Posted on December 19, 2019, by Richard S. Rubin
We have all heard stories of people leaving millions of dollars to their pets. The most famous may be Leona Helmsley, who left $12 million in trust for her white Maltese, Trouble, and nothing to two of her four grandchildren.
Even the courts felt that this was excessive, and a year after Helmsley died in 2007, a judge reduced the dog’s trust to only $2 million. Most of us do not have millions of dollars to leave our pets. However, there is a more important reason to consider a trust for your pets — the cost of caring for them and, if desired, finding a new home where they will be taken care of as you would have.
Historically, you could not leave funds either to a pet or for the benefit of a pet as they were considered property. While you could leave money to an individual for them to take care of your pet, there was no way to enforce the provisions.
This changed when Florida and many other states adopted provisions based on the Uniform Probate Code. The Florida law, Fla. Stat 736.0408, allows for the creation of a trust for the benefit of an animal. The trust terminates on the death of the animal, or if there is more than one animal upon the death of the last surviving animal. The statute also allows the courts to determine if the assets of the trust exceed amounts needed for its intended use. This is the safeguard against cases like Leona Helmsley.
Steps to Creating a Florida Pet Trust
Most responsible pet owners would want to make sure that someone feeds and takes care of their pets in the event of their incapacity or death. With a pet trust, you identity two people to help take care of your pets. One is the trustee who handles the money set aside in the trust for food, veterinary care, and other essentials. The other is the person you have identified to actually take care of your pet, and, if so desired, find a new home for your pet.
Prior to nominating a pet caregiver, you should discuss your desires with the potential pet caregiver to make sure they are willing and able to accept the responsibility and have the ability to take care of your pets.
You can set up the pet trust to take care of your pet until he or she dies. You can also specify that the caregiver is to find a suitable home for your pet. This is called rehoming. While the idea of your pet living a life of luxury sounds great, most of us would prefer that our pet finds a new home, a new family to love them, and enjoy them as much as we did.
As pets do not pay taxes, the IRS does not afford a pet trust the same probate protections that a revocable or irrevocable trust receives. While they will recognize the existence of a pet trust under state law, pets do not meet the federal definition of beneficiaries. Therefore, the assets in a pet trust are treated as part of the taxable estate, and any income earned by the trust is taxable.
No matter how you want to provide for your pets, it is essential to work with an attorney well versed in the complexities, both legal and taxable, related to pet trusts. The attorneys at MLG have the experience and knowledge to assist you in deciding the best way to proceed when you want to make sure your pets are cared for properly in the event of your death or disability.
The above is intended to inform firm clients and friends about recent developments in the law, including analysis of statutes and new case decisions. This update should not be construed as legal advice or a legal opinion, and readers should not act upon the information contained herein without seeking the advice of legal counsel.
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