Estate Planning for Your Pets
Most families’ estate plans cover a broad range of contingencies dealing with the care of their property, and of course their children. However, sad but true, we plan for everything in our lives but often fail to plan for the future of our pets.
Some time ago, I heard of the story where a person’s will left a significant amount of money to a named custodian for a dog which is a wonderful gesture for the custodian considering the dog had been dead for a number of years.
Not all pets die sooner … many have very long life expectancies. Take Cockatoos; they might live up to 70 years, or that warm, cuddly ball python wrapping itself around your feet might live 40 years or more.
I admit to not giving this much thought until I read a recent article on this subject by a planner, Arthur Kroll, in the January issue of Financial Planning magazine. Mr. Kroll sets forth a number of excellent suggestions on how to ensure a pet is properly cared for in the event of the owner’s death or disability. He suggests starting by selecting a willing and able caretaker in the event of the owner’s incapacitation. The owner should create a pet card (with a photo) identifying the pet and naming the caretaker. The caretaker should be given appropriate information about the care and feeding, medications, emotional needs, and behavioral issues.
Another appropriate suggestion is to write a living will for the pet. This document will instruct the veterinarian how far he/she should go to keep a pet alive in the case of serious injury or illness. When you have a beloved pet, this is something that you may want to think about.
An integral component of any estate plan is a durable power of attorney. Pets are considered tangible personal property and the person named in the durable power should be willing to care for the pet. If not, the owner should prepare a second document dealing with the caretaker and compensation for care of the pet.
Some states have adopted enforceable pet trusts enabling owners to transfer funds for long term care into a trust. The named trustee is responsible for seeing to the proper care of the pet. To ensure that the funds are spent properly, the grantor of the trust must also name a third party to oversee the actions of the trustee.
In states where pet trusts are not enforceable, the owner may wish to set up a traditional trust that names the trustee as a contingent beneficiary. The trustee is a fiduciary with fiduciary obligations to the pet. As long as the pet lives, the trustee receives distributions from the trust for the benefit of the pet.
A word of caution … this type of planning is not common and requires the assistance of a competent and experienced professional.
But, given the wide range of pets, extended life expectancies of some, and the love and devotion shared by owners, it is a part of estate planning that should not be overlooked. If you need to speak with an experienced financial advisor to explore the options available to protect your pets, give our office a call!