Having a pet comes with many benefits. Pets may offer companionship and loyalty while decreasing your stress levels. They can teach your children about responsibility and emotional skills. Their presence can also encourage you to be more physically active.
Did you know that February 20 marks National Love Your Pet Day each year? You might consider it the perfect occasion to give your pet that bit of extra attention they deserve. That includes ensuring they will have the care they need into the future.
Whether you have a dog, cat, parrot, or lizard, there are options you can pursue to help secure their well-being. When you’ve passed away or can no longer tend to your pet’s needs, your estate plan will prove essential to them.
For one, you can give directions in your will to leave your pet to a caretaker. However, there is no guarantee that the caretaker will continue to care for your pet. A pet trust can provide a little more security for the pet. A trust obligates a third party – a trustee – to ensure that your pet receives care in the years to come.
What Are Pet Trusts?
A pet trust is a legal arrangement permissible in all 50 states and the District of Columbia. These documents specify how to care for your beloved pet. Like wills and other trusts, each state has different laws governing the creation and use of a pet trust. If you move to a different state, keep in mind that you’ll need to update this document for the state where you reside.
With a trust, one person (the “trustee”) holds legal title to property for someone else (here, your pet). In the case of a pet trust, the trustee makes recurring payments to your pet’s caregiver and pays for your pet’s needs as they come up.
Pet trusts can play an essential role in ensuring that a pet gets the care they need after their caregiver passes. After all, estate planning aims to provide for our loved ones, and many of us consider pets a part of the family. Trusts can ensure that you have money set aside for their care into the future. This legal document is particularly significant for long-lived animals like parrots, horses, or tortoises.
Because trusts avoid the probate process, there is no delay in continuing the pet’s care. Pet trusts also surmount another obstacle by creating a legal entity to receive money. This document is necessary because you can’t leave money or life insurance proceeds directly to an animal.
What Does a Pet Trust Include?
A pet trust operates on a similar principle to a living trust. As the grantor (the person who establishes the trust), you have the authority to specify the handling of assets on behalf of your pet through a trustee. The trustee of a pet trust specifically holds cash or other assets solely for the benefit of your named pet. Funds in the pet trust can pay for their care and other related expenses, including:
- Routine veterinary check-ups
- Grooming costs
- Feeding and boarding costs
- Exercise and companionship care
- Emergency veterinary care
A pet trust may also address end-of-life care preferences and treatments for your pet. You may also choose to specify burial or cremation arrangements for when your pet passes. Some states will cap how long a pet trust can continue. In several states, the limit is 21 years.
How to Plan Your Pet Trust and Appoint Your Trustee
You must identify and receive permission from the person you want to serve as your trustee. And you may want to identify a successor trustee if your pet outlives your first choice. (Read more in this article about how to choose the right person as a trustee.)
You may need to establish multiple pet trusts for certain types of companion animals. For example, care and expenses for horses and dogs can be markedly different from many other companion animals.
Keep in mind the following considerations when structuring your pet trust:
- The current standard of living and care your pet receives
- The standard of care you expect your pet’s new caregiver to provide
- The individuals you select to act as caregivers and successor caregivers (Ideally, name several people as backups and discuss the proposal beforehand.)
- How often the caregiver will provide reporting regarding the status of your pet to the trustee
- The life expectancy of your pet
- The activation date of your pet trust in the event you become unable to handle your affairs
- The likelihood your pet will develop serious health issues as it ages
- Cost estimation for the pet’s caregiver needs in handling pet-related expenses
- Once your pet passes, what will happen to any remaining money in the trust
The last consideration is of particular importance if you heavily fund your pet trust, or if your pet passes away far earlier than you had expected. You can easily ensure that any remaining money goes to others you name in your will or to a charity.
Your pet must be readily identifiable to ensure the pet trust doesn’t suffer financial fraud or abuse of its terms. Photos and physical descriptions of your pets are useful, but microchipping is the most secure way to protect your pet’s identity.
Explain Your Intentions for Your Pet
Make your wishes regarding your pet’s care quite clear. Certain foods or specific brands of food may be a preference to include. Scheduling walks or playtimes may be a routine you wish to continue for your pet, especially as they adapt to your loss. You can offer plenty of guidance in a pet trust.
Consult With an Estate Planning Attorney
A qualified estate planning attorney will help you shape your plan to cover every situation relevant to your pet. Also, be sure to provide your trustee and pet’s designated caregiver with a copy of the pet trust and any updates to the trust in case you move or your pet predeceases you.
A pet can’t legally inherit from your will, so a pet trust becomes necessary to outline the financial and loving care your pet will need in your absence. Pets are a huge part of American life, and more than ever, people want to provide for them.
A pet trust protects your pet in the future and gives you peace of mind. If you’re ready to discuss setting up a trust for your pet, find an estate planning attorney near you. They can also help you with other aspects of your estate planning. Learn more about other ways of protecting your pets into an estate plan.