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When you think of estate planning, it’s common to think only of humans. But, if you want to make sure that your pet maintains a pleasant life after you pass away, one option is to include it in your will (since they are legally owned) and specify which person or place receives it. You could also leave a certain amount of money for that person to use for pet care. In that situation, you would generally want to speak to that person ahead of time if you could to let them know that the money you are leaving is for the pet.
However, if you’re not convinced that you can trust the pet’s sitter to properly budget for and maintain the remaining money for the pet as well, or if you want to avoid probate delays, you may be able to set up in Pet Trust. Most states now allow pet trusts (talk to a lawyer to find out your state). Since 2005, Illinois has provided for the creation of Pet Trusts. Allows you to form the trust and designate a trustee to manage the money in the pet expense trust. This trustee has a fiduciary duty to properly manage the money in the trust. The trustee may be the same as the caretaker, or may designate a custodian to physically care for the pet. One way to form a Pet Trust is to create it “intervivos” so that it starts while you are alive. You can add yourself as a trustee and custodian until you die, and have the trust specify subsequent trustees and custodians. Creating it before death means you will avoid probate (probate = extra time and money).
Here are some common issues you’ll want to think about if you’re going to hire a lawyer to create a Pet Trust for you.
First: the amount of the trust. Funding the trust with the right amount is tricky. You don’t want to go short, as at that point there is simply nothing the trustee can do for the funds once the money is gone. You also don’t want to go to the extreme like Leona Helmsley and leave $10 million to your dog, because the courts can reduce the amount if it’s deemed unreasonable. So in the “funding equation” consider a few things. First of all, the type of pet itself will matter. A horse, for example, probably costs more to maintain than a dog or cat. Second, you should consider the trustee’s fees and possibly attorney consultation fees if the trustee seeks advice on a situation. Third, you’ll want to estimate the pet’s annual expenses for food, vet bills, and living necessities (examples: kitty litter, wood chips, bones, etc.) and then multiply that by the number of years the pet He can live. Also, keep in mind if that breed is susceptible to certain diseases and could require hip surgery or some other major surgery. Fourth, you’ll want to cover any emergency vet bills (example: surgery). Fifth, cover end-of-life costs for the pet, such as euthanasia, burial, or cremation. Sixth, consider any annual/monthly compensation for the animal’s caretaker. Finally, add those costs up and consider adding an extra 5-10% to make sure everything is covered, just in case. All told, $8,000 to $20,000 seems to be common average amounts for pet trusts that cover dogs and cats, but your situation may be different and less or more may be appropriate.
Second: care instructions. You will want to discuss a few things about caring for the pet. List the type of home the pet is used to living in. After all, if you have a “lap dog” that never goes outside, the sitter should know about it, and it should also be mentioned in the pet trust. Mention any health problems you currently have. Also mention the dietary or nutritional needs of the pet.
Third: Identification. You’ll need to identify the pet for the trustee, so there’s no mistaken identity, or so a caretaker can’t substitute a pet to keep the trust money coming in (you never know). Common ways to do this are to provide a photo of the pet or have your dog microchipped. That should eliminate any potential confusion for the administrator. These are other things to think about besides the information in the last post.
Some other notes:
- If you do not name a trustee in the Pet Trust, or the one you named is unable to serve, the court may appoint one.
- You can specify your wishes for the pet’s boarding, food, and health, and specify any compensation to the pet’s sitter and trustee (trustees may have set fees depending on who does it).
- The trust ends upon the death of the pet.
- Typically, you will want to indicate in the Pet Trust where you want the remaining money to go after the pet dies.
Of course, all of this information is subject to your own circumstances and the state in which you live. So if you’re thinking about getting a pet trust for your small dog, cat, hamster, or horse, talk to an estate planning attorney in your state.