If yours is one of the roughly 65% of households in America that owns a pet, chances are you consider your animal companion a part of the family. Yet many pet owners fail to account for their pets in their estate plans. In the best-case scenario, that omission can lead to confusion for heirs. In the worst case, animals may wind up in shelters or be euthanized or abandoned.
"A lot of people love their pets as much as they love their children," says Matthew Metos, vice president of Advanced Planning for Fidelity Investments. "So it makes sense to consider taking the legal steps to provide for them in the event that they outlive you."
Including pets in your estate plan can help you ensure that they will receive the care they need for the rest of their lives—and can give a pet owner some peace of mind.
Meet with friends and family
The first step in planning for the pets future is to determine who should take care of them upon the owner’s death or incapacity. If you have pets, consider meeting with your family or select close friends to decide on the best candidate for a caregiver. Be up front about expectations, and beware of choosing someone who seems hesitant to do the job. Not everyone is up for the day-to-day responsibilities of taking care of an animal, so it's important to make sure that the person chosen has given their clear consent.
Once a caregiver has been identified, a plan should be put in place that specifies what should happen to pets in the days immediately following the death of the owner. During this difficult time, there should be no confusion about where the pets will be staying, what food and medicine they need, and other basic questions.
Consider a pet trust
To make sure that pets continue to receive the necessary care for the rest of their lives, consider formalizing an agreement. A will may not be the best option for this task. In fact, Rachel Hirschfeld, the founder and co-chair of the New York County Bar Association’s Animal Law Committee, considers this option to be only barely preferable to leaving no instructions about your pets at all. “Leaving a pet in a will is practically a death warrant for the pet,” she says. “They can’t hold their breath until the courts choose the manager of the estate.”
A pet trust is generally a much stronger option to consider. A pet trust is a legally binding arrangement that generally provides for the care of pets should the owner become incapable of caring for them. It lets the pet owner set up regular payments to the chosen caregiver that cover the expenses of taking care of the pets.
"You don't want to shoulder a friend or family member with an unwanted financial burden," says Metos. "So creating a pet trust is a courtesy." He recalls one client who set up a trust to pay for the care of a beloved macaw. “Those king-sized members of the parrot family can live to be 100,” Metos notes. “That’s a long time to be paying vet bills.”
Setting up a pet trust is much like setting up any other kind of trust. The owner decides how much money to put into it, chooses a trustee to oversee these assets, and lays out instructions for the use of the money—in this case, detailing how it should be used to care for the pets. These instructions can include such details as the amount and kinds of food the pets should have, their medical needs, even their daily exercise routines.
Tip: It may be wise to designate different people as trustee and caregiver in order to eliminate potential conflicts of interest, says Metos.
When a pet trust is created, the owner also decides what happens to any money left in it after the pet dies. "Pets don't have the longevity of children," Metos notes. "So you have to think about what's going to happen to the money after they’re gone." The remainder beneficiary can be the caregiver, an animal care institution, or another organization.
Hirschfeld recommends a third option: a pet protection agreement. She notes that it includes all the benefits of a pet trust, but also requires a signature from the pet guardian to ensure that they are aware of the agreement and willing to care for the pet in question. The pet protection agreement is also enforceable during the owner’s lifetime—for example, if the pet owner is hospitalized or otherwise becomes unable to care for their pet.
Read Viewpoints on Fidelity.com: Why naming the right trustee is crucial
Taking the first steps
Pet trust laws differ from state to state, but most pet trusts will continue for the life of the pet or 21 years, whichever comes first. Visit the website of the American Society for the Prevention of Cruelty to Animals (aspca.org) to find out about the pet trust laws across the US. Then set up appointments with your attorney and financial advisor to discuss making your pets a part of your estate plan.
“Although a separate pet trust is still a novelty, we have worked with a variety of clients who want to update their estate plan by creating a provision for pet protection in their trust or will. It is likely that a client has a family member that would like to take care of the dog after they’re gone. However, if they don’t have close friends or family members nearby—or have pets that are expensive or difficult to take care of—that’s when a pet provision typically comes into play as part of the estate planning process,” adds Metos.
Checklist: Estate planning that includes your pets
Including pets in an estate plan can be a relatively straightforward process. Consider taking the 4 following steps in consultation with an attorney and financial advisor:
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