I. Introduction
At common law, people were not able to leave money and assets for the care and comfort of their companion animal because people were not allowed to name a pet as a beneficiary of a trust. The rule against perpetuities prevented it. (Jennifer R. Taylor, A "Pet" Project for State Legislatures: The Movement Toward Enforceable Pet Trusts in the Twenty-First Century, 13 Quinnipiac Prob. L.J. 419, 420 (1999)). The rule against perpetuities is the principle that, “no interest in property is good unless it must vest, if at all, not twenty-one years after the death of the measuring life, in the life of the appropriate person who was alive at the time the trust was created.” (Black's Law Dictionary 1331 (6th ed. 1990)). Since a companion animal could not be used as the “measuring life” at common law, a trust for companion animals violated the rule against perpetuities. However, forty-seven states have adopted some version of the 1990 Uniform Probate Code that expressly validates pet trusts and every state has adopted some version of pet trusts. Thus, the landscape of estate planning for pets has forever been changed.
II. Honorary Trusts and Pet Trusts
Historically, estate planners and people who wanted their companion animals to be cared for after their death used “honorary trusts.” (In re Searight's Estate, 87 Ohio App. 417, 421, 95 N.E.2d 779, 781 (1950)). Courts that upheld honorary trusts for pets simply limited the trust life to 21 years to circumvent the measuring life issue caused by the rule against perpetuities. The problem with honorary trusts was that they were unenforceable in the courts, so it was left to the trustee’s discretion to voluntarily honor the settlor’s wishes. In Re Searight’s Estate provides an example of using an honorary trust for the care and maintenance of a companion animal. The testator left his dog, Trixie, to Florence Hand, and created a trust that allocated $1000 to be paid out to Florence for Trixie’s care at seventy-five cents per day. This court held that the honorary trust allocating funds to Florence for the care and maintenance of Trixie was not unlawful. However, since Trixie could not seek judicial enforcement of the provisions of the trust, enforcement of the bequest for Trixie’s care rested on Florence honoring the unenforceable provisions of the will. (In re Searight's Estate, 87 Ohio App. 417, 421, 95 N.E.2d 779, 781 (1950)).
The primary problem for a testator with an honorary trust for a companion animal was that the trustee could simply decide not to follow the testator’s wishes and dispose of the animal. Since the companion animal was not an actual beneficiary that could bring suit against the trustee for enforcement, and the honorary trust was not a charitable trust that allowed an Attorney General to seek enforcement of the trust, the trustee was free to ignore the testator’s instructions. (Pet Trusts: The Uniform Trust Code Gives Enforceability a New Bite, New Hampshire Bar Association, (2006), available at https://www.nhbar.org/publications/display-journal-issue.asp?id=314). So although honorary trusts were legal to create, they were not judicially enforceable.
The issues with honorary trusts were addressed in part when the Uniform Law Commission issued the 1990 version of the Uniform Probate Code that specifically allows for pet trusts. Forty Seven states have adopted some version of some form of the UPC provision. (Pet trusts: Caring for a pet that outlives its owner, American Veterinary Medical Association, (March 2014), available at, https://www.avma.org/Advocacy/StateAndLocal/Pages/sr-pet-trusts.aspx.). The states that have adopted a version of the 1990 UPC provision have effectively eliminated the difficulties a testator had under the common law in providing a trust for the care and maintenance of a companion animal by making trusts for companion animals valid. (§ 2-907. Honorary Trusts; Trusts for Pets, Unif. Probate Code § 2-907). The changes made to the Uniform Probate Code allowing testate dispositions to animals by trust, which further indicates the legislature's and judiciary’s recognition of people’s growing love and affinity for their pets. Congruently, the public response to the updates demonstrates the importance people place on their companion animals. Since the change in 1990, it is currently estimated that one million Americans have named their dogs as the primary beneficiary of their assets held in trust. (Interesting Facts About Dogs, Dogwork.com (August 2017), available at http://dogwork.com/html/dog-trivia.html).
A. Elements of a Pet Trust
A well-drafted pet trust typically includes three key people: the trustee; the companion animal care giver; and a trust protector or enforcer. The trustee is the person who holds legal title of the assets allocated for the care and well-being of the animal. (Margaret R. Hoyt & Sarah S. AuMiller, Can You Trust Your Pet? A Primer on Florida Pet Trusts, Fla. B.J. ( November 2014), at 12, 14). The animal caregiver can be the same person as the trustee, a corporate fiduciary, or a person or organization willing to provide the day-to-day care of the pet after the death of the owner. The trust protector is a concept borrowed from irrevocable trust planning, and delegates power to the selected individual to ensure that the intent of the testator is carried out with regard to the care of the pet. (Id.).
The Uniform Trust Code made similar revisions in 2000. (§ 408. Trust for Care of Animal., Unif. Trust Code § 408). The comments to section 408 of the Uniform trust code harken back to the language of honorary trusts. The comment discusses that horary trusts, or common law trusts, are not enforceable and are really nothing more than the power of appointment. However, the language is still used because of the remaining issue of having a non-charitable trust without an ascertainable beneficiary still exists in modern day pet trust. A modern day pet trust is a trust without an ascertainable beneficiary. This leaves modern day pet trusts with a similar issue to issues with common law honorary trusts. The lack of an ascertainable beneficiary leaves a gap in enforcement because there is no one to sue the trustee to enforce the provisions issued by the settlor if the trustee fails to follow the provisions set out in the trust. Basically, a pet (as personal property) cannot enforce the provisions of the trust on the trustee by suing him or her.
The comment to Section 408 of the Uniform Trust code specifically states that “Sections 408 and 409 close this gap.” (§ 408. Trust for Care of Animal, Unif. Trust Code § 408). The UTC ‘s solution was to create the position of an “enforcer” to enforce the provisions of the trust against the trustee. The settlor is able to appoint an enforcer, and is able to appoint several alternative enforcers in the event the first one dies. If the settlor fails to appoint a person to the position, then the court may appoint an enforcer to the trust. This solution is nearly the same as the one provided in section 2-907 of the Uniform Probate code. “The intended use of the principal or income can be enforced by an individual designated for that purpose in the trust instrument or, if none, by an individual appointed by a court upon application to it by an individual.” (§ 2-907. Honorary Trusts; Trusts for Pets, Unif. Probate Code § 2-907).
Some testators may even decide to include an "animal care panel" to ensure compliance with the testator’s wishes by the trustee and caregiver. These estate planning tools have created a new way for people to love and care for their companion animals even after their own mortal demise. The changes by the Uniform Probate Code and the adoption by states of a version of the updated code by most states reflects a consciousness on the part of the legislature for the increasingly important role that companion animals play in the lives and families of people in America. (§ 408. Trust for Care of Animal, Unif. Trust Code § 408).
B. Excessiveness and Limitations Placed on Pet Trusts
The 1990 revision of the UPC does not necessarily create an unfettered right for dispositions to companion animals by trust. The issue of how much a person can bequeath by trust to a companion animal still seems to be unsettled in case law. However, the UTC does make specific mention of it: “Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use." (§ 408. Trust for Care of Animal, Unif. Trust Code § 408).
This provision of the Uniform Trust Code nicely highlights the issues that currently remain unresolved in the courts. What is amount is necessary, and what amount is excessive in that it exceeds the amount required for the intended use?
In the well-publicized case of Matter of Helmsley, Leona Helmsley died with an estate reportedly worth between five and eight billion dollars. (Going to the Dogs? Leona Helmsley’s Dog, Trouble, Has Her Trust Slashed, but the Rest of the Nation’s Dogs May be sitting Pretty, Findlaw.com, available at http://writ.news.findlaw.com/grossman/20080715.html (April 2015)). Helmsley left twelve million dollars in an intervivos trust to her “beloved Maltese, Trouble.” The will and trust directed to provide care for Trouble “at the highest standard.” (Barbara Graham, Diana Gary, Attention Lawyers: Sit, Stay, Plan, Md. B.J., (March 2010) at 12, 16). The Helmsley court held that twelve million dollars was more than was necessary to satisfy the trusts directive, and reduced the amount held in trust from twelve million to two million dollars. It is interesting to note that, of the estimated five to eight billion dollar estate, only forty million dollars was left to relatives and two grandchildren were entirely disinherited. There are very few cases where a court has reduced a validly formed trust for a companion animal, but this case currently stands for the principle that there are limits on the amount a person can leave in trust for a companion animal. (Barbara Graham, Diana Gary, Attention Lawyers: Sit, Stay, Plan, Md. B.J., (March 2010)). A legal commentator in one CNN article seems to indicate that a more strongly-drafted will could have prevented Trouble’s trust fund from being reduced. (Trouble’s 12M trust fund part of a new legal trend, pettrustlawyer.com, available at, http://www.pettrustlawyer.com/files/cnn.pdf (April 2015)). However, the will was comprehensive enough to include a provision providing for $100,000 annually for security in response to pet-napping threats (Barbara Graham, Diana Gary, Attention Lawyers: Sit, Stay, Plan, Md. B.J., (March 2010) at 12, 16). This case more strongly stands for the proposition that some courts may be willing to reduce a competently drafted, valid trust for companion animals it deems excessive.
In re Copland provides a different outcome from Helmsley. In Copland, Lenore Abels' will created a testamentary trust for her two cats, Polka-a-dot and Ginny. (In re Copland, 44 Misc. 3d 485, 486, 988 N.Y.S.2d 458, 459 (Sur. 2014)). The co-executor of the decedent’s estate petitioned the court to reduce the amount of money to be transferred from the decedent’s estate to the companion animals' testamentary trust.
The will provided that $115,000 in cash was to be distributed to various charities, and the rest of the estate was to be held in trust for Joel, Abel’s relative. In the event that Joel predeceased Abel, then the will provided a salary to Eugenia, a caretaker for her animals, and that the rest of the estate was to be liquidated and held in trust for the care and maintenance of Polk-a-dot and Ginny. Abels’s will provided detailed instructions for the continued care of Polka-a-dot and Ginny. Joel predeceased Lenore by sixteen days. Therefore, according to the terms of the Abels' will her two cats stood to inherit $4,761,346 held in trust. (In re Copland, 44 Misc. 3d 485, 486, 988 N.Y.S.2d 458 (Sur. 2014)).
The executor of the will argued that based on the life expectancy of the cats and a proposed budget to care for the cats for that period of time, the amount of the trust should be reduced to $440,000. Additionally, the executor of the will argued that by liquidating the mansion and relocating the cat’s caretaker Eugenia and the cats to a smaller residence, the tax liability could be reduced and further dispositions could be made to the thirty-three charitable organizations also named in the will. The Copland court held that the trust should not be reduced because the testator’s intent was clear and should be followed. This court reasoned that the Abels wanted the cats to live in the house they were comfortable in and made detailed and specific arrangements in the will to see that effect carried out. The court added that the Abels specifically chose to allocate more money to her own pets than the other charities she had listed, and it was not the court’s place to “rewrite the decedent’s will” to give more to the charities instead of her animals. In Copland, the court specifically distinguished the facts from Matter of Helmsley where the court reduced a pet trust from twelve million dollars to two million dollars. The Copland court reasoned that, in Helmsley, the trust was overfunded to carry out the testator’s wishes; here, the executor wanted to reallocate the funds in the pet trust in different ways than the expressed intent of the will the testator “painstakingly” prepared. (In re Copland, 44 Misc. 3d 485, 486, 988 N.Y.S.2d 458, 459 (Sur. 2014)).
The juxtaposition of the trust reduction in Hemsely and the court refusing to reduce the trust in Copland demonstrates that courts have not yet drawn a definite line on the upper limit of how much property and cash may be held in trust for the care of companion animals. However, both cases demonstrate courts are carefully considering the health, welfare, and wellness of companion animals and showing substantial consideration for the high regard owners hold their companion animals.
III. Conclusion
Since the historic adoption of the 1990 UPC that allows for pet trusts and the subsequent UTC provisions in 2000, all fifty states have some version of pet trusts, and the landscape of estate planning for beloved dogs and cats has been forever changed. Although state courts have left an unsettled question of what would be an excessive amount of pet fees between Matter of Helmsley and In re Copland, it is currently fair to say that $4,761,346 left in trust for two cats may be acceptable, while $12,000,000 left for a single dog may be considered excessive.