Pet Trusts in Florida
Pets Are More Than Just Animals
Pets are kind of weird when you think about it. They’re a different species of animal that live with you. In the past, people kept animals for work or raised them for eventual consumption as food. This (hopefully) isn’t the case with your pets today. Most people have pets for companionship, that is, we like the company.
And that’s interesting because none of them can communicate the way humans do. Sure, some, like cats and dogs, because they’re also mammals, have similar behaviors we can easily understand. But people form bonds with even less traditional pets like birds and reptiles, and they appear to understand the dynamic and reciprocate.
On the other hand, the relationship between humans and animals, dogs in particular, predates agriculture, so perhaps I’m overthinking it. Indeed, a survey by the American Pet Products Association found that approximately two-thirds of U.S. households own a pet. Another survey, this one by the Pew Research Center, found that 97% of pet owners consider them part of the family. Not only that, but a little over half pet owners consider their pets to be a part of the family as much as its human members.
Pet Trust Statue: A Legal Update
And it seems like the laws have been updated to reflect that change. Traditionally, under the common law, animals are considered property and could not inherit money, property, or have an estate. Yet, people wanted to leave something in place to take care of their pets in the event they became incapacitated or passed away. To address this, the Florida Legislature passed what has been codified in the Florida Trust Code as Florida Statute 736.0408, titled “Trust for care of an animal.”
These trusts function like revocable trusts created for individuals: the grantor creates the trust, the trustee manages the assets, and the beneficiary (your pets) receives the benefits of the trustee’s management. You can even sue to enforce the terms of a pet trust and be appointed trustee or have a trustee removed.
How a Pet Trust Different Than a Regular Trust
There are some key differences, however:
The Pet-Beneficiary of a pet trust must be alive during the life of the Grantor, unlike a regular revocable trust where you can create a class of beneficiaries that includes people not yet in existence at the time of trust’s creation.
A pet trust cannot become irrevocable or continue for the benefit of the Pet-Beneficiary’s descendants. You can have multiple animals be the beneficiaries of a pet trust, but once the last one of them passes away the trust terminates.
Unless the trust agreement provides otherwise, a court can determine how much of the trust property is needed to provide for the care of the Pet-Beneficiaries during their lives and then distribute the excess trust property to the Grantor, or if the Grantor has passed, the Grantor’s estate.
What About Taxes?
Assets placed in a pet trust due to the Grantor’s death are included in the Grantor’s gross estate.
The IRS does not have its own version of the pet trust statute and does not include animals under the definition of a "person" or "individual". However, the IRS states that a pet trust will be considered a trust if it is valid under applicable state law. So, income earning assets placed in a pet trust would be taxable.
Tell TealAcre to Tackle the Task
You read this far because you worried about what would happen to your pets if something happened to you. And you care about your pets because they’re family. Let TealAcre help you get the clarity and peace of mind you’re looking for. To contact us you can:
Schedule a complimentary 15-minute consultation by clicking here.
Register for our next webinar by clicking here.
To check out our social media, click here.
To sign up for our newsletter & receive exclusive offers, articles, and insights, click here.