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Trusts for Pets
21 Aug 2024
Love for our four-legged friends
Our most precious family and friends in later years may be of the four-legged variety and we may worry about how to provide for them after we have departed.
It was reported by the South China Morning Post in January 2024 that a woman in China left her US$ 2.8 million estate to her beloved cats and dogs. She did have children but they never visited her and her pets were her only comfort when she was aged and ill. Her will stipulated that her entire estate was to be used to care for her pets and their offspring. The local vet clinic was apparently appointed to administrate her estate.
How does one provide for one’s pets in the event of one’s inevitable passing? The simplest way is to discuss the issue with trusted family members or friends and agree verbally that the pets will one day be adopted by a trusted family member or friend. A more formal appointment can be drafted in a will and even include a fixed amount or a regular stipend, to be distributed by the executor of the will to the pet guardian. A lump sum bequest would suffice for a trustworthy pet guardian. On the other hand, a regular stipend, coupled with specific conditions, can incentivise pet guardians to diligently fulfil their responsibilities and ensure that essential health checks are conducted on the pets in their care.
The widow of Gene Roddenberry (creator of Star Trek) passed in 2009 at the age of 76 and purportedly left a US$ 4 million trust to benefit her faithful dogs plus US$ 1 million for a helper to care for them on her estate, for as long as the four-legged beneficiaries lived. In more complex cases, it may be prudent to set up a trust if an estate is particularly large or if the testator wishes to provide for their pets’ offspring i.e., a multigenerational legacy. Depending upon the jurisdiction, there may be tax benefits associated with a trust. A further advantage of setting up a trust is that one can specify how the trust funds are to be used and managed and include provisions for checks and balances. For example, there could be three separate parties in care arrangements – the actual caregiver(s), the entity/person disbursing funds and the entity/person overseeing the arrangements. If a certain property is designated for the exclusive use of said beneficiaries during their lifetime, provisions should be made regarding its eventual sale, including when the property should be sold and how the proceeds should be distributed.
Conclusion
Providing for our precious pets in the event of our passing requires some planning and careful consideration. While a simple verbal agreement or a simple will may be sufficient for some testators, a trust can offer a more comprehensive solution for larger estates or those who wish to provide for their pets’ descendants. By taking the time to plan for our pets’ futures, we can ensure that they receive the care and comfort they deserve in their older years.
Disclaimer: This article is for reference only. Nothing herein shall be construed as Hong Kong legal advice or any legal advice for that matter to any person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.
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