On April 7, 2011 a statute authorizing the use of Pet Trusts (M.G.L. c. 203 §3C) will go into effect, and Massachusetts will join a majority of U.S. states which permit the use of trusts specifically designed for the care of animals during - and after - the owner's life.
Prior to this statute's adoption, Massachusetts probate law did not permit animals to be named as beneficiaries of a will or trust. This meant that there was no binding instrument to ensure that a pet would actually receive any gifts, as intended by its owner. That a will or trust might not be honored in court because it bequeathed property to an animal has been illustrated in other states, especially by several recent and well-publicized celebrity cases (e.g., Leona Helmsley, and more recently, Gail Posner).
Owners intending to provide for their beloved pet would appoint a "guardian" for the pet, usually providing a substantial sum of money for the guardian to care for the pet during its lifetime. While this might seem like a good solution, it does not create an enforceable obligation for the guardian to spend the money actually caring for the pet. Without any enforceable obligation, pet owners could only hope and rely on the guardian’s good faith promise that the money would be used as directed.
With the adoption of a pet trust statute, Massachusetts now gives pet owners more certainty that their pet will be cared for as dictated by the trust. Specifically, the new statute provides that a person making a will (the "settlor") may create a trust designed for the care of one or more animals. A designated trustee would have a legally enforceable obligation to ensure that the dedicated assets are exclusively used for the benefit of the animals named in the trust (the "beneficiaries").
It is important to note that if a court deems an animal's trust fund as excessive or exorbitant, then it could "claw back" some of the assets, reducing and/or reallocating them according to the other provisions in the will and/or estate plan. The only restriction on the court's power in such a case is that any such reduction or reallocation of funds cannot adversely impact the care of the covered animal(s).
Pet owners should be aware that the pet trust will terminate upon the death of the last remaining animal named in the trust, upon which time any remaining assets of the trust would then be distributed according to any successive language of the trust.
We've all heard of "Poor Little Rich Kids." Now in Massachusetts, this statute will ensure legal provisions for the care of "Poor Little Rich Pets."
For more information about wills, trusts and estate planning, please visit our Estate Planning page.
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