Estate planning is about protecting what is important to you. Although much of the traditional estate planning conversation focuses on surviving spouses, children, grandchildren, and charities, many pet parents wonder what could happen to their “furry children” after their death.
Enter the pet trust. This tool is something that can be easily incorporated into a new or existing estate plan to provide a strategy for your pet’s care. Even if you anticipate outliving your pets, it is always better to be safe than sorry.
How a Pet Trust Works
The majority of pet trusts are incorporated into the foundational document of your overall estate plan (i.e., either in a will or trust). In establishing a pet trust, you must first determine the amount of money you want to leave for your pet’s care. When the pet trust becomes active (upon your death) and while your pet is alive, a trustee will manage the money you have set aside for your pet’s benefit. Second, you must decide on a caretaker who will have custody and responsibility for your pet’s care. Lastly, you will determine who will receive any remaining money in the trust after your pet’s death.
What a Pet Trust Avoids
Frankly, it can be chaos for your pets if you die without a plan in place. With the shuffle of so many other important tasks, a pet can sometimes be overlooked, abandoned, or even euthanized. A pet trust provides a legal tool to ensure that your beloved dog, cat, or other pet is not left without care merely because you are not here any longer. Proactively including a pet trust in your plan is especially important when you have family members who may be unable or unwilling to care for your beloved pets.
Four Decisions You Will Make
Getting your pet planning in order is a reasonably straightforward process. A pet trust is a trust, so let’s start with a quick review of the cast of characters in trusts. There is a grantor, settlor, or trustmaker (the person who creates the pet trust—that’s you!), the trustee (the person you select to manage the money or property in the trust), and the beneficiaries (the person or charity you choose to receive whatever money and property is left after the pet passes away).
In the case of a pet trust, there are four decisions you will need to make to ensure that everything works as you intend:
- Select the trust’s remainder beneficiaries. These beneficiaries will receive any money and property remaining in the trust after the pet has passed away. Some people leave the remaining funds to a favorite charity, while others add whatever is left to a children’s or grandchildren’s trust. You can even designate a specific person or group of people to receive the remainder outright. There are many options, and we can tailor the plan to match your goals.
- Select your pet’s caretaker. Think of this role as similar to the guardian of minor children. This will be the person who cares for your pet if you are no longer able to do so. You can leave detailed instructions or general recommendations for your pet’s care, whichever works best for your pet’s situation. You can even set a certain amount of money aside to compensate the caretaker if you wish.
- Select the trustee. The trustee is the trusted decision-maker you select to ensure that the money you have set aside in the pet trust will be used according to your instructions. The trustee is often authorized to provide money to the caretaker for supplies, vet visits, vaccinations, medications, toys, or whatever else you specify in the agreement.
- Decide on the amount you want to set aside. Some people estimate the expected cost of caring for their pet over the pet’s expected lifespan and leave that amount, plus a little extra. With this approach, the sole goal is to provide for the pet’s care. Others want to establish the pet trust not only to care for their pet but also because they have an eventual charitable goal (e.g., to leave money to a local animal shelter). Many of these pet parents will allocate a large sum of money with the expectation that money will be left over upon the pet’s passing. Determining how much to set aside is really about the ultimate goal you are trying to achieve through pet trust planning. We can help you calculate the right amount, and you can always update the amount as your and your pet’s circumstances change.
Planning for the Future
You might be thinking that you will outlive your pets, so there is no reason to plan. But what if you do not? The entire purpose of estate planning is to ensure that you have legally memorialized your wishes and fully protected your whole family—including your furry, four-legged children. Give us a call today so we can work with you to protect what is important to you.
