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June 01, 2008 at 04:00 PM
Estate planning is for anything but the dogs. Or so it would seem to animal owners who find the profession bereft of advisors who know enough to include provisions for beloved pets into their clients’ all-important trust documents.
The techniques and best practices needed to address this much overlooked area was the focus of a one-hour presentation held on April 24 at ‘s Metropolitan Dog Club. Titled “Estate Planning with your Pet in Mind,” the talk was given by Frances Carlisle, a New York-based attorney who specializes in such planning.
“Estate planning for the care of animals is largely ignored by most estate planners,” said Carlisle. “Many of my clients come to me saying they were dissatisfied with a former advisor who did not take planning for their pet seriously. This needs to change.”
The problems that can arise from inadequate planning, said Carlisle, was widely publicized following the death of billionaire Leona Helmsley. The operator and investor bequeathed $12 million for the care of her dog, Trouble, in an inter vivos trust. Carlisle noted that, even allowing for the most lavish and excellent care, the amount was excessive. The huge bequest resulted in numerous “death and kidnapping threats” made against the dog.
“Any plan that puts an animal in that kind of jeopardy is not good,” said Carlisle. “It’s reported that more than $200,000 per year had to be paid for the dog’s round-the-clock security. And that amount was much more than any other expense devoted to the animal.”
Putting too much money into the trust also raises a legal issue in that it may run afoul of a state’s pet trust statutes. Carlisle, who focused at length on New York’s law (N.Y. Estate Powers and Trust Laws Law, Section 7-8.1), pointed to Paragraph (d) of the statute, which stipulates that ” a court may reduce the amount of property transferred if it determines that amount substantially exceeds the amount required for the intended use.”
A second problem with Helmsley’s will is that it bequeathed Trouble to the billionaire’s brother, who did not want the dog. Carlisle said that she always recommends placing a pet into the trust (in addition to assets necessary for the animal’s upkeep). The trustee thus has a fiduciary duty to safeguard the pet’s well-being, which may entail placing the animal in the care of an animal rescue or charitable organization if family members or friends cannot be found who are up to the task.
Yet a third flaw in Helmsley’s will: The document stipulated that Trouble’s ashes upon the dog’s death be placed next to Helmsley herself at Woodlawn Cemetery in New York City. That was a problem because the cemetery’s laws do not permit animal remains to be buried with those of humans. One solution for pet owners faced with this predicament, said Carlisle, is to purchase a plot in a pet cemetery where both master and dog can be laid to rest.
