Every day the animals in our lives give us unconditional love, affection and friendship.
When you include a gift to the Nebraska Humane Society in your estate plan, and are inducted into the Legacy League for the Animals, you not only help ensure the positive future of the animals NHS serves, but you also have the exclusive opportunity to enhance the safety and security of your own household pets by electing to enroll them in the Very Important Pet Program, otherwise known as the VIP Program.
What is the VIP program?
Legacy League for the Animals members have the exclusive option to enroll their pet(s) in the Very Important Pet (VIP) Program. This program provides safety and security to members’ pets should the members become incapacitated or die. Members of the Legacy League for the Animals who enroll their pets in the VIP Program have their membership information recorded with the Nebraska Humane Society.
Should your pet be brought to the Nebraska Humane Society by Animal Control or anyone else, the Legacy League for the Animals Coordinator, Jennifer Katz, will be contacted and will create a care plan specifically for your pets to ensure the best transition possible while finding new families for your pet(s). Families who will cherish your pet(s) as much as you do.
In addition, once we have received your Pet(s) Enrollment Forms, we will provide you with VIP Program membership cards to share with the people in your life who should know about your plans and, in case of an emergency, may be placed in a situation where it is important to know your intentions regarding your pet(s) futures.
These membership cards provide the contact information for the VIP Program coordinator, Jennifer Katz including her cell phone number, as well as information the Nebraska Humane Society will find useful in providing the level of care your pet(s) deserve during an especially difficult time.
Jennifer and other identified coordinators will come and collect your pet(s) if notified that you are unable to care for your pet(s) in either the short or long term. While we cannot commit to providing transportation of your pet to the Nebraska Humane Society from other states, should an emergency happen we will do our best to arrange for transportation by working with our rescue groups who often transport pets across the country.
To enroll your pet or pets in the VIP Program, please first complete the NHS Gift Intention Form to your level of comfort and return it to:
Jennifer Katz
Director of Legacy Giving
Nebraska Humane Society
8929 Fort Street, Omaha, NE 68134
O: 402-905-3486 C:402-810-0026 E: jkatz@nehumanesociety.org
Once we receive your NHS Gift Intention Form, we will send you your Legacy League for the Animals Welcome Packet and VIP Program Enrollment Forms.
Please contact Jennifer with any questions you may have about planning your estate gift, notifying us of your intention to leave an estate gift, the Legacy League for the Animals, the Very Important Pet (VIP) Program, or anything else you would like to find out more about before or after planning your gift.
What is a Pet Protection Agreement?
A Pet Protection Agreement is a binding contract between a pet owner and a pet caregiver or a pet guardian organization.
The agreement provides for the transitional care of pets during an owner’s incapacity or during the administration of the deceased pet owner’s estate. Ideally, such agreements should be used for short amounts of time and in combination with a planned, easily accessible funding sources to avoid having insufficient funds available to provide for the care of the pets.
Is a Pet Trust Right for Me?
A pet trust is a way for a person to provide funds for the ongoing care and expense of their pets.
Does the State of Nebraska allow Pet Trusts?
Nebraska law, according to R.R.S. Neb. § 30-3834, enacted in 2003, provides that a trust may be created for the care of animals alive during the pet owner’s lifetime. The trust terminates upon the death of the last surviving animal covered by the trust. Click here to see Pet Trust Laws by state.
What Are the Different Kinds of Pet Trusts?
Statutory Trust
In Nebraska a reference made in a will, such as, “I bequest in trust upon my death $10,000 to Dodger” is known as a statutory trust. A statutory trust is typically less complicated to draft, however, future tax liability may be larger than preferred due to an IRS ruling that all pet trust income will be taxed to the trust even if used for the care of the pet. Also, there is no deduction for the amounts distributed for pet care.
Most importantly, a statutory trust, though created through a will reference, results in the exact trust terms being set by state law, making the executor of the will the “guardian” of the pets. The executor of the will may not be the person who is likely to provide the best care for the pets
Traditional Trust
Traditional trusts may be more expensive and complicated to draft, with more upfront costs. However, such trusts provide more options to instruct caregivers regarding the long-term care of your pets.
There are two types of “traditional” pet trusts that are differentiated by when they are established.
Inter Vivos Pet Trust
Created and funded during the lifetime of the pet owner.
Testamentary Pet Trust
Created and funded through the pet owner’s trust or will and after their death.
What Information Is Typically Included in A Pet Trust?
A pet trust generally includes a description of the pets covered by the trust and instructions for their care. Some information that a pet owner may choose to include are instructions on which veterinarian’s office to take the pets to for medical care, what types of foods the pets should eat and/or other actions that would increase the comfort of the pets with transitioning to a new home.
Often, the pet trust also includes the names of people who the pet owner would like to be in charge of managing the money and actually caring for the pets. Sometimes one person is named to manage the money, and another is named as the caretaker of choice.
How is a Pet Trust Funded?
A person who creates a statutory or inter vivos trust can transfer some assets to the trust and deposited into an account titled to that trust to be held for the benefit of the pets. Money can be added to that account throughout his or her lifetime.
A person who creates a testamentary trust must specify which estate assets and/or amount of money will be set aside to go into the trust through a bequest made in their will or trust.
What Amount of Money is Needed to Fund a Pet Trust?
Pet trusts can only pay for expenses directly related to caring for pets and can only be used for the pets and not for the person caring for the pets.
Calculating how much money to put into a pet trust can be complicated and should include enough money to cover food, medical care, emergency medical care, transportation costs, pet enrichment supplies and more. Additionally, pet trusts should factor in the expected lifetimes of the pets along with the possibility of having additional expenses related to the most common medical ailments related to pet species or breed at the end of the pets’ lifetimes.
What Happens When a Pet Owner is Incapacitated and Unable to Continue to Care for Pets?
Funding an inter vivos pet trust can include a clause that funding of the care of any pets would begin when the pet owner is temporarily or permanently incapacitated. The caregiver would become the caregiver of the pet, and the trustee would manage the funds you set aside for the benefit of the pet.
What Happens if the Trust Runs Out of Funds During the Pets’ Lifetimes?
A trust that has no more assets will be terminated. At that point, it would be as if there had never been a trust to begin with, and the caregiver of the pets would be left to either care for them using their own resources or find an alternative home for them.
What Happens If There is Money Left in the Trust When the Last Pet Dies?
It is recommended that the pet owner include a residual clause in the trust that says where any leftover money should be directed. If there is a pet trust that doesn’t have a residual beneficiary, then the extra money would go to residual beneficiaries, meaning the pet owner’s nearest living relatives at the time. A lot of people choose to have leftover money go to a charity that helps with pets and other animals.
Who Should be Appointed as a Trustee/Caregiver of a Pet Trust?
A pet owner has the choice of appointing a trustee who is also a caregiver to the pets, or to appoint a trustee of the pet trust and a separate caregiver for the pets.
Ideally, the appointed trustee should have a basic understanding of how to invest and maintain funds for an extended period of time.
Appointees should be a responsible and trustworthy and depended upon to provide a level of care consistent with the pet owners intentions. Someone should be appointed as caregiver who would show love for the pets, follow instructions regarding the care of the pets, and put the pets’ best interests first. If the caregiver has their own pets, then it would be important to ensure all the pets would be compatible.
It is important to note that an appointed trustee can refuse the appointment. One or more successor trustees and/or caregivers should be named in the event the appointed trustee and/or caregiver refuses or is otherwise unable to accept the position of trustee.
What Are Some of The Legal Challenges to Pet Trusts?
An inappropriately large amount of money placed into a pet trust may be contested by residual beneficiaries. If a trustee is found to be misdirecting funds, the residual beneficiaries may challenge the use of the funds and request an accounting. If the trustee is found to have misappropriated funds, the trustee could be dismissed and a new trustee appointed.
What Is the Process of Creating a Pet Trust?
Creating a pet trust will involve meeting with an attorney and giving them information such as the names and descriptions of the pets, care instructions, who would serve as trustee and/or caregiver.
How Are Pet Trusts Taxed?
Amounts given to pet trusts (traditional or statutory) may be subject to federal gift tax and may not fall under the annual gift tax exclusion since the IRS does not recognize a pet as a beneficiary. However, such amounts should not be subject to gift taxes if gifts to the pet trust falls under the pet owner’s life-time gift tax exemption.
Creating a Traditional Pet Trust along with a Pet Protection Agreement generally provide the best protection for pets and allow planning to support tax-efficient transfers.
A traditional trust provides flexibility for providing specific types of pet care with the possibility of a lower tax burden. However, in traditional trusts, the beneficiary (human) is taxed on any distributions from the trust. This income is reported on their personal tax return while the traditional trust receives the deductions for any amounts distributed to the beneficiary.
This presents a problem for some because the beneficiary must report this additional income without a corresponding deduction. To mitigate this impact, it is recommended that a traditional trust be drafted to cover a pet caregiver’s additional income tax liability.
