Pet Trusts: How They Work and Why You Should Have One
When we generally think about the lives of ultra-rich people like Jeff Bezos, Brad Pitt, etc. we imagine a life of ultimate luxury. Spending months on end in Europe, then, at the drop of a hat, hop on a private jet and fly out to anywhere else one may please. Dropping thousands or even millions of dollars on things average people couldn’t even comprehend. This extravagant lifestyle is something very few people even have the opportunity of enjoying and in most cases, this kind of generational wealth would be passed down for future descendants to enjoy. However, this doesn’t always have to be the case. In fact, in some cases the beneficiary isn’t human. Confused? Allow me to introduce you to Gunther IV.
Gunther IV is not a human, but rather a German Shepard and he has a net worth of almost 400 million dollars. This pup became the richest pet in the world in 1991, after his longtime owner Karlotta Leibenstein passed away, leaving all of her assets to Gunther, a sum of 100 million dollars at the time. Since then, Gunther (with the help of his employees) has quadrupled the wealth left to him, bought a mansion in Miami that was once owned by Madonna, and spends his days eating the finest foods money can buy (his favorites are truffles and caviar). While Gunther’s case is certainly an outlier, it also provides us with an interesting question: how can a dog legally own anything?
This outlandish lifestyle lived out by Gunther IV is the result of a pet trust, and while its practice has been around for quite some time, its legal standing is still in its infancy. Originally, pet owners would be able to leave funds and instructions for the care of their pet in their will or trust, but the actual enforcement of them was highly questionable. This is because under common law, animals are considered property making them ineligible beneficiaries. Due to this inadequate legal weight, starting as early as 1991 states began passing laws to ensure their enforceability and as of today, all 50 states have a pet trust law in place. In our home state of California, pet trusts are enforceable until passing of the last surviving animal specified in the trust or unless stated otherwise.
Of course, with virtually all the changing landscape for pet trust legality occurring in the last two decades, they are not without their disadvantages. For example, under many pet trust laws, including California, the state specifics that all funds in the trust must be used only for the benefit of the animal. In order to ensure this happens, the state will allow “any person interested in the welfare of the animal or any nonprofit charitable organization that has as its principal activity the care of animals may petition the court regarding the trust” which means that organizations like the Humane Society, PETA, etc. can effectively step in on the animal’s behalf. Allowing this also opens the door for these organizations to request annual financial records, check-in’s, etc. to make sure the funds are being used properly. While this can be beneficial in some circumstances, for many it may cause unnecessary stress and headaches for the caretaker of the animal.
In order to get the most out of having a pet trust in place, it is important to consider all other alternatives to ensure that is the most beneficial for your situation. If you have a friend or loved on that would agree to take care of your pet without having a trust or legal obligation to do so (and that you trust to follow through!), it may be best to skip the pet trust altogether. However, if you do not have someone willing to do so, if you have exotic or unique animals that require expert care, or even pets that are likely to outlive their owners (titles, parrots, etc.), having a pet trust in place may be a great option.
-Written by: Dallas Droz
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