Ohio Animal Trusts
by Marc L. Stolarsky, M.A., J.D.
1. The Role of Animals Have Evolved
Americans keep a huge number of pets; more than 68 million dogs and 73 million cats, plus horses, birds and a variety of reptiles, rodents, fish and other mammals. With the increase in numbers, the traditional uses of animals as only a source of food and mere tools to use to increase productivity have evolved over time. The increase of animals as companions has been significant.
Not only are pets friends, they may also help in so many other ways, as well as having tremendous therapeutic effects when they bond emotionally. Pet owners' satisfaction with their pets derives from a human-animal bond, beneficial to both owner and pet in many ways. It extends beyond just companionship, and becomes a symbiotic relationship that enhances quality of life. These benefits can be emotional, psychological, physical, and spiritual.
2. Animals As Property and Not Beneficiaries
Unfortunately in the past, the intent of well meaning animal owners, who in post-mortem gifted some or all of their assets to their pets, have been foiled by the courts that determined no enforceable Trust could be created for the benefit of a specific animal.
People who left money to their pets were considered to be of unsound mind for just that reason and their testamentary document voided. News stories of some famous personality leaving large sums of money to their pets have been reported as oddities and something people chuckle over as being ridiculous. Such stories like that of Leona Helmsley leaving twelve million dollars to her Maltese Trouble is considered to be a per se' sign of a mental disorder.
At common law in the United States, a person could not create an effective trust for an animal because it required a clearly identifiable beneficiary. An identifiable beneficiary was necessary because there had to be someone who would enforce the trust, i.e. someone to bring a suit in court if the trustee was using assets for a purpose outside those outlined in the trust. Animals were and largely are still considered to be property in this country, with few legal rights to assert.
3. Honorary Trusts
Before animal trusts could be created, many states permitted what were called "honorary trusts". In establishing an honorary trust a testator could leave assets to a person or institution for the benefit of an animal. It was termed honorary because the trustee did not have any legal obligation to use the assets for the animal and could use the assets for any purpose they chose, even their own selfish enjoyment.
Recognition of honorary trusts occurred in Great Britain in the 19th Century when court issued their opinion in In re Dean, 41 Ch. D. 552 (1889). Here the decedent had established a testamentary trust for the care of his horses and dogs, ordering the trustee to pay a fixed amount each year for the animals' lifetimes, but for no longer than fifty years. The court held that since the gift was for the benefit of specific animals rather than for animals in general, it failed to constitute a valid charitable gift. Nonetheless, the court upheld the gift as an honorary trust, rejecting the contention that the trust was invalid because it lacked a human beneficiary who could enforce its provisions, and ultimately determined that the gift was not "obnoxious to the law."
In the United States, the Restatement of the Law of Trusts first mentioned honorary trusts in 1935, when it stated that there could be trusts for a "specific" non-charitable purpose". In Section 124 of the Restatement, it stated that if property is transferred for a specific non-charitable purpose a trust was not created, but it did give the individual it was transferred to the power to apply the assets to the outlying purpose.
In a 1950 Ohio case, George P. Searight passed away, leaving $1,000 for the benefit of his dog Trixie, but stipulated his friend Florance Hand would be paid 75 cents a day for the animal's care until she passed away. The Court held that when a trust is created to benefit an animal, but no human beneficiary is capable of enforcing the trust, an honorary trust is created.
In 1957, in the Second Restatement of Trusts, the new Section 124 was almost identical to the first Restatement Section 124, but added to it by acknowledging that an honorary trust could be created with gifts for the benefit of animals. Included in the comments was a fact pattern dealing specifically with how an animal honorary trust could be created. The Second Restatement Section 124 was the impetus for States to adopt honorary trust legislation.
In 2003, Section 47 of the Third Restatement was very much like the first two versions of Section 124 preceding it. Section 47 contained a similar fact pattern like the Second Restatement describing how an animal honorary trust works.
In another important Ohio case in 2004, in Beverly Walkecker, et al. v. Erie County Humane Society , the decedent Ruth Ann Lovett died on December 24, 1996. She had already signed a Will bequeathing $325,000 in assets to the Erie County Humane Society with the stipulation that they take care of her Siamese cat Sinbad for as long as it lived. Ten weeks after her death the Humane Society euthanized the cat, without even attempting to find it a home. The Ohio Supreme Court determined that an honorary trust was created and that it would terminate when the purpose of the trust ended. Here in Walkecker, the Court was again showing that individuals had the right to create an honorary trust, but not an animal trust.
Honorary trusts have a major flaw: because animals were considered to be property under the law, the assets have to pass to a person for the animal's benefit. The person who then receives the assets are on their honor to use the assets for the intended purpose, but have no legal obligation to do so. If they take the assets for their own use and enjoyment, the courts have no power intervene.
In addition, there may be income tax problems with honorary trusts that could have been avoided using other means.
Whatever the result, drafting an honorary trust that had such a tenuous existence was a bad idea. If a trust failed for any of the above or other reasons, the courts were petitioned to determine if the assets contained within it reverted back to the estate and therefore to the heirs of the deceased. Also, if a trust was poorly written and left some doubt as to what its purpose was, a court could determine that it is not an honorary trust and void the entire document.
4. Uniform Probate Code and Uniform Trust Code
Looking back into the history of animal trust legislation, both the Uniform Probate Code and the Uniform Trust Code dominate the landscape. Drafted by a large pool of trust legal scholars chosen from all over the United States, these are comprehensive updates of state trust codes that attempt to close the gaps in our laws.
The Common Law prior to 1990 took the position that animal trusts were invalid because for one, a beneficiary could not be identified in definite and certain terms. The courts held that a beneficiary must be a human being, an institution, or the like and not an animal. This is because a human beneficiary was necessary to hold the power to enforce the trust. Under the law, an animal was not capable of forcing the trustee to administer the trust and provide distributions in accordance with the settlor's directions.
The issues of creating animal trusts were addressed in 1990, when the National Conference of Commissioners on Uniform State Laws (NCCUSL) revised the UPC and included the proposed animal trust code Section 2-907. This was presented as an "optional" section labeled as such because the idea of recognizing enforceable animal trusts was apparently viewed as too radical for states considering adopting the UPC. This Section allowed the establishment of a valid and enforceable trust for "the care of a designated domestic or pet animal." The provision established a "presumption against a disposition . . . [for a pet's care] being merely precatory or honorary" and instead treated these trusts separately from other trusts established for lawful non-charitable purposes. The grantor's intent could be determined by the use of extrinsic evidence. To encourage individuals to serve as trustees of such trusts, the UPC Section reduced the administrative burdens placed on the management of animal trusts. Under Section 2-907, a court was authorized to appoint a trustee and were given the power to make other determinations necessary to carry out the testator's intent. An individual designated by the trust or appointed by the court could enforce the terms of the trust. The inclusion of language allowing for an "enforcer" of a trust negated the need for a guardian ad litem to protect the interests of the animal beneficiaries of an enforceable animal trust. If no more purpose exists, "the trust terminates when no living animal is covered by the trust." There is specific language authorizing the court to "reduce the amount of property transferred, if it determines that that amount substantially exceeds the amount required for the intended use." If there is a reduction in the property transferred, the property would pass as if it was unexpended trust property as directed in the trust, under a residuary clause in the testator's will, or to the heirs of the transferor.
In 2000, ten years after the first UPC was written, another group of trust scholars drafted the Uniform Trust Code that included an animal trust provision, Sections 408 and 409. The UPC Section 2-907 and UTC Section 408 and 409, have both similarities and differences. Both codes declare that an animal trust is now enforceable by providing that either the trust creator or court may appoint a person to enforce the trust. Both the UPC and UTC also provide that the trust may last for the life of the animal, and that the court may order the diversion of funds if the trust property substantially exceeds the amount needed for the intended use.
However, the UPC and UTC differ in other areas. The UPC applies to "domestic or pet animals," which are subjective terms raising possible questions of interpretation. The UTC allows for the creation of a trust for any animal and the UTC provides that a trust for animals is to be treated like any other trust with respect to such issues as trustee reporting, which in this case would be to the trust enforcer.
Because the UTC dispenses with many of the formalities with respect to all trustees, the key difference between the UPC and UTC animal trust provisions in a state that has otherwise enacted the UTC is that the UPC does away with trustee reporting and the vital obligation to keep trust funds separate from other funds: "Except as ordered by the court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds, appointment, or fee is required by reason of the fiduciary relationship of the trustee." However, remember that under the UTC, trusts for humans, animals, and charities are subject to the same rules of interpretation.
The UTC provides a better method for establishing a animal trust then the UPC for several reasons. First, the UTC overrides the rule of perpetuities by matching the allowable period of the trust to the length of the lifespan of the designated animal or animals. While the UPC also sets the duration of an animal trust to the measuring life of the designated animal, the UPC only provides for a single animal, while the UTC permits multiple animals to be covered by the trust. The UTC requires a trust to terminate only at the death of the last covered animal.
Second, the UTC provides greater enforceability to animal trusts than does the UPC, providing greater assurance for the pet owner. The provisions permit any person, not one specifically designated in the trust instrument as permitted by the UPC, to petition a court to evaluate whether or not the trust beneficiary or trustee is acting in accordance with the trust document. In addition, under the UTC, the trust beneficiary, who is the animal's caretaker, has rights of a qualified beneficiary, so that the trustee is held accountable for actions in administering a trust. In contrast, the UPC provides that a trustee has no filing, reporting, or other fiduciary responsibilities designed to hold a trustee accountable, unless specifically provided in the trust instrument.
In the last fifteen years, there are 41 States in this country that have laws permitting animal trust. Specifically they are Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Michigan, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming. Of the states that now have animal trust statutes, nine are based on the 2-907 of the Uniform Probate Code, eighteen are based on the Section 408 of the Uniform Trust Code and eleven are not based on either, but have borrowed generously from both codes.
Of these States, sixteen of them permit trusts for the care of a designated domestic or pet animal and the animal's offspring. These are Alaska, Arizona, California, Colorado, Hawaii, Illinois, Michigan, Missouri, Montana, New Mexico, New York, North Carolina, South Dakota, Tennessee, Utah and Wisconsin. This is significant so that the offspring of these animals will not have to be euthanized or go homeless.
5. Ohio Revised Code Section 5804.08
Based on UTC Section 408, the Ohio Revised Code Section 5804.08, "Trust for Care of Animal", was passed by the General Assembly in 2006 and enacted in 2007 as part of the modified Unified Trust Code introduced by Rep. Wagoner as S.B. 416. The Ohio law as it reads today states the following:
Sec. 5804.08 Trust for Care of Animals
(A) A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, upon the death of the last surviving animal.
(B) A person appointed in the terms of a trust or, if no person is so appointed, a person appointed by the court may enforce a trust authorized by this section. A person having an interest in the welfare of an animal that is provided for care by a trust authorized by this section may request the court to appoint a person to enforce the trust or to remove a person appointed.
(C) The 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. Except as otherwise provided in the terms of the trust, property not required for the intended use may be distributed to the settlor if then living or to the settlor's successors in trust.
Pursuant to O.R.C. Section 5804.08(A), a trust may be inter vivos (created during the life of the pet owner) or testamentary (created at time of death), such as by the Last Will and Testament of the pet owner. The life of the trust will be only as long as the animal or animals live that it is created to benefit. Therefore, in Ohio the trust will not continue to support the offspring of that animals.
In O.R.C. Section 5804.08(B), a person may be appointed as trustee of the animal trust. If no one is appointed, the court has authority to appoint a trustee to serve in that capacity. The court can be petitioned by a person with an interest in the animal including the caregiver of the animal to have a Trustee appointed or have them removed. This concept has its roots in the "Uniform Guardianship and Protective Proceedings Act", which originated the concept of permitting a person with a demonstrated interest in the animal's welfare to petition the court. It's main purpose was to allows a person interested in the welfare of a ward or protected person to file petitions on behalf of the ward or protected person and now that includes those with interests in animals.
In O.R.C. Section 5804.08(C), the property placed in the trust may only be used for the stated purpose of the trust. However, if the property placed in the trust is excessive, the court has authority to distribute the property to the creator of the trust, or to the heirs of the creator of the trust. The court would most likely look at the needs of the animal and the intent of the trust creator and determine the amount of property is necessary for the animal.
While O.R.C. Section 5804.08 is a breakthrough, there are potential problems that should be addressed. The statute should state that the animal trusts are "valid and enforceable." That way the statute would distinguish itself from honorary trust statutes that are not really valid trusts because they are not enforceable in court. It would also imply that animal trusts are no different than express trusts and are subject to the same fiduciary requirements.
The Ohio law should also include a provision, similar to the Washington animal trust statute , which allows for identification of the animals to be covered by the trust. The Washington statute states that the animals "may be individually identified, or may be identified in such other manner that they can be readily identified." The inclusion of such language would help prevent a potential challenge to the trust on the grounds that the "beneficiaries" are not named or described by breed or type. Thus, if a trust document states that "property is to be used for the care of my 'pets' or my 'dogs' " an heir might argue that the trust is too vague or that the beneficiaries are not ascertainable. Including the above language would limit the effectiveness of such an argument by giving the court some flexibility in determining the animals to be covered, and would compensate for vague or incomplete drafting.
The statute should also include language allowing for liberal construction of planning documents and should allow extrinsic evidence to help discern the pet owner's intent. The UPC Section 2-907 includes such language , and attempts to bring any possible animal trust document under its provisions.
The statute's duration should not be limited and should provide that it continue for the offspring of those animals that exist when the trust is created. That way these animals will be assured proper care so long as the trust assets are exist.
Although the general policy of preventing waste justifies the court authority to disallow excessive animal trust funding, in many instances the costs outweigh the benefits. Allowing courts to reduce the amount of trust property not only guarantees a challenge by the pet owner's heirs, but also guarantees a reduction of trust property if a particular judge is not fond of the idea of animal trusts. This is a handy weapon which all challengers may rely on and gives judges who frown on the notion of trusts for animals a sound legal reason for attacking such trusts.
The statute should provide, much like UPC section 2-907, an incentive for a trustee to serve by reducing the amount of administrative duties and requirements. As suggested earlier, including such a provision may be construed as hampering the legitimacy of animal trusts by giving them a status different from that of express trusts. However, this potential disadvantage is far outweighed by this huge advantage: the reduced likelihood that a named trustee will attempt to avoid the responsibility of enforcing the terms of the trust. Thus, a provision limiting the trustee's duties will further the goal of carrying out the intent of the pet owner. An effective animal trust depends on a trustee who carries out the terms, and it makes sense to give him an incentive to accept the job.
The statute should employ language similar to that of UPC section 2-907(b)(6), which states that "except as ordered by the court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds, appointment, or fee is required by reason of the existence of the fiduciary relationship of the trustee."
These are some suggestions and are certainly not all issues that need to be addressed by drafters of legislation. However, if they use these suggestions it would assist those creating animal trust to effectuate their intent.
6. Tax Issues With Animal Trusts
While this work will not present a complete review of all tax issues facing drafters of animal trusts, it is important to at least touch on some of the more relevant tax issues for animal trust. Keep in mind this writer is not and has no desire to be a CPA.
For the calculation of federal estate taxes, any amount passing to an animal trust by reason of the settlor's death will generally be included by the Internal Revenue Service in the gross taxable estate. Under Revenue Ruling 78-105 , the IRS has ruled that no portion of the amount passing to a valid trust for the lifetime benefit of a pet qualifies for the charitable estate tax deduction, even if the remainder beneficiary is a qualifying charity. Trust creators, however, depending on how much a tax burden will result, should consider how the estate taxes attributable to such a trust will be paid. The proceeds from life insurance is an excellent way to pay estate taxes.
Regarding taxation of the income of trust assets, Revenue Ruling 76-486 , provides that if a trust for the benefit of an animal is valid under state law, then the trust itself will be subject to income taxation.
Who is responsible for paying trust income taxes? An animal is not a beneficiary recognized by the IRS and, therefore, cannot be taxed. A caretaker of the animal could not be charged with the tax liability of trust income because the caretaker serves only as an agent of the animal and does not consume the distributions for his or her own benefit (similar to a court appointed guardian of a minor or incapacitated person). The Trustee must pay the taxes of the Trust, since by law he is the owner of the Trust assets and that is his duty. He has a right of reimbursement for the Trust funds he holds. Under some circumstances he may be personally liable for the tax, for example, if he makes other payments and does not retain enough to cover them.
In general, a trust is taxed on the income it accumulates. Trust beneficiaries are taxed on their distributions. The trust itself benefits when distributions are made because income distributions decrease the trust's tax liability. Another benefit of distributions is that the beneficiaries are taxed at a lower rate than are trusts, thus making the assets worth more in the hands of the beneficiary than in the hands of the trust.
If anyone appointed by the trust, such as a trustee or caretaker, receives some stipend or salary, the trust can deduct that amount. If the that person is considered the beneficiary, then under IRC's 661, the trust is entitled to deduct the amount of "distributable net income" paid out to them.
If a trust official is receiving some compensation for services, they in turn are required to recognize this amount on his or her tax return.
7. Trusts vs. Wills For Animal Welfare
A Trust is superior to a Will when passing assets for the benefit of an animal for several reasons. For one thing, a trust can be more specific as to how the assets are distributed, when, to whom and how. A trust can designate a trustee who becomes responsible for carrying out the explicit tenants of the trust. In addition, it can name a pet manager to find a good home for the animal; a caretaker who walks, feeds, cleans and cares for the animal; a veterinarian who is familiar with the pets history; and can require it be feed a certain food, exercised in any manner or way, given acres of space to run or sleep on a bed silk sheets.
A Will is much more rigid then a trust, bequeathing assets to person or institution, and requesting that the use assets for the benefit of an animal. In addition, a Will must go through probate, increasing costs, becoming public record and increasing the time that the testator's wishes are in limbo.
O.R.C. Section 5804.08 has created an easy and affordable way for animal owners who are diligent and dutiful to provide for their animal companions once they are no longer able. It can take effect when the owner becomes ill or when they pass away, but can always detail every single item of their handling. While there are flaws in the Ohio law, a trust can be written to assure that an animal companion is taken care of so that it can lead a happy and healthy life before and after its master is gone.
Marc L. Stolarsky is an attorney practicing Estate Planning in the northeast Ohio area. He earned his Master of Arts From Bowling Green State Unverstity and his Juris Doctor from Cleveland-Marshall College of Law.
J. Animal L. & Ethics 21, Journal of Animal Law & Ethics, May, 2007, 21 Mediating Animal Law Matters, Journal of Animal Law and Ethics; Kathy Hessler.
Pets are an important part of the lives of many individuals. A recent study found that 73 percent of dog owners and 65 percent of cat owners consider their companion animals to be akin to a child or other close family member, and many treat their pets as a member of their immediate family. American Pet Products Manufacturers, 2001-02 APPMA National Pet Owners Survey (2002) (reporting data from 2000).
A survey by the American Pet Products Manufacturers Association found that 84% of pet owners said pets make their family and home life physically and emotionally healthier. See "Pets Bring Out the Best in Humans" (April 26, 2006), found online at http://www.themonroetimes.com/f0424aug.htm.
77 Pa. B.A. Q. 107, Pennsylvania Bar Association Quarterly, July, 2006, "What the General Practitioner Needs to Know about Pennsylvania Animal Law, Personal and Estate Planning For Pennsylvanians Owning Pets", Neil E. Hendershot, Dauphin County.
See Gerry W. Beyer, "Pet Animals: What Happens when their Humans Die?", 40 Santa Clara L. Rev. 617 (2000).
Betty White was reported have a will that leaves five million dollars to her pets. "Betty White Leaves $5M to Her Pets," San Antonio Star, Nov. 4, 1990, at 25.
"Estate planning: Not just for Leona's dog, Linda Lombard; Associated Press, Ohio Lucky dog!", Cincinnati Post, by Linda Lombard, September 22, 2007.
Kristina A. Hancock, Chair of the animal law committee of the ABA's Tort Trial & Insurance Practice Section.
In re Dean, 41 Ch. D. 552 (1889).
Id. at 623.
The Restatement of Trusts Section 124 states: "Where the owner of property transfers it upon an intended trust for a specific non-charitable purpose and there is no definite or definitely ascertainable beneficiary designated, no trust is created; but the transferee has power to apply the property to the designated purpose, unless he is authorized by the terms of the intended trust so to apply the property beyond the period of the rule against perpetuities, or the purpose is capricious."; Note: In Ohio as in many other States, the rule against perpetuities is not an issue with animal trusts. In Ohio O.R.C. Section 2131.08(B) and (C) save the trust if the animal dies within the 21 year period. O.R.C. Section 2131.09(B) abolished the RAP when the trust instrument so provides. Also, the new O.R.C. Section 5804.09 supplies its own rule on duration.
In re Searight's Estate v. Miller (1950) 87 Ohio App. 417.
Restatement (Second) of Trusts Section 124; In part the example states: A bequeaths his dog, Fido, to B together with the sum of $1000 "in trust" to use the money for the support of the dog for twenty years. B cannot be compelled to use the money for supporting the dog, but he has power to use the money for this purpose and incurs no liability by doing so. If B refuses or neglects to support the dog, he holds the money upon a resulting trust for A's estate." Id.
Missouri, Mo. Rev. Stat. Section 456.050; California, Cal. Prob. Code Section 15212; Tennessee, Tenn. Code Ann. Section 35-50-118 (2002); and Wisconsin Wis. Stat. Ann. Section 701.11 (West 2002)
Restatement (Third) of Trusts Section 47.
Beverly Walkecker, et al. v. Erie County Humane Society (April 12, 2004) 810 N.E.2d 968, No. 2004-0607, Court of Appeals Case No. E-03-022, Trial Court Case No. 97-1-019.
See Rev. Rul. 76-486, 1976-2 C.B. 192.
For further discussion of these concepts, see In re Searight's Estate, 95 N.E.2d 779 (Ohio App. 1950); According to Section 124 of Restatement 2d, Trusts, where property is transferred in trust for a noncharitable purpose and there is no definite or definitely ascertainable beneficiary designated (as for the care of animals), then no trust is created. However, the transferee has the power, if exercised, to use the property for the designated purpose. The "trust" is subject to the rule against perpetuities. It may not be held for a purpose extending beyond the lives in being plus twenty-one years.
Jennifer R. Taylor, "A "Pet" Project for State Legislatures: The Movement Toward Enforceable Pet Trusts in the Twenty-First Century", 13 Quinnipac Prob. L.J. 419, 420 (1999).
William J. Bowe & Douglas H. Parker, Page on the Law of Wills Section 40.19 (1982).
The 1990 version of the UPC section 2-907 states:
(a) Honorary Trusts. A trust for a noncharitable corporation or unincorporated society or for a lawful noncharitable purpose may be performed by the trustee for  years but no longer, whether or not there is a beneficiary who can seek the trust's enforcement or termination and whether or not the terms of the trust contemplate a longer duration.
(b) Trust for Pets. Subject to this subsection, a trust for the care of a designated domestic or pet animal and the animal's offspring is valid.
Except as expressly provided otherwise in the trust instrument:
(1) No portion of the principal or income may be converted to the use of the trustee or to any use other than for the benefit of a covered animal.
(2) The trust terminates at the earlier of 21 years after the trust was created or when no living animal is covered by the trust.
(3) Upon termination, the trustee shall transfer the unexpended trust property in the following order:
(i) as directed in the trust instrument;
(ii) if the trust was created in a nonresiduary clause in the transferor's will or in a codicil to the transferor's will, under the residuary
clause in the transferor's will; and
(iii) if no taker is produced by the application of subparagraph (i)or (ii), to the transferor's heirs under Section 2-711.
(4) For the purposes of Section 2-707, the residuary clause is treated as creating a future interest under the terms of a trust.
(5) 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.
(6) Except as ordered by the court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds,
appointment, or fee is required by reason of the existence of the fiduciary relationship of the trustee.
(7) A governing instrument must be liberally construed to bring the transfer within this section, to presume against the merely precatory or honorary nature of the disposition, and to carry out the general intent of the transferor. Extrinsic evidence is admissible in determining the transferor's intent.
(8) A court may reduce the amount of the property transferred, if it determines that that amount substantially exceeds the amount required for the intended use. The amount of the reduction, if any, passes as unexpended trust
property under subsection (b)(3).
(9) If no trustee is designated or no designated trustee is willing or able to serve, a court shall name a trustee. A court may order the transfer of the property to another trustee, if required to assure that the intended use is carried out and if no successor trustee is designated in the trust instrument or if no designated successor trustee agrees to serve or is able to serve. A court may also make such other orders and determinations as shall be advisable to carry out the intent of the transferor and the purpose of this section.
Unif. Probate Code s 2-907(b) (amended 1993).
Gerry W. Beyer, "Pet Animals: What Happens When Their Humans Die?", 40 Santa Clara L. Rev. 617, 663-64 (2000).
Unif. Probate Code s 2-907(b).
Gerry W. Beyer, supra.
Unif. Probate Code s 2-907(c)(7).
Unif. Probate Code Section 2-907(c)(4).
In re Fouts, 677 N.Y.S.2d 699 (N.Y. Sup. Ct. 1998).
Unif. Probate Code s 2-907(b).
Unif. Probate Code Section 2-907(c)(6).
Id.; see also Section 2-907(c)(2).
UTC Section 408 states the following:
(a) Creation and termination. A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, upon the death of the last surviving animal.
(b) Enforcement.--A trust authorized by this section may be enforced by a person appointed in the trust instrument or, if no person is so appointed, by a person appointed by the court. A person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed.
(c) Limitation.--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. Except as otherwise provided in the trust instrument, property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor's successors in interest.
Also, UTC Section 409, "Noncharitable Trusts", states the following:
(1) A trust may be created for a noncharitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by the trustee. The trust may not be enforced for more than 21 years.
(2) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court.
(3) 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. Except as otherwise provided in the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor’s successors in interest.
UPC Section 2-907(c)(5).
Susan Albert, "Pet Trusts: The Uniform Trust Code Gives Enforceability a New Bite", New Hampshire Bar Journal, Winter 2006, found online at http://www.nhbar.org/publications/display-journal-issue.asp? id=314.
Uniform Trust Code s110(c) (2000).
Alabama, Ala. Code § 19-3B-408; Alaska, Alaska Stat. § 13.12.907; Arizona, Ariz. Rev. Stat. § 14-2907 (2002); Arkansas, Arkansas Code § 78-73-408; California, Cal. Prob. Code § 15212; Colorado, Colo. Rev. Stat. § 15-11-901; District of Columbia; Florida, Fla. Stat. Ann. § 737.116; Hawaii, Hawaii Stat. § 560:7-501; Idaho, Idaho Code § 15-7-601; Illinois, Ill. Comp. Stat. 760 ILCS 5/15.2; Indiana, Indiana Code § 30-4-2-18; Iowa, Iowa Code Ann. § 633A.2105; Kansas, Kan. Stat. Ann. § 58a-408; Maine, Me. Rev. Stat. Ann. tit. 18-B, 408; Michigan, Mich. Comp. Laws Ann. § 700.2722; Missouri, Mo. Ann. Stat. § 456.4-408; Montana, Mont. Code Ann. § 72-2-1017; Nebraska, Neb. Rev. Stat. § 30-3834; Nevada, Nevada Stat. § 163.0075; New Hampshire, N.H. Rev. Stat. Ann. § 564-B:4-408; New Jersey, N.J. Stat. Ann. § 3B:11-38; New Mexico, N.M. Stat. Ann. § 46A-4-408; New York, N.Y. Est. Powers & Trusts Law § 7-8.1; North Carolina, N.C. Gen. Stat. § 36A-147; North Dakota, N.D. Cent. Code § 59-12-08; Ohio, ORC § 5804.08 Trust for care of animal; Oregon, Or. Rev. Stat. § 128.308; Pennsylvania, § 7738. Trust for care of animal - UTC 408; Rhode Island, R.I. Statutes § 4-23-1; South Carolina, S.C. Code § 67-7-408; South Dakota, S.D. Codified Laws §§ 55-1-21 & 55-1-22; Tennessee, Tenn. Code Ann. § 35-15-408; Texas, Tex. Prop. Code § 112.037; Utah, Utah Code Ann. § 75-2-1001; Virginia, Virginia Code § 55-544.08; Washington, Wash. Rev. Code §§ 11.118.005 -.110; Wisconsin, Wis. Stat. § 701.11; Wyoming, Wyo. Stat. Ann. § 4-10-409. This list is as of February 12, 2008, pursuant to www.professorbeyer.com/Articles/Animal_Statutes.htm .
8 Alaska Stat. Section 13.12.907 (Michie 1998); Ariz. Rev. Stat. Ann. Section 14-2907 (West 1995); Cal. Prob. Code Section 15212 (West Supp. 2000); Colo. Rev. Stat. Ann. Section 15-11-901 (West 1999); Mich. Comp. Laws Ann. Section 700.2722 (West Supp. 1999); Mont. Code Ann. Section 72-2-1017 (1999); Mo. Ann. Stat. Section 456.055 (West 1992); N.M. Stat. Ann. Section 45-2-907 (Michie Supp. 1995); N.Y. Est. Powers & Trusts Section 7-6.1 (McKinney Supp. 1999); N.C. Gen. Stat. Section 36A-147 (1995); Tenn. Code Ann. Section 35-50-118 (1996); Utah Code Ann. Section 75-2-1001 (Supp. 1999); Wis. Stat. Ann. Section 701.11(1) (West Supp. 1999).
O.R.C. Section 5804.08.
Uniform Probate Code Sections 5-210(b), 5-414(a).
Wash. Rev. Code Section 11.118.020 (2002).
Unif. Prob. Code. Section 2-907(b) (1990) (amended 1993).
Unif. Prob. Code Section 2-907(b)(6) (1990) (amended 1993).
IRS Circular 230 Disclosure: To ensure compliance with the requirements imposed by IRS Circular 230, we inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.
Rev. Rul. 78-105
Rev. Rul. 78-105, 1978-1 C.B. 295.
1976-2 CB 192.