BILL ANALYSIS
SB 685
Page 1
Date of Hearing: June 10, 2008
ASSEMBLY COMMITTEE ON JUDICIARY
Dave Jones, Chair
SB 685 (Yee) - As Amended: May 27, 2008
PROPOSED CONSENT (As Proposed to be Amended)
SENATE VOTE : 40-0
SUBJECT : PET TRUSTS
KEY ISSUE : SHOULD THE LAW BE CLARIFIED TO ENSURE THAT PET
TRUSTS ARE VALID AND ENFORCEABLE IN CALIFORNIA?
SYNOPSIS
This non-controversial bill, sponsored by the San Francisco
Society for the Prevention of Cruelty to Animals (SFSPCA), would
repeal current law on trusts for domesticated or pet animals and
enact new, more detailed provisions for the creation and
enforcement of pet trusts. According to the SFSPCA,
increasingly, pet owners are seeking to ensure that their pets
are cared for after the owner's death or disability. Thus,
informal arrangements with family or friends have been made for
the care of such animals. Some have ventured to include pets in
their wills, while others have created "pet trusts" that set
aside money for the care of the pets in the event of the owner's
death or disability. Examples include famed real estate and
hotel mogul Leona Helmsley who left a trust of $12 million for
the care of her pet dog. Another, lesser known pet owner from
Maryland, willed some $400,000 plus a house to the three stray
dogs that he adopted. Under such trusts, the trustee or
executor is expected to pay a caretaker to ensure that the pets
are housed, fed and maintained as provided in the trust or will.
This bill seeks to ensure that pet trusts are valid and
enforceable in California. The sponsor states that this bill
ensures that the pet or pets designated within the trust are
protected and cared for as the settlor intended and are not sent
unnecessarily into the animal shelter system. This bill has no
known opposition.
SUMMARY : Seeks to ensure that pet trusts are valid and
enforceable. Specifically, this bill :
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1)A trust for the care of an animal is a trust for a lawful
noncharitable purpose. Unless expressly provided in the trust
and subject to certain requirements, the trust terminates when
no animal living on the date of the settlor's death is covered
by the trust.
2)The governing instrument shall be liberally construed in order
to bring the trust within the normal rules for trusts, to
presume against the honorary nature of the disposition, and to
carry out the general intent of the settlor.
3)The trust principal or income shall not be converted to the
trustee's use or for any purpose other than for the benefit of
the covered animal.
4)Upon termination of the trust, the trustee shall distribute
the unexpended trust property as specified:
a) As directed in the trust instrument;
b) If the trust was created in a nonresiduary clause in the
settlor's will or in a codicil to the settlor's will, under
the residuary clause in the settlor's will;
c) If the application of a) or b) does not result in
distribution of unexpended trust property, to the settlor's
heirs as specified.
5)The intended purpose of the trust principal or income may be
enforced by a person designated by the trust or, if none is
designated, by a person appointed by the court. Among others,
any person interested in the welfare of the pet animal or any
nonprofit charitable organization whose principle activity is
the care of animals may petition the court regarding the trust
as provided.
6)If the value of the assets in the trust does not exceed
$40,000, no accounting, filing, separate maintenance of funds,
fees, or other report is required by reason of the fiduciary
relationship to the trustee, unless ordered by the court or
required by the trust instrument.
7)Any beneficiary, any person designated by the trust instrument
or the court to enforce the trust or any nonprofit charitable
corporation that has as its principal activity the care of
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animals may, upon reasonable request, inspect the animal, the
premises where the animal is maintained or the books and
records of the trust.
8)A trust governed by this measure is not subject to termination
solely because the trust principal does not exceed $20,000.
9)A trust governed by this measure shall not automatically be
limited to 21 years.
10)If the trust instrument does not name a trustee or no trustee
or successor trustee is willing or able to serve, the court
would be required to appoint a trustee to carry out the
intended use of the trust property. A court may make all
other orders necessary to carry out the settlor's intent.
11)"Animal" means one or more domestic or pet animals for whose
benefit the trust was established.
EXISTING LAW provides that a trust for the care of an animal may
be performed by the trustee for the life of the animal, whether
or not there is a beneficiary who can seek enforcement or
termination of the trust and whether or not the terms of the
trust contemplate a longer duration. (Probate Code Section
15212.)
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
COMMENTS : This non-controversial bill, sponsored by the San
Francisco SPCA, seeks to repeal current law on trusts for
domesticated or pet animals and enact new, more detailed
provisions for the creation and enforcement of pet trusts. The
author states that this bill creates the basis for oversight and
enforcement of pet trusts, ensuring that the trust provisions
are legally protected. The sponsor, states that current law
treats pet trusts as honorary and therefore these trusts are
unenforceable. The sponsor asserts that California is one of
only two states that have unenforceable pet trust statutes. By
adopting the pet trust provisions of Uniform Probate Code
Section 2-907, the author explains, California will finally join
37 other states that provide for the creation of pet trusts and
the means for their enforcement. The author states that this
bill would also have positive effects on shelters and animal
care facilities, which are often the destination and destiny of
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pets whose owner or guardian has passed away.
No Bones About It, This Bill Creates Enforceable Pet Trusts .
This bill specifies several conditions that the trust must meet
in order to be valid. First, except as the governing instrument
itself may provide, a pet trust cannot be converted to the use
of the trustee or for any use other than the trust's purpose or
for the benefit of a covered animal. Second, upon termination
of the trust, the trustee must transfer the unexpended trust
property either as directed by the trust or, if the trust was
created in a nonresiduary clause of a will, the trustee must
transfer the unexpended trust property under the residuary
clause of the will. If the trustee could not transfer
unexpended assets as described, the trust property would be
distributed to the settlor's heirs as provided in Probate Code
Section 21114.
Additional Trust Provisions Make This Bill The Cat's Meow . This
bill would provide for the court's appointment of a trustee if
the pet trust does not designate a trustee or no designated
trustee is willing or able to serve. The court may require the
transfer of property to a trustee, if necessary to carry out the
settlor's intended use of the property, as well as make other
orders.
This bill establishes a threshold for accounting purposes. If
the value of the assets in the trust does not exceed $40,000, no
accounting, filing, separate maintenance of funds, fees, or
other report is required by reason of the fiduciary relationship
to the trustee, unless ordered by the court or required by the
trust instrument. However, if the value exceeds $40,000, the
accountings required by Probate Code section 16062 shall be
provided to the beneficiaries who would be entitled to
distribution if the animal were then deceased and to any
nonprofit charitable corporation that has as its principal
activity the care of animals and that has requested these
accountings in writing. Section 16062 requires, among other
things, the trustee to account at least annually, at the
termination of the trust, and upon a change of trustee, to each
beneficiary to whom income or principal is required or
authorized in the trustee's discretion to be currently
distributed.
Under this bill, the intended use of the trust principal or
income may be enforced by a person designated by the trust
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instrument or, if none is designated, by a person appointed by
the court. The bill states that any person interested in the
welfare of the pet animal or any nonprofit charitable
organization whose principal activity is the care of animals may
petition the court regarding the trust as provided in Probate
Code Part 5, Chapter 3. This Chapter includes among the issues
for which a petition may be made, the internal affairs of the
trust or to determine the existence of the trust as provided in
Probate Code Part 5, Chapter 3.
The pet trust created under this bill would be subject to all of
the Probate Code provisions that generally govern trusts. As a
result, the trust may sue and be sued, buy and sell stocks, and
conduct any activity that a trust where the beneficiary is a
person may conduct.
Author's Technical Amendment . In order to clarify that this
bill covers both "domestic animals" and "pet animals," the
author has agreed to replace these terms with "animal" and
defines "animal" to mean one or more domestic or pet animals for
whose benefit the trust was established.
REGISTERED SUPPORT / OPPOSITION :
Support
San Francisco SPCA (sponsor)
Action for Animals
American SPCA
Animal Legal Defense Fund
Animal Switchboard
California Federation for Animal Legislation
Humane Society of the United States
Marin Humane Society
Pets Are Wonderful Support
San Francisco Dog Owners Group
State Humane Association of California
United Animal Nations
2nd Chance 4 Pets
One individual
Opposition
None on file
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Analysis Prepared by : Manuel Valencia / JUD. / (916) 319-2334