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