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“In Pets We Trust” - Estate Planning For New Jersey Pet Parents

By: Angela B. Kosar, Esquire

      Much of the focus of estate planning tends to be on families with children and grandchildren, and ensuring the younger generations are provided for through their parents’ and grandparents’ estate plans. But what if you are (or also are) a pet parent and your child is of the furry, winged, or scaled variety? Can you, in New Jersey, provide for your furry friends’ financial future through your estate plan? The answer is yes – with proper planning.

      Originally authorized under N.J.S.A. 3B:11-38, enacted in 2001, New Jersey’s Probate Code recognized “[a] trust for the care of a domesticated animal is valid.”1 It provided that the intended use of the principal or income may be enforced by a person designated for that purpose in the instrument, a court appointed individual, or a trustee.2 The trust was to terminate when no living animal is covered by the trust, or at the end of 21 years, whichever was earlier.3

      The original version of the pet trust statute had some restrictions as well: no portion of the trust principal or income could be converted to the use of the trustee or any other use other than for the benefit of the named animals, unless expressly stated so in the document.Also, upon termination of the trust, the trustee shall transfer the balance in accordance with the trust document. If no such directions exist, then the property passes into the estate of the creator of the trust.5 The Court also had the ability to reduce the amount included in the pet trust if it determined the amount left in it “substantially exceeds the amount required for the intended use.”6

      Earlier this year, New Jersey adopted the Uniform Trust Code, which resulted in a major ongoing overhaul of New Jersey’s existing probate and trust statutes. While N.J.S.A. 3B:11-38 was repealed by this adoption, pet trusts will now be governed by N.J.S.A. 3B:31-24, which will take effect July 17, 2016. The new statute is very similar to the original statute, and provides as follows:

  1. A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates 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.
  2. A trust authorized by this section may be enforced by the settlor or by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court. A person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed.
  3. Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use shall be distributed to the settlor, if then living, otherwise to the settlor's estate.7

      In addition to providing financial resources for your pets through the pet trust, you can (and should) also name a caregiver for your pets in the same way you name a guardian for minor children through a will. You also have the ability to have the remainder of the pet trust donated to your favorite charity, pet-related or otherwise. Also, if you utilize the pet trust as a standalone document (as opposed to using it as a testamentary trust in your will), it can take effect upon disability or incapacity, providing even more protection for your pets and their care and wellbeing. This document should also be carefully incorporated into your estate plan’s other documents so that the total estate plan is cohesive and seamless.

      Through careful and thoughtful estate planning, and working with an attorney who can shape your decisions into a thorough estate plan, you can ensure your most beloved family mascots, companions, and friends have the same care and support through your estate plan as the rest of your family and loved ones. Please contact us to help you with this most important process.

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1  N.J.S.A. 3B:11-38(a) (eff July 10, 2001, repealed eff July 17, 2016)
2  N.J.S.A. 3B:11-38(b)
3  N.J.S.A. 3B:11-38(c)
4  N.J.S.A. 3B:11-38(d)
5  Id.
6  Id.
7  N.J.S.A. 3B:31-24 (eff. July 17, 2016)