When you write a will, you have the freedom to leave a bequest or legacy to any person you choose. However, you cannot legally leave a bequest to an animal. No matter how much that treasured dog or cat is a member of your immediate family, Michigan law treats pets as property. Property cannot inherit property.
More likely than not, you want to make sure that someone takes care of that pet after you pass away. Sure, you can designate someone in your will to “inherit” your pet. However, once that person receives the pet as “property”, he or she has no duty to continue caring for that animal during its life and it could just as well end up in an animal shelter or released into the wild. What if you leave money to that caretaker in a will for the purpose of caring for the pet? That caretaker will gladly take the money, but there is no continuing legal obligation to care of that animal. What is available to avoid these concerns?
Fortunately, MCL 700.2722 specifically allows for the creation of a pet trust that can ensure monetary care for your animals when you are gone. The trust must designate those animals that may be cared for and automatically terminates when there are no living animals left to be covered. The statute also provides that the language of the trust should be construed liberally by trustees, beneficiaries and the courts to ensure that the general intent of the pet owner is carried out. Additionally, the statute provides that no portion of the principal or income can be converted for use of the trustee other than care for the covered animal unless otherwise authorized by the trust. This law ensures the pet owner’s intent to provide monetary care for animals should not be a joke to anyone.
In most cases, the person nominated to be the trustee and the person nominated to be the caretaker of the covered animals are the same person, but there is no requirement they have to be. The trustee can be a professional such as an attorney or a bank and the caretaker can be a family member. If the first family member is unable to providing care, the trustee can find another caretaker who would continue to do so. Depending on the family dynamic, an independent trustee can keep the caretaker honest by providing funds only when they are actually used for the care of the pet. Also, the trustee should be reasonably competent in investing money, making regular accountings and keeping interested persons informed. Most important of all, the trustee should be someone that is loyal to the intent of the pet owner and the goals of the pet trust. The grantor of the trust should take great care in selecting the trustee and caretaker for his or her pets.
The pet trust can be created as a separate document, be created within a revocable living trust, or be created as a testamentary trust in a will or a codicil to a will.
If the trust terminates after the covered animals are no longer living, then the unused trust property is transferred in the following order:
- (1) According to the terms and conditions of the pet trust.
- (2) Back to the trust grantor, if still alive.
- (3) If the trust was created in a will or a codicil to a will, to the beneficiaries under the residuary clause of the will.
- (4) If none of the above, to the heirs of the grantor of the trust.
A person having an interest in the welfare of the animal may request that the court appoint a person that will enforce the terms of the trust or remove a current trustee or caretaker. If a trustee is not designated, not willing to serve or unable to act, then the court can appoint a new one. Additionally, the court can make other orders and determinations necessary to carry out the intent of the pet trust.
Additionally, the court may reduce the amount of funds transferred to the trust for the pet’s care if it determines that it substantially exceeds what is reasonably necessary. This is exactly what a New York court did when a wealthy woman named Leona Helmsley left $12 million dollars to her Maltese dog named Trouble by reducing the amount to $2 million. If more funding is allocated to a pet trust than needed, those monies will be diverted back to their source and potentially used in a way unintended by the grantor. Caution and common sense should be used in deciding how much money is appropriate.
A pet trust, like any other trust, needs to be properly drafted AND properly funded to have the necessary effect. If there is no adequate funding, then the trust will fail. To avoid these consequences, it is important to work with an experienced estate planning attorney that can properly advise you how to carry out your wishes. If you have questions about pet trusts, do not hesitate to contact the lawyers at Kershaw, Vititoe & Jedinak PLC.