Geraldine Tomich, Esq.
You may remember the richest dog ever – Leona Helmsley’s lap dog, Trouble. Helmsley left Trouble a $12M-inheritance in trust. Sounds crazy? Perhaps, a court thought so too and reduced Trouble’s trust down to $2M. It had to be in trust, of course, as Trouble cannot sign checks. Well, creating a trust for your pets might seem crazy to many, but I have been seeing it more and more. Yes – I have been creating trusts for pets.
Pet owners are faced with the dilemma of planning for the care of their pets upon their death. The law treats animals as personal property that can be bequeathed away (like a car, for instance). But for pet owners
, pets are part of the family who also requires care and financial support. Unlike our children who we know (or hope) will grow up and become self-sufficient adults, we do not have such an option for our pets. As an estate planning professional, this steers the conversation to the creation of a pet trust. So what is a pet trust, exactly?
A pet trust is a legal arrangement that you make for the care of your pet or pets upon your death or incapacity. Specifically, you set aside a sum of money to be entrusted to someone who is charged with ensuring that your pet is cared for. Typically, this is a family member or close friend who you know will love and care for your pet, and who is also trustworthy to use the money for your intended purpose.
What to consider when preparing a pet trust:
- Multiple Pets – If you have more than one pet, have they bonded? Do they need to stay together or would it be easier to find separate homes?
- Choosing Pet’s Caretaker – Who will care for your pet? Make sure that they accept the responsibility before putting your wishes in writing. I also recommend naming an alternate caretaker should life circumstances change to where your designated caretaker cannot undertake the care of your pet when the time comes. Stay in communication with the caretaker so you are ready should circumstances or plans change.
- Financial Considerations
a. Who will manage the money? Will you also entrust your caretaker to manage the funds? The main deciding factor here is whether or not you trust your caretaker to manage the money appropriately. The amount you leave for your pet is also a major consideration.
b. What is the appropriate amount of money to leave for your pet’s care? Many things need to be considered when deciding this, such as: pet’s age, health, lifestyle, estimated life span, compensation for the caretaker, and many others.
If you are compelled to leave a substantial amount of money for your pet, you need to consider the possibility of it causing any contention with family members, enough for them to sue your estate and have the amount overturned. Of course, there is not a magic number or specific rule-of-thumb that will apply here as this consideration is unique for every family. How hurt or greedy are they? Is the amount obscene? One must admit that $12M is pretty crazy!
c. What happens to any leftover funds after the death of your pet? What if the funds run out? The former question is easier to plan for than the latter. You can always give the remaining funds to your family members, the caretaker, or charity; however, there may not be a source of funds to replenish the pet trust when the funds are exhausted.
While this article may appear to leave more questions than answers, the main point is that there are indeed a lot of items to consider when creating a pet trust and this is not a one-size-fits-all structure. When you start getting overwhelmed with the various considerations enumerated above (which is not even an exhaustive list), zoom out and look at your overall goal and the reality of what you can really control.