Statutory Trust Options in Pennsylvania and New Jersey
Both Pennsylvania and New Jersey provide for “statutory” pet trusts, which are a simple way of creating a pet trust. For instance, you could write in your will, “I leave my dog, Fluffy, to my friend Jane Smith along with the sum of $5,000 to be used for the care of Fluffy.”
In Pennsylvania, the terms and administration of a statutory pet trust are governed by 20 Pa.C.S. § 7738. The Pennsylvania statute follows the Uniform Trust Code and provides that the statutory pet trust will terminate upon the death of the last surviving animal provided for by the trust. To ensure that the trust funds are used for the benefit of the pet, you can either appoint someone to do so in the trust instrument or the court can appoint someone to enforce the trust. Additionally, a person having an interest in the welfare of the pet has the power and authority to request the court to appoint a person to enforce the terms of the trust or to remove a person appointed. The trust funds should only be used for the benefit of the pet, however, a court has the authority to determine that the funds are excessive for this purpose, in which case the excess funds would become part of your estate, absent any direction from you to the contrary.
In New Jersey, statutory pet trusts are governed by N.J.S.A. 3B:11-38 and differs from the Pennsylvania statute in several key respects. In New Jersey, the pet trust will terminate when there is no longer any living pet covered by the trust or at the end of 21 years, whichever is earlier. This limitation alone could be problematic for several types of pets that have long lifespans. Goldfish, for instance, can live for over 25 years, and many species of birds, such as the Amazon, Cockatoo, Macaw, and African Gray live for 30 years or more. Turtles may live for up to 30 years and pet tortoises commonly live to 70 years of age. In such instances, if you have a pet with a long life span in the state of New Jersey, pet trusts, as explained below, are recommended. New Jersey courts also have the discretion to reduce the amount of trust funds if they are deemed excessive for the needs of the pet and have the discretion to appoint a trustee if one is not nominated in the trust instrument. However, the New Jersey’s statute does not provide any options for a person interested in the welfare of the animal to petition the court for enforcement of the terms of the trust. Finally, similar to Pennsylvania, the New Jersey statute provides that when the trust terminates, the remaining funds shall be distributed to any named remainder beneficiaries of the decedent , or in default of that, to your estate. The New Jersey statute does not provide for what happens to the pet if the trust terminates while the pet is still living.
Unlike the statutory options available in Pennsylvania and New Jersey, a carefully, drafted pet trust provides numerous advantages and flexibility that are not available with “statutory” pet trust and simple directives especially for pets with a long life span or pets that have been raised together and/or have bonded.. You can appoint both a caretaker for your pet and a Trustee to manage the funds that will be used for your pet’s care; indeed, it is highly recommended that the caretaker and the Trustee not be the same person. Additionally, you can also nominate successor caretakers and successor Trustees, in the event the person or corporate trustee you originally nominated is no longer able to care for the pet or serve as Trustee. Your Trustee can receive a fee each year for successfully managing the funds held in trust and you can also provide that your caretaker receives a fee for the care of the pet so that he/she has the opportunity or incentive to complain about his/her/its services or be motivated to misappropriate funds intended to be used for the care of your pet.
A pet trust also give you the opportunity to provide specific directions on how often you want your pet to be taken to a vet and a system of checks and balances in the event the pet needs to be euthanized. Some individuals have chosen to leave the remainder of the funds in the pet trust to the person taking care of the pet, but this is not recommended in that it is important not to incentivize the caretaker to expedite the demise of the pet in order to receive the remainder. Nonetheless, if it is the client wishes to leave the remaining trust funds to the caretaker, you can place safeguards into the pet trust, such as a requirement that the trustee consents to the euthanization of the pet and/or that a veterinarian recommends in writing the pet be euthanized because of advanced age or illness. If the caretaker euthanizes the pet without first meeting those requirements, the trust can provide that he or she will no longer receive the remainder of the trust funds. Moreover, if the pet should die due to the neglect or carelessness of the caretaker, that can be another reason for forfeiture of his or her remainder monetary interest. Alternatively, you could also leave the remainder interest in the trust funds to a charity, including a pet charity, an animal welfare organization or other friends or family members.
Another advantage of creating a pet trust during your lifetime, rather than in your will, is that you can provide for the care of your pets during any period of time when you are incapacitated. As people are living longer and longer, it becomes more likely that you may need to spend time in a nursing home and it is therefore advisable to consider what will happen to your pet in the event the pet could not join you there. A pet trust can provide for a smooth transition for the care of your pet in the event you can no longer care for them yourself during your lifetime and help secure the pets’ future during the transition period between the pet owner and caretaker.
If you have questions about providing for the care of your pets after your death or incapacity, our experienced Philadelphia estate planning attorneys at Pozzuolo Rodden, P.C. can help you today.