Sue_C.
Well-Known Member
After being in the position myself, of buying a horse, and working for months to get papers straightened out after the death of the registered owner, and reading the recent post by someone in the same predictament...I figured this article would come in handy for us all.
Where There's a Will... by: Sushil Dulai Wenholz
June 01 2005 Article # 5762
(thehorse.com)
You worry about your horse's health every day. You scrutinize his diet, study his training regimen, and attend to every sniffle or swelling. Simply put, you take your responsibility as caretaker seriously. You might even have thought ahead about ways to ensure your horse's good life during the golden years of his retirement. But have you stopped to consider what will happen to your horse if you die before he does?
While not many of us enjoy contemplating our own unexpected death, it's an important consideration for any horse owner. If you don't have a will, a court-appointed administrator will make all the decisions about what happens to your horse when you're gone. And if you do have a will, but haven't included your horse in it, your estate executor will be the one deciding your horse's fate. In either case, the person in charge of your estate will have the power to do anything from selling your pal to having him euthanatized. Even in less extreme cases, the administrator or executor simply might not do what you would think is best for your horse.
With the help of equine lawyer Krysia Nelson of Charlottesville, Va., we'll help you understand the important points to consider when putting your horse in your will. Even if you do have your horse in your will, these tips and cautions will help you make sure that the provisions you've made are as thorough and well-planned as possible.
Picking a New Home
In determining your horse's future after you're gone, there are three choices: Give him away, donate him, or sell him. Each has its own advantages and drawbacks.
Gifting--You might find it reassuring to know that your horse will go to the home of a good friend or family member. But, advises Nelson, "You don't want to assume that someone will accept that guardianship. Talk to them in advance."
It's also a good idea to check in with that person from time to time--say, annually--to make sure he/she is still in a position to take on that responsibility. In addition, you should name at least one alternate caretaker who will assume ownership if your first choice can't or won't take your horse when the time actually comes.
Someone who already knows your horse can make an ideal caretaker. For instance, if your spouse or your child has an interest in horses and already participates in your horse's care, this might be a natural choice. Or you might select the person who already cares for and rides your horse when you're out of town. At the very least, you probably want someone who has experience owning and caring for horses.
Ultimately, the most important consideration is how much you trust this person to make the best choices for your horse's welfare. Because once they officially own the horse, they have all the rights of any horse owner, including the power over daily health care and riding routines, as well as the freedom to sell the horse.
Donating--If you can't think of a person to give your horse to, another option is donating him to a charitable organization. "Your estate gets the tax break, so this can be a more cost-efficient option (for your estate) than selling the horse," notes Nelson.
Colleges with equine programs might take horses for use in a horse management or training course. (Schools might also take horses for research use; make sure your will clearly states whether or not this is acceptable.) Therapeutic riding groups and even mounted police units might be willing to take your horse if he meets their needs. You can also ask for your horse to be placed in a horse retirement or rescue facility.
Whatever group you pick, thoroughly investigate it before formalizing any donation agreement. For starters, make sure that your horse meets any donation restrictions, such as for age, health, or temperament. Find out if a monetary gift must accompany your equine donation. This is not an uncommon demand, with amounts ranging from a few hundred to several thousand dollars--money you might want to designate to be paid from your estate.
If possible, visit the facility in person to evaluate the staff, care, and environment. If it's a rescue-type organization, thoroughly discuss their policies and procedures regarding placing your horse with a new family. For other groups, find out what happens to your horse when he becomes too old or incapacitated to participate in their programs.
As with individuals, the organization you pick might be unable or unwilling to take your horse when the time comes. So make sure to include a "Plan B" in your will, whether that's a second-choice institution for donating, or an alternative such as gifting or selling.
Selling--If neither gifting nor donating appeals to you or suits your situation, you can also direct the executor of your estate to sell your horse. Proceeds would go to your estate to be distributed as your will dictates. Nelson recommends providing a list of reputable professionals and/or sale barns that could take on the responsibility of prepping your horse for sale and seeing the deal through. Make sure to include a provision for your estate to pay for these services at the normal rate, she reminds.
Stuff--Your will should specify what you want done with your horse's tack, grooming gear, blankets, and so forth. You might, for instance, opt to have it all go with your horse to his new home, or you might ask that it be sold or donated.
Consider Financial Aid
If you opt to give your horse to a friend or family member, says Nelson, "You need to ask yourself, 'Is this person in a position to assume financial responsibility for my horse? Or, to be fair, do I need to make sure that the person will be compensated financially to make it possible?' "
If you want to provide some financial aid, Nelson notes that there are three common ways to do so:
1) Take out a life insurance policy. While you can't name your horse as the beneficiary, you can designate your chosen equine caretaker to receive the policy payout, says Nelson. Or, she adds, you can name the executor of your estate as beneficiary, leaving instructions in your will that the money will be paid out in a specified manner to the person who receives your horse.
2) Make an additional gift. You can also give your horse's chosen caretaker a gift of cash or other assets as compensation for the cost of horse care. To make sure your friend doesn't incur tax penalties, you can also make provisions in your will for any taxes on these gifts to be paid from your estate, says Nelson.
3) Create a trust. With a trust, you can name your horse as the direct beneficiary and name a person, known as the trustee, to care for him. In addition, you designate the assets that will be cashed out or invested to provide income that the trustee will use to care for the horse. If there are funds remaining after your horse dies, the trust states how it will be distributed. (See "Trust Troubles" on page 104 for information on some special issues to consider.)
Remember Immediate Needs
Deciding who gets your horse after you're gone might be the primary consideration when making provisions for your pal in your will, but it's not the only one.
Since wills must go through the probate process, it can literally take months for all of your instructions to be carried out. During that time, of course, your horse still needs care. Thus, along with your long-term directions, make sure to include a letter to your executor instructing him or her to spend the necessary funds from your estate to cover the care of your horse until he can be moved to his new home. You might also authorize your executor to use estate assets to pay for your horse's transportation to his new home, if it's far from his current lodgings. It is important that this letter is readily acccessible, or it fails its purpose. Some states' laws still require that a person's safety deposit box is sealed upon his or her death, so that wouldn't be a good place to keep the letter (or will).
Your letter, or a separate note, should also include important details about your horse's needs. For instance, you might list your veterinarian's name and contact information, special dietary needs, notes on exercise or health care, significant character traits, and any other comments that will help your horse's immediate and ultimate guardian take the best possible care of him.
Your Executor: Choose With Care
Since your executor will oversee your horse's care at least temporarily during the probate process, you might consider selecting a horse person for the job. However, bear in mind that the executor will have many other duties to handle, so horse knowledge shouldn't be your sole criteria. In fact, says Nelson, people often name their lawyer as their executor because of the substantial legal paperwork involved in settling an estate. If you opt for a family member or close friend as your executor, that person will almost certainly need to hire a lawyer to assist with those tasks, she adds.
Whoever you choose, it's particularly important that they understand and value the importance you place on your horse's care. Nelson explains that executors have multiple responsibilities beyond simply carrying out the directives of your will. Sometimes those duties might conflict with your instructions.
For instance, the executor is charged with preserving estate assets, says Nelson. If your will directs the executor to spend large sums of money for the care and upkeep of your aged, foundered pony, an executor who doesn't thoroughly understand your priorities might feel this instruction is not in the best interest of the estate. The executor can then opt to simply have the pony put down, particularly if no one is keeping tabs on his actions.
Executors are also responsible for maximizing the cash value of your assets. So if you've directed that your best friend receive your valuable show jumper, an executor might feel it's their duty to instead sell the horse and put the profits into the estate pool.
"It's a matter of truly understanding your priorities," says Nelson. "So choose with care and be very explicit in your instructions."
Securing a Bright Future
Despite the temptation of cost savings, Nelson does not recommend do-it-yourself wills. She feels these "fill in the blank" documents tend to be too broad and could lead to critical oversights. "From a lawyer's perspective, it's like having a sore tooth and calling the dentist to walk you through what to do because you have a cordless drill and a bottle of whisky handy," she says.
Nelson recommends finding a lawyer who specializes in estate planning. It's even better if they have experience making provisions for the guardianship of children, because the legal mechanisms mentioned above should then be familiar and fairly easy to put in place. If the lawyer is a horse person, or at least owns pets and understands the human-animal bond, that's even better, as he or she is likely to be more sympathetic to your concerns.
A horse- or animal-friendly estate planner will also have a better handle on the questions to ask and the details to consider when including your horse in your will. That gives you the best chance of securing a bright future for your horse, even if you're not there to watch over him.
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WHEN THERE'S NO WILL: Case Study
One client of Virginia attorney Krysia Nelson owns a boarding stable. The owner of a horse there passed away, leaving no instructions in her will for her horse's care. The horse owner's brother is the estate executor, and he is refusing to pay the boarding expenses while the will, and the estate funds, are tied up in probate. The stable owner has thus far kept the horse at her barn. However, as the last person to have care, custody, and control of the horse, the barn owner would be within her legal rights to sell the animal to recoup her costs, returning additional proceeds, if any, to the estate.--Sushil Dulai Wenholz
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FINANCING CARE: Trust Troubles
If you consider establishing a trust to financially aid your horse's future caretaker, there are two issues to bear in mind. First is the rule of perpetuities, which states that the funds in a trust cannot be tied up longer than 21 years after the death of a person identified in the trust. (That person does not have to be a friend or family member; you can name virtually anyone.)
Another rule that exists in some states prohibits trusts that benefit an animal. If you establish such a trust, the courts can find it invalid. The good news: More than 19 states now recognize the Uniform Trust Act (Alaska, Arizona, California, Colorado, Florida, Iowa, Kansas, Michigan, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Tennessee, Utah, and Washington), which allows trusts that fund the care of animals. The Act also allows the trust to last as long as the animal lives, regardless of the rule of perpetuities.--Sushil Dulai Wenholz
Something we don't want to think about perhaps.....but ever so important to our furry freinds well-being........
One thing that particularly stayed with me from reading this article was a suggestion that whoever is to be designated as caretaker should be named as beneficiary of a modest life insurance policy you take out on yourself. That will provide immediate dollars for care of the horse(s) which the caretaker will receive immediately on proof of your death. No waiting for probate or problems with disputes with any potential heirs. This money will allow the caretaker time to make good decisions for the horses by funding any needed board or veterinary care or transportation. Seems like a pretty good idea to me and worth considering.
I realize that this article is from the US, but I have a feeling that it would be prudent for we Canadians, to check-up on this type of thing as well.
