Pets

A pet trust is an excellent way to make sure your beloved pet will receive proper care after you pass on.  The problem, of course, is that you won’t actually be there to see that your wishes are carried out.  It’s critical to set up a pet trust correctly to ensure there are no loopholes or unforeseen situations that could make your plans go awry.  Here are 5 tragic mistakes people often make when leaving their assets to their pets.

1. Appropriating more than the pet could ever need.

The gossip stories about such-and-such celebrity who left his or her entire fortune to a pet are the exception rather than the rule.  Leaving millions of dollars, houses, and cars to your pet is not only unreasonable, but it’s more likely to be contested in court by family members who might feel neglected.  To avoid this pitfall, leave a reasonable sum of money that will give your pet the same quality of life that she enjoys now.

2. Providing vague or unenforceable instructions.

Too many pets don’t receive the care their owners intended because they weren’t specific enough in their instructions or because they did not use a trust to make the instructions legally binding.  Luckily, a pet trust can clarify your instructions and make them legally valid.

If you leave money to a caretaker without a pet trust in place, hoping it will be used for the pet’s care for example, nothing stops the caretaker from living very well on the pet’s money.  But when you use a pet trust to designate how much the caretaker receives and how much goes for the pet’s care, you’ve provided a legal structure to protect your furry family member.  You can be as specific about your wishes as you’d like, from how much is to be spent on food, veterinary care, and grooming.  You can even include detailed care instructions, such as how often the dog should be walked.

3. Failing to keep information updated.

Bill sets up a pet trust for his dog Sadie, but what happens if Sadie passes away?  If Bill gets a new dog and names her Gypsy, but he doesn’t update this information before he dies, Gypsy could easily wind up in a shelter or euthanized because she’s not mentioned in the trust.  This is a common yet tragic mistake that can be easily avoided by performing regular reviews with your estate planning attorney to ensure that your estate plan works for your entire family.

4. Not having a contingency plan.

You might have a trusted friend or loved one designated as a caretaker in your pet trust, but what happens if that person is unable or unwilling to take that role when the time comes?  If you haven’t named a contingent caretaker, your pet might not receive the care you intended.  Always have a “Plan B” in place, and spell it out in the trust.

5. Not engaging a professional to help.

Too many people make the mistake of trying to set up a pet trust themselves, assuming that a form downloaded from a do-it-yourself legal website will automatically work in their circumstances.  Only an experienced estate planning attorney should help you set it up to help ensure that everything works exactly the way you want.

When attempting to leave assets to your pet, the good news is that with professional help, all these mistakes are preventable.  Call or contact us today about your options for setting up a new pet trust or adding a pet trust to your current estate plan.  We’re here to help.

Estate planning is about protecting what’s important to you.  Although much of the traditional estate planning conversation focus on surviving spouses, children, grandchildren, many pet parents wonder about what could happen to their “furry children” after their death or if they become incapacitated and unable to care for the pets.  Read on if you’ve ever thought, “What will happen to my cat, dog, or other pet if I pass away?” “What if I’m incapacitated and unable to care for them?”

Enter the pet trust.  This tool is something that can be easily incorporated into a new or existing estate plan to provide a strategy for caring for your pets.  Remember, estate planning is about protecting what’s important to you.  So, even if you anticipate outliving your pets, it’s always better to be safe than sorry.

How a Pet Trust Works

Although these can be set up as standalone trusts, most pet trusts are incorporated into your overall estate plan.  First, you determine an amount of money you want to leave for the care of your pet.  When the pet trust becomes active (upon your death or incapacity) and while your pet is alive, the money you have set aside will be managed by a trustee for your pet’s benefit.  Second, decide on a caretaker who will have custody and responsibility for the care of your pet.  Lastly, after your pet’s death, the trust will terminate and any money that’s left will be distributed to the remainder beneficiaries you have chosen.

What a Pet Trust Avoids

Frankly, it can be chaos for your pets if you are incapacitated or deceased without a plan.  With the shuffle of so many other tasks, a pet can sometimes be overlooked, abandoned, or even euthanized.  A pet trust provides a legal tool to ensure that your beloved dog, cat, or other pet is not left somewhere or euthanized merely because you are not here any longer.  Proactively including a pet trust is especially important when you have family members that may be unable or unwilling to care for your beloved pets.

The Three Easy Decisions You Will Make

Trusts may seem complicated, but it is a reasonably straightforward process to get your planning in order.  A pet trust is a trust, so let’s start with a quick review of the cast of characters in trusts.  There’s a grantor, settlor, or trustmaker (the person who creates the pet trust – that’s you!), the trustee (the person who will manage the assets of the trust – you select who this is), and then the beneficiaries (who will receive whatever assets are left after the pet passes away – you choose this as well).

In the case of a pet trust, there are three decisions you will need to make to make sure everything works as you intend.

• The selection of the remainder beneficiaries. These beneficiaries will receive the assets that remain, if any, after the pet has passed away.  Some people leave the remaining assets to a favorite pet (or other) charity, whereas others have whatever’s left pour into the children’s or grandchildren’s trust.  The law is flexible, and we can tailor the plan to match your goals.  It is entirely up to you!
• The selection of your pet’s caretaker. You can think of this role as similar to the guardian of minor children.  This will be the person who cares for your pet if you are no longer able to do so.  You can leave detailed instructions or general recommendations for your pet’s care, whichever works best for your pet’s situation.  The trustee will be authorized to distribute money to the caretaker for supplies, vet visits, vaccinations, medications, toys, or whatever else you specify in the agreement.  You can even have some amount set aside for compensation for the caretaker if you wish.
• The amount you want to set aside. Some people estimate the expected cost of caring for their pet over the pet’s expected lifespan and leave that amount, plus a little margin for safety.  With this approach, the goal is to provide for the care of the pet only.  Others want to use the pet trust as a method for caring for their pet, but with an eventual charitable goal (say a local animal shelter).  Many of these people will allocate a large sum of money with an expectation that there will be money left over upon the pet’s passing.  Determining how much to set aside is really about what you are trying to achieve.  We can help you come up with the right number.  Moreover, since these plans are fully changeable, you can always update the amount as your and your pet’s circumstances change.

Planning for the Future

You might be thinking that you will outlive your pets, so there’s no reason to plan.  But, what if you don’t?  The entire purpose of estate planning is to ensure that you have left your wishes known and fully protected your whole family – including your furry, four-legged children.  Give us a call today so we can work with you to protect what’s important to you.