Super Pet Expo Preview and Pet Trusts

Don’t forget to stop by the Super Pet Expo this Friday, Saturday and Sunday in Chantilly, Virginia!  Bean Kinney will be in Booth #721 (note this is a slight change from our original location).  We’ll have great giveaways and raffles, including a raffle dedicated to this post on pet trusts — one free pet trust for one lucky companion animal!   Another raffle will include a free intellectual property/trademark consultation for a business or rescue!  Please stop and say hello!

Other raffle donations include a relaxing weekend for your dog with The Pawkeeepers in Woodbridge, Virginia, a gift certificate from Fur-Get Me Not, training phone consultations with Opportunity Barks, a one-year subscription to NOVADog Magazine, toys from Cooperative Paws, and goodies from Operation Socialization!

All proceeds from our raffle will be donated to three fantastic rescues — Homeward Trails Animal Rescue, A Forever Home Rescue Foundation (my Sophie’s rescue!), and Rescue Ink!  All three rescues will have booths at the Super Pet Expo, too, so stop by and make friends!

As a preview to our raffles, please enjoy the following article regarding pet trusts by me and my colleague, Jennifer Lee, and courtesy of NOVADog Magazine.

This post was originally printed in the recent edition of NOVADog Magazine and is reprinted with permission by NOVADog Magazine.

Provisions For Pets:  How To Include Four-Legged Family Members In Your Estate Planning

Just last year, forlorn family members brought Bonnie, a five-year-old Golden Retriever mix, to a local shelter.  Bonnie’s owner had just died, and the family wasn’t able to keep her.  Bonnie was very lucky – she was adopted by one of the shelter veterinarians the very same day she went up for adoption. 

Not all dogs are as lucky as Bonnie.  The Humane Society of the United States estimates that animal shelters across the country care for six to eight million animals a year, and approximately three to four million are euthanized each year.  These numbers are down drastically from the 1970s, when 12 to 20 million animals were euthanized each year, but we still have a long way to go.  One way to avoid this unfortunate scenario is to provide for your pets in your estate planning. 

Beyond Leaving Money to Your Pet

Many people scoff at the idea of including pets in their estate plans, pointing to stories such as billionaire New York City hotel operator Leona Helmsley.  When Helmsley – nicknamed the “Queen of Mean” – died in 2007 at the age of 87, she left a $12 million trust to care for her ill-tempered Maltese, Trouble.  Of her $4 billion estate, Helmsley left $5 million in cash and $10 million in trust to her brother, and $5 million in cash and $5 million in trust to two of her four grandchildren.  Helmsley cut the other two grandchildren out completely.

Not surprisingly, the family filed suit, and the court cut Trouble’s trust from $12 million to $2 million.  That $2 million goes towards annual costs of $60,000 for the caregiver’s guardian fee, $8,000 for grooming, $1,200 for food and $100,000 for full time security.  Apparently, Trouble needed security after having received multiple death threats.

Planning for your pets is about much more than just leaving money to your pampered pooch.  If you fall ill or are in an accident, everyone around you will be devastated and may not think about your pets.  In that situation, your pets need immediate care, and your loved ones need guidance.  The better you plan, the easier it will be for your grief-stricken relatives and friends to help.

Recent changes in estate law and the manner in which courts view pets have made planning for the future easier.  The following are a few of the tools you can use to plan for the care of your pet.  Because of differences in state law and the considerations unique to each pet owner and pet, it is recommended that you consult an attorney to determine the best tool for your particular situation.

Your Will

 Some pet owners make provisions for the care of their pet in their will.  However, a will has several drawbacks – it can take a long time to probate a will, or someone may contest it.  Your wishes may not be put into effect until the conflict is resolved or a court may refuse to enforce your instructions.  Additionally, a will is only effective upon your death.

Power of Attorney

Should you become incapacitated, a power of attorney with special provisions for your pet can be very useful.  Those provisions should authorize your agent to care for your pet and spend your money for your pet’s care.  You can also give your agent the power to place the pet with a long-term caregiver if necessary.  However, a power of attorney is only effective while you are alive.

Pet Trusts

Perhaps the best option is to have a power of attorney along with a pet trust.  A pet trust is a legally enforceable method to arrange for the care and maintenance of your pet in the event you become incapacitated or die.  Depending on the laws of the state in which a pet trust is established, a pet trust can continue for the life of your pet or 21 years, or whichever occurs first. 

One of the most important decisions is to designate a trustee of your pet trust.  The trustee will hold, manage, and administer the trust funds according to the terms of the trust.  You must also decide who will be the pet’s caregiver on a day-to-day basis.  It is crucial to name someone who is willing and able to take on this duty.  You should name alternate trustees and pet caregivers in the event the original trustee or caregiver becomes unable to serve in their respective functions for whatever reason.

In a pet trust, you can be as specific as you wish about the care of your pet.  Consider the standard of living you want your pet to have, and the type of care that your pet is to receive.  You can specify your preferred brand of pet food, veterinarians, walking/exercising instructions, training, behavior concerns, and other special instructions.  For instance, when owner Ken Kemper of Hagerstown, Maryland died several years ago, Kemper left $400,000 and his house to his three rescues – a beagle and two lab mixes named Buckshot, Katie and Obu-Jet.  He also left instructions that the dogs were to have a special weekly dinner.  The dogs’ caretaker continues Kemper’s tradition of a Friday night spaghetti dinner, complete with meatballs and garlic bread.

How Much is Enough?

Determining what sums are reasonable for your pet’s care is important so that you can fund the trust appropriately.  Expenses to be considered include food, housing, medical care, and grooming.

As with Leona Helmsley, courts will not hesitate to scale back a pet trust that is out of line with the amount someone has left for their loved ones.  The amount you should leave in a trust for the care of your pets must factor in not only the size of your overall estate, but also the needs and age of your pets. 

The American Society for the Prevention of Cruelty to Animals (ASPCA) has a detailed breakdown of pet care costs at http://www.aspca.org/adoption/pet-care-costs.aspx.   The ASPCA estimates annual costs for a small dog at $1,314, for a medium dog at $1,580 and for a large dog at $1,843. 

Paul Sullivan, a writer with the New York Times, recently wrote an article entitled “Animal Lovers, Beware of Ownership Costs,” questioning the ASPCA’s numbers as being far too low.  Sullivan includes many stories about pet costs that far exceed the ASPCA’s estimates.  One story was about Moose, a Labrador retriever who needed to have a sock surgically removed from his stomach – to the tune of $6,000 in vet bills.  As Sullivan mentions, many of us pay far more than the ASPCA’s estimates in just dog walking and doggie daycare costs.

When thinking about how much to leave for your dog, as well as a possible option for a back-up caregiver, consider the various veterinary schools with programs designed for long-term care of pets.  Texas A&M’s College of Veterinary Medicine and Biomedical Sciences has a privately funded program called The Stevenson Companion Animal Life-Care Center.  There is an enrollment fee of $1,000 and a minimum endowment requirement based on the age of the owner at the time of enrollment (currently between $10,000 and $50,000 if the endowment is paid at the time of enrollment, or between $50,000 and $100,000 if the endowment is made by bequest).  Other veterinary schools with similar programs include University of California-Davis, Oklahoma State University, the University of Minnesota, Kansas State University and Purdue University.  These programs generally seek contributions or endowments in the range of $25,000 to $30,000 for one dog.

No Time Like the Present!

Bonnie was very fortunate that she found someone right away to care for her.  But not all dogs in her situation are as lucky.  With careful estate planning, you can give your loved ones the guidance they need to provide for your pets in the unfortunate event of your death or incapacitation.  There is no time like the present to get your estate planning in order – for you and your pets!

Come See Me and Bean Kinney in Booth 721 at the Chantilly Virginia Super Pet Expo!

Law firm Bean, Kinney & Korman, PC will be in Booth 718 721 (left side, right behind the Franchise Pavillion) for the Super Pet Expo in Chantilly, Virginia on March 18-20, 2011!  I will be there with two of my colleagues — Jennifer Lee and Alain Lapter — to talk about ways our law firm can help pet owners and pet care industry companies and organizations.  For pet owners, we’ll discuss everything from pet trusts to owner responsibility issues such as dog bite and dangerous dog liability.   For businesses and rescues, we’ll talk about many ways to protect your entity, from intellectual property to corporate, compliance and contract issues.  And we’ll have really fun giveaways!  Although Sophie will have to stay at home for this, I may also try to arrange for some guest appearances by Boomer!  Don’t miss it!

UPDATE (3/14/11):  The Super Pet Expo has had to make some floor plan revisions.  Bean Kinney’s booth will be #721 — right across from our original location.

Protecting Your Business: A Checklist For New (And Existing!) Pet Care Businesses In Virginia

Whether you are starting up a new pet care business, or you want to make sure you are covering your bases with your existing business, here’s a great checklist for you.  Watch for more details on these steps in later posts.

1.         Choose a name and protect your mark.  Before settling on a name, check for name availability with both the Clerk’s Office for Virginia’s State Corporation Commission and the U.S. Patent and Trademark Office.  It’s not enough to make sure that no one is using the name of your business.  To fully protect your mark, it is well worth registering your mark on the state level and filing a trademark application with the USPTO.  It usually pays off to consult with a trademark attorney at this step.

2.         Choose a business entity.  The most common entities are a sole proprietorship, a partnership, a limited liability company (LLC) and a corporation.  LLCs are a popular choice for businesses due to the LLC’s flexibility.  It is often in your best interest to consult with a corporate attorney at this point.

3.         Register your business.  Corporations, LLCs and limited partnerships must register with the Virginia State Corporation Commission.  If you are a franchise, you will also have to register with the State Corporation Commission’s Division of Securities and Retail Franchising.

4.         Register any trade names and general partnerships.  If you are using a trade name that is other than your entity’s official name, make sure that you register the trade name with your local Circuit Court Clerk’s Office.  Note that general partnerships also need to register with the Circuit Court.

5.         Check on state requirements.  Depending on your profession and business, you may have state licensing, registration or other requirements.  For instance, veterinarians and veterinary facilities must comply with licensing and registration requirements for the Virginia Board of Veterinary Medicine and the Virginia Department of Health Professions.  Commercial dog breeders, animal shelters and pounds, and rescues are subject to state reporting and other requirements.  Non-profits also have to register with the Virginia Department of Agriculture and Consumer Services’ Division of Consumer Protection to solicit as a charitable organization.  Various state laws also impact groomers, dog kennels and boarding facilities.

6.         Comply with zoning and permitting requirements and code regulations.  You will need to check with your local jurisdiction to ensure that you have complied with zoning and permitting requirements.  This step is more streamlined in some jurisdictions than others.  For instance, the City of Alexandria has created a “Permit Center” as a “One Stop Shop” in an effort to simplify this process.  (By the way, in 2010, Alexandria changed its small business zoning to add a new permitted use in the Cameron Station area for pet supplies, grooming and/or training with no overnight accommodations, if you’re looking for a location!)  Additionally, be sure to check on all building and other code regulations.

7.         Get a local business license.  Once you have registered your business and complied with your locality’s zoning and permitting requirements, you need to get a business license.  This license must be renewed annually.  When you apply for a license, this will also trigger the duty to estimate and pay your local business, professional and occupational license (BPOL) taxes.

8.         Comply with tax requirements.  Along with your BPOL taxes, make sure you have complied with other local tax requirements, such as business personal property taxes.  Of course, you also need to comply with state and federal taxes.  If you run a non-profit such as a rescue, make sure that you look into federal, state and local tax exemptions.  This is another time when you may want to seek help from a tax attorney or accountant.

9.         Get insurance.  Look into the many different insurance policies designed to protect your business, including insurance for general liability, professional liability and malpractice, umbrella liability, business property, business income and extra expense, animal bailee, equipment and commercial automobile coverage.  A good insurance broker can help you out here.

10.       Keep accurate and complete business records.  Generally, the privilege of obtaining a state or local license carries with it the state or locality’s right to audit your business and inspect your records.  Additionally, as mentioned above, certain businesses such as commercial dog breeders, animal shelters, pounds and rescues have their own obligations to maintain records and report information.  The importance of keeping accurate and complete records cannot be emphasized enough. 

Too many people think that they can start out on their own with a business such as dog walking, dog training or animal rescue without following these steps.  You can’t just wait until you have a solid clientele base before you worry about setting up and registering your business entity, getting insurance and a business license, and complying with these other requirements.  If you lack the resources to comply with these requirements prior to taking on your very first client, you should work for an established company for a while first before you take that leap. 

This post is not meant to be a full checklist of everything that is required for your particular business, but it is a great starting point to make sure that you have thought of the most important items to start up and protect your business.  Another great resource in thinking through whether you are ready to start your own business is the Virginia Department of Business Assistance’s Business One Stop Service.