Don't Forget Your Pets in Your Estate Plan!
Legally, pets are considered property. But anyone who actually has a pet understands that they are much more than that—pets are members of the family. You create an estate plan to protect the human members of your family. But have you considered estate planning for pets?
When people first hear the terms “estate planning for pets” or “pet trust,” they may envision a spoiled cat or fluffy lap dog sleeping on tufted cushions and eating out of a crystal dish. The reality is that a pet trust is simply a way to formalize the arrangements that most of us try to make for our pets in case we are unable to care for them.
Estate Planning for Pet Owners
Even the most loving “pet parents” forget about their animals when it comes time to draw up their estate plans. You may figure that if anything happens to you, a family member would simply care for your pet. If you do have a family member who is willing to take your pet if necessary, creating a pet trust can solidify and support that arrangement. If you don’t have someone lined up to take care of your pet if you no longer can, establishing a pet trust can make it easier to find a trusted caretaker.
A pet trust is a legal document that allows you to describe how you would like your pet to be cared for, and provide funds for their care. Between food, veterinary care, grooming, boarding, and other incidentals, owning a pet can be expensive. Knowing that there are funds provided for an animal’s care may help your preferred caretaker be more willing to take on the responsibility.
Creating a pet trust is simple, and can give both you and your intended caretaker peace of mind.
How Does a Pet Trust Work?
Pet trusts have become so mainstream that they are provided for under Michigan law. Here’s how they work.
You can create a pet trust for any type of domestic animal. For most people that means a dog or a cat, but it could also mean a bird, a horse, a turtle, or even a snake that has been kept as a pet. As the creator (settlor) of the trust, you will need to select a trustee. The trustee manages funds in the trust and makes distributions to the caretaker for the pet’s expenses. Often the same person serves as both trustee and caretaker, making it easy and convenient for the caretaker to get the funds they need for the pet’s care. However, if you prefer, you can name two different people to act as trustee and caretaker. You should, of course, make sure your chosen trustee and caretaker are willing to serve in those rules.
The next step is to fund the trust. That simply means putting money in the trust that the trustee can distribute to the caretaker. You want to consider how much it will take to provide for your pet’s needs throughout their life. Consider the pet’s age and likely remaining life span, and think about not just food, but other needs: regular veterinary treatment, emergency care, pet insurance, grooming, toys and equipment, boarding costs, and perhaps some modest compensation for the caretaker.
You want to make sure that there is enough money in the trust so that your pet will not become a financial burden to its caretaker. That said, over-funding the trust is a no-no: a court can reduce the amount of assets in the trust if it feels that there is more than is reasonably needed for the pet’s care.
The trust will continue until there is no living animal covered by the trust (but in no case longer than 21 years). When you create the trust, you should designate what will happen to any remaining funds in the trust by naming a “remainder beneficiary.” That could be your pet’s faithful caretaker, a family member, or a charity like your local animal shelter.
Do I Really Need a Pet Trust?
You may be thinking that pet trusts are all well and good, but that you don’t need one because you’re likely to outlive your pet by decades. Hopefully, you will live a long and healthy life. But it’s still smart to have a plan in place for your pet’s care in case of an emergency.
Unfortunately, a sudden accident or injury can incapacitate you, making it impossible for you to care for your pet, at least for a while. Particularly if you need intensive or ongoing care, your family’s attention and resources may be focused on your needs rather than your pet’s. Without a pet trust in place, they may conclude that your pet needs to be rehomed. If you don’t want to risk that happening, you should consider creating a trust as part of your estate plan, particularly if you live alone with your pet.
To learn more about Michigan pet trust law, or speak with a pet trust attorney, contact Suzanne R. Fanning, PLLC.