Providing for Your Pet in Your Estate Plan

When hotel magnate Leona Helmsley passed away in 2007, she left a $12 million bequest to her Maltese, Trouble. Two of Helmsley’s grandchildren received nothing, while two others received $10 million each. While Trouble’s bequest generated tremendous media attention, it highlighted the importance of ensuring that your pets are properly provided for in your estate plan. Many people consider their pets to be members of their family, but few actually provide for the continued care of their pets in their estate plan.

Americans own an estimated 68 million dogs and 73 million cats, according to a 2000 estimate prepared by the American Pet Products Manufacturers Association. Thousands of pets end up unwanted in animal shelters because their owners died without making any provisions for their care. Many assumed that a family member would step in and care for the pet, but the animal ended up in the shelter. Planning ahead can prevent your pets from a similar fate.

Trusts for Pets
One increasingly popular vehicle for providing for your pet’s care is a trust for the benefit of your pet. A trust allows you to specify a sum of money to be used for your pet’s continued care and to name a trustee to carry out your wishes.

There are different types of trusts for the benefit of a pet. One is a “statutory pet trust” which allows you to simply add a sentence or two to your will and thereby create a trust. You don’t need to specify all of the terms of the trust (the law essentially “fills in the gaps” for you). Currently, 38 states and the District of Columbia have enacted laws to allow you to establish a “statutory pet trust”. California recognizes statutory pet trusts. See California Probate Code Section 15212

The other option is to include a provision for your pet in your revocable intervivos or “living” trust. This type of trust is sometimes referred to as a “traditional pet trust” and may be created in any state, even if that state does not recognize a “statutory pet trust.” This type of trust allows you to specify in detail the terms of the trust. Some of the factors to consider in establishing this type of trust are covered later in this article.

Which type of trust is better? The statutory pet trust is testamentary in nature, meaning it has no effect until you die and your will is deemed valid by the probate court. It does not offer any protection for your pet in the event you become incapacitated, nor does it provide for the care of your pet in the interim period between death and the time the will is probated.

The traditional pet trust is part of an intervivos or “living” trust, meaning it is established during your lifetime and becomes effective immediately upon formation. This type of trust provides an immediate plan for your pet if you become incapacitated or die.

Terms of the Trust
A traditional pet trust allows you to provide special instructions regarding the care of your pet. Some examples of commonly included instructions include:

• Identification of the pet
• Food and diet instructions
• Grooming instructions
• Veterinary care
• Socialization of the pet
• Compensation for the caregiver and trustee
• Method the caregiver must use to document expenses
• How the trustee is to monitor the caregiver’s services
• Whether the trust will cover the cost of veterinary insurance, liability insurance in case the pet bites or injures someone, etc.
• Final disposition of the pet (burial, cremation, etc.)

Other Factors to Consider
Who will serve as trustee of the trust? Most trusts will name a trustee to manage the money for the benefit of the pet and a caregiver to manage the care of the pet. While it is possible to name the same individual as both trustee and caregiver, some prefer to name different individuals since this will provide some oversight or “checks and balances” to ensure that the pet is being properly looked after. You will also want to name a back-up trustee and caregiver in case the individuals you named as first choice are unable to serve due to death, illness or incapacity. It is advisable to speak to the individuals you plan on designating as trustee and caregiver, to make certain they are agreeable to serving and that they understand the responsibilities involved.

What qualities should you consider in selecting a caregiver? Selecting a caregiver for your pet is analogous to selecting a guardian for children. The ideal candidate is someone who knows and loves your pet, who is able to provide a stable home, and is willing to assume the responsibilities of caring for your pet.

What qualities should you look for in a trustee? You will want to select someone that you trust implicitly and have complete confidence in. The trustee should be someone who is financially responsible and able to manage money. Most people opt to name the same person or persons they have named to be trustee of their living trust.

How much money should you set aside? This depends on the species, age and life expectancy or your pet, as well as the annual cost of care for your pet. You will also want to factor in possible emergencies that may arise, such as the cost of surgery or extended veterinary care in the event of a major illness. You will also want to consider any costs associated with the end of the pet’s life, such as cremation or burial arrangements.

How will you fund your trust? You can set aside a certain dollar amount or percentage or your estate to fund the trust, or you can purchase a life insurance policy and name the trust as the beneficiary.

What happens to the money after your pet dies? Some trusts direct that the unused funds will be given to the caregiver. While this is a nice way to reward the caregiver for their devotion to your pet, it may also create a conflict of interest for the caregiver, since any funds expended on your pet will ultimately reduce the amount left over in the trust. You may want to provide that the caregiver will be given some amount of direct compensation from the trust during the pet’s lifetime, and leave the remaining funds from the trust to a charity.

Review Your Plan Periodically
With any estate plan, you should review your documents periodically to ensure that they still reflect your wishes. When you review your documents, you’ll want to consider how your situation may have changed since the documents were executed. Have you adopted any new pets? How old are your pets now? Have your pet’s needs changed? Are you still comfortable with your choice of trustee and caregiver, or have circumstances changed?

Consult an Experienced Estate Planning Attorney
When planning your estate, don’t forget to plan for your pets. Talk to your estate planning attorney about the best way to provide for your pet. The attorneys at the San Diego estate planning firm of Pinkerton, Doppelt & Associates LLP have extensive experience in estate planning and we understand your concern for your pet’s well-being. We welcome your inquiry and invite you to contact us by e-mail, or call us toll-free at (877) 435-7411 within California, or (858) 618-5510 outside of California to schedule a free consultation.