Our pets are some of the most beloved members of the family and yet they are so often overlooked in our estate plans.
When thinking about the future of their pets, most commonly, people have a verbal arrangement with a family member or friend to be the caregiver of their pet in the event of the owner’s death. While this is a good first step, what happens if your designated caregiver no longer wishes to care for your pet or does not care for the pet based on your instructions?
We once had a client who wanted to leave $800,000 to their beloved pet. As mentioned above, your pet is considered personal property. Another example of personal property is jewelry or a car – so while you cannot leave money to your jewelry or car, similarly you cannot leave $800,000 to your pet. Instead, in this case, we were able to create a wholesome estate plan for our client that also included care for their beloved pet at the level that the client desired.
In the event a will is used to plan for a pet’s future care, the will would mention a designated caregiver and list the care instructions to be followed by such caregiver. If this caregiver is a trusted friend or family member, money can be left in the will to this caregiver to provide such care. It would also be advisable to designate an alternative caregiver in the event your first choice for caregiver is unable to provide the desired care. In determining the amount of money to be set aside for your pet’s care, be mindful of current and potential future expenses, including, food, grooming, boarding, medications, vet appointments, and emergency care.
But what happens if the person you appoint as the custodian of your pet in your will, receives the money to do so, but fails to apply it for the benefit of your pet? In the event you wish to have greater piece of mind for your pet’s future, and oversight on how the funds are being applied, you may want to consider setting up a trust for your pet.
A trust allows you to appoint a trustee who is different from the caregiver. The trustee is in control of the money you set aside for the pet’s care, and can hold your pet’s caregiver accountable to the instructions you have listed in your pet’s trust. The assets in your trust also bypass probate, so the monies you leave behind for your pet can be accessed immediately upon your death. If you select the route of creating a trust for the benefit of your pet, you will also be able to name a remainder beneficiary. If any funds are left in said trust upon the death of your pet, you can appoint a remainder beneficiary to receive such funds.