CHERYL K. DAVID North Carolina Estate Planning and Elder Law Attorney

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1 NORTH CAROLINA PET PLANNING PART 1 In this month's discussion of important estate planning topics, we focus our attention on the animal companions that so many of us hold dear. When you have pets or other domestic animals that rely on you for care and affection, you want to be sure that you've done all you can to protect them. CHERYL K. DAVID North Carolina Estate Planning and Elder Law Attorney

2 In this month's discussion of important estate planning topics, we focus our attention on the animal companions that so many of us hold dear. When you have pets or other domestic animals that rely on you for care and affection, you want to be sure that you've done all you can to protect them. This includes making plans for their care even after you die, or in the event you become incapacitated. That's what a pet plan does. With a comprehensive pet plan in place, you can rest assured that your animals will be cared for no matter what happens to you. So, let's take a look at pet plans, what they do, and what yours might look like. 3

3 PET PLANS Whether you have a single pet, a small number of animals, an entire zoo, or are planning on acquiring more animals in the future, knowing what will happen to them should something happen to you is what your pet plan is designed to do. Like other estate planning tools, a pet plan is comprised of one or more specific elements. Each of these elements has to comply with some specific laws and requirements. Should any element fail, or fail to live up to the legal standards, this can cause serious problems with the implementation of the plan. This is why crafting your plan with the advice and guidance of an attorney is absolutely essential. 4

4 PET INHERITANCES A lot of people mistakenly believe that all they need to do to create a pet plan is to simply leave their pets inheritances through their estate plan. For example, some people believe that they can create a last will and testament that leaves their pets money. The pets can then use this money to provide for themselves. Unfortunately, that's not how the law works. Animals are not people, and as such, cannot legally own property. This means that they cannot be the legal recipients of inheritances. Should you choose to leave an inheritance directly to your pet, a court will likely view this gift as invalid. Should this happen, the property you intended to use to protect your animal will be inherited by someone else. 5

5 PET TRUSTS Even though pets cannot own property, they can be protected by your property even after you die or become incapacitated. The way you do this is by creating a pet trust. Though we'll discuss pet trusts in more detail in our next discussion on pet planning in North Carolina, it's important to understand how these tools work. A trust is a special kind of relationship between people and property, though it's easier to view these devices as a type of legal entity, like a corporation. When you create your pet trust, you get to determine the rules under which it operates. Once created, the trust is an independent legal entity, like a corporation, and can own property in its own name. Because the trust is independent of you, it can continue to own property after you die. So, if you create the trust to protect your pets, it can continue to do so even after you die, because it can continue to exist as a legal entity. Note, however, that the trust is not owned by your pet. Instead, you'll appoint someone to manage the trust. That person, called a trustee, will be responsible for managing the trust's property and ensuring that the pet's needs are provided for. 6

6 PROTECTING YOUR PET Like every other part of a comprehensive estate plan, a pet plan requires time, energy, thought, and careful attention to detail to create properly. A good pet plan can grow and change with your needs over time, as well as be flexible enough to not hinder your other estate planning tools, or prevent you from making adjustments as necessary. Pet plans can also provide for your pets not only after death, but also in the face of your incapacitation. In order to create the most protections for your pet that you can, you need to begin creating your pet plan as soon as possible. All too often, people wait until it's too late, and rely on friends or family members to look after their animals for them. Having a comprehensive pet plan in place will always be a better option. If you'd like more information about pet plans, what you need to do to make them, or what your options are, contact us as soon as possible so we can discuss the issues with you. 7

7 ABOUT THE AUTHOR Cheryl David is a graduate of UNC-Chapel Hill, the University of Baltimore School of Law, and the prestigious Trial Lawyer s College presided over by Gerry Spence. A former Administrative Judge, Cheryl is certified as an Estate Planning Law Specialist by the ABA accredited Estate Law Specialists Board, Inc. She is also a member of the American Academy of Estate Planning Attorneys, Medicaid Practice Systems and the National Academy of Elder Law Attorneys. In 2008, Cheryl received the honor of becoming a Fellow with the American Academy of Estate Planning Attorneys. The Fellow program recognizes Academy Members who demonstrate advanced expertise and significant practical experience in the total estate planning, trust, tax planning, guardianship, probate and estate administration fields. In order to maintain this advanced expertise, Cheryl takes over 36 hours of continuing education in Estate Planning, Elder Law, and Taxation each year. Also a Financial Planner, she holds the Series 7 and 66 Investment Licenses in addition to both Insurance and Long Term Care/Medicare designations. Her professional capabilities, together with over 25 years in practice, have combined to bring positive change to the lives of over 4500 clients and their families. 528 College Road Greensboro, NC Phone: (336) Fax: (336)