Jan. 13, 2015
It’s estimated that 70-80 million dogs and 74-96 million cats are owned in the United States according to the American Society for the Prevention of Cruelty to Animals. So as our population ages it’s pretty important to ask, “What happens to someone’s pet after their owner passes away?” Estate planning for your pet can be rather simple, but important process for a pet owner that is never too late to start on.
Pet estate plans have been around for a while and you’ve probably heard the story of Leona Helmsley that left millions for her dog named Trouble’s care. But because these plans were so new, she was ill-advised and none of the instructions she left in her will were followed.
Today that is not the case. Joan Rivers left behind a solid estate plan for her animals. She had two dogs that lived with her in Los Angeles and another two rescue dogs that stayed in her New York apartment. “She loved dogs dearly, and they meant so much to her … dogs have become accepted as essential family members that providing for them well in life, and after death, is considered quite normal,” Tracie Hotchner, River’s goddaughter, told the Daily Mail.
Attorney and financial planner Dan Clapper writing for dailyfinance.com says setting up trust for animals might not be as difficult as your think. “Such trusts allow you to make very specific arrangements about the type of care you want your pets to receive and how the money you use to fund the trust will be managed and used over the pets’ lifetimes,” Clapper said. “Traditional pet trust let you go into as much detail as you want about how exactly your pets should be treated.”
There are however some issues to address before you begin a pet estate plan. Calculating the cost of care and identifying the pets covered should come first. The ASPCA recommends taking pictures, microchipping or even using DNA testing to ensure your pets are the ones being care for.
Determining how much to put into the trust can be difficult, but estate planning attorney Tracy Craig gave a clear formula. “To determine the amount, first estimate the annual costs of food, pet insurance, veterinary care, routine medications and supplements, as well as any other recurring costs, and then multiply that by the entire life expectancy of the pet,” Craig wrote in Financial-Planning.com
Establishing a primary caregiver and standard of care is also important. Like any trust, there will be a trustee in charge of the money, but defining who will actually care for your animals is something that must be included. “Include the name of the preferred veterinarian and the minimum number of vet visits per year, as well as any requirements for boarding, grooming, pet walking services, toys, treats – even doggie daycare,” writes Craig.
Finally, stating what will happen to the remaining funds is something that must be laid out. “The reason; Many states allow interested parties to reduce the amount of funds held for the pet’s care if a court deems the trust to be overfunded,” writes Craig.
“So to starve off challenges, consider naming a charitable organization (preferably an animal welfare, rights or rescue organization) that you think will be more likely to respect the terms of the trust, and won’t seek to decrease its funding or accelerate the remainder benefits.”