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Protecting pets in perpetuity

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Indiana Lawyer Focus

The non-profit American Pet Products Association estimates that this year, Americans will spend $50.84 billion on their pets – not surprising, considering the ever-increasing variety of treats, toys, and services for animals. But what happens to these pampered pets after their owners die? Are they consigned to a life of off-brand food? Forced to take up residence in a cramped kennel?

Since 2005, Indiana residents have had the option of creating a trust for the benefit of their pets to ensure that their animals will continue to enjoy the quality of care to which they have become accustomed. But estate-planning attorneys say that despite some of the obvious advantages trusts have over wills, they haven’t yet seen many people creating these legal protections for pets.

A niche practice

In 2007, Jeffery Stinson, managing partner for Severns & Stinson, wrote an article about pet trusts.

“One of my reasons for writing that article when I did was that I had about three clients in six months interested in doing something for their pets,” he said. Thus far, however, he has had no requests to set up a pet trust. And Stinson admitted he has not created a pet trust for his own dog, either.

“They say the shoemaker is always the last one to have shoes,” he said.

Former State Representative Trent Van Haaften, an attorney with Evansville’s Bamberger Foreman Oswald & Hahn, said that several years ago, one of the firm’s clients had inquired about how to provide for horses through an estate plan. Van Haaften learned that many states already recognized pet trusts, so he decided to introduce the pet trust bill in 2005.

“I think this probably holds true with most firms, that when you’re talking about estate planning, you’re essentially trying to advise your clients of all the available options out there,” he said. “I don’t know how much it’s been used across the state, but it’s just another option for people.”

Hall Koehler attorney Shawn Scott said she has a pet trust for her two Boston terriers. “And that is how I became the pet trust lawyer in this office,” she said. “Probably more than half of lawyers think they’re really stupid, but some people see the merit.”

Scott said one reason lawyers may snicker at the idea of pet trusts is because of the associated taxes.

“From a practical standpoint, in Indiana, we have inheritance tax, so it’s going to be a larger taxable gift than if you gave it to your kid,” she said. “This trust is taxed at the highest rate, so people think … why would you pay this tax?” And then I think beyond that, it’s just people’s opinions of animals. They think: What’s it really matter?”

Nevertheless, for some people, money is no concern when it comes to making sure their pets have a comfortable life.

“I would find that most people that are inclined to do this don’t care, they put significant financial resources into their pets,” Scott said. “And I haven’t done a lot of these. It doesn’t have a huge market, because it does take extra lawyer time – it’s kind of complicated; it’s more complicated than drafting for kids.”
 

dible-jeffrey-mug.jpg Dible

The American Society for the Prevention of Cruelty to Animals advises pet owners that they will spend a minimum of about $1,218 per year on basic care for a large dog. That includes food, toys, and regular veterinary care, but not boarding or unexpected medical treatments. With the rising costs of goods and services – and no minimum required for funding a pet trust – it’s not just aging socialites who are planning to provide for their pets.

“I have a pet trust in my will, and I’m not old or rich,” Scott said. “But we have two dogs that we care about … we really love our dogs.”

Untested waters

Jeffrey Dible, of Frost Brown Todd, led a continuing legal education program on pet trusts for the Indiana Continuing Legal Education Forum last year. He said he is unaware of any pet trusts being challenged in court. But because Indiana’s pet trust statute is so new, it may be several years before any of those trusts become active.

“If you’re careful enough in designing and drafting them … I think it would be pretty hard to break them or to be found invalid,” Dible said. Someone would have to prove that a decedent was not of sound mind or was tricked when setting up the pet trust, he explained, adding that the fact that there’s now a statute makes them harder to set aside.

A pet trust terminates with the death of the animal, or when multiple animals are named in a trust, with the death of the last surviving animal. Because a pet may die before the trust is defunded, a remainder beneficiary must be named. Choosing that remain-

der beneficiary wisely may be the key to avoiding court challenges, Dible said.

If, for example, the decedent’s grandchildren are named as remainder beneficiaries, they could argue that they are entitled to a bigger piece of the pie.

“The grandkids would be in a position to go into court and say: We think too much money is being reserved or set aside for these animals, and we want to change things,” Dible said.

In materials Dible prepared for his CLE presentation, he wrote: “If the settlor or testator who creates a ‘pet trust’ wants to deter human family members from challenging the level of funding of the trust, nothing in Indiana‘s Trust Code would prohibit the settlor or testator from including a provision that would automatically allocate all court-determined ‘excess’ assets to some other taker-in-default (such as a charitable organization) who would not have a strong incentive to object to the level of the trust’s funding.”

Indiana law regards pets as personal property, meaning someone can’t bequeath money to a pet any more than he can bequeath money to his favorite chair. And even when a person’s will sets aside funds for pet care, there is no guarantee that the decedent’s last wishes will be honored.


scott-shawn-mug.jpg Scott

“There’s no enforceability,” Scott said. “It’s just like when you give someone a diamond ring – you could sell it the next day.”

In a hypothetical worst-case scenario, an unscrupulous executor could pocket your pet’s funds and dump your animal at the nearest animal shelter. Setting up a trust makes that scenario less likely, although it never hurts to add some extra provisions to thwart thieves.

Scott said that some pet owners include provisions in their trusts requiring the named caretaker to have a veterinarian perform annual DNA analysis on the pet.

“They have some requirements to make sure that this is Fluffy,” Scott said, adding that people charged with care of the pets could find a lookalike replacement for a pet after it dies and continue milking the trust.

Scott said that if she and her husband were to die unexpectedly, she is confident their friends would look after their dogs. But in the unlikely event that some tragedy should befall her friends too, she wants her pets to be protected.

“They just become a part of your family. It’s hard to imagine them not having a good standard of care if you’re not around to do that,” she said. “People like my husband and I, we probably care for our pets – not better – but differently.”•

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  • ok but consider the needs of humans too
    Hmm I love pets, I have my own, and they are cared for lovingly. However this makes me uneasy: property set up for property's benefit; wow. How far we have come from the days when the Founding fathers like jefferson debated abolishing rights of inheritance altogether.

    Maybe people should benefit from property? What happens if you have needy natural heirs and the deceased is a dastardly kind who leaves his millions to a poodle? Sign me up for that one!
  • Great story!
    I agree and love Ms. Scott's rational and commentary on pet trusts. She is right, what will happen to our pets if we pass and then our friends who are to care for them, pass? Always best to prepare for the unknown, she definitely has her clients interests in mind. I never even considered the possibility that my trustee could/would replace my cats in order to reap funds! It's sad we have to prepare for this, but it's so true that we must! Great article, thank you!

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  1. California Sex Offender Management Board (CASOMB) End of Year Report 2014. (page 13) Under the current system many local registering agencies are challenged just keeping up with registration paperwork. It takes an hour or more to process each registrant, the majority of whom are low risk offenders. As a result law enforcement cannot monitor higher risk offenders more intensively in the community due to the sheer numbers on the registry. Some of the consequences of lengthy and unnecessary registration requirements actually destabilize the life’s of registrants and those -such as families- whose lives are often substantially impacted. Such consequences are thought to raise levels of known risk factors while providing no discernible benefit in terms of community safety. The full report is available online at. http://www.casomb.org/index.cfm?pid=231 National Institute of Justice (NIJ) US Department of Justice Office of Justice Programs United States of America. The overall conclusion is that Megan’s law has had no demonstrated effect on sexual offenses in New Jersey, calling into question the justification for start-up and operational costs. Megan’s Law has had no effect on time to first rearrest for known sex offenders and has not reduced sexual reoffending. Neither has it had an impact on the type of sexual reoffense or first-time sexual offense. The study also found that the law had not reduced the number of victims of sexual offenses. The full report is available online at. https://www.ncjrs.gov/app/publications/abstract.aspx? ID=247350 The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School Article DOI: 10.1086/658483 Conclusion. The data in these three data sets do not strongly support the effectiveness of sex offender registries. The national panel data do not show a significant decrease in the rate of rape or the arrest rate for sexual abuse after implementation of a registry via the Internet. The BJS data that tracked individual sex offenders after their release in 1994 did not show that registration had a significantly negative effect on recidivism. And the D.C. crime data do not show that knowing the location of sex offenders by census block can help protect the locations of sexual abuse. This pattern of noneffectiveness across the data sets does not support the conclusion that sex offender registries are successful in meeting their objectives of increasing public safety and lowering recidivism rates. The full report is available online at. http://www.jstor.org/stable/full/10.1086/658483 These are not isolated conclusions but are the same outcomes in the majority of conclusions and reports on this subject from multiple government agencies and throughout the academic community. People, including the media and other organizations should not rely on and reiterate the statements and opinions of the legislators or other people as to the need for these laws because of the high recidivism rates and the high risk offenders pose to the public which simply is not true and is pure hyperbole and fiction. They should rely on facts and data collected and submitted in reports from the leading authorities and credible experts in the fields such as the following. California Sex Offender Management Board (CASOMB) Sex offender recidivism rate for a new sex offense is 0.8% (page 30) The full report is available online at http://www.cdcr.ca.gov/Adult_Research_Branch/Research_Documents/2014_Outcome_Evaluation_Report_7-6-2015.pdf California Sex Offender Management Board (CASOMB) (page 38) Sex offender recidivism rate for a new sex offense is 1.8% The full report is available online at. http://www.google.com/url?sa= t&source=web&cd=1&ved= 0CCEQFjAA&url=http%3A%2F% 2Fwww.cdcr.ca.gov%2FAdult_ Research_Branch%2FResearch_ documents%2FOutcome_ evaluation_Report_2013.pdf&ei= C9dSVePNF8HfoATX-IBo&usg=AFQjCNE9I6ueHz-o2mZUnuxLPTyiRdjDsQ Bureau of Justice Statistics 5 PERCENT OF SEX OFFENDERS REARRESTED FOR ANOTHER SEX CRIME WITHIN 3 YEARS OF PRISON RELEASE WASHINGTON, D.C. Within 3 years following their 1994 state prison release, 5.3 percent of sex offenders (men who had committed rape or sexual assault) were rearrested for another sex crime, the Justice Department’s Bureau of Justice Statistics (BJS) announced today. The full report is available online at. http://www.bjs.gov/content/pub/press/rsorp94pr.cfm Document title; A Model of Static and Dynamic Sex Offender Risk Assessment Author: Robert J. McGrath, Michael P. Lasher, Georgia F. Cumming Document No.: 236217 Date Received: October 2011 Award Number: 2008-DD-BX-0013 Findings: Study of 759 adult male offenders under community supervision Re-arrest rate: 4.6% after 3-year follow-up The sexual re-offense rates for the 746 released in 2005 are much lower than what many in the public have been led to expect or believe. These low re-offense rates appear to contradict a conventional wisdom that sex offenders have very high sexual re-offense rates. The full report is available online at. https://www.ncjrs.gov/pdffiles1/nij/grants/236217.pdf Document Title: SEX OFFENDER SENTENCING IN WASHINGTON STATE: RECIDIVISM RATES BY: Washington State Institute For Public Policy. A study of 4,091 sex offenders either released from prison or community supervision form 1994 to 1998 and examined for 5 years Findings: Sex Crime Recidivism Rate: 2.7% Link to Report: http://www.oncefallen.com/files/Washington_SO_Recid_2005.pdf Document Title: Indiana’s Recidivism Rates Decline for Third Consecutive Year BY: Indiana Department of Correction 2009. The recidivism rate for sex offenders returning on a new sex offense was 1.05%, one of the lowest in the nation. In a time when sex offenders continue to face additional post-release requirements that often result in their return to prison for violating technical rules such as registration and residency restrictions, the instances of sex offenders returning to prison due to the commitment of a new sex crime is extremely low. Findings: sex offenders returning on a new sex offense was 1.05% Link to Report: http://www.in.gov/idoc/files/RecidivismRelease.pdf Once again, These are not isolated conclusions but are the same outcomes in the majority of reports on this subject from multiple government agencies and throughout the academic community. No one can doubt that child sexual abuse is traumatic and devastating. The question is not whether the state has an interest in preventing such harm, but whether current laws are effective in doing so. Megan’s law is a failure and is destroying families and their children’s lives and is costing tax payers millions upon millions of dollars. The following is just one example of the estimated cost just to implement SORNA which many states refused to do. From Justice Policy Institute. Estimated cost to implement SORNA Here are some of the estimates made in 2009 expressed in 2014 current dollars: California, $66M; Florida, $34M; Illinois, $24M; New York, $35M; Pennsylvania, $22M; Texas, $44M. In 2014 dollars, Virginia’s estimate for implementation was $14M, and the annual operating cost after that would be $10M. For the US, the total is $547M. That’s over half a billion dollars – every year – for something that doesn’t work. http://www.justicepolicy.org/images/upload/08-08_FAC_SORNACosts_JJ.pdf. Attempting to use under-reporting to justify the existence of the registry is another myth, or a lie. This is another form of misinformation perpetrated by those who either have a fiduciary interest in continuing the unconstitutional treatment of a disfavored group or are seeking to justify their need for punishment for people who have already paid for their crime by loss of their freedom through incarceration and are now attempting to reenter society as honest citizens. When this information is placed into the public’s attention by naive media then you have to wonder if the media also falls into one of these two groups that are not truly interested in reporting the truth. Both of these groups of people that have that type of mentality can be classified as vigilantes, bullies, or sociopaths, and are responsible for the destruction of our constitutional values and the erosion of personal freedoms in this country. I think the media or other organizations need to do a in depth investigation into the false assumptions and false data that has been used to further these laws and to research all the collateral damages being caused by these laws and the unconstitutional injustices that are occurring across the country. They should include these injustices in their report so the public can be better informed on what is truly happening in this country on this subject. Thank you for your time.

  2. Freedom as granted in the Constitution cannot be summarily disallowed without Due Process. Unable to to to the gym, church, bowling alley? What is this 1984 level nonsense? Congrats to Brian for having the courage to say that this was enough! and Congrats to the ACLU on the win!

  3. America's hyper-phobia about convicted sex offenders must end! Politicians must stop pandering to knee-jerk public hysteria. And the public needs to learn the facts. Research by the California Sex Offender Management Board as shown a recidivism rate for convicted sex offenders of less than 1%. Less than 1%! Furthermore, research shows that by year 17 after their conviction, a convicted sex offender is no more likely to commit a new sex offense than any other member of the public. Put away your torches and pitchforks. Get the facts. Stop hysteria.

  4. He was convicted 23 years ago. How old was he then? He probably was a juvenile. People do stupid things, especially before their brain is fully developed. Why are we continuing to punish him in 2016? If he hasn't re-offended by now, it's very, very unlikely he ever will. He paid for his mistake sufficiently. Let him live his life in peace.

  5. This year, Notre Dame actually enrolled an equal amount of male and female students.

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