Earth Day Equine Estate Planning, Part 2

horse law business law contracts real estate salesWelcome to Part 2 of my blog posts this week concerning equine estate planning with the Earth in mind. You are probably familiar with  land development in your area that is happening at a breakneck pace. We all know of favorite fields plowed under for a new housing development or a shopping center. The loss of land to ride on, as well as riding facilities, is a constant topic in the horse world. One way to help the natural world and to ensure there is land for horse activities far into the future is to leave your land in a conservation restriction as a part of your equine estate planning.

When you use a will or trust, you are leaving your assets, including your property, to individuals or organizations. When you draft your estate plan, you can include a conservation restriction – called a conservation easement in other states – to protect your property from development. A conservation restriction is a legal document between a property owner and a conservation organization. That organization agrees to monitor the property and enforce the restriction, even if the property changes hands. The property owner can place a restriction that prohibits any development or can state exactly what kind of development is allowed. For example, a property owner could place a conservation restriction on a 50-acre farm and allow one more home to be built on the property but no other buildings. Conservation restrictions can be tailored to meet the property owner’s wishes, and it’s better if they explicitly list what the owner allows and what the owner prohibits to be done to the property. It is considered a deed restriction and goes with the deed to the land, meaning it applies to anyone who purchases the land.

If you want to place a conservation restriction on your property in your will or trust, it is a good idea to check with some conservation organizations to make sure they will accept your property into their land trust program. If you find one or several that will do so, you can even include their names – or name the one you prefer – in your will or trust so the representative or trustee knows who to contact when the time comes to place the restriction. You can even attach a draft of the conservation restriction to your will or trust so that your wishes are clearly articulated.

While it is best to think of these issues before death, a representative or trustee can place a conservation restriction on property after the death of the property owner. It needs to be done quickly, before the federal estate tax is filed, which is usually nine months after death.

Contact me if you want to learn more about conservation restrictions and your equine estate plan.

 

Earth Day Equine Estate Planning, Part 1

On April 22, we will celebrate Earth Day. As horse people, we know how important the natural world is because we spent so much time outside, whether it’s trail riding, showing, or just sitting in the grass while our horse grazes near us. You have probably read about different ways people are recognizing the day and bringing greater awareness to ways we can help our planet, and you may be taking part in some of those activities yourself. Did you know that you can also do things with your estate plan that help the earth? When you make an estate plan, you have probably been advised to think about your assets and your beneficiaries. One of your beneficiaries can be the earth, and this can be accomplished in several ways. In this 5-part series, I will explore these different ways.

A popular way to help the natural world is to bequeath property or money to a nonprofit organization or a business that engages in work that you support. Recently, a woman used her trust to leave $1 million to three Washington National Parks. Elizabeth “Bette” Wallace established a trust so that money could be used to support causes when she died. Her trust, through her niece acting as its trustee, already made contributions to help the homeless and to Washington schools. The latest donation is to the Washington National Park Fund. The amount will be evenly split between Mount Rainier, Olympic, and North Cascades National Parks. Ms. Wallace spent 14 years growing up in Washington and through this generous donation via her trust, she can help the land there and to help people experience that land.

While not everyone has the ability to make such a generous donation, you can make donations via your estate plan to support environmental causes after your death. Using a trust can be the best way to do this, although you can also do it through a will. A trust is a private document that is not filed in the court system, so you don’t have to worry about people finding out about your donation unless you want it publicized. A trust is also a faster way to donate because a will can take 9 months to several years to go through the court probate system. You can either make a specific bequeath through your trust or you can give your trustee discretion concerning what individual, organizations, and companies receive the money. Even a few hundred dollars can go a long way to help an organization such as a horse rescue.

Come back tomorrow and find out another way to help the Earth with your estate plan. This week, I am offering a 10% Earth Day discount on all my legal services, so please feel free to contact me about your estate planning needs, whether you need changes made to your existing plan or you need an entire plan drafted.

Horse Trusts

liability release boarding contract horse lawHow do you feel when see one of those posts on social media about horses whose owner has died or been incapacitated, that are headed for a kill pen if funds can’t be raised to care for them? Do you think it’s tragic and will never happen to you and your horse? Or does the whole thing disturb you to the point where you lie awake at 3 am, wondering what will happen to your horse if something unexpected happens to you? Unfortunately, this kind of thing can happen to almost anyone. Luckily, there is a legal vehicle that allows you to plan for your horse’s future in the event you are incapacitated or die. That document is called a pet trust, and you can have one for every animal in your family, not just your horse. As of January 2017, every state and the District of Columbia had some form of legislation that allows pet trusts.

Under the law, horses are considered property. This means someone literally cannot legally step in and take care of your horse if anything happens to you because they do not own your horse. For example, if you are in a coma and your riding buddy decides to move your horse to a less expensive boarding barn during that time so she can take over board payments for you, she could be charged with theft, no matter how good her intentions. But she could not access your checking account to make the regular monthly board payments she knows you would want to make, to keep your horse where it’s been. She would literally be helpless to intervene if the barn owner decided he had to file legal papers to seize your horse and then sell it to pay for unpaid boarding costs if several months went by while you were incapacitated and unable to take care of things. That’s how situations like the one in those tragic posts we see develop.

The way around this problem is to create a horse trust. The trust becomes active if you are incapacitated or when you die. If you are incapacitated, it is no longer active and returns control to you once you have capacity to handle matters concerning your horse.

A horse trust gives you the ability to provide funds for your horse’s care and to include specific instructions concerning that care. When you set up the trust, you set aside enough money in it to take care of your horse in the manner you prefer. How much money should you put into the trust? It depends on how long you want it to last. Write down a monthly budget that shows how much it costs to take care of your horse. Then decide how many months you want to provide care. For example, you may want to provide care for six months and then have a provision that if you have not regained capacity by then, you want your horse sold to someone or given to a specific person. If you want your horse taken care of after your death, you could put in enough money to care for him for several years. Make sure that the amount is reasonable, though. While horse trusts are generally not challenged in court, an argument could be made to reduce the amount you have left for care if one of your relatives or someone you left an inheritance to claim that it was excessive. Keep in mind that you can add money to the trust. So, start with what you can afford and add more if that works best for your budget.

A horse trust also allows you to name a trustee, which is the person who will take care of your horse if something happens to you. You can be as specific or general as you want concerning that care. You can leave it up to the trustee, or you can put in specific provisions you want the trustee to follow. For instance, you can include directions concerning where your horse is stabled, how she should be fed, and additional instructions about the farrier and vet visits. You can even stipulate specific things such as how you want your horse to be blanketed and special treats she should get fed. It’s always a good idea to talk to the person you want to name as trustee before you set up the trust, to make sure she can take on that responsibility and is comfortable following your directions for your horse’s care.

When you decide you’re ready to create a horse trust, contact an equine lawyer or animal lawyer in your state so you can be sure the state’s legal requirements for the trust are met. If you are a Massachusetts resident, please feel free to contact me to discuss one. Be sure to revisit the trust every year to make sure the funds you’ve set aside are still adequate and to make sure you don’t want to change any of the instructions for your horse’s care. Then enjoy the peace of mind of knowing your horse will never be the “star” of a social media plea for rescue from a trip to the kill pen. You can rest well knowing she’ll be taken care of if anything unexpected ever happens to you.