Articles
Bench & Bar of Minnesota is the official publication of the Minnesota State Bar Association.

Pet Heir: Understanding Minnesota’s pet trust statute

I recently took an unscientific poll of a group of lawyers and learned the following:
  • Roughly 50 percent read the labels on their pet’s food (but not necessarily on their own);
  • 45 percent share a bed with their pet;
  • a sheepish 20 percent admitted to identifying as mommy or daddy to their animals;
  • an even more sheepish 10 percent admitted to buying clothing for their pets;
  • and one attorney’s pet was having glaucoma surgery that day.

 

According to the 2012 U.S. Pet Ownership & Demographics Sourcebook,1 dogs are the most popular pet, found in 36.5 percent of households. 

NATIONAL PET OWNERSHIP*  DOGS CATS BIRDS HORSES
Percentage of Households Owning 36.5 30.4 3.1 1.5
Number of Households Owning 43,346,000 36,117,000 3,671,000 4,856,000
Average Number Pets/Household 1.6 2.1 2.3 2.7
Total Number in US 69,926,000 74,059,000 8,300,000 4,856,000

* Omits “specialty and exotic animals,” which include rabbits, rodents, reptiles, poultry, and livestock.

 

Based the Sourcebook’s most recent survey, it appears that more than 1.48 million households in Minnesota own pets. The American Veterinary Medical Association, publisher of the Sourcebook, ranked Minnesota 42nd in pet ownership with 53 percent of households owning
a pet.2

A comparative psychologist focusing on the relationship between humans and animals, Dr. Bradley Smith, believes that pets improve not only the physical health of their owners, but they also impact the psychological health of their human companions.3 Pet companionship can help alleviate loneliness, depression, and stress, and provide a sense of purpose for children and adults of all ages.4

We love our pets. We care for them. We may be the dominant species but these living creatures hold a dominant place in our hearts. So it’s hardly surprising that many people wish to include trusts in their estate plans to provide for the pets they may leave behind. In 2016 Minnesota became the last state in the country to enact pet trust legislation. This article discusses the concept’s legal background as well as the legal and practical considerations involved in creating such a trust.

Legal background

Common law courts have long recognized testamentary provisions regarding animal care. In an 1842 case, Pettingall v. Pettingall,5 a horseman left a fixed amount to be used for his horse, “her keep in some park in England or Wales; her shoes to be taken off, and she never to be ridden or put in harness; and that my executor consider himself honour bound to fulfil my wish, and see that she be well provided for…” In 1888, an English court determined that the deceased had created an “honorary trust,” defined as a trust that lacks both human beneficiaries and a charitable purpose, yet directs the trustee to use the money for a specified legal purpose—in this case, the care of his horses and hounds.6

The Uniform Probate Code (UPC) began to recognize “pet trusts” in 1990. In 2000, the Uniform Trust Code (UTC) adopted Section 408 to validate the use of honorary trusts specifically for the care of an animal.7

The 2016 Minnesota statute supports the enforcement of pet care provisions in estate documents.8 Pets are legally considered “personal property,” which has raised challenges in adequately addressing their care for estate planning purposes. Property cannot own property and therefore cannot inherit assets. You could leave money to Rover, which is unenforceable, or leave Rover to your loving sister along with $5,000 for his care. The new statute and careful drafting can prevent Rover’s being surrendered at a shelter as Sis wings her way to Vegas.

Drafting considerations

There are several key people in a pet trust: the grantor, trustee, and trust enforcer. The trust provisions may also designate an animal caretaker, separately or in combination with one of the above roles. The grantor creates and funds the trust. The trustee manages the trust and may also take care of the animal in the role of caretaker. The enforcer9 has the authority to make sure the animal is cared for according to the terms of the trust. If there is no enforcer, the court may, upon request, appoint an interested party to act in this role. The animal may be bequeathed to the trustee or assigned to the trust with other trust property. Specific instructions on care and delivery should be included in documentation. Disability prior to the owner’s death is a likely event. This should be addressed in drafting. A situation involving the owner’s disability or move to a care facility should allow the animal to reside with the caretaker, with funding available, prior to the time the owner passes.

Funding for an animal trust can come from a gift, life insurance, or any standard trust funding option. The amount set aside for the care of the animal should be “reasonable” for their care.10 Things to review in determining reasonableness include the type of animal, its life expectancy (some birds can live 75 years), the size of the entire estate, and any special medical care and housing needs. The trust may continue until the last animal dies or up to 90 years, whichever is shorter.

Animal trusts may be established for the pets that are living at the time of the grantor’s death. Because pet parents often find a new pet when one passes away, the animals the owner had at the time of drafting may be different from the pets owned closer to death. Drafting needs to be general enough to encompass that fact. If drafted properly, all pets living at the time of the owner’s passing will be included in the trust.

In Minnesota, an animal trust can be a stand-alone document or drafted as part of an existing or new trust. The trust itself may be revocable or irrevocable but cannot be used to avoid the responsibility of reimbursement for public assistance. If a pet trust is created through a testamentary trust, provisions should be made for pet care issues that arise between the date of death and the establishment of the testamentary trust.

Ideally, an animal trust should specify the remainderman for ease of distribution of any funds remaining after the pet passes. Grantors may direct the remainder to be distributed to heirs, to an unrelated party, or to a pet-related charity (or other charity). If the trust agreement is silent, the remainder will pass to the heirs-at-law according to Minnesota statutes and not according to a trust residue clause.

Practical considerations

Practical drafting considerations should be specific to the type of pet and the “standard of living” that the pet parent commonly establishes for their pets.11 One way to help standardize the health care costs for the pet could be through health insurance on the animal, thus helping predetermine expenses and co-pays.

Often included are an owner’s specific pet concerns such as care instructions, or lifestyle; these issues are best addressed in an exhibit attached to the trust or a letter to the animal caretaker. These should be as detailed as needed, including instructions for the pet’s end of life and burial or cremation options. Remember that the guidelines, whatever they address, should not be so specific that the caretaker is unable to reasonably comply.

As lawyers we are compelled under Minnesota Rules of Professional Conduct Rule 2.1 to render advice that may include considerations beyond the law that encompass moral, economic, social, and political factors relevant to the client’s situation. If the pet owner is an animal hoarder, for example, the drafter’s role may include broader efforts in working with the client in the role of adviser.

Conclusion

Pets provide unconditional love and loyalty. As attorneys, our responsibility includes caring for our client’s entire family whether they have hair, fur, feathers, skin, or scales. Thanks to the Minnesota Legislature, we can now protect them all.

 

REBECCA BELL, an attorney with over 25 years of experience, founded rb LEGAL, LLC 10 years ago.  Rebecca and her colleagues help clients achieve their goals and objectives in the niche law areas of wills, trusts, probate; pet trusts; equine law; animal-related businesses from farms to retail; and small and family businesses. Rebecca has been voted Best Attorney in Golden Valley by SunPost readers for five consecutive years.

 

Notes

1 American Veterinary Medical Association (2017).

2 Jeff Strickler, “Minnesota ranks near bottom in pet ownership,” StarTribune 2/3/2013, http://www.startribune.com/minnesota-ranks-near-bottom-in-pet-ownership/190392781/

3 Smith, B. (2012). “The ‘pet effect’: health related aspects of companion animal ownership.” Australian Family Physician, 41, 439-442.

4 Id.

5 Pettingall v. Pettingall, 11 L.J.-Ch. 176 (1842).

6 In re Dean, 41 Ch.D. at 552. See also Gerry W. Beyer, “Pet Animals: What Happens When Their Humans Die?” 40 SANCLR 617 (2000).

7 National Association of Biomedical Research. http://www.nabranimallaw.org/state/pet-trusts/

8 Minnesota Statutes Section 501C.0408 TRUST FOR CARE OF ANIMAL., 2016.

9 Minnesota Statutes Section 501C.0408, subd.2, 2016.

10 Unif. Probate Code §2-907(c)(6) (1993) (authorizing the court to reduce amount if it “substantially exceeds the amount required” to care for the animal).

11 In re Templeton Estate, 4 Pa.Fiduc.Rep.2d 172, 175 (Orphans’ Ct. 1974).

Leave a Reply

Articles by Issue

Articles by Subject