Providing for Your Pet Family

After Diane Keaton’s death, there were reports that she left $5M to her golden retriever, Reggie, in a pet trust, and the bulk of her estimated $100M estate to her two children. I am not aware of any public confirmation of Ms. Keaton’s estate plan. Likely that is because her estate plan involved one or more trusts to avoid the public nature of a Probate.

Diane Keaton’s provisions for Reggie recalled the famous case of the much-disliked New York entrepreneur and businesswoman, Leona Helmsley who died in 2007 leaving a $12M pet trust for her Maltese dog named Trouble. After a court challenge, this amount was reduced to $2M, which was still sufficient to keep Trouble well cared for until he died four years later in 2011.

California recognizes “pet trusts.” The pet trust must have a Trustee to manage and invest the trust money and to pay the expenses of the pet as directed in the trust. The pet trust can also name a specific person to enforce the trust on behalf of the pet, including the right to visit the pet to make sure the pet is well cared for and appropriately homed, and the right to review the financial records of the trust. The pet trust must also name the beneficiary(ies) to receive what is left of the trust when the pet dies. Pet trusts are subject to legal requirements that ensure accountability on behalf of the pet, and the beneficiaries designated, to receive the trust assets when the pet has died.

Of course, a pet trust that will last for several years has its own expenses in the form of taxes, accounting, and legal fees. Unless you are leaving tens of thousands or even millions of dollars for your pet’s care, it is more common for people to forgo the complexity of a pet trust and opt instead to pre-arrange rehoming of their pet with the gift of a generous amount to cover the anticipated future costs of their pet’s care.

You could name a relative or friend who you know would take your pet into their home if needed. Or, you could name a trusted rescue organization that you are confident will find a new home for your pet. If you will name a rescue organization, you should ask about the dollar amount of the donation the organization would expect to receive in exchange for taking your pet. If you will name a relative or friend, plan to be generous, recognizing how much of your own budget goes to the care and feeding of your pet.

Planning Ahead Column

By Lisa Alexander, Esq.

JAKLE, ALEXANDER & PATTON, LLP

Main Line: 310-395-6555