A client came to me and wanted to provide for her 2 dogs after she passed away. It used to be that pets were classified as property and that there was a great amount of difficulty providing for them. However, as recently as 2006, Pennsylvania joined other states by allowing pet owners the option of setting up a trust to care for their pets. A trust is an arrangement whereby a trustee manages money in an account you set up and gives it to a named pet guardian who takes care of your pet(s). The trustee and the pet guardian can be the same person, however, it allows for checks and balances if they are different people (or organizations, for example, the trustee can be a bank).
You can create a living pet trust that is funded with assets while you are still alive. A living trust solves the problem of caring for your pet when you are still alive but lack full capacity to manage your pet’s needs. You can set up a living pet trust until a testamentary (one made in the will) pet trust takes hold after your death.
Your pet trust should be funded with enough money to meet your pet’s needs for their entire life. You can fund your pet trust with assets from your estate or by appointing the pet trust to be a beneficiary of a life insurance policy or other financial account. Your pet trust will terminate at your last pet’s death. The assets remaining in your pet trust when the trust terminates will revert back to you if you are alive or be distributed to named beneficiaries (e.g., individuals or charities) after your death. You should name a specific beneficiary who will get the remainder of the trust funds should there be money left over.
Be as specific as you can when setting up your pet trust. For example:
- Consider how to fund the trust. Funds can be a fixed amount ($5,000) or, as mentioned above, a percentage of a 401(k) or a life insurance policy or even a portion of the sale of a home.
- Identify your pets in detail, such as using photos or microchips;
- Describe in detail your pet’s standard of living and care, for example, if your cat only likes a particular brand of food or your dog looks forward to daily romps in the park. If you want your pet to visit the veterinarian four times a year, this can also be included;
- Whether you want your pets kept together in the same household;
- Require regular inspections of your pet(s) by the trustee;
- Determine the amount of funds needed to cover the expenses for your pet’s care and specify how the funds should be distributed to the pet guardian;
- Determine whether you want to pay the pet guardian monthly or yearly and specify how to set that up;
- As mentioned above, designate a beneficiary who will get the remainder of the funds in the trust once all pets have died;
- Provide instructions for the final disposition of your pet, such as either burial or cremation.
Again, Pennsylvania specifies that a pet trust terminates when the last pet provided for in the trust dies.
No one wants to leave the care of their pets up to a court. A pet trust sets up a caring, comprehensive plan to take care of your pets once you are gone. Contact me to set up a trust for your pet(s) or with any questions you may have.
— Written by Jen Feld