For those who see their animal companions as family members, a pet is not mere property, but a trusted loved one. And while most humans outlive their pets, some animals can be quite long-lived, and in other cases, an untimely passing might leave a pet homeless. Estate planning may mean the difference between knowing our pet is cared for by a trusted caregiver with the right resources and arrangements, and an animal shelter.
Some people enter their pets into their will. But wills cannot provide for a pet. You cannot bequeath property onto a non-human companion. The best a will alone can do is bequeath your pet to a loved one.
However, they have every right to refuse that bequeathment, and if you try to fund your pet’s care through a will, they also have every right to use those funds for anything but pet care, especially if their financial situation or current life circumstances cannot support a dependent animal. Even if they do take care of your pet, a will alone may not be sufficient to enforce the kind of care you know your pet needs.
This is where a pet trust enters the picture.
What is a Pet Trust?
A pet trust is more than a niche estate planning tool. Pet trusts are estate planning tools devised to organize legally sanctioned care for a companion animal following the trust grantor’s disability or death. Pet trusts are about more than just funding your pet’s lifestyle. Pet trusts can include very specific instructions for your pet’s care, from their preferred routine to the food they respond best to, and their favorite parks.
While pet trusts might seem like a desperate measure to seek a home for your companion, they should be seen as a potent insurance policy. Should anything happen to you, pet trusts ensure that a portion of your estate is dedicated to financing the wellbeing of your companion for their final years, wherein the trustee of the trust is bound by fiduciary duty to the care of your pet.
Pet trusts are still, at a fundamental level, like any other trust. Trusts are legal entities established by the parameters set in the respective trust document and funded by assets and properties listed on an accompanying asset list. Every trust has a grantor, a managing trustee, and a recipient beneficiary.
The grantor outlines the trust’s purpose and function – usually with the help of a legal professional – and the trustee is tasked with carrying out the trust’s vision. Sometimes, grantors become trustees until they die, naming successor trustees to carry out the rest of the trust’s purpose.
In an estate planning context, most trusts safeguard assets for distribution after the grantor’s death, outside of the estate’s probate process. Certain trusts can be built to safeguard assets from creditors, or even minimize an estate’s tax liability. Trusts can be written to make contributions to charity before being disbursed among the living, or they can be written to withhold an inheritance until the beneficiary in question fulfills a certain obligation.
A trust is typically used to separate certain assets and property from a person’s estate in order to bequeath them at a later period.
A pet trust is a living trust set up to create a fund for an animal companion, as well as leave behind specific instructions for their care. The trustee will be tasked with carrying out those instructions until the end of the pet’s life, or in some states, a maximum of 21 years (other states have no such limit).
While many pets don’t outlive their previous owners by two decades, some species – such as horses and parrots – can live for over 30 years. A pet trust ensures that the person you’ve tasked with taking care of your pet isn’t just bound by their word or honor, but by a fiduciary duty, while being supplied by a portion of your estate for funds, and helpful instructions on your pet’s care.
You can still name beneficiaries for your pet trust. If your pet dies before the funds of the trust were completely used up, for example, the remainder may go to an animal shelter of your choice or an animal charity. You can also name businesses, people, groups, or organizations.
Setting Up a Pet Trust
Setting up a pet trust requires a professionally made trust document. The only difference between a pet trust document and a trust document drafted for human beneficiaries is the language used within the document, outlining its intended purpose and the trustee’s duty to the pet in question.
As such, setting up a pet trust requires:
- Identifying the right trustee.
- Providing their name and address.
- Identifying a successor trustee (should the first refuse or pass away).
- Identifying a separate caregiver (if you wish).
- Providing adequate identification for your pet (DNA samples, microchips, and more).
- Determining how large the fund for your pet should be.
- Providing additional information for your pet’s continued care.
- Funding the trust after it has been established (transferring assets into the trust’s name, etc.).
- Designating a remainder beneficiary.
- Providing funerary instructions for your pet.
- And more.
Does Your Pet Need a Trust?
Setting up a pet trust is ultimately much more complicated than simply asking your children to look after the family dog when you die.
But if you are not confident in your loved ones’ commitment to pet care – especially with bigger pets like horses, which require an inordinate amount of time, money, and interest – a pet trust can give you peace of mind and ensure that you have a plan in place for your animal companion should the unthinkable happen.
Other Important Estate Planning Concerns
Pet trusts may just be the tip of the iceberg for your final estate plan. Rather than a once-in-a-lifetime consideration, estate planning should be something you revisit from time to time, with a fresh perspective and an ever-changing list of priorities.
Estate planning elements like trusts, wills, directives, and powers of attorney can help you organize your material and immaterial legacy, but careful management is needed to ensure you leave behind a clear vision rather than a complicated paper trail. Be sure to work with a professional team of estate planners to simplify your plan.