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Featured Article (August 2006) A Change in Virginia Law Benefits Horse Owners If you have ever worried about what would happen to your horse in the case of your death or disability, Virginia’s new trust laws may help ease your mind. On July 1, 2006 Virginia’s version of the Uniform Trust Code takes effect and with it is created a provision legalizing trusts set up for the benefit of animals. Whereas prior to the passage of the new statute, trusts for the benefit of animals were not recognized and therefore not enforceable in Virginia, horse owners can now fund a trust with enough property or cash to provide care for their horse for the rest of its life. The trustee of the trust can make payments on a regular basis to your horse’s caregiver to meet your horse’s regular needs and can also pay for extraordinary expenses, like major injuries or colic surgery, should they come up. When drafting a trust for your horse, it’s important to be as specific as possible. Be sure to include the following specific information: • The name and address of the caregiver and one or more alternate caregivers. These are the people with whom your horse would live after your death, or during any period of disability when you could not care for your horse • The name and address of the trustee and also an alternate trustee in case your first choice is unable to serve • Detailed information identifying your horse (include tattooing or branding information if applicable) • Requirements that your trustee regularly visit the horse and inspect the care arrangements. This will ensure that your wishes for your horse are being met and that no equine identity fraud is occurring • The standard of living that you want for your horse, being as detailed as possible. Some items to consider are: • Types of food, hay and supplements • Stabling requirements • Exercise routines • Turn out arrangements • Frequency of veterinary, farrier and dental visits • Alternative or complimentary care (massage, chiropractic or acupuncture) • Description of your property or assets that will fund the trust • Instructions for what to do with any funds remaining after the death of your horse • Instructions for the final disposition of your horse’s body When determining the amount of property to leave in trust for your horse’s benefit, be careful not to leave an amount greatly in excess of the horse’s reasonable care expenses. A court could step in and declare the trust "excessive" and invalidate it after your death if it is significantly over-funded. Finally, remember that trusts are taxed on their income, but trusts for the benefit of animals are taxed at a much lower rate than most trusts. Be sure to draft your trust with instructions for your trustee to manage the trust assets in a way that will minimize the tax effects. With a little planning, Virginia’s horse owners can now rest assured that their equine partners will always be properly cared for, even in the case of their own death or disability. April R. Fletcher is an estate planning and trust administration attorney in Albemarle County, Virginia where she resides with her husband, six dogs, two cats, four horses, four donkeys, six goats and four hens. For specific questions regarding a trust for your animal(s), or other estate planning issues, contact April at (434) 817-4003 or april@vepcharlottesville.com.
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