Pet trusts aren’t just for quirky millionaires anymore
Valerie Howell volunteers at the Miami-Dade County animal shelter, so she knows exactly what “Maybe a relative doesn’t know what to do with them, so they end up there and may be euthanized,” said Howell, a Coral Gables physical therapist. “Or, they end up at a no-kill shelter and spend years living in a cage.”To guarantee that no such fate befalls the felines in her life when the end comes, Howell, 56, is including a pet trust in her estate plan.
“Almost everybody I know knows I love animals, and are not surprised,” she said.Pet trusts aren’t just for quirky millionaires anymore, like real-estate mogul Leona Helmsley, who left $12 million to her Malti-poo in 2007 — which a judge later reduced to $2 million — or Miami Beach heiress Gail Posner, who bequeathed her $8.3 million mansion and $3 million to her Chihuahua and two other dogs last summer.
Working with attorney Darin I. Zenov, Howell is determining how much money to set aside for the care of rescue cats Snuggles, Scruffy, Luvvie and Precious — or their successors.
Because she is divorced and doesn’t have children, Howell’s plan includes a cat caretaker — a friend — who’ll get a stipend, as well as a “protector/enforcer” to advocate for the cats in the event of an estate dispute.
In a typical pet trust, that person would also get a small fee, according to Zenov, a partner at Foley & Lardner in Miami who has given pet-trust seminars and drawn up about 20 such plans.
He believes animals should be included in an overall estate plan because “these are your best friends, who have brought you so much joy. When you’ve had the worst day of our life, they’re happy to see you. They’re there for you.”
Yet, despite the $48 billion that Americans spend on their pets annually, “the process is relatively new,” he said. “Eighty percent of Americans don’t have estate planning documents. They’re not taking care of themselves, let alone pets.”
He said that the average trust is about $50,000, “though I’ve done two in excess of $10 million, including the house: super pet trusts.”
He charges up to $4,000 for a normal plan; “super pet trust” fees are higher. Florida is among 43 states with court-enforceable pet-trust laws, enacted in 2002 and strengthened in 2007.
Before 2007, “there was no real protection for animals,” Zenov said. “The law permitted creation of [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][a trust] but there was no enforcement.” Trustees “were on the honor system,” but often acted less than honorably.
“The trustees would take advantage of that and not disburse money for the benefit of’ the pets, Zenov said.
The key provisions of Florida Statute 736.0408 are:
(1) A trust may be created to provide for the care of an animal alive during the settlor’s lifetime. The trust terminates on 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, on the death of the last surviving animal.
(2) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is 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.”
Zenov said a typical trust specifies that any money remaining after the pet dies should go to a nonprofit institution that cares for animals, such as the Humane Society of Greater Miami-Dade County/Adopt-A-Pet, where he sits on the board of directors.
He cautions that such donations don’t qualify for charitable deductions, but “in my experience, about 97 percent of my clients still name a charitable beneficiary as the remainder beneficiary.”
In over-the-top cases such as Posner’s and Helmsley’s, Zenov said “the reality is that the amount that will be used on the owner’s pet … will likely be de minimis [versus the value of the trust] and the charity will be the beneficiary.”