Americans love their pets, spending billions on pet care each year. Yet, few pet owners (parents?) consider how to take care of their furry friends after death. This is somewhat curious. After all, many people love their pets more than family members or friends, and of course it is possible for those pets to outlive their owners. If no arrangements are made, the pets become distributable personal property as with furniture or jewelry, to be kept or disposed of by the heirs or legatees as they wish, or perhaps as financial circumstances warrant.
Perhaps few owners know there is more they can do. Fortunately, Missouri and other states have enacted specific laws allowing for the establishment of so-called “pet trusts” to care for pets after the owners have passed. A pet trust can be created in a will or a trust, and may be enforced by a named individual or a person appointed by the court, most likely the person designated by the owner as the pet caretaker. Although no court in Missouri has ruled on the matter in a published case, presumably one can specify the use of trust funds not only for essentials (e.g., food and veterinary care), but for pet toys, grooming and boarding.
A couple of side notes on these trusts: First, if the value of a given pet trust exceeds the amount necessary for the care of the benefited animals as determined by a court, the excess proceeds will be distributed as specified in the trust to given persons, charities or other entities, or otherwise to the owner’s successors in interest, e.g., heirs. Second, the IRS has ruled that income from such trusts is not taxable upon distribution to the caretaker or other human, but taxes must be paid out of the trust, though this ruling has not been amended or tested.
If you want to establish a pet trust for your furry loved ones, or if you have questions, be certain to contact your AEGIS Professional Services attorney, or the author of this note.