Well, readers, as we so often see, the time has flown, and the only way to know it is by keeping an eye on the seemingly endless stream of holidays and events that mark the important dates on the calendar. One such event is the famous Kentucky Derby, which takes place this Saturday, May 7th, at 10:30 a.m. In anticipation of the final event in a two-week-long Kentucky Derby Festival, attendees will take their seats as they wait for what has long been called “The Greatest Two Minutes in Sports”. But the Kentucky Derby isn’t just a time to watch thoroughbreds trot and gallop their way to victory, or a time to show off your best derby hat style- it’s also an important time to consider your assets. And before you say anything, readers, I will admit, it’s true: it really is always an important time to consider your assets! So, sit tight at the edge of your derby seat, sip on your mint julep, and strap in for an exciting (if not slightly educational) ride into the world of equine estate planning secrets.
It might not come as a surprise to you that people looovvveee their fur babies (and who can blame them, right?). But for racehorse owners, the love is twofold: their horses aren’t just their pets…they’re their business partners! As active participants in ensuring their rider’s victory on the derby track, racehorses are actual, tangible assets, known as “bloodstock”, which honestly sounds creepier than it really is. They essentially serve as an investment, so like all other investments, the person handling them must carefully manage them if they really want the best bang for their buck…see what I did there? 😉 Here’s the real kicker, though: it’s not enough for racehorse owners to think of their short-term investment in a horse- they also need to be prepared for what might happen should their living assets outlive them.
I know what you’re thinking: it surely can’t be too complicated, right? I mean, if the horses were just assets, can’t they just be handed off to someone else? And you’d be right, readers! There are many different ways to handle horses long after their rider has passed, but it all depends on what the rider decides to do, and how well they have prepared. The first option is to try your hand at organizing a dispersal sale, which is sort of like an estate sale but for bloodstock and other living animals, where one’s horses can go to the highest bidder, and any money is left to the rider’s estate benefactors. Another option is to clearly lay out in your will who you would want to own and care for your horse in the event of your passing… but for horses that can’t be sold or require special care instructions, or for owners with smaller stable operations, finding a suitable equine lover, responsible buyer, or fellow horse owner can be a difficult task.
Thus, owners with a greater knack for preparedness and caution often go with a more trustworthy option…literally. By creating an entirely separate trust for their horse (or horses), riders can ensure that not only are their horses being cared for by the next most responsible owner, but that they are not considered as simply another asset should their new owner pass away: instead, the horse will be otherwise handled in the manner, and by the person, which their original owner seems fit. It gives riders the freedom to detail exactly how their horses should be cared for and by whom, while also allowing them to care for other horse-related assets and memorabilia in a safe trust after their passing. In fact, should riders have multiple horses, an equine trust is so comprehensive that it is considered valid and legally enforceable even after the passing of one horse, so as to keep protecting any horses that may still be alive.
Phew…the Derby may be a short two minutes, but equine law and the estate planning surrounding it is certainly a long, winding road. But while taking the time to understand the role of trusts, wills, and estate planning in the owning of animals may be a long ride, it doesn’t have to be a bumpy one: with good estate planning attorneys, even the most complicated of plans can be carried out in a way that protects your assets and your legacy at the same time. This is exactly what the estate planning team at Trust Counsel aims to do- so make an appointment today, and see how we can help you prepare for the future (racehorse owner or not).
This article is a service of Trust Counsel, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session.