor's successors in interest. Unfortunately, the South Carolina Trust Code does not clearly define the term successor in interest. This means that the settlor needs to specify what happens to the funds; otherwise, a court proceeding may be required to make the determination.
Often people mistakenly believe that a Pet Trust is easier to structure, draft and administer than a trust for humans. In fact, it is somewhat more complex than trusts for humans, which have many hundreds of years of statutory and common law history. Also, due to the inability of the animal to take care of themselves and to object, it is somewhat more technical than with the majority of trusts for humans.
For instance under what circumstances will the animal be euthanized? Who makes the final decision? How many veterinary opinions are needed? Who is the animal to live with and where is the animal to live. Unlike most trusts for humans, which are not designed to be guardianships, a Pet Trust needs to include something like guardianship provisions. Often, more decisions have to be made with a Pet Trust than for a trust for humans.
If you have a pet that you are particularly fond of, the law now allows you to set aside funds to take care of the pet. However, in order to do so, you need to create the trust for your pet’s benefit.
Other more common approaches are to rely upon family members to take the pet and to specify in your will, trust or tangible personal property memorandum to your will or trust agreement who is to receive your pet. It is also often advisable to leave the person some cash, without strings. Otherwise, you may inadvertently create a Pet Trust, without the necessary safeguards and the person with the pet may not be able to keep the money after the pet dies.
If you think that you might be interested in a Pet Trust, please do not hesitate to contact us. Prior to doing so, you may want to check under the Free Consultation section of our website to see if you qualify for a free initial consultation. If so, please download the necessary information, fill it out and call our office to schedule a time for an appointment.