Anyone who has a pet knows that they are more than just companions, they are members of your family. Often, when people make decisions about their estate plans, they want to take these furry members of their family into consideration – you may remember that Leona Helmsley famously left $12 million to her dog, Trouble. Amount aside, the general concept of pet trusts might be something to consider.
Creating a trust for your pet is not only prudent from a planning perspective, as it provides the person who will be taking care of your furry friend in the future the assets they need to do so, but also comforting to the owner in that they have taken all their loved ones into account in their plan.
In Colorado, pet trusts are specifically authorized under C.R.S. § 15-11-901. Under this provision, the named trustee must only use the principal and income from the trust “for the trust’s purposes or for the benefit of a covered animal or animals.” C.R.S. § 15-11-901(3)(a). Upon termination of the trust (generally when the covered pet passes away), the trustee must transfer the remaining trust assets in the following order: 1. As directed by the trust, 2. If not directed by the trust, then under the residuary clause in the transferor’s will (if the trust was created in a non-residuary clause or in a codicil), and 3. If neither option 1 nor 2 apply, then to the transferor’s heirs pursuant to part 5 of the code. C.R.S. § 15-11-901(3)(b).