Providing for your pet in your estate plan
If you haven’t already seriously considered what will happen to your beloved pet upon your death or disability, now is the time to develop a plan that quickly and easily provides for your pet’s food, shelter, and care.
One of the main goals of estate planning is to provide for your loved ones, and for many of us, “loved ones” includes our pets. While you can always ask a friend or relative to look after your pet, they aren’t legally obligated to do so unless you include provisions for this in your estate plan.
The specific estate planning method you use will depend on state laws, your pet’s needs, your goals, and your financial resources. Working with us, you can plan the best way to ensure your pet continues to have a quality life.
Even though you consider your pet a companion and devoted friend, legally, your pet is “personal property,” which makes it critical to choose the right estate planning method.
Setting up a trust versus a will to provide for your pet
Although it may seem easy to include a bequest for your pet in your will, it may not be the best approach because your will must go through the court probate process before it takes effect. This can be time-consuming and uncertain, and your pet will need immediate attention. Their care, or even ownership, could be jeopardized. While you may want to include provisions in your will for your pet, consider other options. Many people create a trust to provide funds and guidance for their pet’s care.
Unlike a will, which is subject to the probate process, a trust takes effect immediately upon the occurrence of the event specified in your trust, usually death or disability. Your trust outlines the details for the care and control of your pet and makes funds available. Your trust can also include specific directions for your pet’s daily care, medical attention, physical control, and even burial.
Types of trusts available for pets
A pet cannot be a beneficiary of a traditional legal trust because one of the legal requirements for a trust is that there must be a beneficiary who can enforce the trust’s terms. Therefore, the choice and structure of a trust must take this into account and be properly worded to achieve your goals.
Most trusts for the care of pets include the following:
- Statutory Pet Trust– Some states are enacting statutes that allow for enforceable pet trusts. This generally means that the trust can designate a third party who will have the power to enforce the terms of the trust – to compel the caretaker or trustee to use the trust funds for your pet. Some issues that arise with these trusts include whether the amount of funds in the trust is ‘reasonable’ according to court standards, and who the designated third party to enforce the trust would be.
- Honorary Trust– This is a type of trust established for a specific purpose (such as providing for a pet) but without a definite beneficiary. The problem with an honorary trust is that, without a statute specifically authorizing it as a pet trust, it is essentially unenforceable.
- Traditional Legal Trust– One of the best ways to ensure the care of your beloved pet is to set up a traditional legal trust. Your attorney can carefully add language to avoid problems. One method is to place the pet and sufficient funds into the trust. The pet and the funds are the body of the trust. Your attorney then names the caretaker of your pet as the ‘beneficiary’ of the trust. You name a trustee – the party responsible for managing the funds and overseeing the caretaker.
How much should you leave for the care of your pet?
Working with you, we will evaluate the factors that influence your decision, including your finances, your pet, and the amount of care that will likely be needed for the pet’s anticipated lifespan. Obviously, providing care for some pets will be more expensive than for others. If your pet is an elderly dog, you will not need to set aside as much as you would for a young horse.