Have you made plans for your pets in case you die before they do?
Sadly, there are many dogs and cats in shelters because their owners died and made no provisions for their care. This is not just a topic for the elderly, and estate planning for your pet doesn’t have to involve a lot of money.
I’m reminded of hotel tycoon Leona Helmsley, who left an estate worth $12 million to her beloved Maltese, Trouble. Helmsley’s brother was designated to take care of the dog, but he refused to do so. The dog’s ultimate caretaker used some of Trouble’s fortune to hire a security guard, because the dog was the subject of kidnapping threats.
And when Trouble died at age 12, the remaining balance went into a charitable trust to be distributed to causes designated in Helmsley’s estate plan.
That’s taking it to an extreme, but there are some lessons here for all pet owners. Here are a few things you might do to ensure your pet’s care.
The first step is figuring out who is willing to take responsibility for your pet in your absence. It’s one thing for a friend to care for your pet while you go on vacation. It’s quite another thing to take on the responsibility — and the costs — for the remainder of the animal’s life.
If you can’t find a person or people to take care of your animal, you need to find an organization that is willing to take on the care of your pet or will assist in finding a good home for it. A no-kill shelter may be a last resort. But you’ll have more options if your pet comes with a trust fund to pay for veterinary care, grooming and other costs.
You cannot leave money directly to a pet. You can leave money and instructions to a caregiver or you can create a trust that will become active upon your death.
Your estate plan
When you make your estate plan, whether a simple will or revocable living trust, you can designate someone to receive your pets, just as you designate a beneficiary for your artwork, furniture, car or other personal property.
You could also leave a sum of money to that beneficiary, with instructions that it be used for your pet’s care. But there’s no way to enforce that.
Alternatively, you can also instruct the executor of your estate to pay for your pet’s cost of care. But if you have only a will, that involves keeping the estate open and obligated to those payments, prolonging a costly probate process. These distributions might be more easily made by the trustee of your revocable living trust — another reason to choose that form of estate plan over a simple will.
A pet trust
You may be better off setting up an individual trust for your pets, specifying the care that you expect them to receive. Pet trusts are legal in all states. You can fund the trust with a bequest from your estate or with the proceeds of a life insurance policy left to the trust as beneficiary.
The trustee and caregiver can be separate people. You’ll need to leave instructions about distribution of any remaining balance after the death of your pet.
You can specify the kind of care you expect the pet to receive and name a successor caregiver in case the person you choose is unable to act. But all of this should be done with an attorney, and creating the trust could be somewhat expensive.
More than two-thirds of American families have a pet, and most consider them to be part of the family. So if you have a pet of your own, make plans in case of accident or your untimely death. And that’s The Savage Truth.
Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” She responds to questions on her blog at TerrySavage.com.