Where There’s a Will By Wendy Elks, with the Equine Team from law firm Jansen, Walsh and Grace.
Owning and caring for a horse is a massive commitment by horse owners, but what happens to the horses in the case of an ‘owners death’ or incapacitation?
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o one wants to think about dying … why should we, when there’s so much living to do? However, death does happen, and often it’s totally unexpected. Apart from the shock and grief experienced by family and friends after the loss of a loved one, the horse owner leaves behind a set of circumstances that can cause tremendous difficulty and contention: what to do with the horses? Without thoughtful input and firm action taken by the owner before the unforeseen happens, one’s beloved horses can quickly suffer neglect and hardship, either through the ignorance of those left in charge or those burdened by an unwanted responsibility and financial outlay; due to lack of care by others without an emotional bond to the animals, or through misunderstanding or contention about responsibility, or subsequent ownership. A verbal arrangement between two friends over taking a horse, should something happen to one or the other, may seem
enough, but it rarely is: the friend’s partner may not agree to taking on the expense of another horse, the friend may move away, or other circumstances make it impossible. Sitting down and working out what you would want done with your horses, e.g., gifting to a family member, willing to a friend (along with financial provision, to reduce financial burden on the friend), or euthanasia of the elderly, infirmed or otherwise hard-to-home animal, can be decided upon, and the logisitics and responsibilities worked out in advance and put into a legal framework, ensuring clarity and giving peace of mind to all concerned. Kim, a specialist lawyer, keen horse owner and equine consultant with the law firm Jansen, Walsh and Grace in Wantirna, Victoria, shares her expertise on how to provide for your horse when you can no longer do it yourself.
Simple bequest
You may have a family member or relative who is interested in riding to whom you can bequeath your horse in your will on
your death. This is what most people do. The Queen Mother did this. Under her will, she bequeathed her horses to the Queen, knowing that the Queen, who has a keen interest in horses, would look after them. It is more difficult if you have no one whom you can trust to look after your horses if you die, or if you have several horses.
Equine specialists...
Bequest subject to condition
You may be fearful – not without reason – that the executors of your will might euthanase or sell your horse after your death. Even if you make a bequest of your horse to somebody, that person can dispose of your horse as soon as they receive it.
The usual way to get around this is to provide an amount of money to the person to whom you are giving your horse, and to provide an additional amount for its maintenance and care - on condition that they continue to provide this.
Testamentary trust
Another solution is to set up a testamentary trust in your will for the maintenance and care of your horse, so the trust provides for your horse’s care during its lifetime, and the money left over would go to a human beneficiary (such as the carer) or to a charity such as the RSPCA or a reputable, specialist not-for-profit equine care organisation. The funds must be sufficient to pay for your horse’s maintenance and care, including veterinary fees, farrier’s fees, agistment fees, etc. for its lifetime. It is important to have a human beneficiary or a charity that will receive the balance of the funds on the death of your horse.
The trust has to be carefully drafted in all States and Territories other than (South Australia) because of the rule against perpetuities. You cannot have a trust just for the life of your horse, because such a trust would be invalid. For this reason, you must expressly stipulate in your will that it is for the lifetime of your horse or 80 years from date of your death, whichever is shorter. When your horse dies, the remaining funds would go to the human beneficiary or the charity. This is not a problem in South Australia as it has abolished the rule against perpetuities.
The fund
Legislation in all States and Territories permit your spouse or domestic partner or children to make a claim against your estate, claiming that you did not make provision for them in your will or, if you did, that the provision you provided was inadequate. This includes other eligible applicants, which vary somewhat between
the States and Territories. The size of the fund to provide care for your horse should not be excessive. If it is excessive and you are survived by a spouse, domestic partner, or children or any other eligible applicants under the maintenance legislation in your State or Territory, then that person can make an application to the court that the amount is excessive, and the court would probably reduce it. For example, if you provided $5 million for the care of your horse and provided $100,000 to your spouse or domestic partner or children, they could make an application to the court that $5 million was excessive. The amount involved should be reasonable unless it is a very valuable horse, such as an elite ATHLETE horse or champion race horse, where the maintenance costs would be quite high.
Horse executor
As there will be a short period between your death and the grant of probate, you might consider having a horse executor in addition to the ordinary executor (which could be the same person) who could look after your horse between the period of your death and the grant of probate. The horse executor would ensure that the horse was fed and cared for during the interval.
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Establishing trust If you are concerned that there may be a claim against your estate by your spouse, or domestic partner, children or other eligible person after your death, then there is a risk during that period that there may be an inability to access the assets to pay for the care and maintenance of your horse. Presumably, the court would take the view that your horse should be maintained and that this is a normal outgoing, a form of recurrent expenditure in the administration of the estate, which should be paid by the executor.
Sometimes, however, such litigation can be very bitterly fought, and your horse could suffer – not receiving food or veterinary care – because the assets of your estate have been frozen by the litigation.
If you are concerned about this, you might establish a trust for your horse during your lifetime. You would be the first trustee of the trust and you would appoint another person as successor trustee who would replace you on your death. That person could be the same person as the executor of your will, or someone else. You must set aside a fund to pay for the maintenance and care of your horse. The advantage of this is that you would have peace of mind that your horse would be unaffected by any dispute raging over your estate. As in the case of a testamentary trust, you must limit its existence to the lifetime of the horse or 80 years from your death, whichever is shorter. This is not a problem in South Australia as it has abolished the rule against perpetuities.
It is essential to have a human beneficiary (usually the carer) or a charity that will receive the balance of the fund on the death of your horse.
Another advantage of a trust is that you can end the trust at any time, for example, if you sell your horse and you no longer need the trust.”
Providing care for your horse during its lifetime is the first pillar of horse ownership. But this can all come to an abrupt end, should the unthinkable happen to its owner. With every horse’s wellbeing subject to the survival and sense of responsibility of its owner, establishing a trust for one’s horse/s is a way to care for the lives of loved animals, especially those that require specialised care, such as horses.
While everyday care is the hallmark of good horsemanship, the ultimate demonstration of responsibility is to devise a plan for their future wellbeing, even if the person who loves them most is no longer around. About the Equine Team at the legal firm, Jansen, Walsh and Grace - Wantirna VIC. This practice is near the Yarra Valley and advises many equestrians on a wide range of legal disputes involving equines, property and horse-related matters. Ph: 03 9720 2922 Email: info@jwglawyers.com.au Web: http://www.jwglawyers.com.au/