Greenville Estate Attorney: “Honorary Trusts for the Care of Animals”
October 15, 2009
South Carolina is one of about 38 states plus the District of Columbia that allow for trusts to be established for the benefit of animals and pets. While such trusts had not been recognized under the state common law because there were no human beneficiaries to enforce their terms, the South Carolina Trust Code now makes such trusts valid.
South Carolina Trust Code Section 62-7-408, entitled Trust For Care of Animal is the statutory authority. Part A states that animals in being or in gestation at the time the trust is created can be beneficiaries. Additionally, animals born after the trust is created can be added as beneficiaries as long as the Settlor/Grantor is still alive at the time.
Part B of the statute states deals with the problem of enforcement of the trust. Part B allows the trust to designate a person charged with the responsibility of enforcing the trust. If the trust does not designate anybody to enforce it, then a court can be requested by any person concerned with the welfare of any animal beneficiary to appoint a person to enforce the trust or to remove a person so appointed.
Under the common law, such an honorary pet trust could run afoul of the common law rule against perpetuities because there are no human beneficiaries. Mercifully, South Carolina no longer follows the common law rule against perpetuities. Even so, by statute all honorary pet trusts must terminate upon the death of the last animal beneficiary.
Part C of 62-7-408 deals with the situation where there are excess funds in the trust beyond what is or will be needed for the care of the animal. The statute allows the trust’s terms to direct where the excess funds will go. If the trust does not so direct, the statute directs that the excess funds are to be paid back to the Settlor/Grantor of the trust, if still alive, or if not, to the Settlor/Grantor’s successors in interest.
An interesting case concerning honorary pet trusts arose in New York, in the Estate of Leona Helmsley. In that case, an honorary pet trust was created for Ms. Helmsley’s pet dog Trouble. Ms. Hemlsley directed that $12,000,000.00 be placed into the trust (interestingly two grandchildren were disinherited and two were to receive $10,000,000.00 each of the multi-billion dollar estate). As could be expected, the two disinherited grandchildren argued against Ms. Helmsley’s Last Will, arguing she was mentally unfit to validly execute it. The case was settled, with the trust for Trouble being reduced to a relatively paltry $2,000,000.00 (poor dog), and the two children receiving $6,000,000.00 each.
Stay tuned to this case. Additional litigation is underway. Ms. Helmsley apparently had quite a fondness for dogs. She had directed that the multi billion dollar charitable trust she created was to be used at least in part for the benefit of dogs. Several animal right’s groups, including the American Society for the Prevention of Cruelty to Animals, have sought permission to intervene in the matter of the estate and charitable trust, stating that less than $100,000.00 of the trust’s initial grants of $136,000,000.00 have been made to organizations involved with helping dogs. There are also allegations that the trustees are utilizing trust assets to fund their own agendas. This one is getting interesting.
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