When you are planning your estate you are providing for your loved ones who will survive you. Nobody generally overlooks the two-legged members of the family, but it’s easier to forget about planning for the four-legged types as well.
An Imperfect Solution
Planning for the proper care of your pet can mean setting aside resources for the care of your pet when you are creating your plan. A caretaker is named in the will, and this individual is left with a direct bequest. This may be better than nothing, but it is an imperfect solution. The proposed caretaker named in the will is not legally required to use the bequest to care for the pet. In fact, he or she can keep the money without caring for the pet.
Even if the caretaker is honest and truly willing to care for the pet, another potential difficulty exists. It’s hard to predict how much money it will take to care for the pet throughout its life. If too little is left, there could be a gap in care for the pet. However, excess funds allocated for pet care could end up in the hands of the caretaker.
In 46 states it is possible to create a pet trust for the benefit of an animal. With a pet trust, you name a trustee to administer the trust and make sure the pet is taken care of properly. The trustee is bound by law to follow instructions outlined in the trust and use those resources to ensure the well-being of the pet. The trustee can act as the caretaker, but this is not required.
A successor trustee can be named to administer the trust if the initial trustee passes away or becomes unable to serve. A successor beneficiary can also be named who would assume ownership of any remaining funds that may exist in the trust after the death of the pet.
While pet planning has been available for some time, there seems to be an upward trend in those who wish to provide for their pets who will survive them. According to the American Pet Products Association, more pet owners are taking action. As of 2012, nine percent of cat owners had made estate planning provisions for their cats. This is a three percent increase over the 2010 figure of six percent. For dogs the figures have increased similarly. In 2010 five percent of dog owners protected Fido in their estate plans; by 2012 the percentage was up to nine percent.
These are some significant gains over a short period of time. Clearly, pet planning is a growth niche within the estate planning field, and it should not be overlooked, but rather addressed when beginning the estate planning process.
Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555