Assigning Assets and Pets to a Revocable Living Trust During the Pet Owner’s LifetIme
Posted by: Brian E. Barreira on: March 9, 2012
There are very few people who want to leave everything in trust for their pets, and the Massachusetts pet trust law prohibits leaving an unreasonable amount to be held in trust for the benefit of pets. The clients that I have dealt with recently who wanted to take advantage of their new opportunity to leave funds in trust for their p
ets have done a specific dollar amount or percentage of their revocable living trust.
To be able to have the pet taken care of both during the pet owner’s disability and after the pet owner’s death, the Trustee needs the authority to make expenditures for the benefit of the pet. The pet can be assigned to the trust when the trust is established (or amended) or the person serving as agent or attorney-in-fact in the pet owner’s durable power of attorney can assign ownership of the pet and other assets to the trust. Only then can the assets or income of the trust be utilized for the pet’s benefit. To minimize the Trustee’s potential financial liability to anybody inheriting from the trust, it is also advisable for the trust to have an explicit provision authorizing payments to or for the benefit of the pet.
What Are the Income Tax Issues for Massachusetts Pet Trusts?
Posted by: Brian E. Barreira on: October 15, 2011
A pet trust that has investments and earns any income has to file annual federal and state income tax returns. Unless the pet trust provides for payments to a qualifying charity that is caring for your pet, the trust may owe income taxes on an annual basis.
The trust will be considered a complex trust for federal and Massachusetts income tax purposes. Trustee’s fees will serve as a deduction against the taxable income of the trust.
If any person or entity is paid by the trust for their services, the Trustee of the pet trust will be responsible for sending the appropriate tax forms to the service-provider.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
What is Reasonable Compensation for the Trustee of a Massachusetts Pet Trust?
Posted by: Brian E. Barreira on: June 20, 2011
Under Massachusetts law, a Trustee is entitled to a fee that is ”reasonable.” Reasonable persons can have disagreements about what is a reasonable fee for services as a Trustee, so it is important to give guidance in the trust document.
The person establishing the trust can and should establish the method for compensating persons who serve in each key role, including Trustee. 
If a bank will be serving as Trustee, the bank’s fee schedule will establish the fee, but if a person who doesn’t normally serve as Trustee will be serving, the method of determining compensation should be dealt with.
Should the Trustee’s fee be based on an hourly rate or a percentage of the total amount of assets in the trust? There is no right answer. Basing the fee purely on an hourly rate would result in scrutiny by the Monitor, and disagreements could be the result. On the other hand, a percentage fee could result in the Trustee being overcompensated in some cases or undercompensated in others. In many cases, a blended fee could make sense, such as a low percentage of the assets plus a low hourly rate.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
Should the Trustee of Your Massachusetts Pet Trust Be Given a Limited Durable Power of Attorney?
Posted by: Brian E. Barreira on: June 2, 2011
Consider what happens if you become disabled at some point, and funds will be needed to care appropriately for your pet. If you have a funded stand-alone revocable trust, the Trustee could step right in and provide for your pet financially.
If you do not have a funded trust, perhaps the Trustee should be given a limited Durable Power of Attorney to allow some of your funds during your lifetime to be spent on the care of your pet. By use of the Durable Power of Attorney, some of your funds could be moved into the Massachusetts Pet Trust upon your disability.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
Preventing Court Action to Reduce the Funds in Your Massachusetts Pet Trust
Posted by: Brian E. Barreira on: May 12, 2011
Based on my experience, it is my belief that a lawyer for an heir or charity will think twice about mounting a challenge to a trust if it can be quickly shown that the amount funding the Massachusetts Pet Trust was the result of careful budgeting. Thus, establishing a Life Care Plan through the pet’s Veterinarian would be extremely helpful to defend the trust.
The lawyer potentially challenging the trust will be even more reluctant to proceed if the lawyer’s client can receive no current benefit from the challenge (especially if it means that lawyer would have to wait an undeterminable amount of time to receive payment for services).
The new Massachusetts Pet Trust law provides upon trust termination, which presumably includes trust reduction, that the assets get reallocated “as directed in the trust instrument,” so it can be helpful in preventing challenges to include a trust clause that prevents acceleration of anybody else’s interest if the funding of the pet trust is found excessive.
For example, such a non-acceleration clause could state that the funding of the pet trust may appear excessive to an outsider, but that it was your intention to use the trust as a method to provide a delayed distribution to the remainder person or remainder charity, and that the extra funds in the trust are meant to allow the Trustee to invest for higher total returns rather than for mere income.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
When Can the Amount in a Massachusetts Pet Trust Be Reduced by the Court?
Posted by: Brian E. Barreira on: May 8, 2011
Massachusetts law allows a judge to reduce the assets in a Massachusetts Pet Trust if the judge finds that the amount of assets is excessive. The law states that “the court may reduce the amount of property held by the trust if it that 
amount substantially exceeds the amount required for the intended use and the court finds that there will be no substantial adverse impact in the care, maintenance, health, or appearance of the animal or animals.”
It is unlikely that a judge would do so on the judge’s own action. The judge would likely be acting in response to a motion made by a person or organization looking for immediate gain.
With careful planning, disgruntled heirs can be prevented from mounting most challenges on the grounds of excessive funding of the pet trust. A long-term budget should be written out, as it is important that the amount going into the pet trust not simply be a number picked out of thin air. The maximum life expectancy of the pet should first be determined. Second, a Life Care Plan should be outlined for the pet, and the pet’s Veterinarian should be asked to estimate how much the Life Care Plan would cost. Third, compensation for the Caretaker, Trustee and Monitor should be estimated.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
Should Your Massachusetts Pet Trust Be a Provision in your Will, or Should It Be a Separate, Stand-alone Trust?
Posted by: Brian E. Barreira on: May 6, 2011
- In: Caretaker for Pet | Pet Trusts | Wills
- 2 Comments
A Massachusetts Pet Trust can be established in your will, or it can be a separate trust placed into existence when you are still living (i.e., a standalone trust). The type of trust you choose depends on your circumstances.
A trust in your will would not become effective until your death, and, even then, not until the will has been probated and allowed by the Probate Court. A will contest would delay that process.
If there would be an immediate need after your death for the care of your pet, a provision in your will would not be the better way to proceed. Further, if you became disabled before your death, any pet trust in your will would not yet be in existence, so the Trustee and Caretaker would not be able to take care of your pet’s needs.
A properly drafted stand-alone trust would allow the Caretaker, Trustee and Monitor to step in and perform their roles in taking care of your pet immediately upon your disability or death.
Your pet trust could be drafted as a revocable trust that you control for your own benefit and the benefit of your pet while you are alive and competent. Upon your death or disability, the Trustee would take over and your pet would be cared for without the delays involved in the probate process.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
Establishing a Life Care Plan for Your Pet
Posted by: Brian E. Barreira on: April 9, 2011
A well-drafted Massachusetts Pet Trust should include a Life Care Plan for the pet. The Life Care Plan would explain the expected standard of living to be provided to the pet, including food, medication and grooming. The Life Care Plan should also go into whether it is intended to provide for expensive medical treatment. Doing so can minimize the chances of disputes among the Caretaker, Monitor and Trustee.
A well thought-out Life Care Plan should also consider that the Caretaker may at some point be temporarily unavailable to care for the pet, such as when on vacation, hospitalized, or away on business. The Life Care Plan should explain whether the use of a pet sitter or professional boarding business would be acceptable during such temporary events.
Once a Life Care Plan has been established, it will be easier for your Veterinarian to help determine how much funding may be necessary for the Pet Trust.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
Who Should Be the Monitor in Your Massachusetts Pet Trust?
Posted by: Brian E. Barreira on: April 7, 2011
The Monitor should monitor the care of your pet and the actions of the Trustee of a Massachusetts Pet Trust. It may be difficult enough to choose the Caretaker and Trustee, but a third person or entity should be involved. You need to consider that for one reason or another the Caretaker or Trustee may at some point not be performing their roles appropriately, or a dispute may arise between them. The role of the Monitor in a Massachusetts Pet Trust would be to make sure both are acting appropriately at all times and to resolve occasional disagreements. 
The Trustee will be in charge of investing and spending the funds in the trust, and Massachusetts law requires that the Trustee disclose all financial transactions through an accounting. The Monitor can be the person or entity with the responsibility for reviewing those accountings and either approving them or , if appropriate, objecting to them.
The Caretaker will be in charge of the daily care of your pet, and an occasional visit (perhaps sometimes unannounced) by the Monitor can ensure that the pet is being properly cared for.
The Monitor perhaps should be the pet’s Veterinarian, who would have a good idea of what proper care for the pet would be and how much that care should cost.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
Here Is the Text of the New Massachusetts Law Allowing Establishment of Pet Trusts
Posted by: Brian E. Barreira on: April 5, 2011
- In: Legislation | Pet Trusts
- 2 Comments
The Commonwealth of Massachusetts does not promptly update the part of its website containing existing Massachusetts laws. The law effective April 7, 2011 regarding Massachusetts Pet Trusts will eventually be found at Chapter 203, Section 3C, but it may take many months before the law can be found, so I’ve copied and pasted it below:
An Act Relative to trusts for the care of animals.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. Notwithstanding any general or special law or regulation to the contrary, Chapter 203 of the General Laws, as appearing in the 2006 Official Edition, is hereby amended by inserting after section 3B the following section: -
Section 3C.
A trust for the care of one or more animals alive during the settlor’s lifetime is valid. Unless the trust instrument provides for an earlier termination, the trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor’s lifetime, upon the death of the last surviving animal.
(a) Except as expressly provided otherwise in the trust instrument, no portion of the principal or income may be converted to the use of the trustee, other than reasonable trustee fees and expenses of administration, or to any use other than for the benefit of a covered animal or animals.
(b) A court may reduce the amount of property held by the trust if it that amount substantially exceeds the amount required for the intended use and the court finds that there will be no substantial adverse impact in the care, maintenance, health, or appearance of the animal or animals. The amount of the reduction shall pass as unexpended trust property in accordance with paragraph (c) of this Section.
(c) Upon reduction or termination, the trustee shall transfer the unexpended trust property in the following order:
(1) As directed in the trust instrument;
(2) To the settler, if living; 
(3) If the trust was created in a nonresiduary clause in the transferor’s will or in a codicil to the transferor’s will, under the residuary clause in the transferor’s will; or
(4) To the settlor’s heirs in accordance with G.L. c. 190.
(d) If a trustee is not designated by the trust instrument or no designated trustee is willing or able to serve, the court shall name a trustee. The court may order the transfer of the property to another trustee if the transfer is necessary to ensure that the intended use is carried out. The court may also make other orders and determinations as are advisable to carry out the intent of the settlor and the intended use of the trust.
(e) The intended use of the principal or income may be enforced by an individual designated for that purpose in the trust instrument, by the person having custody of an animal for which care is provided by the trust instrument, by a remainder beneficiary, or by an individual appointed by a court upon application to it by an individual or charitable organization.
(f) The settlor or other custodian of an animal for whose benefit the trust was created may transfer custody of the animal to the trustee at or subsequent to the creation of the trust.
(g) Any trust created under this Section shall be exempt from G.L. c. 184A and the common law rule against perpetuities.
What are the Key Issues to Consider When Appointing the Trustee of a Massachusetts Pet Trust?
Posted by: Brian E. Barreira on: April 2, 2011
Generally, the Trustee of a Massachusetts Pet Trust has four major areas of responsibility. The Trustee must:
- collect all of the assets that belong to the trust, including the pet, which is considered personal property under Massachusetts law;
- manage and invest the trust assets;
- pay taxes as required in the trust document or required by federal and Massachusetts tax laws, and pay expenses, including fees for the Trustee, Caretaker and Monitor;
- when the time comes for the trust to terminate, which is usually when the pet dies, the Trustee must distribute the remaining trust assets to the beneficiaries named in the Trust.
The collection of the assets should be a fairly simple task in that the trust should have specific source of funds to be placed into the Trust. Prudent investments must be made, and maintained in a separate account that is not commingled with the Trustee’s own assets. Accurate records of all income and expense of the trust funds must be kept by the Trustee, and an accounting must be prepared on an annual basis and shown to the appropriate persons, as defined by the trust.
The Trustee should be empowered to hire legal counsel or accounting help to assist in the legal or financial affairs of the Trust, to be sure that the Trustee is in full compliance with Massachusetts and federal laws and regulations. In my opinion, the Trustee’s ability to use the trust’s funds to hire lawyers to defend the Trustee’s own fees, however, should be limited.
It has been my experience in similar situations that it seems far too easy for people who are in charge of a trust to overcharge for their services, then get away with it by threatening to damage the trust even more by hiring lawyers to defend their actions.
I would not leave it up to the Trustee to decide how much the services of the Trustee, Caretaker and Monitor are worth. Simple disputes about the value of services can become costly when legal action is initiated, and those disputes be exploited by some lawyers who are looking to feather their own nests.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
Choosing a Caretaker for Your Pet in Your Massachusetts Pet Trust
Posted by: Brian E. Barreira on: March 27, 2011
The choice of a Caretaker for your pet is always a tough decision in the estate planning process. The Caretaker is the person that will be in charge of your pet when, due to your death or disability, you cannot be responsible for the daily care of your pet. The Caretaker will be in charge of your pet’s Life Care Plan, including its diet, exercise, medical treatment and eventual death.
The Caretaker should be expected to follow your wishes for the care of your pet. In most cases, another member of your family or a friend will be appointed as the Caretaker, but you need to discuss the situation completely with the family member or friend in advance to ensure that this person is able and willing to accept this responsibility. In case that person cannot continue to serve in the role, a successor Caretaker should also be appointed in the trust, or there should at least be a method for appointing a successor. If you do not have a clear choice for the role of Caretaker or successor Caretaker, perhaps the pet’s Veterinarian may have some suggestions, such as a local Humane Society.
Under the system of checks and balances in the trust, the person who is appointed Monitor should have the ability to check on the pet at any reasonable time. The Caretaker should be someone who will not be resentful of this scrutiny.
If it is your intention that the Caretaker be compensated for taking care of your pet, the method of compensation should be clearly outlined in the trust.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
Instead of Establishing a Pet Trust, Can You Leave Your Pet to Your Veterinarian or an Animal Shelter?
Posted by: Brian E. Barreira on: March 23, 2011
One option other than a Massachusetts Pet Trust for the future care of your pet is to leave your pet to your Veterinarian
or to an animal shelter. I can’t and shouldn’t speak for your Veterinarian, however, so you should ask your Veterinarian directly about this issue. If the Veterinarian would prefer not be directly involved, perhaps the Veterinarian could present you with suggestions about appropriate animal shelters.
You could then leave enough money in your will to the Veterinarian or animal shelter for the anticipated future care of the pet, and hope for the best for your pet. Consider, however, that your pet would then not be a part of a family and may not receive the same amount of attention and affection that the pet has had at home.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
What Are the Basic Components of a Massachusetts Pet Trust?
Posted by: Brian E. Barreira on: March 21, 2011
When establishing a Massachusetts Pet Trust, there are some basic components that must be considered, including the following:
1. THE CARETAKER: The pet trust must appoint a Caretaker for your pet, and should include either a successor to the Caretaker or a method to determine who will be the successor if the Caretaker quits, becomes disabled or dies.
2. THE TRUSTEE: The pet trust must appoint a Trustee to handle the finances, and should include a successor Trustee or a method to choose the successor Trustee.
3. THE MONITOR: A person known as a Monitor should be appointed to oversee that the Caretaker and Trustee are performing their roles appropriately. The pet’s Veterinarian could perhaps serve as the Monitor, since the Veterinarian is a professional who would not only know what care was appropriate under the circumstances, but also how much that care should cost.
4. THE ACCOUNTINGS: Where Massachusetts law requires that a Trustee of any trust prepare accountings to disclose all financial transactions, the pet trust must specify who is to receive and review those accountings, and what should happen if the Trustee is not handling the role properly. The Monitor can serve in this role.
5. THE PET: The beneficiary or beneficiaries of the trust should be made clear. Every pet that the trust is being established for must be carefully identified. Also, since an animal is considered personal property under Massachusetts law, the pet must be assigned to the trust.
6. THE LIFE CARE PLAN: The trust should state your expectations for the pet’s standard of living and care, including veterinary appointments and surgery. The trust should also have a provision that deals with what should happen if the Caretaker is not doing an adequate job; the Monitor can serve in this role.
7. THE FUNDS: The trust is a useless pile of papers if funds do not arrive in the trust when needed. Consider not only how funds will get into the trust after your death, but also during any period of your disability before death. Perhaps the Trustee should be given a limited durable power of attorney to place funds into the trust if you become disabled.
8. THE TRUST TERMINATION: Provisions should be made for what happens to the pet’s remains after the pet dies, including the pet’s burial or cremation. Provisions should also be made for what then happens to the remaining funds in the trust.
Posted by: Brian E. Barreira, Esq. / 18 Samoset Street, Plymouth, MA 02360 / 508-747-8282
With Whom Should You Discuss Your Plans for Your Massachusetts Pet Trust?
Posted by: Brian E. Barreira on: March 15, 2011
Besides your pet’s Veterinarian, various other parties should be consulted during the process of your estate planning for your pets. Your estate planning attorney must be involved to make sure that your pet trust is prepared in accordance with Massachusetts law and so that there is a method for getting the pet and funds into the trust at the appropriate time.
Your own family members, your choices as Trustee and your choices as Caretaker of your pet must all be aware of your plans and wishes.
If you have a financial 
planner, that person should also know about your plans for your pet trust.
After your pet trust is in place, you also need to let anyone who has a key to your home know about your plans. If something happens suddenly to you, they need to know where your pet should go.
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18 Samoset Street,
Plymouth, MA
508-747-8282
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