Minnesota Pet Trusts

Minnesota Pet Trusts;

Estate Planning for Minnesota Pets

Who will take care of your pets after your death?

While estate planning strategies to provide for surviving pets are somewhat more limited than they are for their human owners, there are a few things that you can do to provide for your pet’s well being after your death.

Your Will can nominate one or more persons to care for your pets after your death:

My personal representative(s) shall deliver custody and ownership of my beloved dog – Scooby (hereinafter, “Scooby”), and my kitty – Boots (hereinafter, “Boots”), if they are living at my death, to my trusted friends, Fred and Wilma Flinkstone, currently residing at 9 Rubblestone Court, Granite City, Minnesota, or to the survivor thereof, if one or both of them survive me.

If both of my friends, Fred and Wilma Flinkstone, fail to survive me, or are otherwise unable to accept custody and ownership of either Scooby or Boots, my personal representative(s) shall deliver custody and ownership of Scooby and/or Boots to my sister Betty Ruble, and to her husband, Barney Ruble (providing that he is then married to Betty), currently residing at 10 Rubblestone Court, Granite City, Minnesota, if Betty Ruble survives me.

If Betty Ruble fails to survive me, or if Betty and Barney Ruble are otherwise unable to accept custody and ownership of Scooby and/or Boots, my personal representative(s) shall deliver custody and ownership of Scooby and/or Boots to such persons or organizations as my personal representative(s) determines to be best able to care for Scooby and/or Boots.

Your Will can provide a financial gift to the person or persons who agree to care for your pets after your death:

My personal representative(s) shall distribute:

$1,000.00 to the person or persons who, or to the organization which, accept(s) custody and ownership of Scooby – to be used for his care and maintenance, and
$1,000.00 to the person or persons who, or to the organization which, accept(s) custody and ownership of Boots – to be used for her care and maintenance.

Your Will can direct your personal representative(s) to care for your pets until they can be delivered to the ultimate caregivers for your pets:

My personal representative(s) shall upon my death provide for the immediate care of my beloved dog, Scooby, and my precious cat, Boots – if one or both of such pets of mine are living at my death – and shall as soon as possible after my death transfer custody and ownership of Scooby and/or Boots to the person or persons who are, or to the organization which is, entitled to their custody and ownership.

I direct that my personal representative(s) be reimbursed for all costs of caring for Scooby and Boots until their custody and ownership can be transferred to the person or persons who, or to the organization which, accepts responsibility for their care.

Prior to your death, you can make a lifetime gift, your Will can make a testamentary gift, or you can make both kinds of gifts, to an animal shelter or veterinary care institution which will either care for your pet, or locate a foster home for your pet, after your death.

Several Minnesota nonprofit agencies and educational institutions will either care for your pet, or locate a foster home for your pet, after your death, providing that such agencies or institutions are the recipient of either a lifetime gift, or a testamentary gift, of some specified minimum amount.

If you intend to have such a nonprofit agency or educational institution care for your pet after your death, the agency or institution should be identified in your Will as being entitled to receive custody and ownership of your pet pursuant to a clause similar to that found in paragraph 1 above.

Certain financial gifts to these nonprofit agencies and educational institutions may be tax deductible. However, you should verify the propriety of taking a tax deduction with respect to such gifts with your tax advisor.

Minnesota residents can direct the creation of one or more Minnesota pet trusts to provide funds for the care and maintenance of their pet(s) during the lifetime of the pet(s) – providing that the pet(s) were alive during the lifetime of the Minnesota resident.

Minnesota Pet Trusts – Duration

Any Minnesota pet trusts must terminate upon the latest death of the animals named in the pet trust as beneficiaries – but no longer than 90 years.

Minnesota Pet Trusts – Enforcer

Because your pet(s) are not able to enforce the terms of any Minnesota pet trusts for their own benefit – as would a human beneficiary – the Minnesota pet trusts may nominate a person for the role of enforcing the terms the trust, and M.S. Section 501C.0408, Subd. 2 provides as follows:

A trust authorized by this section may be enforced
by a person appointed in the terms of the trust or,
if no person is appointed, by a person appointed by a 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 an appointed person.

Minnesota Pet Trusts – Dollar Limitations

While M.S. Section 501C.0408 Subd. 3 identifies no specific dollar limitations with respect to the amount that can be contributed to Minnesota pet trusts, it does permit the court to determine whether:

the value of the trust property exceeds the amount required for the intended use.

Minnesota Pet Trusts – Distribution Restrictions

M.S. Section 501C.0408, Subd. 3 identifies that the income and assets of Minnesota pet trusts may be applied only to the Minnesota pet trusts’ intended use – except to the extent that a Minnesota court determines that the value of the Minnesota pet trusts’ property exceeds the amount required for their intended use.

Minnesota Pet Trusts – Distribution of Assets Upon Termination

M.S. Section 501C.0408, Subd. 3 identifies that upon the termination of any Minnesota pet trusts – either due to:

the death of the animals, or
because the court determines that the pet trusts have excess funds,

the remaining assets in any pet trusts must be distributable:

to the beneficiaries identified in the Minnesota pet trust instrument, or
if the Minnesota pet trust instrument does not identify any such residuary beneficiaries, to the settlor’s:

heirs-at-law determined as if the settlor died intestate domiciled in this state at the time of distribution.

Minnesota Pet Trusts – Income Taxation

Pursuant to the authority of IRS Revenue Ruling 76-46, all of the income of Minnesota pet trusts will be taxable to the Minnesota pet trust if there are no human beneficiaries of the trust who receive distributions.

However, if there are human beneficiaries of the Minnesota pet trust – in addition to one or more animals – all distributions from the Minnesota pet trust to the human beneficiaries will be taxable to the human beneficiaries in the same manner as distributions to beneficiaries in trusts which do not have any animal beneficiaries.

Conclusion – Minnesota Pet Trusts

Minnesota residents can direct the creation of Minnesota pet trusts to provide funds for the care and maintenance of pet(s) during the lifetime of the pet(s) – providing that the pet(s) were alive during the lifetime of the Minnesota resident.

Gary C. Dahle – Attorney at Law

2704 Mounds View Blvd., Mounds View, MN 55112

Phone: 763-780-8390 Fax: 763-780-1735

[email protected]

Legal Disclaimer

Information provided herein is only for general informational and educational purposes. The laws regarding Minnesota Pet Trusts involve many complex legal issues. If you have a specific legal problem about which you are seeking advice, either consult with your own attorney, or retain an attorney of your choice.

Gary C. Dahle, Attorney at Law, is licensed to practice law only in the State of Minnesota, and in the state of North Dakota, in the United States of America. Therefore, only those persons interested in matters governed by the laws of the State of Minnesota should consult with, or provide information to, Gary C. Dahle, Attorney at Law, or take note of information provided herein.

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——— Gary C. Dahle Attorney at Law ———