This is the text of the talk I gave to the Law Society of Scotland private client Update seminar in Glasgow on 24 June 2014.  If you would like a copy of the slides please email me.  

What happens to the pets

Good morning everyone.

My talk this morning covers an area I have often had to deal with in practice but until today had never delivered a talk on.

I only have a 30 minute slot so I propose to speak for about 25 minutes.  That will hopefully leave a few minutes for questions.

Also, and just so you are aware, the text of my talk will be emailed to all of you in the next day or so.

SLIDE 2 – WHAT I INTEND TO COVER

So what do I intend to cover this morning.  The focus of this talk is of course on pets, our client’s pets.  In this context, I will look at some of the issues that arise when a client dies or loses capacity.  I will also look at some of the options for your client if they want to try and ensure that their pet continues to be cared for.  Lastly I will spend a few minutes looking at the relatively new world of digital pets.

SLIDE 3 – picture Mac

That is Mac by the way and the reason for today’s talk.  As a matter of interest how many of you have a pet?

A pet can be as much a part of a family as a person.  Indeed, pets are often the only companion many people have. It can be incredibly upsetting for people living on their own to think that there is no one to care for their pet when they are gone.

If you have ever lost a pet you are likely to know how devastating that can be.

This is the same for a pet if their owner was suddenly not there for them. They rely on their owner for food, shelter, warmth, medical care and so much more.

To put this into context.  It is estimated that in Scotland each year over 5,000 owners die without making arrangements for their pets.

So where to begin.  Let’s start with awareness.  Pets could come up in almost any discussion you have with a client.  When preparing a Will or a Power of Attorney or even at the start, hopefully, of an executry.

As a matter of interest how many of you have discussed pets with a client?

If your client has a pet simply ask him if he has thought about what might happen to the pet if something were to happen to him.  Has he asked someone to take care of his pet even if just for a short time?  That of course could be the end of the matter if he has already made the necessary arrangements.

Ensuring you at least mention this issue may be even more important if your client lives on their own.  I am sure we have all read about people who were not found for a long time after they die.  Think of what would happen to their pet in this situation.

With this in mind, if you are acting in an executry make sure one of the first things you do is find out if the deceased had any pets even if that means going to check the home yourself.

I have already mentioned how important pets can be to their owners. How many of you are aware that there are pet bereavement support services?

Simply google the term: “pet bereavement services” and you will come across a wide range of services offered to people whose pets have died, gone missing or had to be given up.

The reverse is also true.  How many of you are aware that pets who are bereaved mourn and can become depressed?  If their owner dies they are also very likely to suffer a lot of changes all of which will cause them additional distress.

SLIDE 4 – info below  

Some examples on this slide:

• Loss of their home and private territory
• Separation anxiety
• Moving home
• Getting to know new people
• Finding new places to hide, sleep and relax
• Disrupted routine
• Change of diet

How like us they are.

Another reason for making sure your client is at least considering this issue is the on-going costs of care.  This includes:

SLIDE 5 – info below

1. Vets bills
2. Flea and worming treatments
3. Food, bedding and toys
4. Extra cleaning
5. Secure fencing or outdoor space
6. Walking, exercising or pet sitting

With this in mind, when researching this talk I came across a number of references to studies that claim that a friend or family member is far more likely to take care of a pet if they are provided for financially.

So what information should you advise your client to keep?  Let’s call this a “pet checklist”.

SLIDE 6 – info below

1. Vet details – these are especially important if emergency treatment is needed and ideally the contact details of the vet who is familiar with the pet and has their most recent records
2. Pet insurance details
3. Important dietary restrictions
4. Immunisation records (just in case they need to go, for example into a kennel – even temporarily)
5. What they eat, their favoured toys and bedding and where they are kept

Now to what a client might want to do to ensure that their pet is looked after; after their death or if they lose capacity.

Slide 7 – options

I have outlined the main options on this slide.

As I have already mentioned, simply mentioning this issue to your client is an important first step.  It may mean that your client at least discusses this issue with their family and friends.

However if nothing is done and a family member or friend is not willing to take care of the pet in question you will have to contact the nearest animal shelter or other pet charity.

The most important factor in ensuring a pet is looked after is almost certainly finding the right person to do this.

Your client needs to assess who might be the best person to look after their pet both from the point of view of their willingness to do this and ensuring their wishes will be fulfilled.

I am sure that in many cases some form of an informal arrangement will adequately deal with this issue.

Another option is for your client to make provision for this in his Will.

SLIDE 8 – info below  

Two general principles:

• Animals may not be the object of a bequest.

• Animals can though be the subject of a bequest.

This clause is from “Drafting Wills in Scotland” second edition.

“I direct my executors to make over my dog “Spotty” or any other dog owned by me together with the sum of £1,000 to O (design), provided he accepts responsibility for its welfare for the remainder of its natural life”.

The legacy is of the testator’s existing dog at the time of the Will or any replacement dog or additional dog.  As the odds are that the pet will die before the client does, it is best to refer to “or any other dog owned by me”.

The pet is accompanied by a legacy of £1,000.  As the executor needs to obtain the legatee’s agreement the legacy is conditional.

Whilst this clause is not water-tight it may provide a degree of comfort to your client.

As indicated there are some fairly obvious issues.  What is to stop the legatee verbally accepting the legacy and then collecting the cheque and having the dog put down? As mentioned, the importance of finding the right person is of course crucial.

I am sure that in most cases this will suffice, but can – should – more be done?

You could ask the legatee to sign an agreement obliging him to return the legacy in the event of the pet not being properly cared for.  But in whose judgement?  The executors?  Are you trying to impose a continuing obligation on the executors?

What if the legacy only vests on the death of the pet?  Might this hasten the pet’s death?  Again someone would need to decide as to how well the pet has been cared for.  This again might mean a continuing obligation on the executors.

Also what happens to the legacy if the legatee is deemed not to have looked after the pet in question?

A letter of wishes might help to resolve some of these issues.

A letter of wishes in this case is simply a letter prepared by the testator outlining how he wishes his pet to be cared for.  Ideally it will also include the information outlined in the “pet checklist” we looked at a few minutes ago.

A letter such as this can be easily changed without the need to see a solicitor.  The letter also does not necessarily need to be kept with the Will.

It could of course be the case that there is no Will but simply a letter of wishes.

What about owners who may not have anyone who they feel able to ask to look after their pet?

Many animal charities will provide a new home for pets after their owner’s death.

Your client may also want to make a charitable legacy to an animal charity. Your client may want to make it conditional on the charity looking after their pet or finding it a new home.

The Scottish Society for the Prevention of Cruelty to Animals provide a free service where they will look after a pet in the event of the owner’s death and then do all it can to find them a new home.  This service is not legacy dependent.  More information can be found on its website.

If your client does use a service like this, especially one that is not legacy dependant, hopefully they will ensure that knowledge of it will be easily found on their death as it may not be mentioned in a Will.  There may of course not be a Will.

It should be remembered that any bequest to a charity is free from inheritance tax.  If your client feels generous enough to leave at least 10% of their net estate to charity, their whole estate could benefit from a reduced inheritance tax rate.

Another option is to simply state in the Will who is to decide what is to happen to the testator’s pets.  This could be someone other than an executor, for example if the executor is not someone well known to the testator.  Again there are some fairly obvious issues with this but at least something has been done.

Much as people love their pets, they can’t force them on anyone else. All they can say is they would like a certain person to take them.  That person may not outlive them or their circumstances may have changed.  That is why it is a good idea to have a substitute “beneficiary”.

What if the beneficiary lives abroad?

If under a Will the pet has been left to a beneficiary who lives abroad a number of issues arise. You will need to consult the appropriate embassy or consulate about the rules on vaccinations or quarantine.

The Will will hopefully also make clear who meets the cost of doing this.

What if you come across specific instructions in a Will to have a pet put down on the death of the testator?  I am sure other options would be explored by the executors but is this in any case against public policy?

There are mixed views on this, and even it is not against public policy, I would suggest that it is not something we would want to be encouraged.

I also read an article in which a funeral director in England said that he had been asked around a dozen times in the last few years to arrange for a healthy pet to be put down when its owner died.  The owner on each occasion had asked that the pet be put down and placed in the coffin with them.  I was also glad to read that on each occasion he had persuaded the owner that this was not the best course of action.

Another option is making provision for a trust in the Will.

Slide 9 – trusts

For example a liferent of a property plus a sum of money for the life of the pet or until a suitable home for the pet is found.  The property and money are to be used to provide a home and care for the pet.  The liferenter gets to stay in the property and is effectively a “pet sitter” for want of a better term.

Too much?  I have been asked to put an arrangement like this into place a couple of times.  On both occasions the client had at least 4 dogs and no close living relatives.

The trustees would have discretion as to the welfare of the pet in case its life was being prolonged unnecessarily. This hopefully encourages the liferenter to keep the pet in good health.

Another option might be a full discretionary trust provision.  Possibly accompanied by an annuity.  Although that might not be easy to arrange.  This would though provide a clear incentive as payments would be made throughout the life of the pet. Again a letter of wishes might prove useful.

A number of public policy arguments have been made against using trusts in Scotland in this way.

One argument is that such a provision is “wasteful and extravagant” and therefore contrary to public policy.  I do not propose to go into these arguments in any great detail in this talk besides saying for this argument that as long the provision is reasonable in the circumstances it is unlikely to be challenged on public policy grounds.

A second argument is that there is no beneficial right in favour of any living person.  There is though an established exception to this rule namely where the testator makes provision for a memorial or tombstone.  A provision for a pet it is argued is an equally justifiable exception.

For a more detailed discussion on this point I would recommend an excellent article by K Norrie “Trusts for Animals” 1987 JLSS 386.

Now to a slightly different situation.  What if instead your client has lost capacity?

Does your client have a Power of Attorney or possibly is considering one.  This could be another reason for putting one in place.

This would enable someone your client trusts to take care of their pets if capacity is lost.  Although the commonly used “general powers clause” will cover this it may be in certain situations that your client wants to give more specific instructions regarding the care of his pet if he loses capacity.

Now to a few other matters I would like to briefly mention.

You may also have to arrange for the burial or cremation of a pet.  This might happen if your client loses capacity and you are acting under a Power of Attorney or possibly even during an executry.

The law surrounding pet burials is complex, but as a general rule animals cannot be buried in a cemetery designated for humans.  A local vet will be able to give you more information on this or make arrangements for the pet to be cremated.

Again knowing your client’s wishes makes this a lot easier. Often a client wants his pet buried in his garden.  If this is the case you may want to mention this to whoever has inherited the deceased’s home.

What if your client has to go into hospital or a residential care home or has a long term illness and there is no-one at short notice able to look after his pets.  One option is a “pet fostering” service.   Simply google that term.

What if your client owns a horse or even horses?

Whilst most pets have a high sentimental value, horses can also have a high financial value.  They might even be part of an agricultural business.

That said, this is from an article I recently read:  “Scotland, and indeed the rest of the UK, is saturated with thousands of horses with little or no value and a shortage of responsible and knowledgeable owners willing to care for them.”

Looking after a horse is also a great deal more expensive than the average pet.  Possibly thousands of pounds a year. This could cause an issue if a potential beneficiary cannot take on the cost of looking after a horse and no financial provision has been made in the Will.  You may end up trying to find a buyer for the horse, or more likely simply trying to find it a home.  Again just as there are ‘cats and dogs’ homes there are horse sanctuaries.

You also might need to be aware that each horse has to have a “passport”.  It is an identification document which records the identity of a horse and certain veterinary medicines administered to it. You have to have the passport with the horse whenever it travels. This could be to the vet, competitions or if you have to sell it.  More information on this can be found on the Scottish Government’s website.

Now briefly to racehorses.  I should add I have not had many clients who have owned a racehorse.  Racehorses can be owned for business or pleasure. Racehorses can also be owned in many different ways such as by way of a partnership or a company.

This legacy style is again from “Drafting Wills in Scotland” second edition.

SLIDE 10 – info below

“I direct my executors to make over to A all of my interests in any horses at the time of my death, including interest held through the medium of a syndicate, partnership, company or otherwise.”

What if the deceased owned a dangerous animal?

You need to check to see that the deceased had a licence to keep an animal that may cause injury or damage, for example, a poisonous snake or alligator. Licenses are granted by a local authority’s environmental health department.  In some cases you might even have to contact a zoo?

Who said being a private client lawyer is not interesting.

Now to digital pets.  Yes digital pets.  As a matter of interest who amongst you is even aware of the existence of digital pets?

I gave a talk on digital assets last year.  I have never had so much feedback from a talk as that one.  There seems to be a whole virtual world out there that few lawyers are aware off.

So what are digital assets?  Digital assets broadly fall into two categories:

SLIDE 11 – info below

• Personal and sentimental items
• Financial information and assets

For the first category, in an earlier age we would have kept these items in a more solid form.  Our letters, photographs, diaries and videos have been replaced by their virtual equivalents.  Even those items which were created in a more solid form are now often put into a digital format.

The second category were also once held in another form.  Whether it is banking, savings accounts, online investment portfolios and share trading accounts, online shopping or betting and gaming accounts, most of us have an online financial presence in one form or another.

Digital assets also cover such items as virtual farms, virtual relationships, virtual games and of course virtual pets.

If you have not come across this before take a moment to think about this.

Also if you google the term “virtual pets” and you will see how popular a pastime this has become.

This is from one provider:   “This lets you adopt a dog and lists certain qualities you may want in your pet. You name it and then start your pet parenthood by petting it, feeding it, letting it out to play. By doing so you collect bones and coins that allow you to buy cool dog toys, sweaters, fancy toys and even let you decorate your house better. You can even adopt other dogs which makes things more fun. While it’s a pretty demanding game, it’s fun and it will show you how demanding their real dog counterparts are!”

Access to these virtual pets is by way of an online account that is password protected.  There are numerous providers of this type of service.

Is this something we as lawyers need to be aware off?  In short, yes.

These assets have value, and if something is valued – whether financially or sentimentally – people may want to pass them on to their family and friends.

Not surprisingly there are a number of legal issues associated with this type of asset.

For example, what if anything can be done with these particular type of virtual assets on death?  The law as yet does not have a complete answer to that question.

The terms and conditions of use are obviously very important.  Some providers simply close the account which means the content is not retrievable and cannot therefore be passed on.  Many accounts are also closed after a certain period of non-use.  Therefore even if this type of asset forms part of a legacy it may not be possible to pass it to the beneficiary.

Other providers give their users a chance to nominate a “digital beneficiary”.  This is something we will begin to hear more about.

As there is no uniform approach each provider needs to be contacted.

One positive recent development is that most providers now at least have a procedure for dealing with these type of assets on death.

Then there is access to these types of assets on the death of the user.  I have used the word “user” intentionally.

As we know executors do not automatically have access to and control of the deceased’s assets on death.  There is a process that needs to be followed.

Is there a temptation to access these type of accounts if you have the password?  Of course there is.  There may be a concern that content could be lost.  However, the terms of use should not be ignored and in almost all cases the provider should be contacted before accessing the account.

To be clear, an executor accessing an online account using the deceased’s username and password could be committing a criminal offence of “unauthorised access” under the Computer Misuse Act 1990.

A copy of the full text of my talk on digital assets can be found on my firm’s website.

Thank you

Slide 12 – another picture of Mac

Any questions.

Disclaimer

The England and Wales High Court has ruled that a local authority was acting unlawfully in deciding that an individual’s access to a large personal injury compensation fund required her to pay the full cost of her care services.

This is from the case report:

“The claimant, whom I will refer to as “ZYN”, is severely disabled. She has a need for community care services, part of which is provided by the defendant local authority (“the Council”).”

“The issue raised by this case is whether capital derived from a personal injury settlement which is managed by a deputy appointed by the Court of Protection must be disregarded by a local authority when deciding whether the injured person can be required to contribute to the cost of care services which he or she receives.”

“It is common ground that all the capital derived from ZYN’s personal injury settlement falls within paragraph 44(2)(a) of Schedule 10 to the Income Support Regulations, being “an award of damages for a personal injury” to ZYN. It is her case that this capital is to be disregarded because it also falls within paragraph 44(1)(a) and/or (b), being capital (a) which is administered on behalf of ZYN by the Court of Protection and/or (b) which can only be disposed of by order or direction of the Court of Protection.”

“In my view, the only interpretation of paragraph 44(1)(b) which makes rational sense is an interpretation which treats the whole of the capital of ZYN as falling within its scope even after an order has been made which permits a deputy to withdraw a sum of money either for a particular purpose or for the general use and benefit of ZYN. There is no difficulty as a matter of language in saying that, until the money is actually spent, it remains part of a fund which can only be disposed of by an order or direction of the court: it does not cease to be part of such a fund simply because the court has made the requisite order. Moreover, for the reasons indicated, an interpretation which treats a sum as falling outside the scope of the provision when an order permitting disposal is made just because no further order of the court is now needed leads to absurd consequences and is not in my view a result which any rational legislator could have intended.”

“I therefore conclude that the whole of the capital of ZYN falls within paragraph 44(1)(b) of Schedule 10 to the Income Support Regulations.”

The full case report can be found here.

“HMRC has issued a consultation document about whether there may be options for simplifying the calculation of Inheritance Tax charges to which trusts are subjected at ten-yearly intervals and when property is withdrawn from trust.”

More on this can be found here.

“There is a waiting period before your power of attorney (PoA) can be processed and returned to you.

• EPOAR submissions: 15 day waiting period, we are working on PoAs received on 27th May 2014
• Manual submissions: 19 week waiting period, we are working on PoAs received on and around 5th February 2014

If there is a genuine urgency, we will expedite the registration of a PoA ‘on cause shown’. We ask that people respect this service and only use it in cases of true urgency to avoid defeating its purpose.”

More on this can be found here.

Statement from the Office of the Public Guardian (Scotland).

“30 May 2014

OPG Guidance Note – Powers of Attorney

Your attention is drawn to the Public Guardian’s guidance note in relation to the validity of powers of attorney following the recent judgement by Sheriff Baird.”  The guidance note can be found here.

A statement from the Law Society of Scotland can also be found here.

The Crown Office has used the Proceeds of Crime Act 2002 to confiscate a £2,000 legacy on the grounds that the recipient would have used it for unlawful activity.

More on this from Scottish Legal News can be found here.

“New regulations to introduce a charge for single-use carrier bags have been approved by the Scottish parliament.  MSPs at Holyrood backed the plan to charge shoppers a minimum of 5p for bags.  The regulations, which were approved by 100 votes to 12, will bring in mandatory charging for almost all single-use carrier bags from October. Money raised through the introduction of the charge will go to good causes.”

More on this can be found here.  An earlier blog I wrote on this can also be found here.

The background to this case is a family dispute.  The dispute is over where the body of Private Mark Connolly will be buried.   MC’s mother wishes to have him buried in Methil.  His widow wishes him to be buried in Forfar.  The dispute has now lasted three years.

This matter has reached court once again, this time Forfar Sheriff Court.  A newspaper report on the latest proceedings can be found here.

My original report on this matter from 13 September 2011 can be found here.

“Turnaround Time for Account Reviews

There is currently a 17 – 20 week waiting period for accounts to be reviewed. We apologise for any inconvenience the delay may cause financial guardians.

The Account Review Team are currently working with accounts received on and around 13th January 2014. Financial guardians who have queries regarding their accounts or the waiting time may contact opgreviewteam@scotcourts.gov.uk.”

“General correspondence

It is our aim to process general mail within 5 working days. Regrettably we are currently unable to meet this target due to the volume of priority work waiting to be processed. We apologise for any inconvenience the delay may cause.

If you are contacting us regarding an urgent matter and require immediate assistance, please telephone us on 01324 678300.”

“Update on Power of Attorney Submissions

There is a waiting period before your power of attorney (PoA) can be processed and returned to you.

• EPOAR submissions: 7 day waiting period, we are working on PoAs received on 1st May 2014
• Manual submissions: 15 week waiting period, we are working on PoAs received on and around 30th January 2014

If there is a genuine urgency, we will expedite the registration of a PoA ‘on cause shown’. We ask that people respect this service and only use it in cases of true urgency to avoid defeating its purpose.”

More on this can be found here.

The England and Wales High Court has allowed the rectification of a deed of variation thus removing an avoidable inheritance tax liability of approximately £250,000.  The issue was that much of the estate in question was left to an elderly relative rather to a number of charities.  That is why there was an avoidable inheritance tax liability.

This is from the judgement:  “In the light of the matters discussed above I consider that the criteria for rectifying the Deed of Variation so that it reflects the clear intention of the Claimant at the time it was made, are satisfied, and that in all the circumstances it is right to grant the relief.”

The rectification was unopposed.

The full case report can be found here.