What Would Happen to Your Pets in the Event of
Your Disability or Death?
Why Plan for Your Pets?
Across the nation, every day many pets are euthanized because their owners are no longer able to care for them and there is nobody who steps forward to take on that responsibility. Your pets give you love and affection. And, they depend on you for their very lives.
When the day comes that you are no longer able to provide for their care, your estate plan can ensure that your wishes are known to those who will care for them. Without a plan, their fate is unpredictable – and in the hands of others.
- Appoint a caregiver to take care of your pets
- Give directions about your pet’s needs and routines
- Appoint a trustee to oversee your pet’s caregiver
- Provide a source of funds for your pet’s care
- Protect the money designated for your pet’s care
Providing Funds for Your Pets’ Care
Planning also can provide the money needed for the care of your pets. Some pets live a very long time, so planning is needed that lasts for your pet’s life or at least as long as the law allows if that is shorter. An outright gift to a caregiver is risky because, once delivered, they are subject to the caregiver’s misuse, creditors, marital disputes or bankruptcy. Also, if you make an outright gift of money to a caregiver, it will go to the caregiver’s beneficiaries at his or her death and may not be available or used for your pets’ care.
Appoint a Separate Trustee
A safer plan, which we recommend, is to make the gift in trust. You should not appoint the caregiver as Trustee because you need the Trustee to oversee the ongoing care of your pets to make sure that the caregiver is treating your pets in the manner that you have specified. Appointing a separate Trustee allows for a double-check that the money you have set aside for your pets’ care is properly used for that purpose. If there are funds remaining after your pet’s death, the trustee will distribute those funds in the manner you specify.
Give Directions for Your Pets’ Care
You can provide directions regarding your pets’ medical conditions, health care, exercise needs, dietary needs, preferred veterinarian, and burial. Provisions for immediate access to your home for caregivers also can be made.
HOW WE CAN HELP
A pet owner all his life, Dick Brown works closely with pet owners to help ensure that their pets will be properly cared for in the event that they can not longer provide the care themselves. He will be pleased to work with you to design your estate plan to take account your wishes for the care of your family, your pets, and your property.
When you sign your estate plan documents, we will provide you with a card to keep in your wallet to help make sure that someone can begin to care for your pets as soon as possible when the need arises.
To get more information, just give us a call or send us a message through our Contact Us page.
Pet Planning FAQs
What is a “pet trust.”
A “pet trust” is a legal agreement under which property is entrusted to a Trustee to be used to take care of one or more identified animals. Any kind of animal can be the object of a “pet trust,” not just household pets. Many pet trusts are established to provide care for animals that have rather long lives, such as horses, parrots, and even Texas longhorns.
Pet trusts are a recent innovation in the law and are now permitted under the laws of thirty-nine states (including Texas). However, of the four states that border Texas, only Arkansas permits pet trusts.
What are the principal rules for pet trusts in Texas?
Texas has some significant restrictions on what pet trusts can provide. Some of them are:
- The trust purpose must be to provide for the care of one or more animals.
- All of the animals have to be alive during the life of the trust creator. That means you cannot create a trust “for my beloved cat Fluffy and her descendants.”
- If the trust is for the care of more than one animal, it will terminate when the last animal dies.
- It cannot last longer than 21 years beyond the death of an identified living human or the last survivor of an indentified group of living humans. This can be problem with particularly long lived pets, like some tortoises.
- It cannot hold more than the amount of property needed to carry out its purposes. Remember Leona Helmsley who tried to set aside $2 billion for the care of her dog Trouble?
- It can appoint an Enforcer to make sure that the terms of the trust are carried out. If it does not, a person interested in the welfare of the pet can ask the court to appoint someone to enforce the trust.
Can I make my pet the beneficiary of a life insurance policy?
No, you cannot. Pets cannot be beneficiaries of life insurance policies or retirement plans or accounts.
Can I make my friend the beneficiary of a life insurance policy and require him/her to use the money to take care of my pet?
If you name a friend as the beneficiary of a life insurance policy, the money is theirs. Even if you make them taking the money contingent on them taking your pet, once the money is in hand, the friend can take the pet to a shelter or have it euthanized or just turn it out and still keep the money.
How can I make sure that the proceeds from an insurance policy are used to take care of my pet?
That is an excellent use for a pet trust. The life insurance proceeds will flow into the trust and can then be used to take care of your pet.
Does the trust have to name the person who will care for my pet?
No, it does not. One of the jobs assigned to your Trustee can be to find an appropriate placement for your pet. Your pet trust can even provide that your pet should go to a “no-kill” shelter, with the trust funds being given to the shelter as a donation, if a suitable placement cannot be made.
Alternatively, you can name a caretaker or Guardian and a series of successors if you wish.
What happens to the money and other trust property that is left when my last pet dies?
Your pet trust should specify what will happen to it. It could go to named individuals, a class of people, or a charity chosen by you or your Trustee.
What’s the difference between creating a pet trust and putting in my Will who is to take my pet and care for it?
First, a will does not take effect until it is admitted to probate by a judge. That is not going to happen until at least several weeks after you die. A trust, on the other hand, is effective immediately. Another advantage of using a pet trust is that the property you allocate to the pet trust must be spent on the care of your pet. Without a pet trust, your pet would pass to your heirs just like any other item of tangible personal property. The person you name might choose not to take your pet, or might take your pet, then give it away or even euthanize it and keep the money that you wanted to go for your pet’s care
What are the kinds of things that people typically leave in trust to care for their pets?
Typically people leave a specific amount of funds to create the trust, but any kind of property can be put into a pet trust. I know of a pet trust that held a farm for the life of the owner’s horses. It is also important to have sufficient trust assets be liquid (such as stocks, bank accounts, and life insurance proceeds) so that there will be money to provide for your pet’s needs immediately.
What is the “normal” amount left for a pet’s care?
I have seen various amounts. Remember that the pets who are the trust beneficiaries have to be alive when you pass away, so their number is fixed and can only shrink with time. Many clients decide how much to leave based on each pet’s probable (or maximum) lifespan and the amount of care expected per year. Some have left hundreds of thousands of dollars but generally it is around $10,000-$50,000.
If I have a pet health insurance policy, how do I make sure that policy remains paid in full?
The pet trust requires the Trustee to keep it up by paying premiums with the funds in the trust.
What generally happens if the assets left for the care of a pet are used up before the pet dies?
At that point the guardian or the Trustee would have the option of paying out of their own pocket for your pet’s care. Neither the trustee or guardian would be obligated to do so and so your pet could be turned over to a pet organization or euthanized. That is why we advise our clients to overfund their pet trusts and provide that what remains after their pet dies will go to family members or charities.
I understand the general concept of leaving some money in a trust to take care of my pet’s physical needs and medical care. What do I do about my pet’s need for companionship and love?
This is where you should select a Guardian for your pet or give your Trustee instructions on how to do it. It is important to understand there are three actors in a pet trust besides you, who create it. They are a Guardian who actually keeps and cares for your pet, a Trustee who manages the money and doles it out to the Guardian as needed, and an Enforcer who keeps an eye on the money through yearly accountings and on the Guardian through, for example, unannounced visits. One individual can perform more than one function, but it is best to have three individuals involved.
Didn’t the Helmsley pet trust get thrown out?
No, the Helmsley pet trust was upheld. However, because there was no way that little Trouble needed billions of dollars for his care, the Judge reduced the amount that would go into the trust (it will still be a few million dollars). Courts will to do their best to respect the trust founder’s intent, but the amount Mrs. Helmsley said to set aside for Trouble was just not realistic.
Can I leave the proceeds from the sale of my house, my life insurance, and my 401(k) to a trust for the care of my pets?
All of these items can be directed to a trust to provide lifetime care for your pets. The law does not set a limit, other than the amount must not be more than is reasonable under the circumstances to fulfill the trust’s purposes.
Is money in a pet trust protected against debts I may owe when I die?
That depends on how your pet trust is established. There are two ways a pet trust can be created. You can have a pet trust that takes effect during life (called an “inter vivos” trust) or you can have one that is created when you die (called a “a testamentary” trust). A testamentary pet trust would be funded with assets from your estate. The bills would be paid first and then the amount left over could fund the pet trust. An inter vivos pet trust would only be subject to claims of debts and creditors known at the time it was created and then only if you did not then have sufficient other assets to cover them.
How much contingency planning is recommended when setting up a trust to provide care for a pet? What if the person I appoint to be the Guardian is not able to care for my pet when the time comes or later, after I am gone? Should I allow for the Guardian to choose his or her own successor or would it be better if I find and specify who the successor Guardian will be?
It is a good idea to identify a Guardian and talk to the Guardian first to make sure he or she is willing to accept the position. It is also recommended that you name and talk to some alternates, just in case the first Guardian declines or is unable to serve when the time comes.
What if I don’t know who to trust to make sure that my pet gets what it needs and more? I am afraid my children would think I am foolish to leave money to care for my pet when I’m gone.
You will want to select a Guardian who shares your views about the value and appropriate treatment of your pet. That way, the money you decide to set aside for your pet’s care will be used for that purpose. Because pet trusts are allowed by statute, their creation by a pet owner is an appropriate use of the owner’s assets, regardless of what those who would rather get the money think, so long as the terms of the trust are reasonable under the circumstances.
I have written out my wishes for my pets using a software program. I have said that I want to divide my assets among the local humane society, my vet, and a feral cat spay/neuter program. Is it enough that I have e-penned these wishes?
Dividing your assets in that way would constitute gifts to an individual and two charities. None of them would be obligated to use any of what they receive to care for your pets. A pet trust, on the other hand, allocates money for use to take care of one or more pets. The remainder (after the last pet dies) can be given to charitable organizations like the ones you mention or individuals. Putting your desires down in an electronic record would not be effective under Texas law to make them happen.
Do I need a lawyer to set up a pet trust?
There are many contingencies that should be planned for in a pet trust just as in any estate planning. For example, in one infamous case, the owner’s failure to institute appropriate safeguards in her pet trust allowed a Guardian to get paid for keeping a succession of black cats long after the first one died.
Lawyers are trained to think of the “what ifs” and then plan for them. That is why we strongly recommend that you work with a lawyer who has familiarity with pet trusts.