Estate Planning for Millennials

//Estate Planning for Millennials

Part of a series involving practical solutions and tips for millennials to plan their Estates, as well as the consequences of failing to do the same.

Part One: Who gets the dog?

Whatever one may think of treating our dogs like people- whether it is called ‘humanification,’ ‘personhood,’ or some other means of endowing dogs with humanlike qualities- it is impossible to deny the place they have in our hearts, minds and imaginations. From Odysseus’ ever-faithful dog Argo in Homer’s The Odyssey, to the All-American [C]ollie Lassie, to the Jetsons’ futuristic canine Astro, to Dorothy’s little dog Toto too, they are beloved figures in literature, movies and television. And in real life, where would we be without St. Benards and their casks of brandy in the Alps, Pavlov’s conditioned-response subjects, Balto the hero sled-dog racing to the rescue in the Artic, or, of course the [Obama’s] daughters’ [Portuguese Water Dog, Bo]?[1]

As I write, my little dog, Princess, naps quietly at my feet. No doubt she is dreaming of chasing squirrels and eating treats. My love for her is immeasurable and I frequently refer to her as my baby. I am in my thirties, unmarried, and she is my constant companion. This dynamic is not uncommon for many millennials, particularly those of us who, through circumstance, or deliberate choice, have delayed or simply decided not to marry or have children. Indeed, millennials now make up the largest segment of pet owners in the country, with 7 out of every 10 of us owning a pet and 67% of those millennial pet owners, referring to the pet as part of the family.”[2]

Courts in New York frequently deal with pet custody issues in divorce or family law cases. See Hennet v. Alan, 43 Misc 3d 542 [Sup Ct, Albany County 2014] (deviating from common law belief that pets are merely personal property, but rather a “special category of property,” such that a release agreement executed by defendant as to his rights in personal property did not relinquish his right to custody of the family dog); Travis v. Murray, 42 Misc 3d 447 [Sup Ct, NY County 2013] (where court declined to apply “best interest” standard in pet custody case but instead applied a “best for all” standard). But what about if you die without a will? What happens to your fur baby? For a single person this could mean your closest living relative, typically a parent or parents, will get the pet despite the existence of a long-term partner who you would prefer your pet to live with.

NY EPTL § 4-1.1 provides estate distribution rules when a person dies intestate, i.e., without a valid will. Subsection (a) (4) states that if the decedent dies “with one of both parents [then living], and no spouse and no issue, the whole to the surviving parent or parents.” Traditionally, New York courts have held that animals are personal property-i.e., property, exclusive of real estate, that you own; analogous to a piece of furniture or a vehicle. See Mullaly v. People, 86 NY 365 [1881]; Schrage v. Hatzlacha Cab Corp., 13 AD3d 150 [1st Dept 2004]; Rowan v. Sussdorff, 147 App Div 673 [2nd Dept 1911]; Fowler v. Town of Ticonderoga, 131 AD2d 919 [3rd Dept 1987]; ATM One, LLC v. Albano, 2001 NY Slip Op 50103 [U] [Nassau Dist Ct 2001] . What that means is that if you die without a will and you are unmarried, your beloved dog, cat, lizard, turtle, bird, or the like, just like your 2012 Honda, may be going directly to your mom or dad as part of your residuary estate. Even if your partner objects, the pet is still likely to end up with your relative.

[In] non-matrimonial actions regarding ownership and possession of dogs [that] have generally come before New York Courts … it is the property rights of the litigants, rather than their respective abilities to care for the dog or their emotional ties to it, that are ultimately determinative.[3]

Many people are reluctant to plan for their own deaths, it’s not a fun topic to think about. Especially as a young person. But think about what would happen to your pet if you died tomorrow without any direction as to how you want your pet cared for. Would your mom even know the name of the vet or what medications the dog needs to treat her elevated liver enzymes? Would your dad honor the cat’s bedtime routine of brushing her fur while listening to 90s alternative rock? No doubt your partner would. You share your life with this person. So how can you best ensure that your pet is cared for in the same manner as you would care for him or her in the event of your death or incapacity?

New York State allows people to provide for their pets in their wills under so called “Honorary Trusts.” See EPTL § 7-8.1. This trust is a relatively new concept in our legal history.[4] Under traditional common law, these trusts were invalid because a valid trust needed an identifiable beneficiary, and the beneficiary needed to be a person or corporation.[5] Why? Because only a person or corporation has standing to enforce their rights in the trust.[6] However, with the passage of time and the increasingly ‘humanization’ of our pets, New Yorkers, as well as people nationwide, can now create these pet trusts.[7]

Pet owners in New York can now create a trust document and deposit funds to be held in trust for the care of their pet together with directions, ranging from general to exceedingly precise, as to how the funds are to be invested and distributed.[8] In addition, the settlor can identify a specific trustee to administer the trust, conditions for the termination of the trust as well as name remainder beneficiaries (i.e., those who get any remaining income and/or principal of trust assets upon its termination).[9]

In divorce and family law cases, such as Hennet and Travis, infra, a recent trend has emerged. The court will not treat the distribution of pets in a divorce in the same manner as the distribution of personal property. The courts have recognized that pets, although traditionally designated as personal property, are special. When determining custody of dogs and cats the courts will now use a “best for all concerned” standard, applying such factors as how the pet was acquired, how the pet was cared for and the actual arrangement between the parties for spending time with the pet after the parties split up.[10]

Case law is silent as to whether this standard would be applied to determine pet custody between your partner and your parents in the event you die intestate without specific arrangements to care for your furry companion. Your death or incapacity should not be used as a lesson to the future lawyers of America about the harmful consequences of failing to provide for your pet. That’s why it is extremely important to work with a reputable and knowledgeable estate planner today to get more information on preparing a will with a valid honorary trust.

 

Contribution by Elizabeth A. Weikel, J.D. Ms. Weikel recently passed the Uniform Bar Examination and is awaiting admission to the Appellate Division, Third Department.

 

 

[1] Travis v. Murray, 42 Misc 447, 451 [Sup Ct, NY County 2013].

[2] Carley Lintz, How Millennials Spend on Their Pets, PET BUSINESS available at http://www.petbusiness.com/How-Millennials-Spend-on-Their-Pets/ [May 29, 2018].

[3] Travis, 42 Misc at 452-453.

[4] For an excellent discussion of the history, evolution and modern view on Testamentary Trusts, the reader is referred to Andrew B.F. Carnabuci, Note, Avoiding the Fate of Argos: The Duty of Pet Trust Protectors in Connecticut 31 QUINNIPIAC PROB. L. J., 281-334 [2018] available at: https://www.quinnipiaclawjournals.com/content/dam/qu/documents/sol/law-journals1/probate-law/volume-31/consolidated-pdfs/quinnipiac-probate-law-journal-volume-31-issue-3.pdf. Full disclosure: The Author of this Blog Post was on the editorial board that published this Student Note while in law school.

[5] See Jennifer A. Taylor, Note, A ‘Pet’ Project for State Legislatures: The Movement Toward Enforceable Pet Trusts in the Twenty-First Century, 13 QUINNIPIAC PROB L. J. 419, 420-421 [1999].

[6] See id.

[7] See Jim D. Sarlis, Pet Trusts: An Important Planning Tool, New York State Bar Association [summer 2018] available at  https://www.nysba.org/Journal/2018/Aug/Pet_Trusts__An_Important_Planning_Tool/  [last accessed Oct. 22, 2019].

[8] See id.

[9] See id.

[10] See Travis, 42 Misc at 460.

 

By |2019-10-31T10:16:40-04:00October 31st, 2019|Categories: TRK Blog|0 Comments