Leaving Money To Support My Horses

Craig Edward Kennedy

Simple: Contact a local Wills, Trusts and Estate attorney and ask to create a 'Trust' for the benefit of your horses.

While I am not certain about the specifics of California's rules, good counsel should be able to create a legal 'fiduciary' with the relevant directives to ensure that your horses are well taken care of upon your demise. Oh, and you can always make the 'Trust' the beneficiary of your 401k funds.

You know, hiring good counsel tends to get these matters resolved and you just sleep better at night.

I hope this helps!

Janet Lee Brewer

As far as I know, you cannot name your horses as beneficiaries on your retirement plan accounts. You could, however, possibly name a trust for their benefit. However, since they are not "people", the tax effect would be to cause a 100% distribution of the IRA in the year of your death, triggering income tax recognition.

Please forgive me if this sounds facetious, but you need to remember that pets cannot sign checks, cash checks, make ATM withdrawals, invest in mutual funds, etc., by themselves... they need a human "guardian" or "trustee" to do it for them. So you absolutely do need to find someone who would be willing to care for the horses to make this work.

Right now, "pet trusts" are not valid under California law, but California is currently considering "pet trust" legislation.

In the meantime, I have created the equivalent of pet trusts for several of my clients - we just work around the lack of a statute expressly permitting a pet to be the beneficiary of a trust by making a trusted individual the beneficiary and putting protections into place to make sure that the individual follows the trustor's (you) wishes.

Another solution would to find a horse sanctuary that would be willing to accept your horses and use your IRA or other funds to support them (if a bona fide charity is the beneficiary of an IRA, it is not subject to income taxes when the funds are distributed).

You might want to look into "Best Friends Animal Sanctuary" in Kenab, UT. They have several good programs and might be able to arrange an adoption for the horses if that were to become necessary.

Bruce Givner

California Probate Code Section 15212 specifically authorizes the establishment of a pet trust. Rachel Hirschfeld, Esq. has written excellent articles about the issues faced by pet owners generally. Check out her agreement at www.mypetprotection.com. She is not licensed in California, but her agreement provides a good framework. The horses cannot be the beneficiaries of the 401(k) directly, However, the pet trust - properly drafted - can provide for their care. It is similar to drafting any type of irrevocable trust: you have to think through all of the issues that can arise, e.g., what type of medical care will be needed? Will there be a conflict between their caretaker (who gets paid if they live) and the remainder beneficiaries of the trust? Would the caretaker have an incentive, if the pet dies, to substitute another pet so that the caretaker can keep getting paid? So boilerplate trusts will only get you so far. Good lawyering helps you think through and draft to handle the potential issues that might arise.

Bruce Givner

California Probate Code Section 15212 specifically authorizes the establishment of a pet trust. Rachel Hirschfeld, Esq. has written excellent articles about the issues faced by pet owners generally. Check out her agreement at www.mypetprotection.com. She is not licensed in California, but her agreement provides a good framework. The horses cannot be the beneficiaries of the 401(k) directly, However, the pet trust - properly drafted - can provide for their care. It is similar to drafting any type of irrevocable trust: you have to think through all of the issues that can arise, e.g., what type of medical care will be needed? Will there be a conflict between their caretaker (who gets paid if they live) and the remainder beneficiaries of the trust? Would the caretaker have an incentive, if the pet dies, to substitute another pet so that the caretaker can keep getting paid? So boilerplate trusts will only get you so far. Good lawyering helps you think through and draft to handle the potential issues that might arise.

Samuel Joseph Mamola

The previous commentators are correct. California law allows the creation of a trust for the benefit of pets and animals.

You should look for a full-time estate planning attorney experienced in complex trust and estate tax planning. Our office has drafted several trusts for the benefit of our clients' pets and animals. You can find more information about us at www.estateplanningsocal.com.

~Samuel Mamola, Esq.