In the past few years, more clients are asking the Firm to draft pet trusts in their wills to ensure that their beloved pets are cared for when their owner passes away.
Pet trusts are valid under New Jersey probate laws, which provide that the care for a domesticated animal can be set forth in a trust, either as part of a will or an a separate trust document, as long as the trust terminates no more than 21 years after its creation or upon the death of the pet or pets, whichever comes first.
The New Jersey pet trust law also states that the trustee of the pet trust must not use any portion of the trust funds for a purpose other than the care of the pet named in the trust. In other words, the pet trust funds must only be used for the pet’s benefit.
When TREEL drafts pet trusts, we ask the client to name at least one trustee to manage the pet trust funds. Ideally, the client will name an alternate trustee to assume the duties should the first-named trustee passes away or decides not to serve as trustee. The client also must decide who will have “custody” of the pet and provide the care. The trustee and the pet caregiver are usually the same person, but there is no requirement that they must be.
The client must also fund the pet trust with an appropriate amount of funds to care for the pet or pets. The largest pet trust that we have created was for a client who placed $60,000 in trust for her dog. Most likely, this pooch will enjoy a high standard of living with the $60,000, but this figure is far short of the pet trust that hotel owner Leona Helmsley funded for her dog “Trouble”. Ms. Helmsley’s Will left $12 million to the pet trust that she created for Trouble, while Ms. Helmsley, who was known as “the queen of mean”, mostly excluded her relatives from her estate.
Not surprisingly, Leona Helmsley’s relatives challenged the pet trust in New York probate court and the court reduced the amount of Trouble’s trust from $12 million to $2 million. Trouble died a few years later, perhaps of a broken heart from her master’s demise or the reduction of her trust fund.
Either way, the New York court’s ruling to reduce the size of the pet trust for Trouble can also occur in New Jersey pet trusts, since the NJ pet trust law states that “the court may reduce the amount of the property transferred if it determines that the amount substantially exceeds the amount required for the intended use.”
While the Helmsley pet trust is an extreme example, most folks who create pet trusts don’t have millions of dollars and wouldn’t provide so extravagantly for their pets at the expense of their relatives.
Pet trusts serve an important role in the estate planning process for those who wish to ensure that their pets are properly cared for once their owners pass away.
For more information and/or to discuss your pet’s future, contact one of our skillful attorneys today to set up a consultation.