Horse owners are, some might argue, an exceptionally practical, sometimes-morbid group of people. Caring for an animal who is 1,000 pounds with a gastrointestinal system designed by committee walking around on questionable feet and ankles has a way of making the people around them realistic about life and death.
But how many of us spend more time thinking about our horses' mortality than our own?
Joshua Beam is an attorney with Dinsmore and Shohl in Lexington, Ky., and recently gave a presentation about estate planning with horses in mind at a November meeting of the Kentucky Horse Council.
Beam said that when it comes to estate planning, the first step for horse owners – or anyone – is to develop an idea of what they want upon their death and come to a lawyer to help them put that plan into legal terms. The lawyer can't make decisions for you about who should get what, or who knows horses well enough to deal with yours when you're gone.
“Every one of us is going to die. It's inevitable. We're going to leave people, we're going to leave money, we're going to leave dirt, and we're going to leave animals that we love,” said Beam. “Being proactive, being ready is the best thing to do.”
Beam's presentation cannot substitute for legal advice, and focused on Kentucky law, but the presentation can give horse owners a few starting points to think about as they make their own estate plan.
Here are some basic considerations:
–If you don't have a will, be aware of what that can mean in your state. In Kentucky, the assets belonging to a married person who dies without a will are divided in half. Half is directed to the spouse, and the other half is directed to the person's children, then grandchildren, then parents, then siblings, then nieces or nephews before their spouse. So, for Kentucky residents, it's not safe to assume your spouse would legally be entitled to own your horse (or anything else) unless you have put that into a will or don't have family in the aforementioned categories.
–For the purposes of estate planning, horses and other animals are considered “assets” even though some of them have more liquidation value than others, and some have none at all.
–You can use your will to designate anyone you choose to inherit your horse after your death. You can include a list of back-up designees also, if desired. No one is required to accept any asset that's willed to them, however, so someone can turn down your expensive posthumous gift of a horse.
If you name someone to inherit your horse, Beam strongly recommends discussing this with the person in advance, and checking in with them periodically to make sure they remember and are still comfortable with being the designated receiver of the horse.
–You should also make sure the executor of your estate knows who the designated receiver of your horse is, and that the executor knows who they can call to make sure the horse is cared for while your estate is in probate. These may be different people, because probate takes considerable time.
–Beam points out that many people may not realize how much of a lag there is between a person's death and their assets being distributed as they've requested. In Kentucky's Fayette County, where Beam practices, it's typically two or three weeks after a person's death before their survivors reach out to anyone about the probate process. Then it can take two weeks (or longer) for an attorney to get the paperwork around and file it in probate court. Fayette County District Court is about four weeks behind on these types of cases, so it's often another month before the executor can begin acting on the deceased person's will.
After that, there is a six-month waiting period during which creditors may make claims against the estate for any debts. Beam said he doesn't advise executors liquidate or transfer assets during this time, because they become legally liable for debts if creditors emerge in that waiting period and there isn't enough in the estate to pay them. The exception to this would be if the deceased person's spouse inherits everything and is the executor, because they will be liable for the debts anyway.
In all that waiting time, the horse will need to be cared for and fed. It is acceptable for the executor to spend estate money maintaining the deceased's assets, so it's possible for the horse to continue receiving care in this time, but if that horse has economic value, it shouldn't be dispersed to anyone else. The person caring for the horse (a boarding farm operator, etc.) and the executor also need to be in touch with each other, to make sure the care continues during this waiting period.
If the horse has no economic value, it's unlikely a creditor would seek to seize it and, like family pets, horses in this category may be transferred to new homes a little more easily but this can be a gray area legally.
–Beam said he has written wills for people that instruct their animals be euthanized upon the owners' deaths – and that's okay. There are situations where some horses are old, frail, or difficult to manage for people other than their owners, and owners have decided they don't want to risk that horse suffering ill effects from being moved off a property they've lived on for a long time, or falling into the wrong hands.
If you go this route, you need to make sure the person (whether they're the executor or someone else) you leave responsible for coordinating the euthanasia is prepared, financially and emotionally, to carry out your wishes.
–You can and should specify in your will whether you're comfortable with the person who inherits the horse disposing of it via sale or lease. If you expect the person to maintain the horse for the rest of its natural life, it would make sense to leave the person money to do that adequately.
–One way to do this is by establishing a trust that contains the horse in question and whatever money you want to leave the designated person to care for the horse. The executor of the trust, who is charged with overseeing its management, does not need to be the same person performing day-to-day care of the horse. You can outline terms of the trust, which can include details about the standards of care for the horse and what process you want the executor to use to ensure the caretaker is maintaining those standards. But keep in mind the money you're leaving with the horse needs to be sufficient to maintain those standards.
You'll also need to name a residual beneficiary – which can be a person or an organization – who would get any money left over after the horse's death or dispersal.
A revocable trust, which is the most common form of trust used for this purpose, terminates with the death of the last surviving animal in the trust. Only animals that are alive at the date of the owner's death can be included in the trust, which can prove challenging for people with pregnant mares.
If you establish a trust, be sure to fully and completely identify animals contained therein, with registration information or microchip numbers.
–Keep things up-to-date. Beam reminds people to check in periodically not just with their executor, but to also read their will and make sure everything is current. This can often get missed as new family members are added or as friends and family members die.
There's no way to guarantee that things will unfold exactly as you're hoping after you're gone, but by providing a clear set of guidelines for what you want can be helpful – for your human loved ones, and for your horses, too.
The post You Are Going To Die; What Happens To Your Horse When You Do? appeared first on Horse Racing News | Paulick Report.
