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Tags: equestrian | trusts | estate planning | pets

Equestrian Legacy Planning Through Trusts

Equestrian Legacy Planning Through Trusts
(Anastasia Shapochkina/Dreamstime.com)

By    |   Wednesday, 17 January 2018 04:12 PM EST

For some people, their most-prized possession is not a piece of jewelry or classic automobile, but rather, one of the four-legged variety. Horses are loved companions, pets, and riding partners, and they sometimes outlive their owners. Providing for a horse (or other animal) after death can be every bit as important to a horse owner as providing for children or grandchildren. For pennies on the dollar you can provide lifetime care and protection for your animals.

Leona Helmsley famously left a large part of her fortune to care for her dog, Trouble, earning her the nickname “Queen of Mean.” Some would say the New York courts were mean in reducing the amount set aside for Trouble from $12 million to $2 million. But the point is that providing for cherished animals is incredibly meaningful to their owners.

Horses are considered tangible personal property, and previously were not permitted to be the objects of a gift. In the past, estate planning for horse owners consisted of making a bequest to an individual with a request that they use the funds for the horse’s care. Such planning was based on wishful thinking; the money might be squandered if the donee were involved in a lawsuit, or if he or she spent or gambled away the gifted funds.

A horse’s needs are considerable and costly, from boarding and grooming to feed and veterinary care. Horses can live for 25 to 30 years, and many owners have multiple horses. So, funds to care for a deceased owner’s horses may need to last a couple of decades after the owner’s death.

In recent years, several states (including Florida) have adopted laws permitting a horse (and other animals) to be the object of a trust fund. So now, just as one may set aside funds in trust for a child, so too, can a “pet trust” be established to provide for the continued care and maintenance of a horse after the owner’s death.

For some horse owners, establishing a trust fund is about making sure an older horse can be retired to a farm, whereas the owner of a horse in its prime may wish to provide a means for the horse to continue in competition. For ease of administration, a single trust fund can provide for multiple horses. The trust terminates upon the death of the last animal for which the trust was established and the balance can be paid over as the owner directs in the trust document.

The horse owner should consider issues of custody of the horse and funding of the horse’s care. Custody refers to the designation of an individual to oversee the horse’s daily needs. Funding refers to the appointment of a trustee to hold, manage, and distribute the trust funds for the horse and the amount of funds to be set aside.

Horse trusts can be established and funded during the owner’s lifetime or upon the owner’s death through his or her will or as a beneficiary of a life insurance policy. The higher the quality of care that is desired and the more animals to be provided for, the more attractive is the use of an insurance policy on the life of the owner to fund the horse trust, while maintaining the owner’s remaining assets for bequests to family members and charitable causes.

Richard S. Bernstein, CEO of Richard S. Bernstein & Associates, Inc., West Palm Beach, is an insurance advisor for high net worth business leaders, families, businesses, municipalities, and charitable organizations. An insurance advisor to many of America’s wealthiest families, he is a writer, trusted local and national media resource and expert speaker on estate planning and health insurance. Visit his website at www.rbernstein.com. To read more of his reports — Click Here Now.

Benjamin P. Shenkman, Esq. is a partner in the Wellington, Florida, law firm of Gonzalez, Shenkman & Buckstein, P.L. Mr. Shenkman has represented families in estate and asset protection planning in Palm Beach County for over two decades.

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For some people, their most-prized possession is not a piece of jewelry or classic automobile, but rather, one of the four-legged variety.
equestrian, trusts, estate planning, pets
Wednesday, 17 January 2018 04:12 PM
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