Is it possible to bequeath one's assets to a beloved pet?
In June 2019, renowned designer Karl Lagerfeld passed away. A significant portion of his wealth, accumulated during his time leading fashion house Chanel, was bequeathed to his feline companion, Choupette.
In an interview with CNN back in 2013, Lagerfeld shared, "I've never thought I'd fall in love like this with a cat." He added, "There's no marriage yet between humans and animals, but..."
Such bequests are not as uncommon as one might think. Estate lawyers have reported an increase in individuals planning financially for their pets following their demise. Some of these bequests are quite generous.
Twenty-nine states have enacted pet trust laws since 2008, and now every state, along with Washington D.C., has some form of guidelines regarding this matter, according to the American Society for the Prevention of Cruelty to Animals.
However, it's a complex financial matter. Pet bequests have been contested in court, with some success, by disinherited heirs. Since pets are considered property in all US states, the direct transfer of money to them is not possible. However, there are ways to work around this, as more and more pet owners are discovering.
Keeping a pet at home
A pet cannot inherit a home. But if a person appoints a guardian for their pet, they can leave money and property to this person with the stipulation that it's used for the pet's care, even within the deceased's residence. However, there's no guarantee the guardian will comply with these wishes, and in many cases, they aren't legally obliged to do so.
If a person favors their pets over their family, attorneys warn that the reasons for disinheritance must be clearly stated in the will. If a person disinherits their children or grandchildren out of anger or disappointment, they should document these incidents to support their wishes in court.
In 2008, a New York probate court reduced controversial real estate mogul Leona Helmsley's $12-million bequest to her Maltese, Trouble, to $2 million. The judge also awarded $6 million to two grandchildren she had disinherited "for reasons known to them."
It made headlines in Asia earlier this year when one elderly Shanghai woman announced she was leaving her $2.8 million estate to her cats and dogs because her children never visited her.
Setting up a trust
If a person wants to establish a legally binding trust for their pet's care with guaranteed funds, they typically need to set up a trust. Majel Barrett-Roddenberry, the actress and widow of "Star Trek" creator Gene Roddenberry, did just that before her death in 2009. She set up a $4 million trust for the couple's dogs and allocated an additional $1 million for an employee to care for them.
Florida attorney Peggy Hoyt, author of "All My Children Wear Fur Coats," advises her clients to leave detailed instructions for their pet's caretakers. They should have access to their home, care and feeding instructions for the pet, the name and contact information for their veterinarian, and written instructions for the long-term or permanent care of their pet.
If the pet outlives its caregiver, state laws vary about who is responsible for the animal (The ASPCA offers a guide, state-by-state.). Leslie Ann Mandel, the widow of science-fiction author Arthur Herzog III, made detailed provisions for her cat, dog, and more than two dozen cockatiels in her will. She left a trustee $100,000 and access to additional funds, but the birds were required to live in the aviary of Mandel's Wainscott, Hamptons home after her death (in 2015). Her primary demand: "no cages."
When things go wrong
There are numerous potential issues.
Estate attorneys recommend setting up a separate trustee for the trust who is not also the pet's caretaker. It's more likely that the pet's wishes will be carried out if there are multiple individuals administering the terms of the trust. Even a well-intentioned caretaker may be tempted to divert funds towards their own needs if they face financial hardships.
A simpler solution is to leave a sum of money to an animal protection group. A few of them, such as the Associated Humane Societies, run shelters throughout New Jersey, which will care for cats and dogs after their owners have passed.
"We require at least a $10,000 minimum donation for future care of the animal," said Director of Development Danielle Mania. "However, we don't want them to have to live out their lives in a shelter. We try to find them a new 'forever home.'"
The increase in pet bequests has led some estate lawyers to provide more comprehensive financial planning services for pet owners. Businesses, recognizing this trend, have started offering pet-related services, such as pet cemeteries and luxury pet care services.
In the event of a pet owner's death, it's crucial to choose a guardian who will adhere to the pet's care instructions, as the guardian is not legally obliged to comply. This could potentially be a business opportunity for individuals or organizations offering pet care services that are committed to adhering to such instructions.
