Estate Planning…For Your Pet!
Many of us are familiar with the New York case where Leona Helmsley left a $12 million trust for her pet Maltese dog, named Trouble. The trust was later reduced to $2 million, by the Court, which ruled that the trust was excessive. Trouble went on to live for another four years following Mrs. Helmsley’s death.
Such cases seem outrageous to some, but make others wonder, what will happen to my fur baby in the event of my passing? That is especially a topic for one’s consideration, if you don’t have children or other family members who are willing and able to take care of your pet, in the event of your passing.
This topic was discussed in a paper by Jenny Pho of Dale & Lessmann LLP for the Law Society of Upper Canada’s Practice Gems: Probate Essentials program on September 29, 2017. Ms. Pho considered the topic of estate planning for pets, in Ontario.
In Ontario, pets are considered property, even though to many of us, they are anything but. Since pets are considered property, they cannot hold other property in their names alone. That means, that you cannot leave a simple cash legacy to your pet. Similarly, in Ontario, you cannot set up a trust where the beneficiary is a pet rather than a person, because there is no certainty of objects, meaning that such a trust is invalid. No certainty of objects means that there is no ascertainable person who benefits from the trust and one who can enforce it. Interestingly enough, a Saskatchewan Court recently found that a $10,000.00 trust for the testator’s four cats was valid. Such trusts are also valid in certain states of the United States of America.
There are some options for people residing in Ontario, who would like to include their pets in their estate planning, including leaving a cash legacy to a pet guardian, setting up a trust for a pet guardian and participating in a pet stewardship program.
Cash Legacy to a Pet Guardian
You can leave a cash legacy to a pet guardian and bequeath the pet to him or her. You can include a condition precedent whereby the pet guardian cannot accept the cash legacy, without accepting the pet as well.
One disadvantage of this option is that you cannot enforce any instructions for the care of your pet along with the cash legacy. In addition to that, you cannot provide for a pet in the event that it outlives the pet guardian.
This option is recommended for those who trust the person that they are appointing as the pet guardian.
Trust for Pet Guardian
With this option, you can include instructions for the care of the pet and the ongoing use of funds. Notably, the trustee and guardian should be different people in order to ensure that a separate party enforces the terms of the trust (i.e. the trustee).
With this option you can also plan for an alternative beneficiary as the guardian as well as alternate trustees. On that end, it is important to keep in mind the “rule against perpetuities” and that the ownership of the pet will have to vest in a pet guardian.
You can also determine the residuary beneficiary when the pet dies. It is not typically good planning to include the pet guardian as the residuary beneficiary because it may perpetuate the type of behaviour where the pet guardian spends less money on the pet in order to receive a larger trust when the pet dies.
Finally, you will also want to consider what is reasonable so that the trust is not ultimately challenged in Court as being excessive, such as what happened with Mrs. Helmsley’s trust for Trouble.
Pet Stewardship Program
You can also make an agreement with an organization to bequeath your pet to them along with an enrollment fee and any other amounts in addition to that. Their objectives under such a program will typically include things like finding a permanent home for your pet as well as providing ongoing medical care throughout your pet’s lifetime.
On that end, it is important to keep in mind that there is typically a minimum enrollment fee with such programs. Some organizations that offer programs like that are the Ottawa Humane Society and the Windsor/Essex Humane Society.
Thanks for reading.
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