Pet lovers making an estate plan often ask how they can provide for the future care of their pet. This is a natural question since a pet can be an important life companion, especially as people get older.
If you want to provide for your pet after you are gone, there are ways to handle it that are not too complicated and will ensure their well-being.
A Pet Cannot be a Beneficiary
One thing to understand is that you cannot name your pet in your will or life insurance, or leave them money or property directly. The basic reason is that they do not have any legal status. So, even if you do name your pet as beneficiary it will not be enforceable or valid.
Unless you are certain that a friend or family member will care for the pet, you may want to use a legal document to protect their future.
You Can Set Up a Separate Pet Trust
There is an option of setting up a separate pet trust for care of your animal, but there are a few guidelines if you do this:
First, you have to name the specific animal(s) to be cared for, and that the trust will end when they die. A pet’s offspring cannot be cared for with the trust, unless they are already alive and named in the trust. It is a good idea to have your pet individually identified to ensure your specific pet will be cared for, and not another or “replacement” pet.
You also need to name a caretaker of the animal in the trust and it is best if you ask the person ahead of time if they are willing to take care of your pet. The caretaker, and not the pet, is the actual beneficiary of the trust who will be spending the money.
As with any trust, you will need to name a trustee, a trusted person to oversee use of the trust’s funds and ensure it is being spent as intended by the caretaker. The trust will also specify the amount of money to be used for care of the pet, so it should be calculated realistically.
A Few Cautions
While making a pet trust might seem like a perfect solution, you should also consider its impact on the rest of your estate plan. Sometimes, heirs will challenge a pet trust in court, especially if it dramatically reduces their inheritance.
It is also necessary to specify what happens to the trust funds after the pet dies. The remainder beneficiaries can been family members, the caretaker as a gift, or a charity. You should seek the guidance of an experienced estate planning attorney to assist you set up a trust for your pets.