Monday, February 2, 2009

An Overview of Animal and Pet Trust in the United States

by Marc L. Stolarsky, Esq.

As of this writing there are 40 of the United States that have passed laws permitting animal or pet trusts. Of these state laws, ten are based on some form of the Uniform Probate Code Section 2-907, eighteen are based on the Uniform Trust Code Section 408, and twelve borrow from both, but are not specifically based on either. In this article, I will review the relevant statues in the UPC and the UTC as well as the other states with pet trusts laws.
Uniform Probate Code Section 2-907
Prior to 1990, the Common Law took the position that animal trusts were invalid because a beneficiary could not be identified in definite and certain terms. The courts had 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.
The issues of creating animal trusts were addressed in 1990, when the National Conference of Commissioners on Uniform State Laws (NCCUSL) met who then drafted the UPC and included the proposed animal trust code Section 2-907. 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 terminated when no living animal was covered by the trust. There was 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." (Emphasis added) 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.
Uniform Trust Code Section 408
In 2000, ten years after the first UPC pet trust statute was written, another group of trust scholars drafted the Uniform Trust Code that included an animal trust provision, Sections 408. The UTC Section 408 is much shorter then the UPC statute, and consists of three sections. Section 408(a) states that a trust may be created for the care of a living animal alive during the lifetime of the settlor and that the trust terminates when the animal(s) die.
Section 408(b) states that the trust may be enforced by a person appointed by the trust or a person appointed by the court and that any person with an interest in the welfare of the animal may request that the court to enforce the trust or appoint someone to enforce the trust or remove a person appointed. Also, while the animal will ordinarily be alive on the date the trust is created, an animal may be added as a beneficiary after that date as long as the addition is made prior to the settlor’s death. Animals in gestation, but not yet born at the time of the trust’s creation may also be covered by its terms. A trust authorized by this section may be created to benefit one designated animal or several designated animals. The person appointed by the court to enforce the trust should also be a person who has exhibited an interest in the animal’s welfare.
Section 408(c) states that an animal trust may not have an excessive amount of assets in it and the court may invade the trust if it deems it is excessive. However, it does not define what is excessive.
Comparing and Contrasting the UPC Section 2-907 and UTC Section 408
The UPC Section 2-907 and UTC Section 408 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 which provides 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.
Specific State Pet and Animal Statutes
States have been slow to adopt pet and animal trust statues although the laws they did pass have been similar to the UPC and UTC examples. From 1993 to 2002, nine states passed pet trusts laws based on the UPC 2-907, specifically Montana , Arizona , Colorado , North Carolina , Alaska , Utah , Michigan , Oregon and Florida . During the same time of 1993 to 2002, five states passed pet trust laws that were not based on any suggested code, specifically New York , Iowa , Washington State , New Jersey and Nevada .
Although UTC 408 was offered to the states in 2000, it was not until 2003 that any state enacted it. From 2003 to 2007, eighteen states based laws based on UTC Section 408, specifically Kansas , Wyoming , New Mexico , Missouri , District of Columbia , Tennessee , New Hampshire , Nebraska , Maine , Arkansas , South Carolina , Oregon , Virginia , Pennsylvania , Ohio , Alabama , Florida and North Dakota . After 2003, only four states passed pet trust laws modeled after the UPC 2-907, being Illinois , Hawaii , North Carolina and South Dakota .
From 2003 to 2007, only four states passed pet trust laws that are not based on either the UPC or UTC statute: specifically Indiana , Idaho , Rhode Island and Texas . Of all these statute, the most progressive and far-reaching has been the California law recently enacted on January 1, 2009. It includes animal organizations as interested parties of a pet trust and permits the following: (1) the trust may be enforced by the trustee, anyone appointed by the court or any person interested in the welfare of the animal or " . . . any nonprofit charitable organization that has as its principal activity the care of animals may petition the court regarding the trust . . . " (Emphasis added) and (2) "[a]ny beneficiary, any person designated by the trust instrument or the court to enforce the trust, or any nonprofit charitable corporation that has as its principal activity the care of animals may, upon reasonable request, inspect the animal, the premises where the animal is maintained, or the books and records of the trust." Time will tell if the California law becomes too difficult to legislate and if the courts there are bombarded with litigation or if it helps to administer the ultimate intent of the settlor.
While pet and animal trusts have been utilized by only a small percentage of the populace, they are important in assuring a valued companions are not left homeless or euthanized when their owners are gone. The future will most likely bring changes on the law that are lacking in many ways such as defining what animals may be covered, what are excessive amounts in the trust, who is an interested party and what happens to the offspring of the animals covered in the trust.


Marc L. Stolarsky is an attorney practicing Estate Planning probate and domestic relations in the northeast Ohio area.
Wisconsin law has an honorary trust law that allows pet trust, but they are not enforceable; Wis.Stat. Section 701.11.
William J. Bowe & Douglas H. Parker, Page on the Law of Wills Section 40.19 (1982).
The original UPC was drafted in 1969 as a joint project between NCCUSL and the Real Property, Probate and Trust Law Section of the American Bar Association. It has been revised several times, most recently in 2006.
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(a).
UTC Section 408(b).
UTC Section 408(b).
UTC Section 408(b).
UTC Section 408(b).
UTC Section 408(b).
UTC Section 408(c).
Unif. Probate Code s 2-907(b)(9); UTC Section 408(b).
Unif. Probate Code s 2-907(b)(2) and (b)(9); UTC Section 408(a) and (c).
Unif. Probate Code s 2-907(b).
UTC Section 408(a).
UPC Section 2-907(c)(5).
UTC Section 408(a).
UTC Section 408(a).
UTC Section 408(a).
Susan Albert, "Pet Trusts: The Uniform Trust Code Gives Enforceability a New Bite", New Hampshire Bar Journal, Winter 2006, found online at id=314.
Uniform Trust Code s110(c) (2000).
Unif. Probate Code s 2-907(b)(6).
Mont. Code Ann. Sec. 72-2-1017.
Ariz. Rev. Stat. Section 14-2907.
Colo. Rev. State Section 15-11-901.
N.C. Gen. State Section 36A-147 was law from October 1, 1995 to Jan 1, 2006 and on January 1, 2006 enacted N.C. Gen. Stat. Section 36C-4-408, both based on UPC Section 2-907.
Alaska Stat. Section 13.12.907.
Utah Code Ann. Section 75-2-1001.
Mich. Comp. Laws. Ann. Section 700.2722.
Or. Rev. Stat. Section 128.308 was law 2001 to Dec. 31, 2005 based on the UPC 2-907; Or. Rev. Stat. Ann. Section 130.185 was enacted January 1, 2006 was based on UTC Section 408.
Fla. State. Ann Sec.737.116 was law Apr. 23, 2002 to June 30, 2007 based on UPC 2-907; Fla. State. Ann Sec. 736.0408 was enacted July 1, 2007 based on UTC Section 408.
N.Y. Est. Powers & Trust Law Section 7-8.1.
Iowa Code Ann. Section 633A.2105.
Wash. Rev. Code Sections 11.118.005 through .110.
N.J. State. Ann. Section 3B:11-38.
Nevada State. Section 163.0075.
Kan. State. Ann. Section 58a-408.
Wyo. Stat. Ann. Section 4-10-409.
NM. Stat. Ann. Section 46A-4-408.
Mo. Ann. Stat. Section 456.4-408.
D.C. Code Ann. Section 19-1304.08.
Tenn. Code Ann. Section 35-15-408.
N.H. Rev. Stat. Ann. Sec. 564-B:4-408.
Neb. Rev. Stat. Sec. 30-3834.
Me. Rev. Stat. tit. 18-B, 408.
Arkansas Code Sec. 28-73-408.
S.C. Code Section 67-7-408.
Or. Rev. Stat. Section 128.308 was effective 2001 - Dec. 31, 2005 based on UPC 2-907; Or. Rev. Stat. Ann. Section 130.185 effective January 1, 2006 is based on UTC Section 408.
Virginia Code Sec. 55-544.08.
Uniform Trust Act Sec. 7738.
ORC Section 5804.08.
Ala. Code Section 19-3B-408.
Fla. State. Ann Sec.737.116 was effective Apr. 23, 2002 - June 30, 2007 and based on UPC 2-907; Fla. State. Ann Sec. 736.0408 effective July 1, 2007 was based on UTC Section 408.
N.D. Cent. Code Sec. 59-12-08.
Ill. Comp. Stat. 76 ILCS 5/15.2.
Hawaii Stat. Sec. 560:7-501.
N.C. Gen. State Section 36A-147 was effective October 1, 1995 - Jan 1, 2006 and based on UPC 2-907; N.C. Gen. Stat. Section 36C-4-408 enacted on January 1, 2006 was based on UPC 2-907.
S.D. Cod. Laws 55-1-21 - 55-1-22.
Indiana Cod Sec. 30-4-2-18.
Idaho Code Section 15-7-601.
R.I. Statutes Section 4-23-1.
Tex. Prop. Code Section 112.037.
Cal. Prob. Code Section 15212(c).
Cal. Prob. Code Section 15212(f).

No comments:

Post a Comment