Protect Your Horse:
Your Will & Estate
1. Understanding & Creating A Plan
A simple will provision such as "I give my horse to [Name]" is not sufficient to protect your horse after your passing. It leave your horse's care and fundign unclear and subject to probate delays.
To avoid these pitfalls, it is recommended to create a pet trust. Under modern statutes, all 50 U.S. states allow for the creation of pet trusts. (New Jersey, for example, permits a trust that "terminates when no living animal is covered by the trust". It also allows courts to intervene if the trustee or caretaker fails in their duties.)
You may create this trust either during your lifetime (an inter vivos trust) or within your will (a testamentary trust). Each method has legal validity, but a trust created during your lifetime may offer additional flexibility and control.
2. Choosing the Required Parties
To structure your plan effectively, you will need to identify and assign key roles. These individuals will work together to carry out your instructions and ensure your horse's care is maintained as intended.
You will designate a person to:
-Create and fund the trust
-Manage and distribute funds
-Be the caregiver for the horse
-Serve as legal or financial backups
Each role has distinct responsibilities and legal significance, which are described in the glossary that follows this guide.
Suggestion: When possible, select different individuals for each role to maintain checks and balances and avoid potential conflicts of interest. Always names alternates in case someone is unable or unwilling to serve.
If you have not yet identified a potential caretaker, your trust should include specific instructions for selecting one. Eg: you may direct the trustee to consult your veterinarian or reputable equine rescue organizations. If you decide to go this route, it is recommended to donate to the chosen rescue on a monthly basis. It's also highly recommended to require proof of regular veterinary exams, as equine health can decline rapidly and often requires swift medical attention to prevent serious issues.
Guide to Protecting Your Horse
in Your Will/Trust
3. Drafting the Pet Trust
use precise and mandatory language when drafting the trust. Courts enforce clear directives such as "shall" or "must", while terms like "wish", "hope", or "recommend" are not considered binding and should not be used.
The trust should include:
1. A no-sale clause: for example, "No horse I own shall ever be sold, traded, leased, or auctioned."
2. Detailed care instructions: including veterinary care/dentist, farrier, quality feed/supplements, and living conditions.
3. Caretaker/Sanctuary compensation: such as, "The trustee shall pay [Caretaker's Name]$X per month for services from the trust funds."
4. A remainder clause: identifying where any unused funds should go after the horse dies.
5. A priority clause: ensuring that trust funds are used for the horse's care before any distribution to the remainderman.
6. Authority for euthanasia and medical decisions: e.g., "The trustee or caretaker shall have full authority to determine the proper medical treatment for my horse, including when to euthanize based on the qualified opinion of at least two licensed equine veterinarians."
reference your state statute directly in the trust where applicable. For example: "This trust is established pursuant to N.K. Stat. 3B:31-24 and shall be construed liberally to carry out the intent of the settlor."
4. Funding & Duration
Estimate the cost of your horse's care and fund the trust accordingly.
Cost should include:
1. Boarding
2. Transporting
3. Feed (Hay & Grain)
4. Supplements
5. veterinary Exams
6. Dentistry
7. Farrier
8. Compensation for the Caretaker
9. Any unique requirements
Overfunding is preferable to underfunding, as inflation and rising costs can quickly outpace your original estimates. Any surplus remaining after the horse's death may revert to the estate or be distributed to the names remainderman.
Be aware of duration limits in certain states. Some states, like Florida and New York, impose a 21-year limit on pet trusts. If necessary, structure the trust to transfer the horse and remaining funds to a sanctuary if the statutory term expires before the passing of your animal. You may also consider establishing the trust under the laws of a state with more favorable terms. For example, New Jersey and Washington D.C. allow a pet trust to continue for the full lifetime of the animal. To do this effectively, the trust must establish a valid legal situs in the chosen state—typically by naming a trustee or administering trust assets from within that jurisdiction.
An experienced estate attorney can help structure the trust so that it complies with both your state of residence and the governing state's law.
5. Formal Execution
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Ensure your trust and will are signed with all required formalities. Typically, this includes signing in the presence of two witnesses and having the trust notarized. Improper execution can render the documents invalid.
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Include a no-contest clause if appropriate. This provision may discourage heirs from contesting your will or trust by stating that anyone who challenges the document risks losing their inheritance. (However, in some states, these clauses may be unenforceable or could unintentionally penalize a legitimate concern or good-faith dispute.) Consult with an estate planning attorney to determine whether a no-contest clause is advisable in your situation and how to draft it so that it supports, rather than undermines, your intentions.
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Communicate your plan in advance. Inform your family, trustee, caretaker, veterinarian, farrier and any other involved parties of the plan’s existence and their roles in it.
Common Mistakes to Avoid
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Using DIY (Do-It-Yourself) or generic forms that may not comply with your state’s legal requirements.
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Relying solely on a will, which may not provide enforceable care instructions or sufficient funding.
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Underfunding the trust, which can lead to inadequate care.
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Using vague or conflicting language between your will and trust.
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Failing to update your plan to reflect changes in your life or the law.
Remember: Always consult with an experienced estate planning attorney to finalize your documents and tailor your plan to your jurisdiction's laws.
Terms to Know
Pet Trust
A legal trust created to provide ongoing care and funding for a horse (or pet) after the owner’s death. Funds are protected and must be used per your instructions. Enforceable under state law.
A trust created in your will that takes effect after death.
Testamentary Trust
A living trust established during your lifetime.
Inter Vivos Trust
The person who creates and funds the trust.
Settlor/Grantor
The person or entity managing trust assets and distributing funds for your horse’s care.
Trustee
Caretaker
The person who provides day‑to‑day care for your horse under the trust instructions.
Remainderman
The individual or charity that receives leftover trust assets once the horse dies or when the trust ends.
Enforcer
A person/legal officer appointed to enforce compliance with the trust (e.g., court-appointed if misuse occurs).
No‑contest Clause
A clause that discourages heirs from challenging the will/trust by threatening disinheritance.
Precatory Language
Non-binding words (e.g., “wish,” “hope”) that do not create enforceable duties.
Mandatory Language
Binding terms (e.g., “shall,” “must”) that compel action and are legally enforceable.
Formal Execution
Proper signing/witnessing/notarization of the trust/will to ensure validity.
Statutory Cap
Legal limitation on the duration of a trust (e.g., 21‑year term) in some states.
Pet-trust Statute
State law that expressly allows and enforces pet trusts. NJ codified: N.J. Stat. §3B:31‑24.
Probate
The court process validating a will, during which assets (like a horse) may be tied up and delayed.
Situs
The location of property or an item for legal purposes
Retirement Plans
A donor my name SRF as a beneficiary of a 401K retirement plan or IRA with simple changes to his/her beneficiary designation.
Donor Advised Fund
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A donor advised fund (DAF) is a charitable account that helps you organize your giving.
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It’s easy to open with most major financial institutions or foundations such as: Bank of America/Merrill Lynch, BNY Mellon, Morgan Stanley, etc.
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Through your DAF you can recommend grants to SRF and other charities and your fund will be invested with the potential to grow more charitable dollars over time.
IRA Charitable Rollover
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The IRA charitable rollover is a great way to make a tax-free gift to SRF.
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Gifts may satisfy or count toward the required minimum distribution (RMD) for the year.
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Take advantage of federal, and in many cases, state income tax savings.
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To qualify:
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You must be at least age 70 ½ at the time of your gift distribution.
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Distributions should be made from your IRA administrator directly to SRF
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Distributions must be made from a traditional IRA or Roth IRA (Some plans such as 401k, 403b, SEPs are not eligible. Please contact your plan admin for more details and options).
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The charitable distribution must be complete by December 31 of the year it is claimed.
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Total charitable distributions cannot exceed $100,000, per taxpayer per year.
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Securities (Stocks/Mutual Funds)
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A gift of stock or mutual funds before December 31st could be your best way to maximize tax savings and meet your charitable giving goals this year.
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For stocks that have lost value (depreciated), the key is to sell them first and then give the cash proceeds to SRF.
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You benefit tax-wise in two ways - you can take both the loss deduction and the charitable deduction.
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For stocks that have increased in value (appreciated), the key to receiving tax savings is to donate the shares directly to SRF.
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You receive a double tax benefit by avoiding capital gains on the profit you've gained and you will receive a full tax deduction for the fair market value of your gift.
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Charitable Trust and Charitable Reminder Trust
Under the right circumstances, this plan can increase income to the donor, reduce taxes, and create a legacy for SRF horses with tax planning and distribution provisions in your trust. Please consult your tax or legal advisor to establish a trust.
Charitable Lead Trust
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Make an impact now and provide for your family later.
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You can transfer cash or other assets to a trust that makes payments to SRF for a period of time. When the term is up, the remaining trust passes to your family or other beneficiaries you select.
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There are two ways that charitable lead trusts make payments to SRF: A charitable lead annuity trust pays a fixed amount each year to SRF and is more attractive when interest rates are low.
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A charitable lead unitrust pays a variable amount each year to SRF based on the value of the assets in the trust, referred to as unitrust, if the trust's assets go up in value, for example, the payments to SRF go up as well.
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Charitable Remainder Trust
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If you have built a sizable estate and also are looking for ways to receive reliable payments, consider a charitable remainder trust. (This type of trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.)
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At the end of the trust term, the balance in the trust goes to SRF.
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These types of gifts may offer you tax benefits and the option for income.
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There are two ways to receive payments and each has its own benefits:
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The annuity trust pays you, each year, the same dollar amount you choose at the start.
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Your payments stay the same, regardless of fluctuations in trust investments.
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The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets.
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The amount of your payments is redetermined annually.
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If the value of the trust increases, so do your payments.
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If the value decreases, however, so will your payments.
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Wills & Estate Planning
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Designate a specific dollar amount or percentage of your estate to SRF.
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Designate SRF as a residual beneficiary. Whatever is left over after your primary beneficiaries are gifted will go to SRF.
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Designate SRF as an alternative or contingent beneficiary in the event that your primary beneficiaries predecease you.
Beneficiary Designation
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If you are not ready to commit to SRF in your will or estate, but prefer the increased flexibility that a beneficiary designation provides, then you can designate SRF as the beneficiary to your:
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IRAs and retirement plans
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Life insurance policies
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Donor-advised funds
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IRA Charitable Rollover
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The IRA charitable rollover is a great way tp make a tax-free gift to SRF.
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Gifts may satisfy or federal, and in many cases, state income tax savings.
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To qualify:
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You must be at least age 70 1/2 at the time of your gift distribution.
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Distributions should be made from your IRA administrator directly to SRF
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Distributions must be made from a traditional IRA or Roth IRA (Some plans such as 401K, 403b, SEPs are not eligible. Please contact your financial planner for more details and options).
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The charitable distribution must be complete by December 31 of the year it is claimed.
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Total charitable distributions cannot exceed $100,000, per taxpayer per year.
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Securities (Stocks/Mutual Funds)
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A gift of stock or mutual funds before December 31st could be your best way to maximize tax savings and meet your charitable giving goals this year.
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For stocks that have lost value (depreciated), the key is to sell them first and then give the cash proceeds to SRF.
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You benefit tax-wise in two ways - you can take both the loss deduction and the charitable deduction.
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For stocks that have increased in value (appreciated), the key to receiving tax savings is to donate the shares directly to SRF.
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You receive a double tax benefit by avoiding capital gains on the profit you've gained and you will receive a full tax deduction for the fair market value of your gift.
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Real Estate
Deferred Charitable Gift Annuity
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Are you tired of the hassles of maintaining your property such as paying taxes, utilities, and repair bills? Consider donating the property to SRF in exchange for reliable payments for life for you (and someone else, if you choose).
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When you arrange a charitable gift annuity, you receive a federal income tax charitable deduction in the year you set up the gift annuity when you itemize on your taxes.
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If you use appreciated real estate to make a gift, you can usually eliminate capital gains tax on a portion of the gift and spread the rest of the gain over your life expectancy.
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A gift of unmortgaged property to fund a deferred gift annuity is preferable and generates the greatest tax benefit.
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Bargain Sale
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When you make a bargain sale, you sell your property to our organization for less than what it's worth.
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The difference between the actual value and the sale price is considered a gift to SRF.
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A bargain sale can be an effective way to dispose of property that has increased in value, and it is the only gift that can give you a lump sum of cash and a charitable deduction (when you itemize) at the same time.
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It is best to obtain professional advice from your tax planner or legal advisor.
Should you have any questions, kindly contact Judith Bokman
at SRF-609 738-3255, SRFhorsesandkids@gmail.com