Pet Trust: Federal Legislation

Currently the federal tax code does not recognize the validity of pet trusts. The Internal Revenue Code views companion animals as “property,” and one piece of property cannot hold title to another. Therefore the federal government does not allow a companion animal to be the sole beneficiary of either a will or a trust.

The Solution

The re-introduction and passage of the Charitable Remainder Pet Trust Bill will ensure that all animal guardians can provide for their pets in a manner of their choosing.

The Charitable Remainder Pet Trust Bill would insert language in the Internal Revenue Code so that a companion animal may be the beneficiary of a charitable remainder trust, which allows a trust fund to be established for the continued care of a loved one. When the beneficiary of this trust dies, the remainder interest goes to the charity of choice as indicated in the trust. This would allow animal guardians to benefit from the federal tax break associated with the creation of such trusts. The bill mirrors the current language for existing charitable trusts.

Encouraging the creation of pet trusts helps to relieve society from the financial burden of caring for orphaned or abandoned animals. It also provides peace of mind to the millions of Americans who consider their companion animal a member of the family.