Equine Law Explained

When I tell people I am an equine attorney, a lot of people think I represent horses in legal actions. That’s not quite how it works, although I hope that horses benefit from the work I do with humans. An explanation of equine law might help explain the wide breadth of this area of law and what I can do for you.

Equine law focuses more on the community it serves rather than a specific area of law. As an equine attorney, I work with people who have horses in their lives. My clients can run the gamut from a person who has a horse in the backyard as a companion animal to someone who competes at the national and international levels. I work with individuals and companies, both for profit and non-profit, who are involved in the horse industry. These people have different legal needs depending on their role in the horse world. Some of the people who require equine legal services include horse trainers, riding instructors, boarding barn owners, clinicians, breeders, horse sellers, professional riders, horse purchasers, equine vets, horse chiropractors, and horse massage therapists.

In order to meet the various needs of the horse community, equine law encompasses several areas of law. Business law applies to many horse-related activities, especially when dealing with contracts. The horse industry has historically conducted business “on a handshake,” but that leads to many problems. Contracts are a way for all parties involved to make sure everyone has the same understanding concerning the transaction. Some of the contracts necessary to the horse community are boarding contracts, sales contracts, breeding contracts, and liability releases. Business law also applies if a person wants to create a company or a nonprofit. Many horse people are great with horses, but not with the business side of being a horse professional. Hiring an equine attorney allows you to feel confident that you have picked the right business structure and that your business has been set up properly. Because of my experience as a horse professional, I also provide consulting services for equine business owners.

Another very important area for equine business owners is trademark law. If you want to protect your brand, and by that I mean your business identification not your horse brand, then you should register your name, logo, slogan, or something similar that lets people recognize your business. Registering a trademark can be tricky because it’s not an automatic approval process. I provide a search and analysis for horse businesses as well as registration services. If you tried to get your mark, and the United State Patent and Trademark Office denied your registration, I also respond to Office Actions after discussing the issues with you to see if there is a chance we can get you your mark.

A lot of horse people are writing books and creating DVDs. In addition, equine photography is a growing field in the horse industry. These creative horse people need to protect their work with copyright registration. It’s true that you own the copyright as soon as you create a work. However, you can only enforce those rights in court if you have an approved registration of your work with the US Copyright Office.

Estate planning is an important legal area to include when thinking about equine law. In Massachusetts, an individual can have a horse trust, which ensures that a horse or horses are taken care of if the owner is incapacitated or dies. You may think your will is all you need in those situations, but a will has no effect if you are incapacitated, and it must go through probate before it can take effect when you die. Money and other assets are not available until the will is probated, which can take several months or even years. A horse trust gives you peace of mind that your horse is taken care of as soon as you are incapacitated or during the time your will is probated. In addition, Massachusetts has an estate tax unlike most other states. If you own horse property, you may hit the $1 million amount that triggers the tax. I have solutions for you to save you on estate taxes so that more money can go to your beneficiaries.

There are only about 100 attorneys in the country who practice equine law.  To be a good equine attorney, the person should obviously be a good attorney but she should also have a solid working understanding of the horse industry.  The more experience an equine attorney has around horses, the better she will be able understand the many scenarios that can happen and she will be able to craft solutions to avoid problems or to handle them if they arise.

Joanne L. Belasco, Esq.I practice preventive equine law, which means that I work with clients to avoid problems that may lead to litigation.  When you talk to me about your legal concerns, I understand your problems because of my experience as a horse professional and personal horsewoman.  An attorney without knowledge of horses and the horse industry is not able to understand basic terms and broader situations that we, as horse people, do. You don’t have to spend time explaining basic concepts to me, such as your horse colicking, because I know the term and have gone through the experience myself with my horses.

Contact me today, and we’ll set up a time to see how I can help with your equine legal needs.

Nonprofit Property Purchase

Depending on your mission, you may have a nonprofit that needs property to run its programs. For example, if you are a horse nonprofit, you invariably run into the issue of where to hold your programs. Having horses means there is a need for land to house those horses as well as having a safe, secure place where you can run programs with them. I have seen several scenarios where equine nonprofits have leased property and then run into difficulty when the lease ends. I have read Facebook posts from horse nonprofit leaders desperately seeking land for horses that need homes or even trying to rehome the horses themselves. Some nonprofits have even ceased functioning or had to put their programs on hiatus while a new location is found. How can you avoid these scenarios? By having your nonprofit own its own property.

Purchasing Property

Contrary to what many people think, a nonprofit can buy and own property. The first thing to know when deciding whether your nonprofit should buy property is that your board of directors must be involved. Since nobody owns a nonprofit, the board must be consulted about any property purchase. Your bylaws should actually include a provision that allows your board to make such a decision and exercise the right to buy property.

Another thing to keep in mind is that the property needs to be related to your nonprofit’s mission statement. Otherwise, you may need to pay taxes on it, and you may not be able to use grants and donations to purchase it. For example, if you rescue horses, and you purchase property, you might have to pay taxes on that property if you use it to raise Angus cattle instead. You might also have to pay taxes on the cattle sales as unrelated income. I say might because without knowing your nonprofit’s mission statement, I can’t say for certain. Selling Angus cattle might actually relate to your nonprofit’s mission.

Loans

Again, while most people think a nonprofit can’t get a loan to buy property, that simply is not true. I will caution you, though, that it may be more difficult than getting a personal mortgage. Why? As you know, when getting a mortgage, you need to assure the bank that you can pay the mortgage. Unfortunately, many nonprofits are huge labors of love, and they don’t bring in sustainable, dependable revenue. If your nonprofit has been around for many years, and you can show that you can pay off a loan, then you have a chance to get one. But if you are paying for most of the expenses out of your own pocket, or you haven’t been around very long, then you may have to make some changes before you can apply and expect to get a loan.

Grants and Donations

Another way that nonprofits purchase property is by grants and donations. This type of purchase can occur a number of ways. You can get a grant, a donation or several donations, or a combination of the two. If you are running a fundraiser for this specific purpose, then it is called a capital funds campaign. Many grants won’t allow you to use grant money for a capital funds campaign so you need to read the grant proposal carefully before you put in time to get a grant that won’t support your campaign.

You can use donations to buy property but you need to keep the idea of restricted and unrestricted funds in mind. If you receive a donation that is unrestricted, then you can use the funds for any of your programs or nonprofit work. However, if a donation is restricted, then it must be used for the purpose intended by the donor. For example, if someone donates $10,000 and says it’s for the capital funds campaign, then you must use it for that purpose. You may want to even place it in a separate account so that you are sure not to use it until you buy property. What happens if your nonprofit winds up not buying property? You either have to return the money to the donor or get permission from the donor to use it for other nonprofit purposes. I suggest you get that approval in writing, by the way, so there is no confusion at a later time concerning the purpose of the donation.

If you have more questions about purchasing property for your nonprofit or need legal services associated with it, please feel free to contact me.

Equine Estate Planning

horse law attorneyHow will your horse, your horse property, and even your horse business be taken care of if you are ever incapacitated or after your death?

I know that these are not pleasant topics to read about. We all want to think that we will never get badly injured, but we know it happens. We’ve all read about the tragic riding accidents suffered by Christopher Reeves and Courtney King Dye. You may have also seen the various Facebook posts asking for help to care for a horse whose owner was injured in an accident and didn’t have any system in place to pay for horse care. These kinds of situations can be addressed before they ever happen. Estate planning documents that take into consideration your equine lifestyle can give you peace of mind that your horse, as well as property and business, are will be taken care of in the case of incapacitation or death. First, let’s look at estate planning documents and then I’ll talk about how they apply to horse interests.

As you will see, there many considerations with your estate planning if you are involved with horses. There are also many options that allow you to create a plan that works for your individual needs, as well as the needs of your horse, property, and business. As a horse person and an estate planning attorney, I can talk with you about your various options so that you have an equine estate plan that meets your specific needs and provides you peace of mind about the care of your horse, property, and business.

Wills and Trusts

wills trusts equine law bridle saddle pad To provide for the distribution of your estate after your death, you should have a will or trust. If you own anything — like a car, house, or horse tack — then you have an estate. Under Massachusetts law, horses are considered property so they are handled just like any other kind of property. If you do not plan for how you want that estate to be distributed, then you will die intestate, and your items will be distributed according to the state intestacy laws.

Everyone has heard of a will when it comes to estate planning. A will is a legal document that allows you to leave property to certain individuals and organizations. What you may not know is that a will does not automatically give your estate away the moment you die. It must go through probate, which means it is filed with the court and becomes a public document that can be seen by anyone who looks up the file. Probate is a process that takes anywhere from 9 months to several years, depending on the complexity of the estate and any challenges to the will. It usually costs several thousand dollars to have an estate probated. A will usually requires the payment of estate and inheritance taxes. If you haven’t made other plans for the probate period, your assets are not available to pay for horse needs, such as board, feed, and farrier care.

trust estate planning equineA trust is another estate planning vehicle that allows you to leave your estate to certain individuals or organizations. A trust does not go through probate so it is effective as soon as you die. It is also not a public document. Oftentimes, it is used as a way to defer and avoid certain taxes. During your lifetime, you place your estate in the trust. As trustee of the trust, you still have full control over the items as if you owned them. One advantage of the trust is that funds to care for your horse are  available automatically because it does not go through probate.

There are several factors to consider when deciding if you want a will or trust as your main estate planning vehicle. I go over those considerations when I counsel my clients on what would work best for their individual situation.

Additional estate planning documents

There are also several other documents you should have as a part of your estate plan. These documents are very important in the case of incapacitation.

Durable Power of Attorney:  This document allows you to appoint an agent to handle your financial and other affairs if you become incapacitated.

Health Care Proxy:  This document allows someone you have designated to make medical decisions for you should be you become unable to do so.

Advance Directive:  Sometimes called a living will, it is a guide for your agent listed on your health care proxy concerning what health measures you want taken should you become unable to make those decisions for yourself.

HIPAA Release:  This document allows your medical information to be released to individuals or organizations you list in the release.

Horse Trusts

horse trust care feedEveryone with a horse should have a horse trust in addition to the other estate planning documents. You can have a horse trust even if no other property is in a trust. Massachusetts law provided for horse trusts beginning in 2011.  The law allows you to create a trust to take care of your horse or any other animal in the event you are incapacitated. The trust can terminate when you are able to take care of the animal again or at the animal’s death.

A horse trust gives you the ability to include specific instructions concerning the care of your horse. You can specify basic care such as where your horse is stabled, how it should be fed, and additional care, such as farrier and vet visits. You can name the person who will take care of your horse, which means you can make sure the person you want is taking care of your horse. You can even stipulate specific things such as how you want the horse to be blanketed and special treats for your horse. One of the biggest advantages to a horse trust is that it takes effect at the moment of incapacitation or death. This means you don’t have to worry that your horse will be neglected should anything happen to you.

Horse Property

horse property barn wills trustsUnlike having a house, a horse property provides you with additional considerations when it comes to your estate plan. As with a house, you may stipulate whether your horse property is sold after your death or whether you leave it to someone. You may also want to ensure that the property remains available for a horse lover to purchase at some time in the future and not turned into a shopping mall or housing development. To do so, you can have a conservation easement put on the property. A conservation easement allows you to determine limitations on future development, and it may also lead to some positive tax consequences. One negative to these kinds of easements is that it may lower the property value if the property is sold at some point.

Horse Business

trail ride horse equine law attorney older riderIf you are a horse professional, you want to decide what will happen to your business when you die. One option is to simply let the business end. But if you want the business to continue, you should consider how you want it to operate without you. This is called succession planning. Some of the considerations include who will own and manage the business as well as the development and training of successive owners. There are several different ways to create a succession plan, some of which involve trusts in order to reduce taxes and avoid probate.

If you would like to discuss any of the options you have just read about, contact me today.