Paule, Camazine & Blumenthal, P.C. posted in Estate Planning on Thursday, April 02, 2015.
Many people consider their pets are as much a part of the family as any other relative. For these individuals, including pets in their estate plans is the best way to insure Fido will be taken care of upon the owner’s death.
The law usually considers pets to be property. That means that failing to plan the pet’s transfer to a new owner means the pet will be distributed through the estate plan (or by state law if there is no valid will or trust) along with the rest of the owner’s property. The result may be unintended consequences, such as leaving your Doberman to your brother, Ralph, who is happy to receive a monetary inheritance but who is terrified of dogs.
Incorporating your pet into a proper estate plan can eliminate this kind of problem. Such planning may be very simple, or complex, depending upon the level of instructions you wish to leave.
Many people provide for their pets in their wills by, for example, leaving Boots, the cat to neighbor Bob, along with $1,000 to help cover the cost of Boots’ care. Even better, a pet trust can provide extra details to more effectively protect your pet’s welfare.
A pet trust may be a separate, stand-alone trust agreement or it may be incorporated into the owner’s revocable trust. The pet trust designates an individual, or a guardian, to care for pets upon the owner’s death, or even during the owner’s life if the owner becomes unable to care for the pet. You can also name a successor guardian in case the initial guardian is unable to serve in that capacity, or declines to do so.
A pet trust may also leave a sum of money to be used by the guardian to care for the pet. The amount is determined by the owner, and usually takes into consideration: the total value of funds in the estate, number of pets, type of pets, ages of the pets, and overall health condition of the pets. In addition, the owner should consider the desired type of lifestyle for the pets.
Unlike a bequest in a will which simply leaves money outright to the pet’s guardian, without assurance the funds will be used for the benefit of the animal, a pet trust names a trustee to oversee the expenditure of the funds, so that funds are properly spent.
Finally, the pet trust will say where any remaining funds in the pet trust go upon the pet’s death. Some owners leave the remaining funds to the guardian, as a token of appreciation; however, this may create a conflict of interest for the guardian. Other owners leave the remaining funds to other individuals or to charities.
Regardless of the instructions left by a pet owner, the owner should consider the possibility of pets outliving him or her, and consider the type of life he or she would like for the pet. Making these instructions part of a proper estate plan can prevent tragic consequences for these beloved family members.