As a pet lover, you might joke (or daydream) about leaving your pets everything you own when you are gone. Because they’re not just pets; they’re family. They’ve been by your side through thick and thin, offering unconditional love, endless comfort, and the occasional slobbery kiss or chewed-up shoe. But what if you could leave them everything—your home, your savings, and even your favorite sweater they like to curl up and snuggle in? The good news is you can legally ensure that your furry, scaly, or feathered friends are cared for when you’re no longer around. The secret? A pet trust.
Let’s dive into the nuts and bolts of this delightful and practical estate-planning tool that ensures your beloved companion lives out their golden years in comfort and love, and maybe with a few extra belly rubs or head scratches, too. Spoiler alert – it’s more than just a plan to fund a lifetime supply of treats and toys, though that is undoubtedly part of what it’s used for!
What Is a Pet Trust?
A pet trust is a legal arrangement that allows you to set aside funds and assets to ensure your pet will be financially supported and cared for according to your wishes after you’re gone.
With this type of property trust, you designate a trustee to manage trust funds and assets and ensure your pet’s needs are met. A pet trust can operate in your lifetime or after you pass away, and some people use them when they become incapacitated or otherwise unable to care for their pets.
Unlike a simple will, which might leave a lump sum to someone who has to figure out how to care for your pet, a pet trust directly allocates funds for your pet’s specific needs and designates a caregiver or trustee to manage those funds.
Think of it like a special “care package” for your pet, with instructions on how to care for them, where they’ll live, and how their daily needs (food, medical care, grooming, etc.) will be met—all funded by a trust that you set up while you’re still in the picture.
Related Article: What Are the Best Assets to Put in a Trust?
How Does a Pet Trust Work?
While a pet trust does work similarly to a more conventional irrevocable or revocable trust, these trusts serve a more niche and specialized purpose. Here’s an overview of how these unique trusts work to ensure they can fulfill their purpose.
Setting It Up
First, you need to create a legal document with the help of an estate planning attorney that specifies how your pet should be cared for, the exact amount of money allocated to their care, and who will manage that money.
This will take some thought because you must determine and outline your pet’s specific needs in the document. When establishing this type of trust, consider things like food, daily walks, shelter, veterinary care, and yes, even their squeaky toy addiction.
The key here is that your wishes are legally binding, and the funds are managed in accordance with those instructions. Keep reading for more detailed information regarding setting up this type of trust.
Related Article: How to Set Up a Living Trust in California
Naming the Animals
Your pet will be the de facto beneficiary of this trust, so you need to designate them in the trust document. An animal not named in the trust will not be included. As a result, they will pass to your family through the ordinary probate process.
Choosing a Trustee
Just like with a human trust, you’ll need to choose a trustee. The trustee is the person (or organization) who will manage the funds and ensure they’re used for your pet’s benefit. You will want to pick someone responsible to manage the trust funds and assets and oversee your pet’s care.
You could select a trusted family member, close friend, or professional fiduciary specializing in managing trusts and trust accounting. Being a trustee requires a specialized set of administrative, financial, and organizational skills. Also, ensure the person you choose has a big heart for pets!
Related Article: Who Should You Name as a Trustee? Why to Hire a Professional Fiduciary!
Designating a Caregiver
In addition to a trustee, you’ll also need to designate a caregiver, sometimes called a guardian. This person will take care of your pet.
The caregiver could be a family member, friend, or pet-sitting service. The caregiver’s job is to follow your instructions about your pet’s daily routine, diet, exercise, and other needs. In other words, they will be responsible for the day-to-day care of your pet.
Funding the Pet Trust
Now, the trust needs money to work its magic and ensure this furry tale has a happy ending. Specify how much you want to allocate to your pet’s care, and the trustee will manage those funds on behalf of your pet. The more detailed you get about your pet’s needs, the better.
Whether you have a high-maintenance kitty with a penchant for gourmet food, a dog with demanding walking and grooming schedules, or a pet with potential health care needs down the road, it’s essential to cater to your pet’s unique circumstances, pleasures, and necessities!
What Happens to Leftover Funds from a Pet Trust?
Once your pet passes away, the remaining funds in the trust typically go to a charity or person you’ve designated in the trust document. But funds can also be returned to your estate.
This flexibility is a great advantage. You can specify what happens with leftover funds in your pet trust, so there’s no confusion about what should happen when your pet’s time on Earth ends. This will help avoid disputes that could arise among family members.
Why Should You Consider a Pet Trust?
As much as you love your pets, they’re not considered heirs in the eyes of the law. So, how do you ensure they’re cared for after you’re gone? This is where the pet trust shines! The most significant benefit is receiving peace of mind and securing your pet’s well-being – no questions asked.
If you don’t create a pet trust and something happens to you, your pet becomes part of your estate. Without specific instructions, your pet will likely be left in the care of someone you’ve named in your will, or they could be subject to intestate succession, meaning you have no say in the matter. Even worse, that person may not have the financial resources or knowledge to provide proper care.
There could also be some tax benefits if your contributions to this type of trust qualify as charitable donations. This benefit depends on several factors, like the type of trust, and it’s crucial to consult with a financial expert and attorney to determine if it applies to your situation.
However, some people wonder whether or not a will is enough in these situations. The reality is that it is insufficient to provide your pet with the care and quality of life they need for a few reasons.
A Pet Trust vs. a Will
While you can certainly leave your pet to someone in your will, there are significant differences between a will and a pet trust, and several areas where wills fall short. Here’s what to know:
- A Will Doesn’t Ensure Care: A will might say, “I leave my dog Fluffy to my niece Sally,” but it doesn’t make sure Sally has the resources or knowledge to care for Fluffy properly. A pet trust, on the other hand, directly funds your pet’s care and outlines exactly how your pet should be treated, even if the person you’ve left them to isn’t financially prepared to care for them.
- Pets Are Not Property: Sure, pets are legally considered property, but they’re much more than that. A will doesn’t specifically allow for their care beyond ownership transfer. A pet trust, however, treats your pet’s well-being as the primary focus without burdening someone with the financial or emotional strain of caring for them.
- Ongoing Care: A pet trust ensures your pet gets ongoing care. A will only activates after death, which could leave a gap in care if your designated person is not immediately available or willing to look after your pet.
How to Create a Pet Trust
As we mentioned above, the process of creating a pet trust is similar to setting up a revocable or irrevocable trust. Here is a step-by-step guide to setting up a pet trust:
- Consult an Estate Planning Attorney: The first step is to find an experienced estate planning attorney who can guide you through the process of setting up a pet trust. Remember – this isn’t a DIY project. This is a legal document and arrangement, so it needs to be carefully drafted with detailed care instructions to ensure your wishes are clear and enforceable.
- Choose Your Trustee and Caregiver: Take your time choosing the right people (or organizations) for the roles of trustee and caregiver. It’s important to pick individuals who are trustworthy, responsible, and comfortable handling your pet’s specific needs. Bonus points if they love pets as much as you do.
- Designate Your Pet as Beneficiaries: You need to correctly identify each pet you want to provide care for in the trust document. This can require using names, descriptions, photos, microchips, and possibly even DNA samples.
- Fund the Trust: You’ll need to allocate a reasonable amount of money to cover your pet’s lifetime care. The amount depends on your pet’s age, health, and lifestyle. Keep in mind that the more specific your instructions, the better
- Review and Update: Like any other legal document, you should review your pet trust periodically to ensure it reflects your pet’s changing needs, your evolving wishes, and any additions to your precious pet family! If your pet’s health condition changes or if you want to add new instructions, make sure to update the trust.
“A pet trust is a great legal tool for pet owners. While your pet may be the king or queen of the castle right now, technically speaking, they’re still considered property, and one piece of property cannot legally own another, so they cannot inherit from you. But by setting up a pet trust, you are leaving your beloved companion a golden ticket for unlimited luxury – minus the family drama and the risk of a nine-life legal battle.”
– Marcia L. Campbell, CPA, Private Fiduciary, and Professional Trustee
Ensure Your Estate Plan Accounts for Every Family Member, Including the Furrier Members! Work with a Professional to Set Up a Pet Trust.
A pet trust is the perfect way to ensure your beloved pet is well taken care of after you’re gone. By setting up a pet trust, you’ll provide them with the security and yourself with the peace of mind that comes from knowing they’ll be loved, cared for, and supported, no matter what. Still, like any other aspect of estate planning, a pet trust requires some legal four-legged legwork. But rest assured – your pet will thank you for it with an extra tail wag or purr in gratitude.
If you’re ready to start planning, reach out to an experienced attorney who can help you set up and manage a trust that’s as unique as your pet. You both deserve peace of mind, and your pet’s future just might be a whole lot brighter because of it.
