Posted by Alicia K. Waltenberger.
How much do I leave to my kids? Who should I name as executor? When writing a will, we tend to focus on people and things—and overlook those treasures that aren’t quite people, but aren’t exactly things either.
Though some cats I know would bristle at the idea, a person’s property is made up of everything they own, including their pets. It’s funny to think of these personalities as part of your estate, but they are.
“When getting your estate planning ducks in a row, make one of those ducks your pet.”
Animals inhabit the homes and hearts of most Americans. According to the latest figures, 68% of households own a pet.1 Unless you factor them into your estate plan, your beloved Beagle or budgerigar will face an uncertain future, if something were to happen to you. In other words, when getting your estate planning ducks in a row, make one of those ducks your pet.
You may have family members or friends who adore your cat or dog, but they won’t necessarily have the time or resources to give your beloved animal the care he or she needs. Owning a pet can be costly, so you want to make sure that expenses like food and vet fees are covered for the rest of their lives (or nine lives, as the case may be).
You could leave them something in your will, but that won’t protect the little creatures if you become incapacitated. Also, items in a will have to go through probate, and that can be a lengthy process—whole dog years, even.
Protect what’s precious with a pet fund
An increasing number of pet owners are finding peace of mind by creating trusts for their pets. This is basically a provision in your will or revocable trust, naming a caregiver (beneficiary) to look after your furry, feathered or scaly companions in the event you’re no longer able to. Regular payments are generally made to the caregiver for the rest of your pet’s life (although some states set a maximum duration of 21 years). Pet trusts are usually revocable, meaning you can make changes at any time or add new four-legged family members in the future. Before contacting an attorney, you’ll need to do a little homework to decide if a pet trust is right for you. Here are the five steps to setting up a pet fund:
1) Choose a beneficiary
As the primary caregiver, the beneficiary has to be someone you trust—possibly a close family member who your pet already knows and who loves it as much as you do.
Ask this potential caregiver if they are okay being named beneficiary. Being responsible for another life is a gift that no one should accept lightly. Give them time to think it over. You’ll need to come clean about what the role entails. Some animals can be left alone in an apartment all day, while others need a vigorous walk morning, noon and night. Is your critter noisy? Does it have complex dietary needs? Give an accurate picture of what 24/7 pet ownership looks like.
Your beneficiary may be enthusiastic about the idea and confident in their caregiving abilities, but they may not have the lifestyle or space to accommodate your animal. If your German Shepherd is used to roaming around a large backyard or is nervous around kids, he obviously won’t be a good fit for some families.
Next, name a successor beneficiary, just in case. What, for example, would happen if your carefully chosen caregiver discovered an undiagnosed cat allergy, a sudden fear of dogs, or is otherwise unwilling or unable to perform their duties? Your backup caregiver would then take over—ideally someone who already knows your pet, and can accommodate them in the event that your primary beneficiary is no longer able to. Naming two separate caregivers offers added peace of mind.
2) Assign a trustee
The great thing about trusts is they come with built-in checks and balances. In addition to your chosen beneficiary, you can name a separate person as trustee. This person will be in charge of managing the funds you set aside, making sure the caregiver spends them on your pet. It’s also a good idea to have your trustee check in on your pet on a regular basis, so make sure you assign someone who is comfortable doing that. A trust company or the trust department of a bank could also act as trustee, but may not be able to keep track of your pet’s welfare in quite the same way.
3) Describe your pet—and what they need
Spend some time writing detailed instructions for how you want your pet to be cared for. This should include things like what brand of chicken chunks to buy and whether they prefer to sleep in their own bed alone or in the company of a human caretaker.
Also consider your pet’s belongings—their favorite blanket or toy need to be mentioned in the trust so they don’t end up getting misplaced or thrown out with the trash during the disbursement of your property.
Provide a detailed description of your pet, especially if you don’t know the trustee (stories of imposter animals may sound far-fetched, but you want to make extra sure your pet fund is used on your actual pet). Many of us already tag our pets—microchips are one popular way to keep track of roving dogs and straying cats. If you haven’t already invested in such technology, now may be the time—you can then grant tracking access to both caregiver and trustee in your trust.
4) Provide medical and end-of-life details
Make sure your pet’s registration papers and/or medical records are in order and included with the trust. You may also decide to include a financial and healthcare power of attorney authorizing your chosen caregiver to make important decisions in the event that you’re unable to do so.
Think about whether you’d like your pet to be buried or cremated, and be sure to specify your choice in the trust.
5) Earmark adequate funds
Cat owners in the U.S. spend around $235 per year on basic food expenses.1 But this is just an average figure. I have a friend who spends $1,000 per month on food for her canine. He isn’t snobbishly picky, like Rum Tum Tugger in the Old Possums Book of Practical Cats: “If you offer him pheasant he would rather have grouse.” Rather, he has legitimate dietary restrictions. Every animal is different, and you’ll need to take your pet’s unique needs into account before earmarking a dollar amount in your trust.
Scribble down the amount you spend on your pet in a year, plus emergency money to cover medical bills or any new expenses your caregiver might incur (for example, if they work full-time, they might need to hire a dog walker).
Multiply that sum by your pet’s life expectancy to calculate the size of your fund (you can reduce it each year, as your pet gets older). Specify how the funds should be distributed to the caregiver. You may set up regular payments, or a one-time gift—to spare them the inconvenience of reaching out to the trustee every time they rack up an expense.
Better to overfund than underfund, since any remaining money will go to a remainder beneficiary (which could be a charity if not another person). To avoid a conflict of interest, this beneficiary should be someone other than the caregiver (you can leave money to them separately).
In some rare cases, a family member may have reasonable cause to contest your wishes, perhaps arguing that you were unduly influenced when crafting the trust. In such a case, your pet will likely be more protected if you stated in the trust the rationale behind your decision to leave money to your pet.
Pets can’t plan ahead—and that’s why we love them
Animals teach us to live in the moment—that’s what makes them so delightful, so enchanting. They have no concept of the future. Luckily, their human protectors can plan ahead for them. A pet fund is a simple way to plan for your beloved animal’s future, ensuring they always get the care they need—even when you’re not around to provide it.