TRUST & ESTATE PLANNING

Protecting Your Pets: How to Make Financial Provisions in a Will or Trust

06.19.2018

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For many people, pets aren’t property—they are members of the family in every sense of the word; providing emotional support, protection and comfort in good times and bad.

In return, we give them shelter, affection and a significant amount of financial support. According to a Harris Poll survey, Americans spend an average of nearly $1,500 on essentials such as food, grooming, boarding and trips to the veterinarian’s office for their pets each year. Horses are the most expensive at roughly $13,000 a year.1 

But making financial provisions for a pet who outlives you hasn’t always been possible, at least not formally. Trusts were designed originally to benefit humans or charity, not animals. It was not until the early 1990s when pet trusts were expressly enabled by a handful of US states. Since then, all 50 states and the District of Columbia have adopted laws that allow trusts to be established for your furry, feathered or four-legged friends. 

Different states have different restrictions on pet trusts, including limits on how long they can continue. So be sure to work with a qualified attorney before funding a trust for Fido or Fluffy. 

Here, National Head of Trusts and Estates, Gerry Joyce, answers commonly asked questions.

Q: Should I Use a Will or a Trust to Protect My Pet after I’m Gone? 

GERRY: Both are important when making financial provisions for a pet. First, your will should name your pet’s new caregiver (owner) after your passing. If you do not include specific language in your will, your pet’s care may be left to a trustee, individual, or group of people that is not your first choice. Second, you can set aside money in a pet trust, which is a segregated fund you create as part of your will or in a separate agreement during your lifetime. You name a trustee to distribute funds to the pet’s guardian (the owner) or make payments directly to veterinarians, groomers, dog-walkers and other service providers. 

Q: Could I Simply Leave Money to a Trustworthy Friend?

GERRY: Yes. It is possible to leave a sum of money to a friend and request that the funds be used to take care of your pet. But the downside of this approach is that the request would not be legally binding, so the recipient could theoretically use those funds for other purposes, including the possibility of being legally required to pay a claim made by one of his or her creditors. Instead, you might consider creating a trust that is managed by a professional trustee and naming a friend or family member as beneficiary. Then you can include language in the trust document instructing the trustee to make special payments to the beneficiary who takes care of your pet.

Q: Why Is the Trust Document so Important?

GERRY: When you create a trust for your pet, the trust document allows you to spell out its purpose in detail. For example, in addition to specifying that the trust is intended for the “care of” your pet, the trust document should articulate exactly what you mean by “care.” It can be interpreted in many ways—from basic services such as medical attention and shelter to specific preferences for different types of food, veterinary care, treats and dog-walking services (apologies to cat owners for singling out dogs). It might also include directions for grooming and set your expectations for special activities your pet enjoys, such as a daily romp in the park, mountain hikes or trips to the beach. 

It is also important to include the name of your pet and the name of the pet’s guardian in the trust document so they are both perfectly clear. You might also require the trustee to conduct in-person visits to be sure your pet is being treated well and name a remainder beneficiary to inherit any money not spent on your pet. Finally, while it’s true that cats have nine lives (see, I love cats too!) you should also consider making provisions for what happens at the end of your pet’s natural life, such as directions for a proper burial and/or memorial service.

Q: How Long Can a Pet Trust Continue?

GERRY: Some states limit the term of a pet trust to 21 years, which may not be sufficient to take care of certain types of birds (especially parrots), horses and other pets with especially long lifespans. So, it is important to establish your trust in a state that allows “noncharitable purpose trusts” to take care of your pets as long as they are living and can also take care of their offspring.  

Q: How Much Money Can I Leave to Care for My Pet? 

GERRY: You can leave as much money as you’d like, but trust laws in many states allow the courts to reduce any trust that is deemed excessive. The most famous example of this situation is the case of Leona Helmsley, heiress to the Helmsley Hotel fortune, who made headlines by leaving $12 million to a Maltese named, appropriately enough, Trouble. A New York judge ruled that the dog’s inheritance was unreasonable (excessive) and reduced it to $2 million. 

Although Trouble did not live a life of austerity (his daily menu reportedly included fresh chicken and vegetables prepared by a Helmsley Hotel chef and served on fine china) the Helmsley case illustrates the power of the courts to reduce the size of pet trusts. Large bequests for the benefit of a pet can also open the door to financial abuse. For example, we have heard of cases in which the pet died, and the guardian went out and bought a new pet that looked exactly like the original so he or she could continue to collect a stipend. Some, but not all, of these problems can be avoided by constructing a proper trust document. 

Q: What Are the Most Unusual Trust Provisions You Have Seen? 

GERRY: We have seen all kinds of special provisions included in pet trust documents, so I wouldn’t describe any of them as “unusual.” The number of special provisions you can include is virtually unlimited—all you must do is think about the things you do for your pet today and include them in the trust document. The challenge is that turning your wishes into reality can be expensive and not everyone is in a financial position to leave millions to care for their beloved pets. 

Even so, most people have a deep and abiding love for their pets, and the growing popularity of pet trusts proves that our love (and financial support) continues even after we’re gone. 


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