Who will take care of Fido when you're gone? Minnesotans put trust in trusts

If Jean Stelten-Beuning died, her five beloved sheltie dogs would live the rest of their days at Top Dog Country Club, a dog "vacation club" she runs in New Germany, Minn. Their medical care and other expenses would be guaranteed by a trust she's established.

Dr. Sarah Carlson, a Twin Cities veterinarian, has decided that without children or other heirs, her net worth will pay for the well-being of the horses and dogs that might outlive her.

"I have a pile of animals," she said. "It just seems like the practical thing to do in my position."

Caroline Melberg was concerned that it might be hard to find someone to adopt her 90-pound German shepherd and her 15-year-old black Labrador mix if she and her husband died. So the Wayzata couple set up a trust of about $125,000 to care for the pets and any future dogs they might have.

"It just gives us peace of mind," Melberg said.

Those legal arrangements are possible because of a relatively new state law allowing people to create pet trusts.

Since the law was enacted in 2016, Minnesotans have been setting aside thousands — or even hundreds of thousands ­— of dollars to guarantee the care of their animals after they die or are incapacitated.

With a pet trust, there's a guarantee that the money set aside will be used to care for the animal. A trust can designate a separate caretaker, trustee and a trust enforcer to care for the animal, manage the money and make sure the care is being carried out as specified, according to Rebecca Bell, a Golden Valley lawyer.

It can include legally enforceable instructions on the type of food, medical care, exercise and housing the pet will get as well as the pet's end of life and burial or cremation options.

"It's the way to guarantee your wishes will be followed," said Bryan Lake, a lawyer and a lobbyist with the Minnesota State Bar Association.

Pet trusts are usually set up when people write their wills, something which the pandemic has spurred many to do. But they aren't only for the wealthy.

"Even people with modest wealth but [who] just have a love of their pets will consider it," said Ivory Umanah, a Minneapolis lawyer.

Despite our reputation as a pet-loving place, Minnesota wasn't exactly a trailblazer in the field. In fact, it was the last state in the country to legalize pet trusts.

Since then, however, Minnesotans have established trusts naming beloved dogs, cats, horses, parrots, rabbits, mules, donkeys and even a raccoon as beneficiaries, according to local lawyers.

States began adopting pet trust laws in the 1990s, after a national commission of lawyers recommended the provision, according to David Favre, a Michigan State University law professor and editor-in-chief of the Animal Legal & Historical Center website.

Favre said the concept was initially considered radical because it would allow an animal to have similar status as a person by being beneficiary of a trust. But it was recognition of a broad social change that's occurred in the past few decades, as pets are increasingly treated as family members.

"It's not just property," Favre said. "We're seeing animals in a different light."

"They're family," said Minnetonka dog owner Pam Kermisch. "I grew up as an only child. My dog was my sibling."

Kermisch said she has established a "significant" amount in a trust to care for her two current dogs, Australian labradoodles Waffles and Pancakes, if they outlive her.

Kermisch said she sees the trust as a way to ensure that if the dogs have to be adopted by her father or her daughter, they won't be a financial burden to them. The money is also a way for her to give the dogs the care she would have given them in repayment for the love and loyalty they've shown her.

"I can't buy someone to love them, but I can ensure they have the quality of life and choose people who will love them," Kermisch said.

When the pet trust law was being debated in the Minnesota Legislature, lawmakers and lobbyists in favor of the law had to overcome concerns from the agriculture industry that the law might somehow impede livestock production. There were also concerns that pet trusts could be used to hide assets from the tax rolls or public assistance system.

And then there was the notion that pet trusts are frivolous, an option for wealthy eccentrics like New York real estate and hotel tycoon Leona Helmsley, who famously died in 2007 leaving $12 million for the care of her Maltese lap dog, Trouble. (The courts later reduced that amount to $2 million.)

"I think there was a little bit of skepticism," said Sen. Scott Dibble, DFL-Minneapolis, who authored the bill in the Minnesota Senate.

"This was a heavy lift," said Dennis Smith, a former state representative who authored the bill in the state House. "Unless you're an animal lover, you really don't care about it."

Smith, a Republican from Maple Grove, brought his golden retriever, Reagan, to a hearing to support the bill.

"She barked in committee," Smith said. "She was on the record."

Before she died last year at age 15, Reagan had $75,000 in a trust, Smith said.

Smith, an attorney, said the amount of money put into a trust to care for a pet can't be excessive, otherwise a judge might end up reducing the amount.

So far, he hasn't heard of any cases in the state where pet trusts have been challenged.

A trust can be used to care for an animal before the owner dies but becomes disabled or incapacitated. When the pet dies, depending on how the trust was set up, the money left in the trust would be distributed to heirs or could go to another designated person or charity.

Before pet trusts became available, a person could write in their will that a relative will inherit a pet. You could also bequest money to your relative intended to pay for the animal's care.

But because pets are legally considered personal property, they can't own property or inherit assets themselves. So there's nothing that would prevent your relative from getting rid of the animal after you die and spending the bequest money on themselves.

"If the sister becomes inconvenienced by the cat and drops the animal off at a public access shelter, the sister would still be able to keep the $10,000," according to a scenario described by Barbara Gislason, a Fridley lawyer, in her book, "Pet Law and Custody," published in 2017.

Gislason notes that between 12 and 27% of pets end up being euthanized after their owners die or become disabled.

"Of the approximately 3 million pets euthanized annually, more than 1 million of these result from the deaths of pet owners who have not arranged for their pets' care," according to Minneapolis estate planning attorney Mary Alice Fleming.

The pet trust law can provide a plan for animal lovers who want to own pets late in life, but who are afraid the pet might outlive them.

Stelten-Beuning, owner of the Top Dog Country Club, said she's offering a pet trust fulfillment program through a foundation she has started.

If a dog's owner dies but the dog has a trust, it can spend the rest of its days at Top Dog Country Club.

It's a facility that Stelten-Beuning, a former hotel executive, describes as "Marriott hospitality meets Club Med vacation," with a heated swimming pool and orthopedic beds.

The cost is $24,000 a year, plus 5% for a medical fund.

Richard Chin • 612-673-1775