We consider our pets important members of our family. We are there for them when in need and strive to provide them with healthy and happy lives. Too often overlooked, however, is the question of how our pets will be cared for upon our death or incapacity. New Jersey has permitted the creation of pet trusts for quite some time. After New Jersey’s adoption of a modified version of the Uniform Trust Code in 2016, pet trusts are governed by N.J.S.A. § 3B:31-24 (Trust for Care of Animal).
In short, the law allows you to create a trust for your pets to ensure that their needs will continue to be met when you may no longer be capable of providing for them directly. Although the trust can be structured to take effect immediately, the more common planning is to draft the trust in a manner so that it becomes operative upon your incapacity or death. You have the right to choose a trustee who will be in charge of managing the trust assets for the benefit of your pets. Since your pets cannot enforce the terms of the trust in their own right, the law allows you to appoint someone who may act on behalf of your pets in enforcing the trust if the trustee does not act properly. This person may also receive notices concerning the trust on behalf of your pets and provide consents. The law further provides that any person having an interest in the welfare of your pets may petition the court to enforce the trust or to remove a person appointed.
A pet trust continues until the death of your last surviving pet, at which time any remaining trust assets pass to the remainder beneficiaries specified under the trust instrument, or, if you do not designate remainder beneficiaries, to your estate for distribution in accordance with the terms of your will.
It is important to consider tax consequences when establishing any trust. In the case of a pet trust, these include:
An alternative to a pet trust is to rely upon a cash gift to a family member or other trustworthy person coupled with the precatory request that he or she use the funds to care for your pets and always look after their best interests. The problems with this technique are that (1) there exists a potential for abuse as a formal fiduciary relationship is not established, and (2) there is no availability for third party or court enforcement as exists in the case of the pet trust.
Whether or not a pet trust is for you, be sure to consider your pets when reviewing your estate plan.