Pets are part of the family. They eat special food, require daily care and medications, and even sleep with their owners at night. But have you considered actually leaving money to your pet after you die? It may sound crazy, but under the law, pets are considered tangible personal property, similar to a car, jewelry, or furniture. Therefore, you can and should consider including your pet in your overall estate plan, because otherwise you risk your pet going to a shelter or being left homeless after you die.
For starters, it is important to consider who would take care of your pet in the event that you die. If you do not have anyone to care for your pet, consider reaching out to a charitable organization. Oftentimes, such organizations will agree to take pets and find them a good home. This option should be planned in advance though, as most organizations require that you either leave them a specific sum of money or sign an agreement regarding this plan.
Once you have determined who will care for your pet, decide whether you want to include your pet in your Will or create a separate pet trust. Each of these has its pros and cons.
Option #1: Include Your Pet in Your Will
Most people choose to include pets in their Wills because doing so is simple and straightforward, and (usually) relatively inexpensive. A benefit of this method is that you can state in your Will who you have chosen to inherit your pet upon your death. You can also leave a sum of money for the pet that can be used for its care. This sum of money can be conditioned on the person agreeing to care for your pet, which means that the person will only receive the money if he or she accepts the pet.
This approach does have its drawbacks, however. A significant downside is that once the chosen caregiver takes your pet and the money, there is no guarantee that the caregiver will actually use the money to care for the pet. In addition, the caretaker can choose to give the pet away after he or she has assumed guardianship of the pet. Therefore, if you decide to go this route and use a Will, it is imperative to choose someone whom you trust to keep and care for your pet.
Option #2: Create a Pet Trust
If a Will does not give you enough assurance, consider creating a pet trust. A pet trust is a legal document that can stand alone, or be part of an overall trust document used in your general estate plan. With a pet trust, you set aside money with specific rules as to how the money must be used for your pet’s care. The trust holds a sum of money to be managed by a Trustee, and the money is used exclusively for the care of the pet.
You can leave custody of your pet to a specific person (usually referred to as a caretaker), who would then go to the Trustee to obtain the allotted funds for the pet’s care. Many states, however, including Massachusetts, allow you to actually leave ownership of the pet to the Trustee, in addition to money. The Trustee is then responsible for not only making sure the funds are used for the pet’s care, but also for ensuring that a caretaker properly cares for the pet. And, if the Trustee is the owner, the Trustee is also empowered to switch caretakers if a problem arises with the current caretaker.
While the major benefit of a pet trust is that it provides more assurance your pet will be cared for as you wish, a pet trust will cost more in attorney fees to set up. Though this may at first deter you, keep in mind that there are many decisions to be made with a pet trust. Whom should you name as your pet’s caretaker? Whom should you name as Trustee? What type of pet care should the trust cover? How much money should you leave to the trust? We can help you sort through these decisions and figure out what is best for you and for your pet.
When determining how much money to leave to your pet trust, factor in the overall cost of care for the pet’s lifetime, any special needs such as diet and medication, grooming, and boarding, as well as additional funds for unforeseen circumstances such as an injury or surgery. Typically, we recommend that clients calculate their annual costs to care for the pet, multiply that number by the pet’s life expectancy, and then round up for unexpected contingencies. Keep in mind that health care costs for senior pets can increase significantly, which needs to be factored in as well.
Weigh the pros and cons of a pet trust versus a Will based on what works best for your family, your pet, and your financial situation. Know that with either option you will have peace of mind, having secured some sort of care for your pet.