Today’s financial and estate planning tools give us lots of options when it comes to looking after our human loved ones postmortem, such as life insurance, wills, trusts, holding property jointly, etc. But what about our other loved ones—our pets?

Introducing the Pet Trust!

What is a pet trust?

A pet trust is a legal arrangement providing for the care and maintenance of your pets should they outlive you. Pet trusts are created to ensure that your animal is cared for, and you have peace of mind knowing your faithful companion will be in good hands.

How is a pet trust created?

The pet trust can be created in a few different ways. For instance, you can create a pet trust within your own living trust, or you can create a testamentary pet trust in your will. You could also create a stand alone trust for your pet, but it is more cost effective to include it in your own estate plan.

How does the pet trust work?

You choose a caregiver (the trustee) and leave instructions about which type of food you prefer your pets eat, which veterinarian should be responsible for managing their health, and how they should be groomed. You also set aside funds to pay for your pet’s care and maintenance.

For example: You have a cat and a dog. Together they have an average life expectancy of 15 years. Their care costs, including vet visits, food, boarding, grooming, and costs you around $5,000 a year. You could create a pet trust and fund it with $75,000, which would cover the costs of the pets for up to 15 years. You could include instructions for the trustee that if any funds are left over when the trust expires, they should be donated to your local ASPCA or pet rescue organization.

All 50 states have laws that recognize pet trusts, though the wording may vary from state to state, and not all are enforceable.

For example, Alaska’s law specifies that pet trusts are allowed for designated domestic or pet animals. Other states, including Arizona and California, only mention “animals” in the wording of their pet trust statutes.

For those states with enforceable pet trust laws, people are allowed to petition the court if they have reason to believe that the animals’ welfare is not being properly maintained.

I would not counsel all my pet owning clients to include a Pet Trust in their estate plan. But for those who keep pets with exceptionally long life spans—such as parrots 70 years, horses 35 years, box turtles 30 years, or clients who run animal rescues, should consider creating a trust to look after their animals when they are gone.

Some of the pet trust pros….

Pet trusts create a legal obligation to care for your pet in accordance with your wishes,

• It provides accountability for the funds you leave to the caretaker, and
• It allows you to set up a care plan that will take effect if you become incapacitated and are no longer able to care for your pets.

And the cons….

They are inflexible if circumstances change after your death

• They are not always enforceable
• They can be altered by the court. For example, Leona Helmsley left a hefty portion of her estate to her dog while disinheriting grandchildren. The court however reduced the amount of money in trust for the dog and distributed a portion to the disinherited grandkids.

Pets are treated like family members these days, but it wasn’t always so. Just a few decades ago dogs slept outside in dog houses, cats were kept outside and expected to sustain on whatever they could hunt and catch. Now we pamper our pet. But if don’t make arrangements for your pet in your estate plan, the care your pet gets depends upon what arrangements you’ve made, or not made. For instance, if you have no estate plan, your possessions will pass according to state law, and your pets are considered property for these purposes. Thus, you should consult with an experienced estate planning attorney to ensure your pets are properly cared for when you are no longer able to.