By Benjamin P. Shenkman
Horses are loved companions, pets and riding partners, and they sometimes outlive their owners. Estate planning for horse owners provides a unique set of challenges. It is generally the process of arranging one’s affairs to allow their possessions to pass upon their death to the person or persons they desire, in an efficient manner. Horse owners should consider the following:
Transfer of Ownership — When a person passes away, his or her assets generally pass in accordance with the terms of a last will and testament or similar legal document, such as a revocable trust, or under the default laws of the state of residence if there is no will. At a minimum, horse owners should have a valid will disposing of their property, including ownership of horses. To avoid dealing with a potentially costly and public probate administration, a horse owner may register ownership of animals in a revocable trust during his or her lifetime. Assets in such a trust pass to the beneficiaries named in the trust while avoiding probate administration.
Asset Protection — Of course, some horses are extremely valuable, and some horse owners own multiple horses. Ownership of a horse in one’s individual name, similar to other assets, puts the horse at risk of being seized to satisfy a judgment against the owner. Having horses owned by husband and wife as “tenants by the entirety” or in a limited liability company (LLC) or other entity may provide protection of the horses and their value from the horse owner’s potential creditors. Owning a horse through an LLC may have the added of advantage of limiting the owner’s personal liability if the horse injures another rider.
Care After Death — One of the primary concerns for a horse owner is to ensure that funds are available to maintain the horse after the owner’s death. In the past, planning consisted of making a bequest to an individual with a request that they use the funds for the horse’s care. Such planning was based on wishful thinking; the money might be squandered if the donee were involved in a lawsuit or if he or she spent or gambled away the gifted funds. A horse’s needs are considerable, from boarding and grooming to feed and veterinary care. Horses can live for 25 to 30 years, and many owners have multiple horses. So, funds to care for a deceased owner’s horses may need to last several decades after the owner’s death. Florida is one of a number of states which adopted laws permitting horses, and other animals, to be the object of a trust fund. So now one may set aside funds in a “pet trust” or “horse trust” for the continued care and maintenance of a horse after the owner’s death. A horse trust can be established and funded during the owner’s lifetime or upon the owner’s death. A horse trust may be utilized to retire an older horse or to allow a horse in its prime to continue in competition. The horse trust terminates upon the animal’s death, and the balance can be paid over as the owner directs in the trust document.
Attorney Benjamin P. Shenkman is a partner in the Wellington law firm of Gonzalez, Shenkman & Buckstein PL.