The ability to make an enforceable trust for the care of companion animals has become a hot issue, with many states adopting provisions that take the uncertainty out of how to administer estates with specific provisions made for animals. The most widespread language adopted from Section 408 of the new Uniform Trust Code issued by the National Conference on Commissioners on Uniform State Laws. For that reason, Animallaw.com, with permission from the NCC of USLs, has also adopted this language for the "Model Law" for creating enforceable "Pet Trusts."
Sec. 1. Purpose
To authorize the creation of testamentary and inter vivos trusts to provide for the care of an animal.
Sec 2. Definitions
(a) "Animal" means a companion animal (including, but not limited to, a cat, dog, rabbit, guinea pig, hamster, gerbil, ferret, mouse, rat, bird, fish, reptile or horse) which is living, and is owned and cared for by the taxpayer establishing the trust, at the time of the creation of the trust.
(b) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation, or any other legal or commercial entity.
(c) "Property" means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein.
(d) "Settlor" means a person, including a testator, who creates, or contributes property to, a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person's contribution except to the extent another person has the power to revoke or withdraw that portion.
(e) "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's provisions as expressed in the trust instrument or established in a judicial proceeding.
Model law language taken from Section 408 of the Uniform Trust Code issued by the National Conference of Commissioners on Uniform State Laws.
Trust For Care of An Animal:
Unif. Trust Code § 408 (amended 2003).
(a) A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, upon the death of the last surviving animal.
(b) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court. A person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed.
(c) Property of a trust authorized by this section 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. Except as otherwise provided in the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor's successors in interest.
In recent years research indicates that about half of Americans who drafted wills included a provision for their pets. However, pet owners have encountered obstacles to planning for the care of their pet after death. This model law, based on Section 408 of the Uniform Trust Code (UTC), validates a trust for the care of a designated domestic or pet animal and the animal's offspring. Many states have already adopted this section or other similar measures (Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Michigan, Missouri, Montana, North Carolina, North Dakota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming). To see the law for an individual state, go to the Search Law & Legislations page, select your state, and use the key words: pet trust. A policy consideration motivating courts and legislatures to permit the creation of pet trusts is certainty in the disposition of estate property. This pet trust statute provides for valid and enforceable trusts, giving pet owners security that their wishes will be carried out.
Historically, there was no legal basis for the bequest to animals, which are considered property under law. Attempted gifts in favor of specific animals usually failed for a variety of reasons. One reason was violation of the Rule Against Perpetuities (RAP). The RAP prohibits granting an estate, "unless the interest vests, if at all, no later than 21 years after the death of some person alive when the interest was created." Essentially, the RAP means that for a pet trust to be valid, the trust must completely dispose of the property within twenty-one years of the measuring life. However, an animal's life is not an acceptable measuring life â€“ the measuring life has to be that of a human being. Section 408 of the UTC has made pet trusts a statutory exception to the Rule Against Perpetuities, so that no measuring life is needed.
Although a pet trust is considered an exception to the rule against perpetuities, it is against public policy to allow a trust to go on indefinitely. Under the UTC provision, a trust for the care of an animal may last for the life of the animal. While the animal will ordinarily be alive on the date the trust is created, an animal may be added as a beneficiary after that date as long as the addition is made prior to the settlor's death. Animals in gestation but not yet born at the time of the trust's creation may also be covered by its terms. A trust authorized by this section may be created to benefit one designated animal or several designated animals.
In the past, courts also found pet trusts to be unenforceable honorary trusts because they may have lacked a human or legal entity as a beneficiary. A direct bequest to a pet automatically led a court to invalidate the bequest, because an animal could not be a beneficiary under a will as the law considers animals to be property, thereby incapable of holding title to other property. Moreover, courts do not recognize animal beneficiaries as having standing. As a result, an animal beneficiary could not petition a court to enforce the terms of a trust. Under the UTC, honorary or purpose trusts for the care of an animal are recognized as valid and enforceable despite the fact there is no ascertainable human beneficiary.
The language of this model law specifies the requirements for trusts without ascertainable beneficiaries. Section 408 basically creates the office of "enforcer," by providing that the intended use of a pet trust may be enforced by a person designated in the terms of that trust. This provision allows the designated person to oversee the trustee and make sure the trustee uses the principal and income for the intended purposes. To ensure that a pet-beneficiary is properly cared for, a pet owner should thoughtfully select a person to enforce the trust for the animal. It is suggested that a pet owner should name several alternative "enforcers" if the owner's first choice is unable to serve for the duration of the pet's life. Section 408 provides that if no person is designated by the terms of the trust, an enforcer will be appointed by the court. A person with an interest in the welfare of the animal has standing to petition for an appointment. Generally, the person appointed by the court to enforce the trust should also be a person who has exhibited an interest in the animal's welfare. The concept of granting standing to a person with a demonstrated interest in the animal's welfare is derived from the Uniform Guardianship and Protective Proceedings Act, which allows a person interested in the welfare of a ward or protected person to file petitions on behalf of the ward or protected person. Overall, pet trusts are subject to the same administrative requirements as private or charitable trusts.
The model law also mandates that trust property be used only for its intended use, with the exception that a court may reduce the trust property if it determines that it exceeds the amount required for the use. If the court makes this determination, excess property is distributed in the settlor or settlor's successors in interest.