Planning for the Future: From Pet Owners to Non-Profits
|September 3, 2007||Posted by russmead under Planning for the Future Care of Animals||
It can be disastrous for the animals when a pet owner or the operator of a small shelter dies and leaves them with no one willing or able to care for them. It can be just as problematic when a shelter including a non-profit decides to close. It is important to plan for the continuing care of animals even if it is just until they can be placed in other homes or facilities. In many cases, their lives may depend on it.
The options all boil down to finding the appropriate party to care for the animals. The key is to prepare in advance by locating that person or organization who will take on this responsibility.
Pet owners/small unincorporated shelters
Under the law animals are generally treated as property. In the event of the death of an owner, the animals will pass to his or her heirs. These may not be the best people to care for the animals. Also, the owner may not have family, friends or anyone who can help care for the animals in the event of death, illness or other emergency. The owner may be of advancing age or has an illness or disabling condition or is simply no longer able or willing to care for the animals. There may be a number of animals or they may have long life expectancies or special needs. For all of these reasons, it is important to find a qualified caretaker who can take over the care of the animals in the event it becomes necessary. That means someone or a group that will not only agree to the responsibility but who is a good fit for the animals. Consider this from someone in search of a future caretaker for her several animals:
"Hopefully, there are friends or family who love our creatures almost as much as we do. That is the perfect scenario. If this is so, we must examine these persons and their life styles. We must ask ourselves the hard questions and determine whether we are placing an unbearable burden on those nearest to us.
The first thing in this examination is to objectively look at the habits and schedules that our pets adhere to. Are the dogs housebroken? Or, are we house broken? By this, I mean, do we anticipate when the dogs need to go outside or do the dogs let us know that need? Are we home most of the time to meet the need in the former situation? Are the dogs able to go with us most of the time when we leave home? Are they able to stay outside when we leave? Is there a doggie door and do they use it? Are other creatures safe to leave with the dogs? How often do the dogs eat? Are they on a special diet and if so, is this diet expensive? Do any of our dogs need special veterinary care? How much does this care cost along with preventative heart worm treatment and flea and tick preventative? Do our dogs sleep on doggie beds or on our beds and couches? These are just a few of the questions that we must ask ourselves. It might even be a good idea to examine the daily habits of the dogs and ourselves in our interactions with them and possibly make notes of them.
The next step is to look at the habits and schedules of the friends and family who we think might be able and willing to take care of our dogs when the time comes when we either are not there or are unable to care for them. Perhaps the most helpful analysis is to look at the answers to the questions above and put each answer beside the habits and schedule of the prospective caregivers. Do they fit together? Are the prospective caregivers aware of all aspects of the care of our dogs? Would they actually be able practically to give the care to which our dogs are accustomed? They may want to, but can they? We are not talking a weekend’s worth of care, but a lifetime of care. We must be realistic about this situation. Are there other animals in the homes of the prospective caregivers and would we be placing stress on those animals as well as on our own and on the caregivers themselves?
Cats are a different story. Cats have peculiar habits. Because we love the character of the CAT, we put up with and even laugh at the peculiar habits. We make allowances for their behavior that can only be described as unacceptable. And what are these allowances? Some cats eat too fast and then vomit up the undigested food wherever they happen to be, whether it is on the kitchen table or the new couch. Some cats just have to "do paws" on furniture and we consider this the cost of their companionship and do not worry about it too much. Some cats, when they are stressed, just poop or pee wherever they feel the need, including spraying furniture and walls. We just find another solution that may or may not work and succumb to their purring as they show us that they are the most important parts of our lives. Some cats insist on sitting on the table while we eat and sharing our food with us. We feed into it. Some cats will not use a litter box that has already been used, causing us to scoop the box more than once daily. Some cats think that the commode top is a great place to poop, so we leave the top up. Some cats think that the bathtub or sink is a great place to pee, so we rinse it out before use. Some cats just have to jump on our shoulders as we walk by them, just for the fun of it and we, too, are amused. Whatever the peculiar habits may be, we adjust and enjoy them to an extent. But, there again, we love these independent felines for all of their peculiarities and in spite of them. We have to ask ourselves if other people will also love them enough to adjust and enjoy them.
Like for the dogs, we also have to ask the questions about health, diet and cost for taking care of our cats as they grow older and as they most likely develop physical problems. They also need the routine care of teeth cleaning, check-ups, and flea and tick preventatives. These are also expensive. So, once again, with our cats, we must look at their habits and ours and match them with the prospective caregivers.
Of course, there are other pets who are loved who are not cats or dogs. There are horses, hamsters, degus, guinea pigs, goats, llamas, exotic birds, monkeys, fish, snakes, lizards, and many other creatures that people have and love. The same examination must be made for each of these pets also.
If after going through the examination, we find that we have the perfect family or friends or other person who can care for our animals, then the next thing that must be tackled is to inform these folks and get their agreements as well as memorializing the agreements. There are ways to do this that are not expensive and are legally binding.
Most of us do not have the financial wherewithal to leave an immense amount of money to give to prospective caregivers and this is one of the most distressing aspects of what will happen to our animals when we die or when we become incapacitated. This becomes a real dilemma for us in the examination of the situations and lifestyles of our family and friends. Possibly and most likely, our friends and members of our families are in the same situation with limited resources as we are and have pets that they love and care for. In the larger scheme of things, and looking at the overall picture, it is painful to think that so many beloved pets end up at shelters and many, many will be euthanized. Does this mean that if we have little resources and no one appears to be able to take on our animals, that we should just plan to have them euthanized? No. There are other solutions.
What are these solutions? There are, of course, the wise and perhaps the most unused resources. These are the resources that come from financial planning and estate planning. Unfortunately, for the general public, (and the general public love their pets as much as those who are wise and plan well,) financial planning and estate planning is as foreign to their knowledge and lifestyle as planning a trip to Mars. Practically speaking, it just does not happen, nor will it happen. Most of us are struggling to get by from day to day. One of the reasons that we have pets is to enjoy our lives even though often it is a struggle to just survive emotionally, physically, and financially. So what about these folks, the majority of us?"
Here are some possible solutions:
1. Place the animals in a new home or with a new facility
It may be easiest simply to place the animals before death or incapacity with a new caretaker along with any available necessary funds. This method offers the least protection for the animals, though. It may help for the owner or operator to maintain a life insurance policy or retirement plan designating the new caretaker as beneficiary.
For pet owners or small unincorporated sanctuaries, rescues or shelters, one solution may be to enter into a contract with family, friends or others willing to care for the animals. The contract should address issues such as appropriate housing and care, exercise, appropriate veterinary care, placement or adoption criteria and euthanasia.
Contracts may be helpful for owners or operators trying to place animals because they are closing a shelter, rescue or sanctuary or in the event of incapacity. It is important to check with an attorney on the enforceability of such contracts made in anticipation of death.
A will becomes effective only upon death. There are certain requirements for a will to be valid. These requirements vary depending on the jurisdiction. Typically, provisions can be made in a will for the care of animals which will be treated as property. A problem in providing for care of animals through a will is that it is often not possible to ensure the animals will be cared for as provided. It may be helpful to state in the will that the funds left to the caretaker must be used for the care of the animals, but it will be difficult to enforce this obligation.
4. Revocable living trust
The owner or operator can also create a living trust to provide for the eventual care of the animals. Under the provisions of a revocable living trust, the owner or operator is actually also the trustee but is required to keep, administer, and distribute the trust property. The owner or shelter operator can revoke the trust, but upon death or incapacity a successor trustee takes over and distributes the property according to the trust provisions. Provisions can be made for a trust to benefit a caretaker or the animals. A living trust avoids the costs and difficulties of probating a will.
5. Life insurance and retirement plans
One way to provide funds for the care of animals, always an important factor in planning for their future with a new caretaker, is to designate the caretaker as a beneficiary in a life insurance policy, a qualified retirement plan, IRA or the like. There are forms that must be completed and submitted to assure the proceeds of these plans or policies go to a certain beneficiary.
It is difficult, however, to assure the proceeds will be used for the care of the animals without a trust or some contractual arrangement. Even then there are limits on the enforceability of the obligations.
6. Durable power of attorney
By executing a Durable Power of Attorney, a pet owner or small rescue operator can authorize a designated person to care for the animals in the event they become physically or mentally incapacitated. The Durable Power of Attorney should be self-executing and can even direct the authorized person, for example, to make available money for the care of the animals and place them in permanent homes, if necessary.
7. Pet trusts
In the past several years most states have passed legislation allowing the creation of pet trusts. These laws allow pet owners to provide for the care of their animals after they are no longer able to look after them. Pet trust laws allow owners to set up a trust with funds designated for the care of the animals and a trustee who can also serve as caregiver. Under some state laws a court can appoint a caregiver if one has not been designated by the pet owner.
Unlike for trustees in most trusts, pet trustee/caregivers are generally not required to file reports or accountings or pay fees. After all, most trusts have limited funds and trustees also serving as caretakers have little incentive or time to comply with onerous and unnecessary reporting duties.
Most state pet trust laws allow persons appointed by the court to enforce the terms of the trust. In other words, if the trustee/caregiver is not caring for the pets, "[a] person having an interest in the welfare of the animal" may request the Court intervene and appoint someone to enforce the trust. It should be noted, though, some state laws restrict the ability of animal rights groups to try to enforce these trusts. The trust itself may designate someone to enforce the terms of the trust. Or the court on its own may simply appoint someone to enforce the terms of the trust. In a few states the trusts can be set up but are not enforceable.
In setting up the trust, it is important to designate the trustee as owner of the animals. It is also important to make clear the caretaker agrees to honor the terms of the trust even if the animals are moved into a jurisdiction that does not recognize pet trusts.
Under many of these pet trust laws, a court can determine that more money than is needed has been left for the care of pets. The laws, in effect, protect human heirs from a loving pet owner who attempts to place in trust more money than the pets may need for their care. If a pet owner does not want others to protest the amount given for the animal’s care or get any of the proceeds, it may be a good idea to state in the trust document that any sums declared excessive by a court will go to a designated animal charity.
Under these laws the money or property in the trust can only be used for the care of the animal. It does not belong to the caregiver. Note that few state laws allow compensation for the caregiver unless it is stated in the trust document. Even then some state laws do not appear to allow compensation for the caregivers.
The lack of compensation may make it difficult for a court to find a caregiver if one has not been designated. It may also mean a pet owner cannot depend on a designated caregiver.
Still, pet trust laws are preferable to making a bequest in a will of money or property to a caretaker in the hope he or she will care for a beloved pet. These pet trust laws are better than life trusts under which a monetary gift is made to a caretaker with the proviso he or she must care for the pet. With a life trust it is much more difficult, if not impossible, to assure the care of the pet.
These pet trust laws are with some exceptions generally modeled after the Uniform Trust Code §408 or Uniform Probate Code §907. The latter basically has incorporated §408 into the Uniform Probate Code §907. Other states have some more limited provisions for pet trusts. A few states have enacted independent statutes for pet trusts.
8. Lifetime care programs
Many organizations do offer programs for the future care of animals. These programs typically require the owner to make a substantial payment of bequest in return for the lifetime care of the animals. This is typically not a practical solution for pet owners or operators of small rescues, sanctuaries or shelters.
Non-profits are owned by the people of the state in which they are incorporated; they do not have stockholders or individual owners. Thus, in closing a non-profit, it is typically not legal simply to transfer assets to an individual, group of individuals, an unincorporated entity or a for profit corporation. Of course, animals can be transferred pursuant to the non-profit’s adoption or placement policies to anyone or organization. But it is not typically legal to sell or give away the non-profit itself or its assets except to another non-profit. In other words, a non-profit cannot offer cash, revenues, real estate, buildings or other assets to someone or an organization other than a non-profit to help with the care of the animals.
That leaves basically two ways to plan for the continuing care of animals in the event of closing a non-profit or departure or death of the primary caretaker:
1. As a non-profit, the organization can continue to operate despite the death or departure of the primary or even sole caregiver. The Board of Directors can plan for this event by adding ahead of time another person as Director who can then take over and operate the non-profit. Also, it is possible to obtain life insurance on the founder or principal caretaker. The non-profit can be designated as a beneficiary, and the proceeds can then be used to help continue the operation of the non-profit.
2. The Board of Directors can enter into a contract with another non-profit or organization to care for the animals upon the occurrence of a contingency such as dissolution of the non-profit or death of a principal caretaker. Typically, the assets of the closing non-profit would be transferred as well under the contract. If there is a life insurance policy for the founder or principal caretaker, the non-profit that has agreed to care for the animals can be designated as the beneficiary.
The contract should address issues such as appropriate housing and care, exercise, appropriate veterinary care, placement or adoption criteria and euthanasia.