Until hotel heiress Leona Helmsley left $12 million to her Maltese dog, Trouble, following her 2007 death, the idea of a pet trust seemed foreign to most. Why would a millionaire give part of her fortune to a dog while leaving two of her four grandchildren out of the will?
Despite the negative attention that this story garnered more than a decade ago, pet trusts are a practical way for an owner to ensure the safety of his or her special friend – even if the funds don’t amount anywhere close to $12 million.
While it was previously thought that a family member would inherit an individual’s pet if he or she died or become too ill to care for the animal, this isn’t always the case. In fact, it’s not uncommon for some pets to end up at the local shelter following an owner’s death.
However, by creating a pet trust now and setting money aside, you can ensure that your pet will be properly taken care of in the event of an emergency.
Why a Pet Trust?
Simply put, a pet trust is a proven financial support system that can be used to pay for your animal’s future expenses, such as food, shelter, vaccinations, vet visits, or funeral arrangements.
Because you can’t directly leave money, property or a life insurance policy to a pet since they are technically considered “property” under current laws, a trust is the most practical option. Especially if your relatives don’t want to be responsible for caring for your animal.
Although a standard will and testament may seem like a viable alternative to a pet trust, it can’t require an inheritor to adhere to specific guidelines since it only has the power to designate ownership of property.
Therefore, if you leave your pet to someone in your will, he or she has the freedom to care for it in his or her own way. But if it’s setup in a trust, the guardian must follow your specific orders.
The Three Types of Trusts
If you decide to research pet trusts, you’ll find that there are three main types, each with their own benefits and drawbacks. As a result, it’s essential that you carefully consider the needs of your pet now, and in the future, before making a decision.
- Traditional trust – This type of trust, which has the most flexibility, enables you to outline specific caregiving instructions for your pet and appoint a trustee who will be responsible for managing the account’s funds. It also allows you to partially fund the trust with a life insurance policy if you name the trustee as the beneficiary.
- Statutory pet trust – With this option, you entrust a specified dollar amount to the care of your animal and the courts fill in the gaps, such as who is responsible for providing the care and overseeing the money. If you’re unable to find a caregiver, a statutory pet trust is the best route. However, the only flaw is that you’re unable to leave specific instructions regarding your pet’s care.
- Pet Protection Agreement – This option, which is the simplest of the three, is tailored for those who don’t need to leave a substantial amount of money designated for their pet’s care and already have a predetermined guardian in mind. A Pet Protection Agreement, which is available through LegalZoom.com, allows you to create a caregiving procedure that is then signed by you and the intended guardian so it becomes a legally bound document.
Other Things to Consider
- Set aside an amount that is realistic – and not excessive – so relatives don’t become disgruntled
- Outline where the remainder of the trust should go if there’s money left after the pet dies
- Ensure that the guardian is able to perform the caretaking duties before putting it in writing
- Be specific with the instructions because not all guardians know how to take care of your animal
For more pet tips, or to learn about Peaceful Pastures’ funeral pre-planning options, call us at 724-745-8502.