Estate Planning for Pet Owners
Here’s something you may not know about me: I’m a pretty crazy animal person. I love all kinds of animals, I’m a strict vegetarian, and I try to volunteer as much as I can at different animal shelters.
In order to tie in my love for animals, I am going to talk about a few estate planning issues for pet owners. Since my animals are the closest things I have to kids, I understand that it is very important to pet owners to make sure your pets are going to be properly taken care of in case something happens to you. So here are some of the things you can do, as a pet owner, to make sure that your pets are going to be properly taken care of if something happens to you.
One thing that you can do, if you have a lot of money and you really, really want to make sure that your pets are taken care of is to set up a Pet Trust. A pet trust is basically where there are three actors, and you, as the settlor, create a trust for a person, called the trustee, to manage any money for the benefit of the beneficiaries.
So in this example, you are the settlor, and the trustee can be a friend, a bank, a relative, or somebody that you trust to manage that money, and the beneficiary is going to be your pet: your dog, your cat, your horse, whatever you want it to be. When you put this money into a trust and give instructions for how the money is to be used for the care of your pet, the trustee is then in charge of making sure that if something happens to you, the money in the trust will be used to take care of your pet. In this case, the trustee has what’s called a “fiduciary duty” to make sure that the money is used for the care of your pet. So, because the trustee is a fiduciary, the trustee can’t just go spend that money on himself or blow it somehow without considering the fact that it needs to be spent on the care of your pet.
Setting up a pet trust can be a bit of work and can be a bit expensive; there’s a lot of administrative work that goes into it, so it’s not too typical with everyday, regular people. Usually a pet trust is for people who have quite a bit of money they want to set aside for their pet and want to make sure that the money is gong to be protected for the care of their pet.
The other option, which is probably more realistic for most people, is to put a provision in your Will which states who you want to take care of your pet when you die. So you can say, for example, I want my dog, Rocky, to go to my mom, or to my friend, or whoever you want to take care of your pet. Then, you can also gift a certain amount of money to that person with the instruction that they spend that money on your pet.
Now, this isn’t quite as controlling and as iron-clad as a trust because when you are giving the pet and this money to the person in your will, that person doesn’t have that same fiduciary duty that they would have if they were a trustee. So, while you can say: “I’m giving my dog, Rocky, to my mom along with $5,000 to be spent on the care of Rocky,” that instruction does not necessarily force them to spend that money for Rocky. So you have to really make sure that it is a close friend or family member that you know is going to take good care of that pet.
That’s a pretty simplified version of estate planning for pets. As mentioned, I’m a huge animal lover who volunteers with shelters and I think it is very important that we all play our part. So I just wanted to use this platform to get that message across and to ask that if you can, help out or donate your time or money to shelters and to helping adorable little kittens and other animals.