CONTRIBUTED CONTENT — You may have heard of the uber-wealthy leaving large sums of money to their pets.
Hamptons millionaire Leslie Ann Mandel ran a fundraising business and created the largest private mailing list in the country at one time. At her death, she created a trust for all 32 of her cockatiels along with her cat, Kiki, and dog, Frosty.
In a similar story, the world’s richest dog, Gunther IV, is a German shepherd with a net worth of more than $370 million. The original Gunther was left $80 million from a German countess named Karlotta Leibenstein, who died in 1991.
Many years ago, inheritances for pets were illegal. You could not leave money to care for your pets primarily because pets were not able to ensure the proper application of funds, and the trusts were too subject to fraud and embezzlement. However, today the law does allow these arrangements, and they are very common.
I regularly prepare wills and trusts with money being left for pets. However, the inheritance amounts are usually a few thousand dollars instead of a few million – but if you have that kind of wealth, you can leave all the money you want for your pet.
Trusts for pets are called honorary trusts because the human trustee left with the money is on their honor to use the money for the pet and not for themselves. That is an obvious temptation since the trustee of an honorary trust is not required to account to anyone unless you expressly say they have to in your trust. The law does allow you to appoint someone to enforce the trust and keep an eye on the trustee if you want, but that is not required.
The law also allows any interested person to bring the matter to a court to ensure the trust money is being handled properly. So if a neighbor sees your trustee pull up in a new Escalade to take your dog for a walk, that neighbor can cry foul on behalf of your pet. If necessary, a court can name a different trustee to ensure your pets and money are cared for properly.
An honorary trust in Utah must end after 21 years. When that time is reached or when the pet “graduates from life,” the remaining funds in your pet’s honorary trust will be paid to whomever you designate. You can leave the remainder of the funds to the caretaker of the pet, friends or family, a charity or any other beneficiary of your choosing.
If you leave an amount of money that is substantially more than the amount required for the anticipated needs of your pet, your heirs can request that a court whittle it down to a more reasonable amount. So although you can leave any amount you want, it is usually best to be reasonable about it to avoid a court contest. You could name any excess to benefit an animal charity of your choice, the people who are a meaningful part of your life or any other beneficiary you desire.
If a pet is an important part of your life, you should strongly consider ensuring their care by creating an honorary trust for their benefit. It is the only way to ensure your intentions are carried out to care for your pet after your death.
Written by M. SEAN SULLIVAN, founding partner at Brindley Sullivan.
About M. Sean Sullivan
M. Sean Sullivan is an attorney with 22 years of experience in will, trust and estate planning law, and he has worked with clients from all parts of the United States. His office offers free initial consultations at your convenience, which can be requested online or by calling 435-673-9220.
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