Wednesday, July 23, 2008
On July 22, 2008, California Governor Arnold Schwarzenegger approved S.B. 685 which replaces California's permissive pet trust statute with a modern statute with enforceable provisions.
Here are some of the highlights of this new statute:
- A trust for the care of an animal is deemed to be for a "lawful noncharitable purpose."
- "Animal" is broadly defined to include pets of any type as well as domestic animals.
- The trust terminates when the last animal dies that was alive when the settlor died (unless the settlor provided otherwise in the trust instrument).
- The court must liberally construe the trust.
- The court must presume that the trust language is not precatory or honorary.
- Extrinsic evidence is admissible to ascertain the settlor's intent.
- Trust funds may be used only for the benefit of the animal unless the trust instrument provides otherwise.
- When the trust ends, the balance of the trust property passes (1) according to the terms of the trust (i.e., to the remainder beneficiaries), (2) if none and the settlor created the trust in a non-residuary will clause, under the residuary clause, or (3) in other cases, to the settlor's heirs.
- The settlor may name a trust enforcer in the trust.
- The court may appoint a trust enforcer.
- Anyone interested in the welfare of the animal and any nonprofit charitable organization that has as its principal activity the care of animals may petition the court to enforce the trust.
- If the settlor did not name a trust or if the named trust is unable or unwilling to serve, the court must appoint a trustee.
- Accountings must be given to the remainder beneficiaries (or those who would take upon the death of the animal) as well as to any nonprofit charitable corporation that has as its principal activity the care of animals and has made a written request for accountings.
- Trusts with property valued at $40,000 or less are exempt from accountings, filings, reportings, and other requirements which normally apply to trusts under California law.
- Upon a reasonable request, the animal and the trust records may be inspected by any beneficiary, the trust enforcer, or a nonprofit charitable corporation that has as its principal activity the care of animals.