Creating Pet Trusts in Singapore: Are They Legally Recognised?
As a pet owner, you may want to provide the best for your beloved pet. However, what would happen if your pet outlived you? Who will take care of them?
In Singapore, pets are considered property and cannot inherit any of your assets. Instead, when planning your estate, a pet trust can be used to ensure that your pets are provided for after your death.
This article will explain:
What is a Pet Trust?
A pet trust is a legally sanctioned arrangement providing for the care and maintenance of pets in the event of the owner’s disability or death. Just like how a parent creates a trust fund to guarantee the physical and financial protection of their children, pet owners can likewise create special trusts that allocate money and provide instructions for their pet’s long-term care.
In a pet trust, you (i.e. the trustor/pet owner) will name a caregiver as the trustee and allocate financial resources to the trust for the purpose of caring for your pet. The money in the trust will provide compensation for the caregiver and cover the costs of caring for the pet. The person you name as trustee will likely act as your pet’s guardian and have the legal authority to manage your trust after your death.
The trust can specify details like the pet’s dietary preferences, grooming instructions and guidelines for veterinary care. The trustee is legally obliged to use the money you have left in the trust for your pet’s care according to your instructions and has to manage the trust in the best interest of the pet.
Why Create a Pet Trust and Not a Will?
As mentioned earlier, pets are considered property, thus you cannot leave them money in your will. Generally, the purpose of a will is to set out your instructions and wishes on how you want your estate to be distributed upon your death.
Compared to a will, a trust is useful in protecting the interest of beneficiaries who are not capable of handling their own financial affairs, for example, minor children (i.e., children below the age of 21). Rather than allocating a lump sum of assets to your minor children according to a will, it may be more effective to set up a trust for them so that someone suitable can handle their financial interests until they are of age.
Similarly, creating a pet trust allows you to name a caregiver for your pet and leave money and/or property to that person. Under a pet trust, the caregiver is under legally binding obligations to use those assets only for your pet’s benefit. A pet trust is, therefore, a useful legal tool to give pet owners the peace of mind knowing that their beloved pets will be in good hands in case the unthinkable happens to them.
Notably, the terms of a will can create a trust and allocate assets to the trust. This type of trust is called a testamentary trust and takes effect only after the death of the trustor.
Is a Pet Trust Legally Recognised in Singapore?
Unlike other countries with laws that allow for pet trusts to be set up, Singapore currently does not have such legislation. A pet trust is a unique type of trust because, unlike typical private trusts, it is a trust for a non-charitable purpose. This type of trust is more complicated in law and the legality of it is contentious. Hence, if you are looking to set up a pet trust, you are highly advised to seek legal advice on how to best do so.
Who Can Create a Pet Trust?
The trustor may create the trust. The trustor can be any corporate entity or individual (such as the pet owner) who is at least 18 years old, of sound mind and who owns the proposed trust property. In this case, the pet is the beneficiary of the trust.
Apart from a trust that arises after the trustor’s death, a trust can also operate during the lifetime of the trustor. This can be provided for in the terms of the trust and take effect when the pet owner becomes incapacitated (e.g., sick, injured, comatose).
You may refer to our other article for more information on how a trust generally works.
When Would a Pet Trust Take Effect?
Depending on the terms of the trust, the trust can either take effect on the death of the trustor or during the life of the pet owner.
A testamentary trust is formed in the pet owner’s will and takes effect only after the death of the pet owner. The trust does not exist in the pet owner’s lifetime. Instead, when the pet owner passes on, assets flow into the testamentary trust through the will.
A living trust, on the other hand, is created during the pet owner’s lifetime and exits as soon as it is established. The pet owner can then place assets in the trust during his or her lifetime. A living trust allows the trustee to look after the pets in the event the pet owner becomes terminally ill, comatose or mentally incapacitated in some way.
How Can I Create a Pet Trust?
Setting up a pet trust is similar to setting up a private trust. A trust may be created by will, by deed or by declaration. To be effective, the trust must be certain in relation to its:
- Intention (i.e desire to create such a trust);
- Subject matter (clearly identifiable trust property); and
- Objects (clearly identifiable beneficiaries).
In the context of a pet trust for example, the will or deed must explicitly state that the trustor wanted someone to hold property for the benefit of the pet rather than simply making a gift to the person. The property attributed to the trust must be clearly identified (e.g., $10,000) or described with sufficient clarity (e.g., anything that is left of the testator’s estate). Finally, your pet must be clearly named (e.g., ‘my pet golden retriever Lucky’).
In Singapore, the trustor is free to settle most types of property (e.g. cash, shares, private businesses) as the subject matter of the trust so long as the property is in existence, ascertainable and capable of being owned by an individual.
Trusts created by wills must comply with the formalities of the Wills Act and will take effect only after the trustor’s death. Just like leaving other property to someone, you would have to specify the recipient as the beneficiary in your will and name the pet as what the beneficiary will receive. The person that you entrust your pet with is called a pet caregiver.
A trust that is intended to take place during the life of the pet owner would be created by declaration and must comply with the Civil Law Act. A declaration of trust is a document used to establish the primary details of the trust so that the trust can be legally recognisable. Generally, the trustor must execute a written document along with the legal transfer of the property to the trustee. A trust lawyer can help you file all the required paperwork and adhere to the legal requirements to put the trust in place.
In both types of trust, the pet owner may state instructions for the pet caregiver in the Letter of Wishes. The Letter of Wishes is written by the trustor to the trustees to guide them on how the trustor would like the trust to be administered. A Letter of Wishes can be revised anytime by the trustor. However, this document is not legally binding and only serves as guidance to the trustee on their exercise of powers under the trust.
When setting up a pet trust you may be asked to provide information such as:
- Photos, microchips and DNA samples to adequately identify your pets in order to prevent fraud by using the funds for a different pet
- Detailed description of your pet’s standard of living and care
- The amount of funds needed to adequately cover the expenses of your pet’s care and specifications of how the funds should be distributed to the caregiver
- Designation of remainder of funds in the event the funds in the pet trust are not exhausted
- Instructions for the final disposition of your pet (e.g burial or cremation)
Are There Any Considerations to Note About Setting Up a Pet Trust?
Picking a pet caregiver
When picking a caregiver, you should pick someone who you know will love and provide for your pet like you would. The person will become your pet’s new owner and will be responsible for providing food, shelter and companionship for your pet. Being a pet caregiver is a big responsibility, so do ensure that the caregiver you select is up for the task before you put their name down.
If you have more than one pet, consider if you want one person to care for all of them or send them to separate homes. If you cannot find a suitable caregiver, you may consider naming a local shelter or rescue group as their caregiver. If you do so, you should seek the consent of the organisation first and ensure that they are able to adhere to your pet care instructions.
Allocating assets to the pet trust
When considering how much money to allocate to a pet trust, consider your pet’s life expectancy, their expenses and their likelihood of developing health issues. The amount allocated should be a reasonable amount of what your pet might need for their care.
If you leave an excessive amount of money in a pet trust, your family members may be able to challenge the terms of the will allocating funds to the trust in court. For example, your family members who are beneficiaries to the will may assert that there was a mistake in the terms of the will due to an error in drafting and does not accurately reflect the trustor’s intentions. The will may be contested and an application may be made to alter the distribution of the trustor’s estate.
What Happens If the Pet Trust is Not Executed According to My Wishes?
In the event that the trustee caregiver breached his/her duty in carrying out the trust, the beneficiary would usually have a claim of breach of trust against the trustee. However, in the case of a pet trust, the situation is further complicated as the pet beneficiary cannot file a claim. Since the position in Singapore is not clear, it would be best to seek legal advice from a trust lawyer who has expertise in estate planning.
Typically for a private trust, the trustor may appoint a ‘protector’ for the trust to reserve some control over the trustee caregiver. This is usually a trusted friend or professional advisor to oversee that the pet trust is being carried out properly and your pet is being taken care of. The protector may be given a wide variety of powers, including the power to remove and appoint trustees, settle their compensation and add discretionary beneficiaries. Again, it is legally uncertain if you can appoint a protector for a pet trust as it is unique. Ultimately, you should seek legal advice on how best to enforce such a trust.
How Else Can I Protect My Pet’s Interests If I Don’t Wish to Set Up a Trust?
If you do not wish to set up a pet trust, there are other legally recognised ways in which a pet owner can seek to protect their pet’s wellbeing.
In your will, you can specify a guardian, such as your close friend or relative, to look after your pet and leave some funds for pet care. Your will should be specifically drafted in such a way that the cash gift would only apply if the beneficiary agrees to take care of your pet.
You can then leave a letter of instructions for your pet guardian that describes the care you want your pet to receive. Letters of wishes are estate planning devices designed to provide informal instructions and work together with your will. These letters are not legally binding, so you should leave your pet with someone you trust that will follow your wishes.
Pet trusts are a useful tool for pet owners to ensure that their pets will be taken care of should anything happen to them. A pet trust can be set up through a will or deed by clearly stating your intention to create a trust for your pet, property to be included in the trust and your pet as the beneficiary of the trust. A set of instructions can also be given to a trusted pet caregiver detailing your wishes as to how your pet should be taken care of.
Due to the complicated nature of pet trusts, you should consult a trusts lawyer for further advice or assistance if you are looking to set up a pet trust. The lawyer can help you structure your trust and ensure that it is legally valid and properly reflects your wishes and instructions for your pet.
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