(Featured image: children with puppy, at Grupo Platero dog and cat sterilization project in Parana, Argentina. Courtesy Lucretia Mors, Grupo Platero)
If you care about animals and donate to organizations that protect and defend them, or are an activist yourself, there is a strong chance that you’ll want your legacy to continue benefiting animal protection causes beyond your own lifetime. However, there are a number of important issues that must be considered in advance, to ensure that your intentions of benefiting animals are honored and fulfilled after you no longer have the power to enforce them yourself. Animal People has advised donors in planning their estates for the past 24 years, and from 1999 until 2013 published the annual Watchdog Report on Animal Protection Charities, providing program and financial information on over one hundred animal rights, welfare, and conservation organizations worldwide. Based on our experience, we created this guide on estate planning as a resource for donors who care about animals.
Making Bequests to Animal Charities & Setting up Trusts to Benefit Animals
Josephine Usag loved animals all her life. At age 84, having no surviving members of her immediate family, she left equal shares of an estate of $173,000 to four different animal protection groups: the Medina County Animal Shelter and the Medina County SPCA (both in Ohio), and two national organizations––People for the Ethical Treatment of Animals and the National Wildlife Federation.
Each received $29,678. The Medina County Animal Shelter and the Medina County SPCA were particularly grateful, because local animal shelters are perennially underfunded, heavily dependent upon volunteer help, and in urgent need of all sorts of things that only money can provide. They usually are bypassed by people drafting wills––and people making routine donations––because they aren’t as big and visible as the national advocacy groups whose appeals continually stuff your mailbox.
But whatever Ms. Usag intended her money to do, chances are that at least one share of it canceled out the work done with one of the others. PETA and the National Wildlife Federation have strongly opposing philosophies of how people should relate to animals. Since both are mainly advocacy groups, they often lobby and petition on opposite sides of issues. Most fundamentally, PETA is opposed to hunting; the National Wildlife Federation originated as an umbrella group for 48 state hunting clubs and is still the leading organized voice of the “hunter/conservationist” philosophy in the United States (the World Wildlife Fund is the global leader). PETA and NWF might agree on a few points, for instance the need to protect wildlife, but they would strenuously disagree on how to do it ethically. The animal rights position would be that wildlife and wildlife habitat should be left undisturbed; hunter/conservationists would argue that allowing hunting in wildlife protection areas is the most appropriate means of managing and financing habitat protection.
Hunter/conservation groups such as NWF, WWF and the Nature Conservancy hide anti-animal-welfare positions with mailings to donors that contain photographs of appealing animals whom they purport to be helping, when in fact the hunter/conservationist groups favor hunting, favor sustainable use of wildlife in even the most sensitive wildlife habitats, and support extremely cruel means of exterminating animals who are labeled non-native or invasive.
It can be extremely difficult for donors to find out exactly where “wildlife” organizations stand on animal rights and welfare, as their responses to direct questions about policies or principles are often deliberately evasive. In public policy debates, these organizations may openly ridicule animal welfare concerns as “sentimentality,” and yet they do not hesitate to employ highly emotive language and images in funding appeals sent to rented animal welfare mailing lists.
It is important to review your choices periodically and to stay aware of changes at organizations which might influence your decisions to support them.
Once you have carefully researched your prospective beneficiaries to make sure that they represent your interests and to ascertain that their asset and program spending profiles are acceptable to you, you must make sure that the money will get to those groups and not others with similar names.
Use the official legal name of the charity in your will. There was a case involving a California man who left a multi-million-dollar estate to “The SPCA.” Which SPCA, where? More than 1,500 organizations in the U.S. include the words “society for the prevention of cruelty to animals” in their titles. More than 4,000 perform the recognized functions of SPCAs. A probate judge eventually split the estate in equal shares among all the SPCAs who applied for some of it.
We were once asked to help find an animal rescue group that was named to receive a Vancouver woman’s estate. The “group” turned out to have been a single individual, who was incorporated as a nonprofit organization and did charitable work, but who had made no provision for the continuance of the organization after her own death––-and she died nearly a decade before the woman who left her the money. The woman who left the money also failed to indicate in her will a second choice, in case the first beneficiary was no longer around. When you name a charity as a beneficiary in your will, notify the charity, so that they may keep you and your executor informed if their charitable status changes, or in case they relocate or rename the charity. Also be sure to notify a charity if you have named it as beneficiary of a life insurance policy.
If you want to be absolutely certain that your money is used properly, you will have to distribute it yourself, to organizations in which you have total confidence. Naming a charity to receive a bequest many years hence is a crap shoot insofar as insuring administrative integrity and honesty is concerned. Many people in the field of animal protection now will be dead or retired in 20 years. Groups that seem full of vitality now may have fallen into decline.
Choosing an executor for your estate is fraught with risk unless you are 100% certain that person shares your commitment to animals––or, at the very least, is not personally interested in the estate and is without any actual or potential conflict of interest.
Even allowing your chosen executor to choose an animal charity to receive your estate is potentially problematic. All that a self-interested executor need do to hijack an estate is to incorporate a new animal group and pay him- or herself the money as salary to direct it. This has happened more than once. There are no substantive legal controls on misuse of funds by charities.
If the bulk of your assets cannot be distributed until after your death, take steps to prepare an ironclad will declaring that the money will go to animal charities named in a codicil to your Last Will and Testament. Your attorney (or you) can easily prepare a new codicil to your will with exact instructions about the charities you are naming every year, with minimal effort and expense. This way you can review and change your charity choice as often as you feel the need. If a group disbands or loses its purpose, choose another. Purge any group that has become dysfunctional or corrupted. This is also your opportunity to add a deserving new group you have learned about.
In planning the distribution of their estates, some donors shy away from the smaller, poorer, less established animal charities in favor of the ones that are securely institutionalized. But while it is true that small groups may disband if something happens to their leader, it is also true that large, wealthy, and well established charities may lose their purpose once their founders retire or pass on. Think about the possibility that you might end up bequeathing your estate to a charity that will simply use it to increase the value of its stock portfolio.
Just as the people leading organizations will change in years to come, the most urgent problems faced by animals will change – or at least we must hope so. Because situations will change, be careful not to be overly specific in directing how a charity may spend your money. Many donors who contact us for advice wish to have their estates used for surgical sterilization of dogs and cats. However, by the time they are likely to pass on, safe and effective immunocontraceptives and/or chemosterilants may be used for homeless and unadoptable populations of cats and dogs instead of surgical sterilization. Dog and cat population control would then be revolutionized. With any luck at all, by 2025 there won’t be dog and cat overpopulation as we know it now. If dogs and cats are your special interest, we recommend that you prepare a will bequeathing your estate, or whatever portion of it you wish, to the animal protection charity you designate, not for spaying and neutering but “to be used for the purpose of eliminating dog and cat overpopulation and homelessness.”
Trusts are not so trustworthy
Candy heiress Helen Vorhees Brach was murdered in 1977 while investigating a ring that killed race horses to collect insurance. The perpetrators were finally brought to justice nearly 20 years later. Brach had already formed the Helen V. Brach Foundation. During her lifetime, 100% of the Brach Foundation went to projects benefiting animals, reported Steve Warmbir of the Elgin Daily Herald. After Brach’s death, projects benefiting animals got just 20% of the grant money allocated during the next five years, Warmbir found. This dropped to 10% by the time Brach’s brother Charles Vorhees died in 2002, and was less than 6% in fiscal 2015.
According to some of Helen Brach’s closest friends, she meant to leave her entire multi-million-dollar estate to benefit animals. Unfortunately, the attorney who drafted her will and the Brach Foundation articles of incorporation included “boilerplate” language in these documents, copied from the state charities act, which directed that the funds could go to any charity that engaged in any sort of activity to benefit animals, education, or human health. The will was challenged in court by some of the intended beneficiaries, but the challenges failed because Helen Brach herself was no longer able to testify as to precisely what she meant. In the absence of clear testimony to the contrary, the language of her will stood, even though she had never shown any personal interest in any of the other philanthropic projects her estate now supports.
As the Brach case illustrates, if your intention is to set up a foundation or trust to benefit animals, it is crucially important that you hire an attorney who specializes in trusts and estates.
Creating trusts creates further problems. Can you name trustees with the assurance that they will survive your own death? Someone you don’t know – perhaps the courts – may end up appointing trustees. You may be able to define criteria for the kind of trustees you want, but the likelihood that they will hold the interest of animals first and foremost is probably 50/50. At most you may be able to ensure that trustees have no personal conflict of interest with their fiduciary responsibilities.
Several mega-foundations that were established in part to help animals have actually granted little or nothing to pro-animal projects over the years, or at least in recent years. In each case, the management of the money either was placed or somehow fell into the control of bankers, lawyers, accountants, stockbrokers, and other appointed trustees who have had little if any interest in educating themselves about animal issues, seriously reviewing animal-related grant proposals, and making a sustained, conscientious effort to realize the founders’ wishes.
Unfortunately, despite occasional noise made in Congress about the need to reform the laws governing foundation management, the likelihood of it happening in a way that benefits animals is slim to none.
For that reason, ANIMAL PEOPLE advises estate planners not to create trusts––period. The surest way to ensure that the bulk of an estate will benefit animals is to have it disbursed immediately to active animal charities.
Very rarely, a foundation is created with a “sunset clause,” requiring the foundation to disburse all assets and cease operating at a particular time, such as after the death of the last original trustee. Except in the case of a foundation with a “sunset clause,” foundations are managed for self-perpetuation, by people for whom “perpetuity” is a mantra.
Although foundations are typically oriented toward funding special projects, they inherently tend to favor projects that will have material perpetuity, such as building a shelter or clinic––not projects whose results will scatter into invisibility, like sterilizing and vaccinating tens of thousands of feral cats. If tens of thousands of feral cats are sterilized and vaccinated, the shelters and clinics might not be necessary, but money managers rarely think in such terms. What they want to see is something that will have the foundation’s name on it for decades to come.
Likewise, foundation grant makers tend to favor the charities that have existed the longest, under the most stable management. Dynamic, innovative young charities typically stand very little chance of getting genuinely big grants. Instead, the biggest grants tend to go to the applicants whose profiles most neatly match the grant makers’ own perception of good management – even though good management in relief of immediate suffering may be an entirely different matter from good management concerning a bank account or an annual budget.
ANIMAL PEOPLE has actually met grant makers who refused to make grants to charities with less than a year’s operating expenses in reserve, because in the perception of the grant makers, failure to build reserves – and even an endowment – indicated that a charity might not be stable enough to fulfill the terms of a grant, no matter how urgent the need and how dedicated the charity personnel.
Foundations, in short, are inherently conservative. Even when they do make a sustained, conscientious effort to realize the intent of the funders, it is unrealistic to look toward foundations to underwrite anything innovative or untried. Foundations want investments, not gambles.
Meanwhile, an inescapable irony is that the humane community might have all the resources necessary to fulfill its present goals, if only the wishes of legators had been honored.
Manhattan Surrogate Court judge Troy Webber on February 25, 2009 ruled that the trustees of the Leona M. & Harry Helmsley Charitable Trust are not bound by the first clause of Leona Helmsley’s 2004 mission statement, to make grants for “purposes related to the provision of care for dogs,” and may instead follow the second clause, to fund “such other charitable activities as the trustees shall determine.”
Helmsley Charitable Trust spokesperson Howard Rubenstein stated that the trust’s funds, estimated at $5 billion to $8 billion, will be allocated “as soon as possible in such areas as health care, medical research, human services, education and various other areas” that he did not specify. “Rubenstein did not say whether dog-related charities would be guaranteed recipients of the trust,” reported Amy Westfeldt of Associated Press. The Helmsley Charitable Trust assets alone could have trebled the resources of the U.S. hands-on animal welfare community, with enough left over to extinguish canine rabies worldwide. Instead, it may do nothing for animals whatever.
The Helmsley debacle came 16 years after tobacco heiress Doris Duke left $1.2 billion to endow the Doris Duke Charitable Foundation, mandated to fund projects in the areas of the performing arts, the environment, prevention of cruelty to children and animals, and biomedical research. Duke also expressed her interest in animals by leaving smaller sums to the Doris Duke Foundation for the Preservation of Endangered Wildlife, the Doris Duke Foundation for the Preservation of New Jersey Farmland and Farm Animals, and the Wildlife Conservation Society. Then, recalled HSUS president Wayne Pacelle when the Helmsley verdict was announced, the Doris Duke Charitable Foundation trustees “parsed the language of Duke’s will to justify exclusion of animal welfare funding as a priority.”
This had a precedent in the Helen V. Brach case. Helen V. Brach’s will has been cited in at least four estate planning handbooks as an example of sloppy wording that enabled the Helen V. Brach Foundation trustees to circumvent her intentions, and to instead fund projects of personal interest to them. The same could be said of the Duke and Helmsley estates. But Brach, Duke, and Helmsley also erred in putting their estates into perpetual trusts, instead of having their estates set up so that bequests were made directly to specific charities.
Contrary to common belief, creating a perpetual trust does not help to ensure that an estate will not be misused. Rather, it gives more people the opportunity to misuse it, while keeping the money away from the purpose it is supposed to be used for.
Charitable gift annuities & community trusts
Many charities have set up plans called “charitable gift annuities,” “life income funds,” “unitrusts,” or “pooled income funds,” where in exchange for your contribution of cash, stock, or other property, you are promised a lifetime of fixed payments. Upon your death (or the death of your spouse or other named beneficiary), the contribution you have made belongs entirely to the charity. These plans are generally considered safe investments, but they are irrevocable.
Another approach to planned giving and eventual distribution of an estate is to join a “donor advised fund,” “community trust,” or “joint charitable trust.” These are all variants on the same basic idea. The entity holding the funds is incorporated as a public charity. This enables the participants to claim a tax deduction for their contributions and avoid estate taxes. However, contributions to “donor advised funds” et al. are also irrevocable, and since the entity receiving the funds gains full control over how they are spent, there is no guarantee that the donor’s advice about how the money is distributed will be honored. We have seen “donor advised funds” refuse the explicit instructions of the donor.
Endowments
The whole notion of endowing a charity also requires revisiting. Conventional wisdom in nonprofit management holds that legacies not specifically designated for a here-and-now purpose should be kept in permanent reserve, to generate interest or dividends. Typically these returns are invested in fundraising. The endowment income thus drives institutional growth. However, while 5% to 10% of the endowment helps to fund the work of the charity, 90% to 95% helps to fund whatever for-profit enterprise the rest is invested in, via banks and stockbrokers.
Though investing endowments is considered to be the “safe” approach for ensuring that a charity will have a future, endowments can be lost to bad investments. Hundreds of charities, including dozens in animal work, lost the equivalent of many months or even years of operating expenses in the financial crash of 2008. Some invested in non-repaid mortgages. Some were caught in the collapse of the stock market. Either way, money bequeathed to help animals that was put into these endowments did less for animals than if it had insulated a rat’s nest.
To limit the potential damage from investment losses, many states have laws preventing charities from using endowment funds if the value of the endowment funds falls below the sum of the money that has been put into them. Thus the Massachusetts SPCA, still among the ten richest humane societies in the world, in 2009 laid off staff for the second time in six years and closed three shelters, leaving large parts of Massachusetts with severely restricted humane services. At least three other humane societies among the twenty largest in the U.S. made deep cuts in services for essentially the same reason.
The fallacy inherent in both creating posthumous trusts and in funding endowments is in seeking perpetuity – in effect, though not in intent, investing in the continuance of misery: dribbling a bit of relief year after year without providing enough to really solve a problem.
Thoughtful estate planning empowers credible and committed beneficiaries to lastingly reduce suffering in the future by eradicating sources of misery in the here and now.
Providing for Animals
What becomes of your animals if something happens to you?
Providing long-term care for animals left behind is one of the most neglected areas of estate planning, perhaps because most people mistakenly think that finding new homes for their wonderful dogs, cats, birds, horses, or other animals will be easy. The animals one leaves behind are no doubt wonderful, but animal shelters are unfortunately full of wonderful animals. Currently, several million dogs and cats are killed in shelters each year because there are not enough adoptive homes for them all – and the older the dog or cat is, the less likelihood there is that the animal will be adopted. Because most pounds and shelters are desperately short of space, many kill the majority of animals over three years old upon arrival.
If you want your animals to go on living a happy, healthy life after your departure, make sure they are remembered in your will. The history of attempts to look after animals properly through wills and bequests indicates that you will definitely need the help of an experienced estate lawyer. Other beneficiaries often challenge bequests made on behalf of animals––usually winning. Because animals do not have legal standing, courts have repeatedly overturned wills that leave money or property directly to them. Likewise, courts have overturned hundreds of wills that leave money or property to other people on condition that they look after certain animals. Such “gifts on condition” do not have the binding strength of specific contractual agreements under which both parties agree to what is to be done in exchange for what considerations.
There are three legal ways to provide for your animals.
First, you may establish a trust fund for that purpose. The conditions of the trust must explain what is to be done with the remainder of the fund after the demise of the animals. Avoid “over-funding,” which some courts have cited as a reason to overturn trust funds. A trust fund that can pay out the cost of boarding an animal at a good kennel for the maximum expected life of the animal will probably be considered appropriate; a larger fund may run into trouble.
If setting up your own trust fund is impractical, you may enter into a direct contractual relationship with someone to take care of your animals, effective upon your death or incapacitation, designating your estate executor as agent for your end of the contract.
You can also leave a bequest to a charity, such as a humane society, which agrees to look after your animals – but make sure you have the agreement finalized, in writing, before putting it into your will.
Of course it is possible that your surviving friends and family are prepared to take in your companion animals, if necessary. But be aware that the cost of maintaining each animal can be considerable: $500 to $3,000 a year for dogs and cats, depending on the age, health, and needs of the animal. Ask before making assumptions, and be sure the arrangements you make in your will are appropriate. Too often we hear about cases like one in California, where a woman who died without assets left 35 dogs to dear friends, all of whom were on fixed incomes. Nine of the dogs did find new homes, but 24 were killed by animal control due to lack of adoption opportunities.
From the mid-19th century until the late 20th century, estate planners would often advise people who had beloved pets, but no heirs who were willing or likely to take good care of the animals, to include in their wills a clause requiring that the pets be humanely euthanized upon the person’s death. However, this custom was held to be “contrary to law and public policy” in the Capers Estate case in Pennsylvania in 1964, in the Sido case in California in 1980, and in the Estate of Brand case in Vermont in 1999. Probate courts in all three cases required that healthy animals be offered for adoption. The Sido verdict was reinforced by an act of the California state legislature that terminated the opportunity for the executrix of the estate of the deceased to pursue an appeal. As a general rule, a pet keeper today should not presume that a request that all pets be euthanized upon his or her demise must be honored. Even in states where such a request remains legal, there is the possibility that law and precedent will shift toward conformity with other states in the years between when an estate plan is written and when it is executed.
Companion Animals in Nursing Homes
Nothing about entering a nursing home is likely to be easy. The expense, the loss of privacy, and the loss of familiar surroundings are well-recognized blows to the patient’s sense of self. But an even harder blow to many is having to give up cherished animal companions. In most states, nursing homes don’t even have the option to allow residents to keep dogs and cats. The only exceptions are made for seeing-eye dogs and hearing dogs. Various attempts have been made by state legislatures to allow ambulatory patients to have animals if they’re able to look after them, but so far all such efforts have failed in committee.
The problem, explains Samantha Mullen, formerly of the Humane Society of the U.S., is that the presence of dogs and cats could greatly complicate keeping nursing homes clean. Further, once dogs and cats are admitted, administrators anticipate great difficulty in persuading people to part with the animals when their health deteriorates to the point where they can no longer care for the animals themselves. It is easier to simply keep animals out altogether.
Animals are allowed in nursing homes in a few states, but only under tight restriction. Most nursing homes that accept animals will permit only small caged birds or a small tank of tropical fish. A few will accept neutered cats. Ambulatory patients often feed stray, feral, or wild animals, but strictly on the sly.
Regardless of age or health, everyone with animals should carry a wallet card informing emergency personnel who to contact to take charge of the animals in the event of disabling injury or death. The designated person should have a key to your home and full instructions on care for the animals, including an advisory on what to do in the event of your death.
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You may help continue the work of ANIMAL PEOPLE by bequeathing a gift of money, securities, or other property to “Animal People, Inc., a 501(c)(3) charitable organization, federal tax identification number 14-1752216.” To donate today, visit https://animalpeopleforum.org/donate/
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Other Resources:
All My Children Wear Fur Coats: How to Leave a Legacy for Your Pet by Peggy R. Hoyt (Legacy Planning Partners, 254 Plaza Drive, Oviedo, FL 32765; 1-407-977-8080, <info@legacyforyourpet.com>; www.legacyforyourpet.com).
2nd Chance 4 Pets, 1484 Pollard Rd. #444, Los Gatos, CA 95032; 408-871-1133; <info@2ndchance4pets.org>; www.2ndchance4pets.org
Trusted Pet Partners, P.O. Box 6752, Santa Barbara, CA 93160; 1-805-910-7387; www.TrustedPetPartners.com
