A pet trust is an estate planning instrument in which the owner, called the trustor or grantor, places money or property in trust to be held and managed by another person or institution, called the trustee, to pay for the care and maintenance of the owner’s animals. A pet trust is used when a pet owner wants to leave or set aside funds, in a legally enforceable estate planning document, to ensure his pets receive food, shelter, veterinary care, boarding, and grooming for the remainder of their lives.
When you establish a pet trust, you leave your pet and money or property to the trust. You appoint a trustee to manage the trust and pay expenses for your pet’s care. You also appoint a pet caregiver. The caregiver is to provide shelter, food, and other care for your animals and should be reimbursed by the trustee for these expenses.
How to Include a Pet Trust in Your Estate Plan
To make a pet trust, you should contact an estate planning attorney licensed in your state. As of December of 2011, nearly every state recognizes some form of pet trust. However, a handful of states still do not have a pet trust law. An estate planning attorney can advise you on the steps you need to take to ensure your pets will not be turned over to the pound to be euthanized if something happens to you. For more details on pet trust law, see pet trust information.
There are a few different ways to create a pet trust. You can create a stand alone trust, or an inter vivos trust, which becomes effective immediately and does not go through probate when you die. One of the advantages of this type of trust is the trustee can also manage the funds and provide for the care of your pet if you become incapacitated or disabled. You can name yourself as the original trustee and name a successor trustee to take over in the event of your incapacity, disability or death.
Another option is to create a pet trust as part of your will, known as a testamentary trust. In a testamentary trust, the money or property set aside for the care of your pet first has to pass through probate before it can be used to pay for your pet’s care and other expenses. Because probate can take at least six months to more than two years, using a testamentary trust could result in no money being available to care for your pet while your estate is in probate. Your pet could end up in a pound and be euthanized in the meantime. One reason a testamentary trust is often used is it is usually less expensive than creating a stand alone pet trust separate from your will. However, depending on how you have your estate plan prepared, the cost difference may not be that significant and may be outweighed by the advantages of a stand alone pet trust.
If you choose to create an inter vivos trust, you should have your other estate planning documents, such as your will, living trust, and financial power of attorney, reviewed as well to make sure the pet trust is drafted in a manner consistent with your overall estate plan. If any changes need to be made to your other estate planning documents to incorporate the pet trust, those changes should be made at the same time.
For information on how to fund a pet trust and what happens to property in the pet trust after your pet passes, see funding pet trusts.
Don't Rely on Verbal Agreements
If you have pets and want to ensure they are cared for after you are deceased, you may want to use a pet trust as part of your estate plan. As of 2009, the law does not allow you to leave property, money, or other assets to animals. If you leave money in your will to a relative or friend based on a verbal agreement that he or she will use the money to care for your pets, this person is under no legal obligation. Your friend or relative can keep the money and take no responsibility for your pet. To most pet owners, the thought of your beloved pet being abandoned on the street or left to die is unbearable. But it happens every day. To ensure your pets will have a home, food, and someone to care for them when something happens to you, you may want to set up a pet trust.
Protect Your Pets From Greedy Heirs
If there is an heir or beneficiary of your estate that may object to you leaving a significant portion of your estate in trust for the welfare of your pets, make your lawyer aware of this when drafting your pet trust. One way such person can try to have your pet trust declared invalid is to claim the amount you left for the pets is excessive. For example, if you leave an amount of money in the pet trust that a court finds to be far greater than necessary to care for your pets throughout their lifetimes, the pet trust could be invalidated. Be sure the amount you set aside in trust is reasonable and adequate to provide for your pet’s care, but is not so much as to be considered excessive. Your CPA or financial advisor can help you calculate a reasonable amount to set aside. An estate planning attorney can assist you in drafting the pet trust in a way that may prevent a challenge by greedy heirs.
How to Choose a Pet Caregiver and Trustee
In the trust document, you appoint a caregiver for your pet. The pet trust provides that the caretaker is to be paid for the expenses of caring for your pet out of assets in the trust. The trustee is responsible to manage the assets and disburse them according to the terms of the trust.
The caretaker and trustee can be the same person or you can choose different people to serve in each role. The trustee can also be a bank or trust company. However, the fees and costs of a having a bank or trust company serve as trustee can be expensive. It is usually less expensive to have an individual serve as the trustee.
Before choosing a caretaker, discuss the responsibilities of caring for your pets and what you expect. Examine whether the caretaker has a love of pets and try to envision your caretaker adapting his or her lifestyle to include your pets. If the caretaker has never had pets or seems uncomfortable with yours, you may want to consider other options. Your caretaker may believe there is a financial incentive to agree to care for your pets. If the caretaker is in need of money or has a history of financial problems, consider whether he or she would be prudent with the funds you leave behind for the care of your pets. Also, when asked to serve as caretaker, the person may not want to let you down and may agree to care for your pets out of a sense of obligation. If the person you appoint as caretaker does not have a genuine interest in being around animals, consider other estate planning alternatives, such as a pet retirement home.
How Much Does a Pet Trust Cost?
The cost of hiring an attorney to draft a pet trust varies from firm to firm. A pet trust will typically cost at least $300 or more, depending on a variety of factors, such as how many pets you have, applicable state laws, legal fees in your area, and the number of issues involved in your particular estate plan. You can contact several lawyers and obtain a fee quote or estimate. While the fees to create a pet trust may seem expensive, it may provide you valuable peace of mind to know your pets will have a home after you are gone.
Name a Successor Trustee and Caretaker
To ensure there will always be someone to care for your pets and manage the funds you leave in trust, it is recommended you name successor pet caretakers and successor trustees in your trust document. For example, if the caretaker becomes ill, has to move or changes jobs, the caretaker may no longer be able to care for your pets, despite best intentions. Name at least two successor caretakers in your pet trust. While it is preferable to name successor caretakers with whom you have a relationship, you can also include the names of no kill animal shelters or pet retirement homes as successor caretakers. It is also recommended you name successor trustees to serve in the event your first choice of trustee cannot continue in that role for any reason.
