TESTIMONY ON BEHALF OF MSBA ANIMAL LAW COMMITTEE IN FAVOR OF SB 235

By Kathleen J. Masterton

Good morning, Senators. My name is Kathleen J. Masterton. Thank you for allowing me the opportunity to testify today in support of Senate Bill 235, "Estates and Trusts—Trust Care of Animal." I am an attorney in private practice in Lutherville, MD, focused on estates and trusts and equine law. I also am a former Assistant Attorney General who served as counsel to the Md. Orphans Court Judges and the MD Registers of Wills. I am here today not only in my capacity as an experienced estates and trusts attorney, but primarily on behalf of the Animal Law Committee of the MD State Bar Association.

The Animal Law Committee is a special project of the Maryland Bar Association serving as a focus for attorneys interested in the law as it impacts animals and the people involved with them in our society. The Animal Law Committee hopes to educate legislators, members of the bar, and lay people on legal issues as they pertain to animals, and influence the drafting of quality legislation to address animal-related issues such as trusts for the benefit of animals after their owners' demise. The Animal Law Committee is not an animal rights group, but rather a forum for attorneys of all viewpoints whose practices may involve animal-related legal issues.

Recent decades have seen an evolution in the relationships between people and their animals. Many people consider their dog, horse, bird or ferret a member of their family and feel both an obligation and a desire to provide for the animal's welfare during its entire lifespan. Dogs and cats may live 10-20 years; horses commonly live for thirty years, and some bird species may live as long as 75 years. Current Maryland law makes the fulfillment of this desire after the owner's death problematic. In Maryland, animals are considered to be tangible personal property, no different than a chair or a car.

The Personal Representatives who administer estates have a fiduciary duty to minimize the ongoing costs to an estate. In the absence of adequate planning, where the estate owns tangible personal property with a high daily maintenance cost and a relatively low valuation, such as a pleasure horse, the Personal Representative could conceivably be held to have a duty to eliminate the maintenance cost from the estate as expeditiously as possible, for example, by selling the animal at auction for slaughter. This outcome is abhorrent to many animal owners, who may regard their horse or other animal as their best friend. But there are few viable alternatives.

At present, Maryland citizens who want to engage in post-mortem planning for an animals' welfare are largely limited to designating, in a will, a person whom the owner believes is willing and able to care for the animal after the owner dies, and to leaving that person a sum of money intended to cover the cost of the animal's care. There are many problems with this approach: the named caretaker may be unable or unwilling to care for the animal at the time this becomes necessary, may be a spendthrift, may be incompatible with the animal in ways that were not anticipated, or may simply prove untrustworthy. Essentially, under current law, animal owners and their animals are at the mercy of fate. As animals are not considered legal persons, current legislation does not authorize the creation of trusts for their benefit, and it is unlikely that any such trust, if created, would be enforced by the courts of this state.

The Uniform Probate Code and the Uniform Trust Code are model statutes promulgated by the National Conference of Commissioners on Uniform State Laws, a group of eminent attorneys who focus on designing excellent laws after much study of the problem at hand. Both uniform codes provide for so-called "pet trusts." While at least 26 states have adopted some form of legislation allowing for the establishment of trusts for the benefit of animals, usually based on one of the uniform codes, Maryland has not yet done so. It is time to correct this oversight by adopting SB 235.

Trusts for the care of animals are a viable solution to the responsible pet owner's dilemma. The experiences of other states who have adopted animal trust legislation show that many of the common objections to such trusts are readily overcome in the model law. SB 235 is similar to Section 2-907 of the Uniform Probate Code and Section 408 of the Uniform Trust Code. It provides for the creation of trusts for the care of one or more animals alive during the life of the trust settlor and the termination of such trusts at the death of the last survivor of the so-designated animals; this eliminates the concern that such trusts could continue indefinitely. SB 235 also specifically provides that the common law "rule against perpetuities" does not apply to bar the validity of a so-called pet trust.

SB 235 authorizes the enforcement of the trust by a person appointed under the terms of the trust or, if no such person is appointed, then by a person appointed by the court. This addresses the primary practical problem with establishing an enforceable trust where no human beneficiary exists with standing to enforce the terms against the trustee. Such states as Florida, New Jersey, New York, the District of Columbia, and many others have adopted this approach with success.

SB 235 provides that, unless a court holds otherwise, the property of the trust only may be applied to the intended use of the trust. This addresses concerns that trust proceeds could be used for impermissible purposes, and the above-referenced enforcement provisions ensure that this clause has teeth. Finally, SB 235 provides that if any funds are not required for the intended use—for example, if funds are leftover after the animal in question passes away—then the funds will be distributed to the successors in interest of the deceased settlor. This, of course, satisfies the natural desire that a person's assets, not otherwise disposed of, pass to the natural objects of his or her bounty--the heirs at law.

In short, the MD State Bar Association Animal Law Committee feels that SB 235 is a well crafted piece of legislation embodying language that that has withstood the test of time in other states, that will address a problem keenly felt by many Marylanders engaged in estate planning, and that will result in the overall improvement and modernization of the estate and trust laws in Maryland. We urge that it be favorably be reported out by this Committee and enacted as the law of Maryland.

Thank you for your courtesy in listening to my remarks today.