Kentuckians are known for their love of horses. Kentucky not only hosts the Kentucky derby in Louisville but it is also home to more than 400 horse farms around the city of Lexington. What is more, a new racetrack is being built in Oak Grove, Kentucky that is expected to open in the summer of 2020. Once open, this new facility will undoubtedly bring a renewed emphasis in horse racing and culture in Western Kentucky.
If you live in Kentucky, you may have a horse or two of your own that you adore. As you know, caring for horses is a full-time job requiring significant resources. Horses can live up to 30 years and need a great deal of attention.
So, what happens to your horses if you cannot care for them or die without a plan for their maintenance? Just like your loved ones, you want what's best for your horse—you don't want them to end up at an auction. You may not have known it before, but if you have an estate plan or are considering one, then you should know you can provide for your horse—just like your family—well after you have died. Here are a few tips to know about including horses in your estate plan:
Tip No. 1: Be Specific.
Estate planning itself can be a real chore—there is not a one-size-fits-all type of plan. The key to making sure your horses live out their lives as you intend is straightforward: your estate plan must specify exactly what you want. Be specific. How do you want them cared for? Where do you want them to live? A knowledgeable estate planning attorney will help you be clear and specific in the estate plan.
Tip No. 2: Determine Who Will Care for Your Horse
Whether it's a person or an organization, you need to determine who will be responsible enough to care for your horse. It's not about finding someone who wants a horse or loves horses. Rather, it's about finding someone who has the capabilities and resources to care for the horse. In your estate plan, you will likely allocate some resources to this person or organization, so in what's most important is finding someone who knows how to take care of your horses and will take on that responsibility.
If you have a special needs horse, it is especially important to determine who is capable to care for it.
A trust may be something to consider when determining who will care for the horse. A trust offers a number of benefits, some that a will cannot provide:
- more flexibility
- easier to manage
- probate avoidance
- controlled management of operations.
You will also not only have to determine who will care for the horse, but who will receive all of your belongings pertinent to the horse. You may have some things that the horse caregiver will need, like saddles, harnesses, farm equipment. But you may have things the caregiver will not need, like trophies or extra saddles and harnesses or additional farm equipment. The things not to be designated to a person or organization can be sold and add additional value to your estate.
Tip No. 3: Determine What You Will Do with the Land
If you have land on which your horses grazed and you want to maintain that land for your horses, then this can be added into the estate plan.
Something like a conservation easement is a legally binding agreement allowing you to limit uses on the land or to prevent certain types of development on the land. The benefit of a conservation easement is the ability to determine what happens to your land, but the downside is the value of the land may remain lower than what it otherwise could have been. Nevertheless, this type of easement is something to consider when thinking of your horses.
Tip No. 4: Determine if Selling Your Horses is the Best Option
You may have many horses. In some cases, the best option may be to sell your horses. If you are inclined to sell your horses, take time to identify an agency who can sell the horses privately. What you want can and should be clearly stated in a last will and testament or revocable living trust. A sale may increase the overall value of your estate, thus benefiting your family more in the long run. So, that's an additional point to consider as well.
The Key Takeaway
Horses are loved animals, but they are also an investment to large extent. You need to decide whether you will care for them in perpetuity or sell the horses to boost the liquid value of your estate. Either way, the process is complex and to succeed to avoid probate, the estate plan must be specific and clear. An experienced estate planning attorney representing clients in Kentucky can help you in this effort.