Horse Trusts

As the COVID19 pandemic spreads, I have seen people on social media ask how they can make sure their horse is taken care of in case they are unable to do so. We are facing a reality many of us have never wanted to actually face. But here we are. As someone works with fearful riders, I know that if we can face what we are afraid of, we can handle what most concerns us.

Many people say they have talked to a friend or they have written some informal agreement. For example, I know of a nurse who asked a good friend to take care of her horse is anything happens to her. There is a legal document that allows you to plan for your horse’s future in the event you are incapacitated or die. That document is called an horse trust, and you can have one for every animal in your family, not just your horse. Currently, every state and the District of Columbia had some form of legislation that allows for animal trusts. While an animal trust is a stand-alone document so it doesn’t need to be included in your estate plan, it is a good idea to let your estate planning attorney know that you have or want one.

Horses as Property Under the Law

Under the current law in every state, horses are considered property. This means someone cannot legally step in and take care of your horse if anything happens to you because they do not own your horse. For example, if you are in a coma and your riding buddy decides to move your horse to a less expensive boarding barn during that time so she can take over board payments for you, she could be charged with theft, no matter how good her intentions. She also could not access your checking account to make the regular monthly board payments needed to keep your horse where it’s currently boarded. She would literally be helpless to intervene if the barn owner decided he had to file legal papers to seize your horse and then sell it to pay for unpaid boarding costs if several months went by while you were incapacitated and unable to take care of things. We all would hope that a boarding barn owner would understand but sometimes that isn’t the case.

Horse Trusts

The way around this problem is to create a horse trust. The trust becomes active if you are incapacitated or when you die. Once you are no longer incapacitated, it is no longer active and returns control to you to handle matters concerning your horse.

A horse trust gives you the ability to provide funds for your horse’s care and to include specific instructions concerning that care. When you set up the trust, you set aside enough money in it to take care of your horse in the manner you prefer. How much money should you put into the trust? It depends on how long you want it to last. Write down a monthly budget that shows how much it costs to take care of your horse. Then decide how many months you want to provide care. For example, you may want to provide care for six months and then have a provision that if you have not regained capacity by then, you want your horse sold to someone or given to a specific person. If you want your horse taken care of after your death, you could put in enough money to care for him for several years. Make sure that the amount is reasonable, though. While horse trusts are generally not challenged in court, an argument could be made to reduce the amount you have left for care if one of your relatives or someone you left an inheritance to claim that the amount to care for your horse was excessive. Keep in mind that you can add money to the trust. So start with what you can afford and add more if that works best for your budget.

A horse trust also allows you to name a trustee, which is the person who will take care of your horse if something happens to you. You can be as specific or general as you want concerning that care. You can leave it up to the trustee, or you can put in specific provisions you want the trustee to follow. For instance, you can include directions concerning where your horse is stabled, how she should be fed, and additional instructions about the farrier and vet visits. You can even stipulate specific things such as how you want your horse to be blanketed and special treats she should get fed. It’s always a good idea to talk to the person you want to name as trustee before you set up the trust, to make sure she can take on that responsibility and is comfortable following your directions for your horse’s care. Depending on your state, there may be other people included in the trust, such as a vet who makes sure the horse is being taken care of properly.

attorney lawyer massachusetts online affordable convenient massachsuettsUse equine law as a tool to help you. When you decide you’re ready to create a horse trust, contact an equine or animal lawyer in your state so you can be sure the state’s legal requirements for the trust are met. If you are a Massachusetts resident, please feel free to contact me to discuss one. During the COVID19 epidemic, I am providing free horse trusts if you need me to draft or update an estate plan for you and at a discounted fee if you just need the trust. If you don’t live in Massachusetts, I may be able to refer to an attorney in your jurisdiction. Be sure to revisit the trust every year to make sure the funds you’ve set aside are still adequate and to make sure you don’t want to change any of the instructions for your horse’s care. Then enjoy the peace of mind knowing your horse will be taken care of if anything unexpected ever happens to you.

Stay safe, stay healthy, stay compassionate.

This blog post is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation. 

 

Cybercriminals and new scams

As an equine horse professional and business owner in the digital age, you have to be careful of scams that happen in your business dealings online. For example, we all know to be careful when buying a horse in person. Is the horse lame? Is the seller being honest about the horse’s training? But you need to also consider email scams when doing business. The latest email scam is one that could easily hit the horse world and hit it hard.

According to a recent NPR story, cybercriminals are engaging in new email scams. These scams involve someone hacking into an email conversation. They monitor the conversations and then wait for an opportunity. When they see one, they pretend to be a person involved in the conversation. The opportunity usually involves a monetary transaction. The scammer provides information concerning where to send the money, and before the person knows it, they have paid the scammer instead of the legitimate party

Here is how the scam would work in the horse world. You find a horse advertised online that you buy for yourself or a client. You and the seller wind up negotiating the sale of the horse via email. Unbeknownst to you, the cybercriminal hacks into your email conversation. He or she waits until you are about to send the money and then pretends to be the seller. The directions you get for the payment are coming from the cybercriminal, not the seller. You send the money, thinking the seller is all set. When you check with the seller to confirm receipt of the money, you see that the money has gone to the cybercriminal and is probably out of the country and irretrievable.

The best way to avoid such a scam is to call the seller to discuss payment and to get payment instructions. Any conversation that might lead to a scammer getting confidential information or involving bank information should be conducted by telephone. Having actual discussions can lead to a greater level of security for your business transactions.

 

 

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.

UK Decision Showcases Liability Dangers

equine law horse attorney liability insuranceAs horse owners, we enjoy sharing our love of horses, and we sometimes even let our friends ride our horse. What happens if a person is injured while riding your horse on your property? Many factors influence whether you will be held liable for those injuries. A recently-decided case in England highlights some of the important points to keep in mind. While British law is different from the law we practice here, the case raises some important points.

Ashleigh Harris was 14 years old when she went on a picnic with her boyfriend and his family at their family farm. She had been riding for about a year on her own pony at a local stable. She had never ridden a horse. Her boyfriend’s mother, Rachel Miller, who was new to riding, had recently bought an ex-racehorse. They visited the horse on the picnic, and Ashleigh wound up riding the horse. She trotted the horse in an open field, and the horse began to canter. Ashleigh lost control and fell over the horse’s head. Ashleigh suffered a spinal cord injury and is now paralyzed from the waist down. She sued for compensation for the lifelong medical care she now requires. Miller rejected a settlement offer for the maximum amount under Miller’s “personal liability” coverage, so the case proceeded to trial.

Last week, a judge at the High Court in London ruled in Harris’ favor and awarded her more than 3.5 million dollars. In his decision, the judge found that Miller had encouraged Harris to ride the “strong and willful Thoroughbred.” The judge stated that Miller had limited knowledge of Harris’ riding ability but knew she had done more riding than Miller. He said that Miller had made a “serious error of judgment” in buying such a horse because Miller was so inexperienced and that she should have known such a horse would be difficult to ride, even for a competent novice rider. The judge ruled that Miller was an unreliable witness with an implausible explanation for what happened that day. The judge went on to find that Miller exposed Harris to a risk of injury by encouraging her to ride the horse and either condoning or instructing her to trot the horse in an open field for the first time. The judge said it was reasonably foreseeable that the horse would be difficult to control and, in certain conditions, might throw a rider who wasn’t used to riding a horse bred to race and trained to gallop. Miller was only insured for a limited amount, and that amount was not enough to cover the judge’s ruling.

An important factor in this case concerned insurance. It appears from the decision that Miller relied on her homeowner’s insurance and did not have specific equine insurance. Your homeowner’s policy may cover some equine-related activities on your property, but questions can arise concerning what kinds of activity and what level of finequine law horse attorney liability insuranceancial coverage is provided. If you intend to have people engage with horses on your property, you should consult an equine insurance agent and discuss your needs.

You may be thinking that you would be covered if this accident happened on your property because your state has an equine liability statute. Not necessarily. Many of the statutes only apply to equine professionals, which means you may not be covered if you have a horse for fun and a friend is injured by your horse. In addition, many of the statutes have exceptions to the law. For example, the Massachusetts equine liability statute includes an exception if the horse professional fails to make “reasonable and prudent” efforts to determine if the participant can safely participate in the equine activity, and also states that the equine professional must determine that the participant has the ability to handle the particular equine. Those are factors the UK judge mentioned when he found that Miller should not have encouraged Harris to ride the unruly horse and to trot in an open field.

You may wonder if liability can be avoided or limited if the person riding your horse signs a liability release. It depends on the facts of the specific situation. Generally speaking, a release won’t relieve you of liability if you are negligent in letting someone with little to no experience ride a horse that is not suited for that person. Even a horse professional may still be held liable in that scenario. Many factors come into play such as whether you knew about the person’s level of experience, whether the person was honest about their level of experience, and how much you knew about the horse and the level of rider it required.

Many people simply take care of potential liability for someone riding their horse by not letting anyone else ride their horse. Your friends will invariably say that they won’t sue you if anything happens. Let your friends know that you aren’t worried about that, but that insurance companies are becoming more active in suing to recover expenses. So if an injury occurs, you may have to deal with a lawsuit from the insurance company concerning your friend’s medical expenses. If your friends insist – and it’s hard to resist sharing our love of our equine partners – you can explore other options, such as finding a local barn where you can ride together.

equine law horse attorney liability insuranceIf you really want to let you friends ride your own horse then get liability insurance that is suited to your specific equine situation. Don’t assume your homeowner’s insurance will protect you. Talk to an equine insurance agent, not just your homeowner’s insurance agent, to get the best protection tailored to your situation. While no insurance can bar a lawsuit from being filed, it can protect you by paying any claim and lawyer’s fees instead of you having to pay out of pocket. This type of insurance is often called Private Horseowner’s Liability Insurance. If you get this kind of insurance, you know you are covered, and you can have fun with your friends and your horses.

This blog post is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation.