Do you love your pet? Do you consider your pet to be part of your family? Are you concerned about what will happen to Fluffy or Fido if anything happens to you? If your answer to any of these questions is “yes”, please read this blog and learn more about how you can create a pet trust to insure that the people you want will care for your pet when you can no longer do so.
What is a pet trust?
It is a legally enforceable document that insures your pet receives the care you would have provided had you not passed away or become incapacitated.
How does it work?
You name one or more persons to act as a trustee, the person who will use the money or property you put in the trust for your pet’s benefit. The caregiver you chose will care for your pet with a portion of your assets paid by the trustee. The trustee will check periodically on your pet to make sure he or she is receiving the level of care specified in the trust instrument and that the monetary allowance left to the pet’s caregiver is being used for the care and feeding of your pet.
When does a pet trust take effect?
A pet trust takes effect on your death. It is created during your lifetime with the assistance of an experienced estate planning attorney and is found in your Will or Living Trust. It details your pet’s care, feeding, routine, medical history and anything else you want a caregiver to know in order to take care of your pet. The executor or trustee pays for your pet’s expenses and the caregiver continues as caregiver as long as your pet is alive.
How do I fund the pet trust?
A pet trust is funded through assets designated in your will or trust. A pet trust can be funded with virtually any asset you may own. Popular approaches include naming the trust as a full or partial beneficiary of a life insurance policy, annuities or retirement accounts or pay on death bank accounts. You can also transfer real estate to the trust through your will or living trust.
How much should I put in my pet’s trust?
That depends on many factors. Is the trust for the benefit of one pet or multiple pets? What is the age of the pet and what are the anticipated veterinarian needs? What is the standard of living for your pet? Will the trustee and/or the caregiver be paid and, if so, how much? Will the trust pay for sitters or other temporary caretakers if the caregiver is unavailable?
What happens if I put too much money in the trust?
You may recall the case where a court reduced the amount that Leona Helmsley left for the care of her Maltese, Trouble, from $12 million to a more “modest” $2 million. The court has no express power under the Probate Code to reduce the amount placed in the trust; however, if it is an excessive amount, family members may try to undermine your intentions. The best approach is to put no more than twice the amount you believe will be needed.
What happens to any money left in the trust on the death of my pet?
You can and should designate in the trust the persons or organizations you want to receive the surplus money after your pet passes away. Many leave the remainder to the caregiver, or to their relatives, friends or to organizations like the Humane Society, the SPCA or local animal rescue groups. You should be very careful about leaving the surplus to the caregiver as that person may be tempted to put his or her financial interests ahead of the welfare of your pet.
Who should I select to act as a caregiver?
Ideally, you want to select someone you believe will provide a good home for your pet. Relatives, friends and neighbors are all good candidates but if none are available there are organizations that will take on this responsibility. Successor caregivers should be named to give the trustee the option to place your pet elsewhere should circumstances warrant a change.
What happens if the trust runs out of funds before my pet dies?
If this occurs you are dependent upon the good will and financial circumstances of your caregiver. It is for this reason that you should use great care in choosing this person and his or her successors. The trust instrument should contain a provision naming a person or organization you want your pet to go when all else fails.
How do I create a pet trust for my pet?
Contact us for more information on pet trusts.