Fortunately, your worry was solved by the Massachusetts Pet Trust Law, M.G.L.A. 203E § 408, which allows the creation of a trust during the settlor/owner’s lifetime for the continuing care of a pet or other animal should the pet outlive its loving owner.
However, as indicated in Matter of The Estate of Theresa A. Jablonski [1], if you decide to establish a trust for your beloved furry friend, make sure it is well drafted and takes into consideration the possibility of outliving your beloved beneficiary pet or pets. In the Jablonski case, Theresa A. Jablonski (“Theresa”) created a testamentary trust under her will and the trust was set to be funded upon her death. The beneficiaries of this trust were limited to her dog, Licorice, as well as any other pets the decedent had in her possession at the time of her death. The trust provided that after the death of the pet beneficiaries, “the trustee shall have the power and authority to designate a charity to receive the remainder of any and all such funds that shall be in their possession, custody or control.” Licorice passed away before Theresa. At the time of her death, Theresa did not own any other pets. As a result, the court had to decide: was the trust terminated before Theresa’s death, creating an intestacy, or should the contingency clause of the Trust control the distribution of the property?
The Court held that the pet trust established under the decedent’s will had terminated before Theresa’s death. Under G. L. c. 203E, § 408 (a), “[u]nless the trust instrument provides for an earlier termination, the trust shall terminate 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.” Neither Licorice nor any other pet survived the decedent, therefore, the trust was terminated before Theresa’s death.
On termination of a trust pursuant to G. L. c. 203E, § 408 (a), the trustee is required to “transfer the unexpended trust property in the following order: (1) as directed in the trust instrument; (2) to the settlor, if living; (3) if the trust was created in a non-residuary clause in the transferor’s will or in a codicil to the transferor’s will, under the residuary clause in the transferor’s will or codicil; or (4) to the settlor’s heirs in accordance with [G. L. c. 190B]” G. L. c. 203E, § 408 (d). In Theresa’s case, the testamentary trust explicitly stated that the trustee “shall have the power and authority to designate a charity to receive the remainder of any and all such funds that shall be in their possession, custody or control.” However, the trustee did not own or possess any funds at the time of trust termination because a testamentary trust is only funded at the time of the decedent’s death, which in this case was after the trust was terminated. The Court concluded that the trust had lapsed, and therefore the assets of Theresa’s estate had to be distributed to her next-of-kin—her four nieces and nephews—instead of Theresa’s desired charity.
It seems clear that this was not the outcome Theresa intended when she created her pet trust. To make sure estate assets are distributed according to your wishes, it is important to think through and address all possibilities. To avoid the issues that arose in Jablonski, when creating a pet trust you should:
- Specify clearly what happens to residual assets if there is a failure of the trust;
- Designate a dependable trustee and caretaker, as well as an alternate person or organization, who will provide care to your pet in his/her best interest;
- Include detailed instructions for your pet’s well-being; and
- Update your trust or will if your pet passes away.
The good news is that pet trusts can provide peace of mind for loving pet owners. But they must be carefully thought through upfront to prevent confusion, and possibly more legal costs when the time comes to implement their provisions.
Yi Ke is an estate planning attorney at the Boston-based law firm of Conn Kavanaugh Rosenthal Peisch & Ford, LLP. She can be reached at YKe@connkavanaugh.com.
