Many people consider a prized possession to be jewelry passed down from previous generations, a collectible automobile, or fine art that decorates their home. For some people, their most prized possession is their four-legged companion and riding partner, their horse.
We never want to face the inevitable question of what will happen to our possessions and loved ones if we were to pass away or become incapacitated. It is important to understand that asking this question is essential to planning a solid foundation and creating a legacy. If you ask the average horse owner what concerns they have regarding their assets in the event of incapacity or death, nine times out of ten, their priorities are their families and their horses. These priorities make horse owners a unique type of client in estate planning.
Estate planning is not just about writing documents. Instead, it comprises creating a solid foundation now and for the years to come. In addition to setting up a revocable living trust and ancillary documents, many horse owners choose to set-up pet trusts to set parameters for their animal’s care in the event of incapacity or death. Providing for a horse (or any pet) can be expensive and sometimes even considered a luxury to be able to afford caring for these animals. Providing for them after your death is a completely different story. Who will pay for their boarding, grooming, and even pet insurance?
Creating a plan for your fur babies now for what will happen to them after your death is an important decision that needs attention. While you may consider your horses and pets to be members of your family, horses (and pets) are just considered property under the eyes of the law. Because of this, many states have carved out provisions that allow for animal care to be detailed in an enforceable trust instrument. Actually, in recent years, Florida adopted a law permitting horses to be the beneficiary of a trust fund. Just like you can set aside funds for your heirs, you can now set up a trust for your horse.
These “pet trusts” are estate planning tools that provide instructions and financial support for pets with long life expectancies such as dogs, cats, and horses. You can give yourself peace of mind by planning for the continued maintenance of your beloved horse.
How does it work?
Trusts are administered by appointed trustees. The named trustee is given access to the funds and given guidelines as to how to administer the funds according to your wishes set out in the pet trust. Normally trustees are close family members or hired professional fiduciaries. Unfortunately, unless you have family members who are also horse savvy, many trustees are ill-equipped to provide proper care for your horses because they do not know the basics of care, feeding, and training. In this case, many clients establish specific care instructions and appoint a caretaker for their horse until either sale or retirement.
Horse owners can designate a caretaker for their horses, setting aside care directions and funding to ensure their horse is properly cared for. These instructions are then carried out by the Trustee upon incapacity or death. Beyond feed, farrier and exercise mandates, care instructions can dictate how long the horse is to remain in training until the guardian can re-home, sell or retire the horse. Winding up an estate is a lengthy process, many family-member trustees or “non-horsey” heirs of horses often do not realize that the 6-12 months it takes to administer a trust is enough to deteriorate the health and value of the horse. Just like many trustees choose to do renovations on a home prior to sale, a horse needs to stay in training to be properly conditioned until the horse is sold. There are many things to take into consideration when deciding to create this plan for the future of your horse. It is also a significant responsibility to take care of your horse so taking time to appoint the right trustee is just as important, if not more, as simply deciding to create a plan.
Care instructions should probably be specific too. Feed type, a specific farrier or maintenance joint injections are all valid considerations to ensure your horse is healthy and happy. Some clients who leave full discretion to their trainers to decide how to market and value their horse. Other clients want their trainer to try to sell the horse for a period of time, then instead of burdening the trainer, the client will put aside trust funds to donate or retire the horse after the designated time period lapses. Depending on how the plan is designed, the caretaker will receive a monthly stipend from your trustee to pay necessary training, feed, vet and farrier bills, and equine insurance to ensure there is not a lapse in care for your beloved four-legged friend should something happen to you.
Picking a caretaker for your horse is difficult decision, many trainers are busy running full-time show barns to assume the full responsibility of keeping up with the trustee and the other responsibilities that come along with caring for your horse. Clients may sometimes select a barn mate who is instructed to keep the horse in the same barn and under the same trainer. Regardless of your caretaker decision, having a pet trust in place eases the burden for a trusted barn buddy or trainer who will assume the responsibility for your horse in the event of incapacity or death. Many people may overlook estate planning for pets when they are creating their own wills and trusts. This is why a pet trust is a good option to add to an existing estate plan or as a stand-alone trust to ensure proper care for our most precious “property.”
We understand that planning for the future and the unknown can be overwhelming, especially if you have a beloved asset to protect. We are here to answer any of your burning questions regarding estate planning for your horse and more. Call us today at (305) 702-8250 to schedule a consultation where we can explore your wishes and figure out a plan that best fits your and your horse’s needs.