Finally. I am back. AT&T DSL has my entire computer shut down for a few more hours, but at least I can tap out a post and upload it later.
So, we know some stuff about honorary trusts. We know that they can be drawn up to leave money for the care and upkeep of your animals. We know a “trustee” will use that money to pay for your pets care. But most importantly, we know that a trustee has real, articulated legal duties and a court can enforce what you put in your trust. That’s the biggie—a COURT can do something if your wishes are not followed.
So lets talk about some of the details that survey web-sites do not cover. We know you can leave money for the care and upkeep of your animals, but how much money??? That depends on the state in which your trust is administered. Some states have years of experience with honorary trusts and have refined their codes to reflect the problems encountered over the years. Some states have just recently enacted the code and have bare minimum guidelines that will grow and change as the courts are faced with the results of litigation over Poopsie’s bequest.
Lets talk about the 2 extremes. The most extreme law actually outlines what reasonable costs for care should include and may limit those costs to the actual bills for feed, Veterinary care and other essentials. They do not allow the caretaker to be paid for the time and effort of caretaking. This is still an improvement over nothing, but it is more readily applied to small pets then to horses. Finding a home for a Yorkee might be easy, but finding board for a horse that does not include the costs of handling and extras is harder. Horse board includes the labor for caring for the horse. It can be hard to tease out which part of the bill is for the actual hay and feed and which part is for the labor.
In addition, I have never been fond of laws that require you to be loved and popular for them to work. Yes, most of us have family and friends who may take in our pet if something were to happen to us, especially if there are no extra bills to pay. But no, not all of us do. Some people must depend on professionals to care for their animals if something were to happen to them. Some of us will outlive our friends and family. Some of us would prefer to have our horse or dog taken care of by a professional, but professionals rightfully expect to get paid.
Next, what is the reasonable cost of upkeep? In the past few years costs have doubled and tripled. How can we plan for what it will cost to care for a horse a month or for a lifetime on 10 years? 20 years? I cannot even begin to imagine how to predict those costs in such a volatile economic climate. I think the key word is “reasonable” It may be very reasonable to play it safe and leave enough money for 10 times as much as it costs now and for twice as many years and we expect our animal to live. Unreasonable is probably leaving millions or billions of dollars like a recent hotel executive did. Anything over 1 billion is going to be seen as unreasonable.
The other extreme is a state where the code simply states you can use a honorary trust and they shall be enforceable by law. That’s it. No guidelines or case law to limit how you decide to use your money for your pets. A section of the code that states the law in place when the trust was created shall apply to the terms of the trust is great too. You should still limit your funding to a reasonable amount to avoid someone trying to overturn your trust, but no statements about how the money can be used or limiting paying for the care your animal receives is a better choice.
What? Did I say choice? That sounds off, doesn’t it> You can chose your laws? Yes, you can. You can chose your laws because you can chose any state to be the state your trust is administered in. You don’t have to live there, you don’t have to own property there, your animals do not have to be located there. At least one of your trustees must be there and the checks must come out of that state, but you can shop for the best state to have your trust administered in. Just like a corporation can chose a state that lets them pay very little taxes and gives then great protections (Delaware) trusts can be in any state you chose as long s that’s where they are administered. So a large NY bank can be the trustee of a large fortune and a small SC law firm can write your trust and administer it in SC for your pet. Cool, huh?
You, that horse owner in a state that does not have honorary trusts can still have one written and administered in a state that does. Nobody gets left out. You, that dog owner that lives in a state that will not allow your funds to be used for a boarding kennel can have a trust in a state that does. You must have a trustee in that state, but you can have multiple trustees. Your sister in CA can still be the one to decide what food your dog will eat but a trustee in some other state writes her the check to pay for the food. Administered means the under that states laws and somebody is doing the books in that state. It doesn’t mean you have to move there or ship your animals here on your death.
Do I hear a collective sigh from you readers???? Just find the best deal on trusts and then find a good trustee!
Which I will talk more about soon.
I wrote this whole post and did about 100 other tasks all while on the phone on hold with AT&T. I have spent most of the last 2 weeks on the phone on hold with AT&T.