Pet Trusts Revealed

So it’s not surprising that in April of 2000, Michigan enacted a new probate code, the Estates and Protected Individuals Code (EPIC), which makes Michigan one of 40 states that has some sort of statutory provisions for “pet trusts” for domestic or pet animals.

Nancy Little, an attorney with Foster Zack Little Pasteur & Manning, PC, says, “My area of practice focuses on trusts and estates which would include estate planning and administering trusts and probate estates after a person has died.

“The EPIC legislation permits an individual to leave a trust for a domestic animal. Prior to that, pet animals were considered property, and an individual couldn’t leave a gift to property. But since this legislation, a person can establish a trust to provide for the care of an animal.”

According to Little, “There has been a general trend around the country of moving away from the idea of seeing animals only as property and recognizing that many people consider their animal or animals to be an important part of their lives. In 2001, the American Veterinary Association reported that Americans spent over $19 billion on pet care and another $31 billion on products for their companion animals. The American Animal Hospital Association says that, according to their polls, 47 percent of pet owners would spend ‘any amount necessary’ on veterinary care to save the life of an animal, and 73 percent say that they would spend ‘at least $1,000.’”

She says, “I have very few people who will come in right off the bat and say, ‘I want to leave money to my pet.’ It seems that people are a little embarrassed to say that. But how it will come up is that they will jokingly say, ‘I should probably leave something for the dog.’ So then I’ll ask them to tell me about their dog, and they’ll start talking, and it becomes apparent that they have a really close bond with this animal, and they are concerned about what will happen to the animal after they are gone. Ultimately, they realize that it’s not such an odd thing to do; it’s just part of good planning.”

The usual practice is for an individual to name a guardian or caretaker for the animal as well as a designated trustee who would manage the money. Little encourages those interested in setting up such a trust to consult with an attorney and also to make sure that the animal is micro-chipped and that all relevant information about the animal and its care is in writing.
And, of course, Little has made provisions for her own dog.

The field of animal law is now taught in 112 out of the 180 law schools in the United States, including Michigan State University College of Law. Professor David Favre of MSU says, “This isn’t new. The human desire to do something for your companion animal has existed for many, many years. The legal context, however, was that because pets were considered property, they were not considered to be capable of receiving care from a will or a trust. The only option until very recently was that an individual could give money to somebody with the hope that they would spend it as the pet owner wished. There was nothing under the law that would enforce such an informal arrangement. In the ’90s, the thought that something better than this could be established for clients percolated within the estate and trust area. New provisions were added to existing law that allowed animals to be the beneficiaries of trusts; and within the law is the stipulation that if someone sees that the provisions of the trust are not being followed by either the designated caregiver or the trustee, that person can sue the caregiver or trustee to ensure that the wishes of the animal’s original owner are followed.

“These laws and provisions came about due to the urging of advocacy groups like the Animal Legal Defense Fund and others who work on behalf of animals. Many people are not even aware that such provisions are part of the law. But it comports with common sense. Why shouldn’t you be able to leave money to your companion animal? Of course, then we get the cases like Leona Helmsley who left $12 million to her dog and excluded two grandchildren from the will altogether! In that case, after litigation, the courts actually reduced the amount that ultimately went to her Maltese, but the dog was left well provided for.”

Favre says, “Other than extreme examples like the Helmsley case, there has been almost no litigation in these trusts. The amount of money is not usually that much. While the duty of the caregiver is clear, the trustee also has certain duties. He or she must invest the money well and see that it is properly administered. Of course, the trustee needs to guard against speculative investments, and that person should be a responsible, fiscally astute individual.”

The lawyer who has created this trust for the animal does not continue to monitor the case to make sure that the caretaker and trustee are fulfilling their ongoing responsibilities, but other interested parties can pursue litigation if they feel it is necessary. The caretaker and trustee are responsible to the court to meet their obligations.

Favre says, “Because almost none of these trusts are contested, it’s hard to know just how many there are, but my sense is that lawyers are seeing a growing demand for these kinds of trusts.”
Favre maintains a website (www.animallaw.info) with extensive information in the area of animal law and related subjects.

No less a respected figure than Ghandi said: “The moral progress of a nation can be determined by the way it treats its animals.” We here in Michigan can be justly proud of the efforts we have made toward the goal of treating all animals more humanely.

Author: Jane Whittington
Photography: Terri Shaver

 

Information Box:
Foster Zack Little Pasteur & Manning, PC
Nancy Little, JD, Attorney at Law
2125 University Park Drive, Suite 250
Okemos
517-706-5790
www.fosterzack.com

Michigan State University College of Law
David Favre, JD, Professor of Law
361 Law College Building
East Lansing
517-432-6800
www.law.msu.edu
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