Including Pets in Your Estate Plan: Pet Trusts

To say that pets are family members doesn’t encompass the depth of feeling that comes with loving and cherishing a furry, feathery, or scaly member of the clan. As with all facets of estate planning, the responsible thing is to make formal arrangements for the care of your beloved pet well before your death.

“People are living longer and many older people are alone,” notes Chester B. McLaughlin, an estate planning attorney in Prescott, Arizona. “And so their pets become incredibly important to them. The pets become their children. So if you had children, would you just not even deal with them in your will or your trust and say nothing about them? Of course not.”

Owners can relieve some of those anxieties by setting up a pet trust. Most state laws consider pets as property, which means they can’t inherit money directly. But through a pet trust, you can set money and instructions for their care.

For legal advice about planning for your pet if you pass away, talk to an animal law attorney.

Estate Planning Options for Your Pet

“When I bring up pets as part of the estate planning process, most clients either say, ‘Huh, I never thought of that.’ Or they’ll say, ‘Yeah, I already have someone in place who is going to take care of Fido,'” says Melissa Moser, an estate planning attorney with Moser Law in Norfolk, Virginia.

“I do typically caution the ‘I already asked so-and-so’ clients with this: Circumstances could have changed for the person you asked, or perhaps that person agreed but didn’t really think taking over care of your pet is something that would actually come to fruition.”

But, Moser says, there are options.

Option 1: Creating a Pet Agreement

“The most basic level would be a pet agreement,” Moser says. “That is formalizing a request for someone to take care of your pet upon your death with a contract between both parties.”

Option 2: Listing Your Pet in Your Will

The second tier is adding your pet to your will. “You could say in your will, for example, ‘I want so and so to have my pet, and I’m setting aside $5,000 for that care in a one-time transfer upon my death,”‘ Moser says.

“The problem, of course, is that there is no guarantee that the sum of money will actually be used in that manner, as there is no ongoing court oversight after the transfer takes place. If you’ve chosen the right person, you hope that they do the right thing.”

Option 3: Establish a Pet Trust

The safest option, with the most peace of mind, is a pet trust to take care of your pet’s needs.

“A pet trust is an arrangement where you get down in writing what the care and the maintenance of your animal is going to be in the event of your disability or death,” says Laura E. Cowan, who runs her own estate planning practice in Manhattan. “Because it’s a legally enforceable arrangement, you can be assured as a pet owner that your directions are going to be followed.”

How do you know if a pet trust is right for you? “Generally, if you want to ensure care for your pets when you can’t care for them,” says Kera Reed, an estate planning attorney at Ruskin Moscou Faltischek in Uniondale, New York. Some examples: “You get sick, or you can no longer reside in your home, or at your death.” 

“With a pet trust, you have named a caregiver, a backup caretaker, even a third potential caregiver if you so desire,” adds Moser. “The caretaker is going to be the person who provides the actual care for your pet. But then you have a trustee of the trust, who is not the same person as the caretaker, which offers a system of checks and balances to ensure the trust is running the way you wished it to.”

What To Include in a Pet Trust

To be effective, the person setting up the trust (trustor) should appoint a trustee who can ensure that the trustor’s pet is cared for in accordance with specific instructions outlined in the trust. “You want to pre-arrange or pre-clear with whoever your intended recipient of the pet is,” Reed says.

Make Sure You Understand and Address Your Pet’s Needs in the Pet Trust

Next, make sure you have a good understanding of your pet’s needs. “When I first meet with potential clients, I usually ask them to fill out a questionnaire before coming in,” Cowan says:

• What kind of a pet is it?
• What is their life expectancy?
• How many pets do you have?
• How much do you generally spend on their care?

Carefully Consider the Costs of What Your Pet Will Need When You’re Gone

Consider the costs of vet visits, grooming, toys, food, medicine, and boarding or pet sitting, Reed adds. She suggests figuring out the annual cost of your pet, then multiplying it by the pet’s life expectancy to determine how much money your caretaker will need. You may also want to consider including compensation for your intended caretaker beyond simple reimbursement. 

You can include things like what kind of food your pet should be fed, walking instructions for their favorite park. “Basically, whatever you do with your pet on a daily basis that you would want carried out in the event of your own incapacity or death, that’s what you should include in your pet trust,” Cowan says. “And there’s really no right or wrong. This is your chance to give instructions for how you want your pet to be taken care of.”

Finally, when deciding how much money to put in the trust, “You’re better off overfunding it and then having a remainder beneficiary if you have the means to do that,” Reed says. Anything left over when the pet dies can be distributed to a person, a local animal shelter, or another recipient.

Pets Are Considered Property in Estate Law

“If you try to designate money for your pets, it most likely won’t work, especially if challenged,” says Bruce A. Wagman, an animal law attorney at Riley Safer Holmes & Cancila in San Francisco, California. “Basically, without the availability and use of the pet trust statute in California, any attempt to provide for your pet could be ruled invalid under the law.”

Wagman says a trust is the best way to provide for the animal’s well-being after the owner’s death. “The way our trust is set up, any pet living in the house at the time of our death is covered, and the trust is set up to take care of all of them until their deaths,” he says.

“Just directing the trust to care for any pet alive at the time of your death is the way to do it. Otherwise, every time you get a new pet, you’ve got to go back to the lawyer and say, ‘Put in Fluffy’s name instead of Rover’s.'”

Planning for Your Incapacitation or Absence

You can also plan in the event of your incapacitation — or, Moser says, for something as basic as care of your pet while you’re on vacation.

“We can incorporate a clause in a financial power of attorney that authorizes an agent to seek and obtain veterinary care for a pet, which can be effective immediately upon signing. That would enable the agent to seek animal care if, say, the principal is on vacation,” Moser notes.

Why It’s Important To Plan for Your Pet’s Future Well-Being

Moser admits it might sound a little outlandish to provide a care plan for companion animals. However, the statistics tell a different story.

“The pet industry in this country is worth tens of billions,” she says. “The amount of money that people are spending on their pets in this country continues to rise, as does pet ownership. Sixty-eight percent of households have a pet, so we’re talking about millions and millions of pets in America right now.”

And perhaps most telling, Moser notes, is that as the country’s birth rate decreases, pet ownership increases. “Looking at this from a generational aspect, people are considering their pets as if they are akin to children, relative to 50 years ago when your dog was out on the farm and slept in the barn,” Moser says.

When Should You Start the Estate Planning Process?

So when’s the best time to get your estate planning for your pet’s future care in order? “Yesterday,” Moser says.

“No matter your age, finances, or health. The amount of time and funds it takes to have your estate planning documents in order is minuscule in comparison to the emotional exhaustion your loved ones could have to go through in court to gain legal authority over your person or your estate in the event of your incapacity. You never know when something might happen. Estate planning is so important for you, but it’s also an incredible gift to your family members and loved ones to have your affairs in order.”

As for Moser’s rescued Carolina Dog, Miss Magnolia, “She has her own pet trust,” Moser says.

Find an Experienced Estate Planning Attorney

If you’re a pet owner and have any questions about how best to include your furry friends in your estate documents, talk to an attorney. An experienced animal law attorney can help with legal advice about planning for your pet’s care.