We all know that horses require a lot of personalized care and attention, and there needs to be a plan in place to guarantee their continuity of care and to ensure that there are funds available to provide this care no matter what happens to you.
The next question is what type of plan is best for you and your horse?
The three types of plans that are most commonly used to protect a horse are the Equine Protection Agreement, the Equine Trust, and the Equine Protection Trust. Each of these plans is best-suited for a different type of horse and owner, and they all protect your horse and ensure its uninterrupted care in the event you are unable to provide this care yourself.
The Equine Protection Agreement is a simple and affordable way for an owner to protect their horse. It is a contract between the horse owner and the person selected by the owner to be the horse's guardian. It creates a legally binding plan and set of instructions for the horse's care that the guardian is contractually obligated to follow. The Equine Protection Agreement is best- suited for owners who only have a single horse that requires basic care.
It does not have many of the useful features included in the Equine Trust and Equine Protection Trust, but it is still an effective planning tool for some types of horse owners.
The Equine Trust is by far the most common choice for most horse owners. It allows owners to provide for multiple horses, multiple guardians, and different types of care for each horse. The Equine Trust is also useful in situations where the owner needs or wants to have a system of checks and balances in place to guarantee that their instructions are being followed. It can accommodate the wishes of even the most exacting owners, and it allows them to truly customize a plan for their horse.
With an Equine Trust there is a trustee in place to oversee the person selected to be the horse's guardian. The owner establishes the scope of the trustee's role and involvement, but generally speaking, the trustee is there to facilitate the trust and to ensure that the guardian is adhering to the trust document. The trust instructions may also require the guardian to send monthly updates, veterinarian reports, and other documentation to the trustee to demonstrate that the guardian is fulfilling their duties. This provides a system of accountability, and gives the horse owner additional piece of mind that their horse is being cared for according to their wishes.
The Equine Trust may also designate multiple guardians to serve different purposes. For example, the owner may prefer to give one guardian day-to-day caretaking duties and to give the other guardian the power to make specific decisions related to the horse. If the owner knows a horse is prone to colic and may require surgery to save its life, the owner may not want the horse's daily guardian making such difficult decisions alone. Instead, the owner may want the guardian to consult with a co-guardian, or they may want the co-guardian to make the decision altogether.
These are just a few of the many useful features of the Equine Trust. It is flexible enough to handle a myriad of situations whether it is being used to protect one horse or many. It is best-suited for the owner that has multiple horses or for someone who is looking for built-in accountability to guarantee their horse is being cared for correctly. The Equine Trust is also the best option for owners of performance horses or horses that require very specific care and/or training.
Finally, the Equine Protection Trust combines all of the features of the basic Equine Trust with a traditional asset protection trust that is designed to protect your assets from creditors. Horses can be very valuable assets, and it is important to protect them the way you would protect other valuable assets.
Many horse owners are involved in lucrative professions that expose them to a greater risk of lawsuits and creditors. These owners often own horses that are worth six figures and up. In fact, they often own more than one. It is important to make sure these horses are protected by a plan that not only guarantees their future care, but also ensures they will not be sold to pay creditors. The Equine Protection Trust is certainly not for all horse owners, but it can be a very powerful tool for others.