When planning for loved ones, don’t forget to include your furry friends. As our love for our pets reaches new heights, estate planning for pets has become popular. If an owner wants to ensure his or her best buddy is well cared for after he or she passes, it is essential to do some estate planning for your pets.
Joan Rivers once said, “A study says owning a dog makes you 10 years younger. My first thought was to rescue two more, but I don’t want to go through menopause again.” Although Rivers joked about restraining herself from adopting two more dogs because she didn’t want to de-age herself more than 20 years, it was obvious she loved her pets. Among these pets were two rescue dogs living in her New York residence and two other dogs that lived with her in California. To Rivers, these dogs were more than just pets. They are considered her essential family members. Thus, it is no surprise that Rivers wanted to ensure her dogs were well provided for after her death.
Rivers taught the world an important lesson about estate planning for pets. Rivers chose to create a pet trust to ensure that her dogs would receive the proper care after her death. A pet trust is a legal arrangement that provides for the care and maintenance of your pet in the event of your disability or death. Much like a normal trust, the person who creates the pet trust is known as the “trustmaker” and the person who is entrusted with the funds is called a “trustee.” Additionally, similar to other trusts, a pet trust needs to be funded by transferring money or other property into the trust for the care of the pet. Then, when it is appropriate, the trustee will distribute amounts to the pet’s designated caregiver to ensure the pet is well taken care of.
Although Rivers’ estate was large enough that leaving money for the care of her dogs was not financially burdensome, it is a common misconception that you need a large amount of money in order to provide for their pets through formal estate planning techniques. This is untrue. When considering how much money or other property to transfer into the pet trust, one needs to consider the following:
- The life expectancy of your pet;
- Standard of living you wish to provide for your pet including grooming, food and diet, and daily routines
- Health history and the possibility of future costly health treatments; and
- Whether you want the trustee to be compensated for his or her services.
Whether or not you decide to use a trust, it is critical to determine who should care for your pet after passing. Hundreds of thousands of pets are surrendered to shelters and euthanized each year because their owner passed or could no longer care for the pet.
The first and most important step in estate planning planning for pets is deciding who the pet’s caregiver will be. Consider the potential caregiver’s willingness to assume the responsibilities associated with caring for a pet, the ability to provide a stable home for your pet, and the relationship between the caregiver and his or her family and your pet. It is suggested that the trustmakers check with the potential caregiver before designating the position. In the event that person cannot take the pet, avoid having your beloved pet end up homeless by naming a sanctuary or a no-kill shelter to take your pet if no one is able or willing to provide the care your pet needs.
It is also important to note that a person making a pet trust should always name a “remainder beneficiary.” A remainder beneficiary will receive any remaining trust property after the pet dies. Generally, it is not a good idea to name the caregiver of the pet or the trustee of the pet trust as the remainder beneficiary because there is less of an incentive to keep your pet alive. Therefore, name a remainder beneficiary that loves your pet as much as you do, or an animal charity.
Without a doubt, critics and people who dislike animals will likely see Joan Rivers’ last provisions for her dogs as another joke. For people who love their pets as much as she did, a pet trust is the best step to ensure your pets are well taken care of when you are unable to do so yourself. We offer both a stand alone pet trust and a pet trust that is part of your revocable living trust. Call Powers & Neal at (480) 699-7992 to discuss how to protect your pets today.