Estate Planning for Pets
In 2020, Americans spent over $100 billon on their pets’ health. Estate planning, however, for these animals is often forgotten or ridiculed as a waste of time and money. While there are laws against animal cruelty, pets are still considered property in Pennsylvania.
You can leave your faithful companion to a friend or a family member but your Will can’t provide for its long-term care and needs. If you’re spending money on your pet during your life you obviously care about its well-being. While most people joke about estate planning for a pet, most pet owners would want to ensure that some one cared for their animal after their death.
Pets are a different type of “property.”
Since pets are property, much like a house or a car, they can pass through your Will upon your death. While you can transfer a piece of property like a house to someone else you can’t require the new owner to maintain or care for it in a specific way without some type of supplementary document or agreement. Unlike a house, a pet is obviously a living thing whose health can drastically change in a very short period of time without proper care.
It normally takes between 6-9 months to settle a person’s affairs with the state and federal government. During this time, it’s not unusual for houses to remain vacant, cars to remain in the garage, jewelry in a safe deposit box, and money in investment accounts. Obviously natural disasters and other unforeseen occurrences (fires, floods, stock market crashes, etc.) can damage assets but their lack of use during the probate process will not, in most cases, harm them.
Pets, however, require immediate and constant attention. Even if the Will names a new owner there is no guarantee that the new owner will accept the pet or have the financial means to care for it. There are many situations where a person is named as a pet’s caretaker in a Will but after the Testator (person who has died) passes away the new owner, for whatever reason, turns the pet away.
How you should plan for your pet.
If you are going to plan for your pets’ care after your death, it’s important that in addition to naming a caretaker you consider a trust for the pet’s care. You should estimate the amount of money to leave based on your current annual expenses for your pet and its life expectancy. In addition, the “pet trust” should name an alternate caretaker and provide very specific instructions regarding the pet’s care so that in the event the current caretaker fails to follow your instructions there is a backup.
All pet trusts should contain the following elements:
- Settlor – The person making the trust and the current pet owner;
- Pet guardian – The person or organization that will care for the pet after you die;
- Funding source – The money that will pay for the pet’s care (funds can come from any part of your estate including a percentage of a bank account, 401K, or even a portion of proceeds from the sale of a home);
- Remainder beneficiaries – The person, group or organization who will receive the funds after the pet’s death).
If you care about your pet during your life you shouldn’t be embarrassed about planning for its care when you’re gone. If you don’t plan for its care after your death you are risking that your pet’s quality of life will suffer after your passing.
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