The goal of estate planning is to provide for those we love, especially those who depend upon us for their care, after we are gone. Your will, life insurance, and beneficiary designations can give to your family, friends, and charities you support https://keystoneelderlaw.com/wills-inheritance-7-assumptions-that-may-derail-your-intentions/, but not to your pet. Most people who have pets view them as important members of the family, and a pet trust is one way to protect your pet.
Based on a recent survey by the American Pet Products Association https://www.americanpetproducts.org/, as of 2020, seventy percent (70%) of households in the US have pets—about 90.5 million households. The total U.S. pet industry expenditures in 2020 were $103.6 billion dollars, including pet food, treats, veterinary care, medication, grooming, training, insurance, and other supplies and services. Preliminary estimates for 2021 are even higher at $109.6 billion dollars. That does not include the cost of “I love my grand-dog” bumper stickers, “world’s greatest cat-dad” mugs, corgi socks, renaissance style portraits of pets dressed as King Henry VIII, and other items some of us buy to celebrate our favorite pets.
In short, we love our “fur-babies,” and they depend upon us financially. There are a lot of reasons to love them. Pet ownership can keep you young at heart and give you a reason to stay active. Petting a furry animal has been shown to lower blood pressure and anxiety. Service animals may even be trained to help their owners with mobility, recognize the presence of allergens, detect blood sugar levels by smell, and get help in an emergency. As much as we may depend upon them, though, they depend more upon us to provide for their care. So how can we make sure they are cared for after we are gone?
Some people have informal agreements that a certain friend or relative will take in their pets. You can include a provision in your will for that person to receive extra money with the understanding that it will help cover the cost of the pet’s care. Those informal agreements are not binding, though, and life circumstances can change. What if your designated person has a child with allergies, moves somewhere that does not allow pets, adopts another pet that does not get along with yours, or simply decides they cannot handle the responsibility? If that person changes their mind, there is no way to hold them accountable for taking in your pet or turning the money you left them over to the person who does.
An option to provide better protection for your pet is a pet trust. Pet trusts have been recognized in all 50 states as a lawful way to provide for your pet’s needs. A pet trust can provide for your pet during your lifetime as well as after you pass away. This allows for continuity of care for your pet if you become incapacitated during your lifetime and need someone else to have the guidance and resources they need to care for your pet.
A pet trust is a legal document prepared by an attorney, and typically includes financial accounts in the name of the trust. Some important provisions to think about when setting up a pet trust are:
- Who will be the caregiver, also called a pet guardian, for your pet? You can and should identify a few potential pet guardians in order of succession, in case the first guardian is unable or unwilling to provide care.
- If all of your designated pet guardians fall through, you may wish to identify a no kill shelter or similar organization with which your pet could be placed. These organizations often operate on tight budgets with limited capacity. Your preferred organization may be more willing to take your pet in if you have set aside funds to cover the cost of your pet’s care and supplies, as well as any fees the organization may charge. You can provide directions for the adoption of your pet, such as specifying if two closely bonded pets should be adopted together.
- What instructions do you want to leave for your pet guardian? This can include information about your pet’s known health issues, prescriptions, veterinary provider, as well as preferences in foods, treats, grooming, and favorite toys.
- You should include a detailed description of your pets as well as their names so they can be clearly identified. You can amend your trust during your lifetime. You should do so any time you adopt a new pet, to ensure the trust maintains an accurate list of the pets you wish to provide for.
- Who will be the trustee, who is responsible for managing the pet trust? Consider whether you want this to be the same person as the pet guardian or not. Using a different person as a trustee can help to ensure your instructions are followed. Using the same person can allow the pet guardian to act more quickly if funds are needed to cover an emergency veterinary expense. The trustee will be responsible for managing any investment of the funds in the pet trust, so it is a good idea to choose someone who is financially savvy for this role.
- How much funding is required? Funding is actually optional, but recommended. Consider how much you spend on your pets now, their life expectancy, increased cost of care with age and inflation, whether the pet guardian will receive compensation, and potential need for an emergency fund.
- Be sure to include instructions on what happens to funds in the pet trust after your pet dies. Some common choices are distributing to a loved one or a favorite charity. This should be done in percentages, because there is no way to know how much will be left in the trust at the time your pet passes away.
Caring for pets is a big responsibility. It is hard to think of leaving pets behind, but the consequences can be even more heartbreaking if proper arrangements are not made for their care.