Pet Trusts
Although you can’t leave money directly to a pet, there are lots of things you can do to make sure that your pets are well provided for. Those of us who think of our companion animals as family members are becoming aware of the fact that part of our responsibility to these dependent creatures is to make sure that their care and comfort continue uninterrupted should we become incapable of caring for them ourselves. One way to plan for that contingency is to set up something called a pet trust. To help you decide if this might work for you, here are some basic definitions and guidelines to keep in mind:
A pet trust is a legally sanctioned arrangement providing for the care and maintenance of one or more companion animals in the event of a grantor’s disability or death. The “grantor” (also called a settlor or trustor in some states) is the person who creates the trust, which may take effect during a person’s lifetime or at death. Typically, a trustee will hold property (cash, for example) “in trust” for the benefit of the grantor’s pets. Payments to a designated caregiver(s) will be made on a regular basis. The trust, depending upon the state in which it is established, will continue for the life of the pet or 21 years, whichever occurs first. Some states allow a pet trust to continue for the life of the pet without regard to a maximum duration of 21 years. This is particularly advantageous for companion animals that have longer life expectancies than cats and dogs, such as horses and parrots.
What is a Pet Trust?
How to Proceed?
Since there is one state in which a pet trust is not valid, and other states where enforcement is discretionary, it is advisable to set up a trust with the help of an attorney who specializes in estate planning. Also, be sure that the gift of your pet is not a surprise. Talk to the person(s) you want to care for your pet, and make sure that they are ready, willing and able to do it.
Why a Pet Trust?
It is a big responsibility to take care of your pet. So, when you leave them with a new owner, consider how much money will be needed to go toward the cost of caring for your pet. You should leave your pet and the money to care for it, to someone you trust.
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Because most trusts are legally enforceable arrangements, pet owners can be assured that their directions regarding their companion animal(s) will be carried out. A trust can be very specific. For example, if your cat only likes a particular brand of food or your dog looks forward to daily romps in the park, this can be specified in a trust agreement. If you want your pet to visit the veterinarian four times a year, this can also be included. A trust that takes effect during the life of the pet owner can provide instructions for the care of the animal(s) in the event the pet owner becomes incapacitated (sick, injured, comatose, etc.) Since pet owners know the particular habits of their companion animals better than anyone else, they can describe the kind of care their pets should have and list the person(s) who would be willing to provide that care.
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In addition to providing the name and address of a trustee and successor trustee, a caregiver and successor caregiver (all of whom can be corporations and/or individuals) you will be asked to provide enough information to:
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- Adequately identify your pets in order to prevent fraud, such as through photos, microchips, DNA samples, or alternatively, by describing your pet as a “class”—in other words, as “the pet(s) owned by you at the time of your illness/death;
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- Describe in detail your pet’s standard of living and care;
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- Require regular inspections of your pet(s) by the trustee;
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- Determine the amount of funds needed to adequately cover the expenses for your pet’s care (generally, this amount cannot exceed what may reasonably be required given your pet’s standard of living) and specify how the funds should be distributed to the caregiver;
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- Determine the amount of funds needed to adequately cover the expenses of administering the pet trust;
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- Designate a remainder beneficiary in the event the funds in the pet trust are not exhausted;
Provide instructions for the final disposition of your pet (for example, via burial or cremation).
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Pet trusts can offer pet owners a great deal of flexibility and peace of mind. In the state where no pet law exists, however, or if a companion animal has a longer life expectancy, other arrangements must be considered in combination with or in lieu of a pet trust. Also, if your pet dies before you do, you need to a contingent beneficiary for the funds or do an amendment to your trust.
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