Inheritance for your dog: How the rich put millions into trusts with very specific purposes, from taking care of pets to cryogenically freezing their bodies

  • The rich can use trusts to devote millions to pets, art collections, and even cryogenic freezing.
  • Sometimes they leave would-be heirs high and dry – and it’s perfectly legal.
  • Lawyers to the uber-rich told Insider how purpose trusts work and how to plan for centuries ahead.

Pets can become four-legged members of the family for animal lovers. With wealthy people, this can mean lavishing millions on their pets while leaving their children high and dry. When Leona Helmsley, the late luxury hotelier, died in 2007, she famously left $12 million in a trust for her pet Maltese named Trouble.

While trusts are a popular way to pass on wealth, an animal cannot be named as a beneficiary. There is, thankfully, a workaround: purpose trusts.

These trusts exist to serve a variety of purposes, such as caring for a racehorse or maintaining luxury automobiles, rather than to benefit an individual or an entity. As the wealthy invest in longevity and immortality, lawyers are seeing an increase in trusts dedicated to cryogenic freezing, the process of preserving bodies in the hope that modern science will be able to resurrect them in the future.

“The idea behind a purpose trust is what do you care about and how can you best try to plan for it if you are not yourself able to make those decisions,” says Naomita Yadav, partner at Withersworldwide.

Trusts are well-known for their ability to save millions of dollars in taxes, but purpose trusts are rarely used to pay less to Uncle Sam. Trusts established to, for example, preserve frozen sperm or eggs and direct how the genetic material is used have no monetary value. A purpose trust provides clients with the assurance that their wishes will be carried out even if their heirs disagree.

Pet trusts are relatively simple, typically allocating funds for caretaker pay, veterinarian bills, food, and other expenses, but other purpose trusts can be time-consuming because they must plan for decades in advance.

Here is how purpose trusts work

Yadav told Insider that purpose trusts aren’t absolutely necessary to ensure your pets’ care after your death. Smaller estates can use wills or revocable trusts to distribute their assets. According to Yadav, who typically works with centimillionaires, purpose trusts come into play with larger estates and clients who have complex needs, such as wanting to care for a stable of racehorses.

Pet trusts are typically limited to the life of the animal or animals specified, but other purpose trusts, such as those dedicated to the maintenance of a business or directing the use of intellectual property, can last decades or even in perpetuity if established in the appropriate jurisdiction. In the case of these long-term trusts, lawyers must include procedures for trustees to appoint other trustees or specify a line of succession.

Trusts must have an end date and a plan for allocating unused funds in states where perpetuities are prohibited, such as California. According to lawyer Neil Solarz of Weinstock Manion, purpose trusts established to maintain art collections typically include a timeline for liquidating or donating the artworks. Setting up trusts for this purpose can take several weeks because it involves establishing commissions and consultants to decide how the artwork is secured, displayed, or sold.

Trusts for cryogenic freezing have a whole host of issues

According to Yadav, who has set up a corporate trustee for a client, cryopreservation trusts can potentially last centuries. Allocating enough funds to cover the cost of the freezing is only one part of the equation. Lawyers and clients must plan for a variety of hypothetical scenarios.

“What if the company goes bankrupt,” Yadav wondered. “What if a natural disaster occurs and the facility is damaged?”

Solarz has not created a cryopreservation trust, but he believes that, like genetic material trusts, they will become more common.

“People have always been interested in immortality and cheating death,” said Solarz, whose clients have an average net worth of $40 million. “I expect science to be more important in the future than it is today.”

Purpose trusts come in handy when you don’t trust your heirs

Rather than establishing a purpose trust, Yadav advises clients to establish trusts for family members that will carry out their wishes.

When clients have strong and specific wishes, however, a purpose trust with professional trustees is the most certain way to ensure that they are honored, according to Solarz.

“In a nuclear happy family, typically the surviving spouse is the trustee, followed by one or more children,” he explained. “For whatever reason, either because they’re troubled or because they don’t know how to handle money.”

Purpose trusts for pets or collections are typically carve outs rather than the bulk of the estate, but Solarz has seen a client leave her entire estate to her cats. He has dealt with litigation stemming from disagreements with disgruntled would-be heirs. Lawsuits have made headlines, such as when a woman sued her boyfriend’s estate for leaving nearly $6 million to Samantha, his cocker spaniel.That case was settled out of court, and these documents are widely accepted.

Purpose trusts are more robust when specific language lays out how the funds will be spent and excludes any children or grandchildren from those funds. Solarz has older clients examined by a geriatric psychiatrist to ensure they are of sound mind and free of undue influence.

Making a million-dollar gift to a pet or a passion project can raise eyebrows.

“I’m not here to judge someone’s wishes and what’s important to them,” Yadav said. “If someone loves their dog or their car collection and wishes to apply their estate to them rather than their children, they have the right to do so.” Solarz has three dogs: a German Shepherd who is 16 years old and two younger Siberian huskies. He is confident that his children will care for the huskies after he and his wife die, but he told Insider that if he felt it was necessary, he would set up a pet trust.

“My dogs are my best friends,” he declared. “Call me crazy, but that’s exactly what they are, unconditionally.”

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