It is common to worry about what will happen when pets die. On the other hand, many people do not anticipate what will happen to their pets in the event that they pass first. Pets are dependents that require extra care to ensure that their needs are met in every situation. For many pet owners, making their pets an important part of their estate planning helps to solve the problem. With this guide, pet owners will know about the options they have for providing for their pets, tips to smooth out the process, and how best to get started.
What Happens to Pets When I Pass?
When people die, what happens to their pets depends on the arrangement that they already have in place. For a lot of people, ownership of the pet would simply transfer to another adult member of the household, like a spouse or adult child. If the choice is not obvious, the process for determining who can claim the pet may be more complicated.
There are two common scenarios that may cause stress for pet owners and their pets. The first is conflicting expectations, where there are multiple people who think that they should be able to claim the pet. This is more likely to happen for valuable pets and long-living pets that are well-known by many members of the family. The second scenario can be just as difficult, when there are no caregivers ready to accept the pet. This situation is more common when people live alone, with no friends or family members nearby.
Since pets are legally the owner’s property, the way that they are transferred to another person depends on the estate planning of the pet owner. If someone makes a detailed will, it may be clear to whom the pet should go. Pet owners who create a trust for their pets will have a specific process in place to transfer the pet to the caregiver and provide for them. In the absence of either of these arrangements, it’s up to the next of kin to determine what to do.
Who Needs a Pet Trust?
Almost anyone could benefit from establishing a pet trust. Although pets are considered property, they aren’t like a piece of furniture. They require care on a daily basis. Setting aside money for pets in a will is helpful, but it may not be sufficient. While the executor carries out the terms of the will, there needs to be a plan in place to care for the pet. Pet trusts are ideal for many situations, including:
- Valuable pets
- Pets with complicated or expensive care needs
- Pets with a long lifespan, like tortoises or birds
The goal is to make the transition as seamless as possible. Pet trusts are often the most practical way to do that.
Trust Basics
Setting up a trust is a very common thing for people to do as part of estate planning. However, it’s a concept that many people find difficult to understand. Pet owners who don’t have a lot of money saved may wonder if they even need a trust. Understanding the basics of a trust and how it would work for pets can make it easier for pet owners to make the most appropriate decision.
What is a Trust
In the most simple terms, a trust is an amount of money set aside with a specific purpose and designated beneficiaries. For example, a parent who thought that they would not live to see their children become adults might create a trust to provide for their children. Although there are many different types of trusts, they fall into one of two categories: revocable and irrevocable. Revocable trusts allow people to change the terms after they have created the trust. As a general rule, irrevocable trusts do not. Irrevocable trusts are more common for grantors who are trying to minimize taxes on their estate.
How Does a Trust Work?
Most of the time, people who want to set up a trust will go to some type of financial planning firm to set it up. A representative from the company will explain the different types of trusts and identify which ones would be most appropriate for the situation. At this time, the person creating the trust, also known as the grantor, decides which funds will be used for the trust. This might involve a deposit to an independent account. People can also assign existing accounts to the trust. The grantor sets rules for disbursement of the funds. For example, they may say that they want to disburse funds once every year to help pay for pet expenses. The trust is managed and carried out by the trustee.
How Is a Trust Different from Leaving Money in a Will?
Although pet owners can certainly leave money in a will to another person to care for their pets, that’s not always an ideal choice. When someone dies, the next of kin usually gather to evaluate any will or estate plan left behind. Even if the paperwork is complete, accurate and recent, there is still a chance for conflict. While the executor determines the accuracy of the will, all of a person’s assets may be held before disbursement. By comparison, establishing a trust can make it easier for a designated caregiver to access funds to care for the pets. It’s not necessarily instantaneous, of course. But a lengthy probate process can last months or years, whereas a trust may make those funds available within weeks.
How Can I Set Up a Trust?
To set up a trust, pet owners may want to start by asking their own banking institutions. Although not every bank or credit union offers this service, the ones that do may make it more convenient. Pet owners should make a list of conditions that they feel are important for caregivers to follow. It is a good idea to research in advance anticipated costs for caring for the pet. In addition, pet owners should have ideas for sources of money for the trust. They should consult with businesses that establish trusts before withdrawing funds.
It is possible to set up a trust independently, but most experts recommend hiring a professional estate planner. Errors in paperwork can make it more complicated to disburse funds, especially if there are multiple parties seeking access. As a general rule, pet owners should plan to spend up to $2,000 establishing a trust.
Who Will Ensure My Pets Are Cared For?
For pet owners who have a trust, the trustee will ensure that the terms of the trust are met. Although pet owners can designate a variety of people to be the trustee, it’s also common to use a trustee from a financial institution. Corporate trustees understand the obligations and can meet them with less complication. To meet the terms of each disbursement, the caregiver must prove to the trustee that they are providing necessary care as indicated by the trust.
Preparing for Pets with a Shorter Lifespan
Pet owners have a certain degree of control over the way that they establish a trust. People who might accumulate more pets over time may want to create a trust for certain types of pets. Using classifications can make it easier to meet the terms of the trust without having to update it constantly. It’s a particularly good idea for pet owners who keep animals that do not live very long. For example, someone who keeps horses and also has a few cats may wish to create separate trusts for their care. A pet owner who keeps expensive fish might prefer to make a single trust for all fish that they own at the time of death.
Pet Trusts for Horses and Livestock
When people think about establishing a trust for their pets, they may not consider the needs of all of their animals. Depending on the state, pet owners can establish a trust for virtually any kind of pet they have. Given the higher costs and care requirements for large animals, establishing a trust may be the most important in these situations. With this information, owners of horses or livestock will understand why they should consider incorporating these animals into their estate planning.
Why Large Animals Need Estate Planning
In a pinch, pet owners with a single dog or cat may be able to find an alternate caregiver with little or no notice. By comparison, people who own horses or other livestock need to develop a detailed plan in advance. The terms of a will can take weeks or months to sort out. It may be a significant period of time before any money from the estate becomes available. In the meantime, someone needs to be responsible for the animals. Otherwise, the animals may not receive regular care, including feeding, watering, exercise and veterinary care.
Outline Your Expectations
As they would with any other pet trust, pet owners should create a detailed outline for the care of their horses:
- Identifying details for each horse
- Care requirements for the herd and specific animals
- Contacts for regular services
- Equipment, supplies and housing for the animals
- Estimated costs of care
In some cases, pet owners may need to plan for the animals to be sold at auction. Even in this instance, it is important to provide for the animals’ care until such a plan can be arranged.
Designate a Caretaker
Depending on pet owners’ plans for their horses, they may need to designate one or more caretakers. It is not uncommon to ask a person who is close to the family to provide basic care for the horses until their long-term caregiver can take possession of them. The caretaker may not necessarily be the person who is doing all the work for the animals. However, they should know which types of care are involved, and be able to schedule them or ensure that the services happen.
Choose the Right Trustee
In this situation, choosing the right trustee is almost as important as the caregiver. The trustee is responsible for ensuring that the terms of the trust are met by the caregiver. In order to do this, the trustee needs to have sufficient experience with managing the needs of horses or livestock. Pet owners may want to consult with local organizations to get recommendations for institutions that specialize in livestock trusts and can serve as an effective trustee.
Don’t Forget Equipment
Unlike household pets, horses and livestock often require a lot of expensive equipment. If this equipment is not included as part of the trust, the caregiver may be required to purchase it independently. Since equipment can cost tens of thousands of dollars or more, it makes more sense to include existing equipment in the trust. Pet owners may want to look for estate planners with experience creating trusts that include property as well as funds.
Choosing a Caregiver
Designating a future caregiver for pets is an important decision. Although pets count as property, people usually want to ensure that their pets will go to a home with good care. Since some pets can represent a significant investment of time and money, pet owners are more likely to have a good result if they identify a caregiver well in advance and ensure that the person is willing to accept the responsibility. These tips can make it easier for pet owners to determine who might make a good caregiver for their pets and confirm that their wishes will be followed.
Make a List of Needs
Every pet has unique needs, depending on their species, breed, age and temperament. As such, pet owners may want to start by outlining their pets needs on a daily basis. These needs might include:
- Feeding, including special food or medical diets
- Exercise
- Shelter, especially for pets that cannot live in a house
- Medical conditions
- Preferences
At this time, pet owners may want to draw up a budget of regular expenses for their pets. Designated caregivers may be willing to accept a small amount of financial responsibility for a loved one’s pet, but they might not be able to pay hundreds of dollars a month for upkeep.
Evaluate Caregiver Options
With this list of needs for the pet, pet owners can start to evaluate possible caregivers that they know. It’s important to keep in mind that pets can represent a large investment of time and energy, not just money. People who already love the pet may be good candidates, but it depends on their ability and willingness to provide care. For example, older people may struggle to keep up with the requirements of young pets, especially puppies that need a lot of exercise. Older children and teenagers can be excellent caregivers for pets, but they may not be a proper choice to designate in a trust. In all cases, pet owners should confirm that everyone in the house is amenable to the idea of taking the pet.
Identify Organizations to Help
In some cases, pet owners may not be able to think of someone that they know to take their pets when they die. There are many organizations that exist to help find new homes for pets of varying species and breeds. Although they usually focus on finding homes for strays or abandoned pets, they may also be able to serve as a beneficiary of a trust. That way, pet owners can be sure that they are placing their pets in the hands of experts, especially if they don’t have anyone in the area they could ask as an alternative
Notify In Advance
Estate planning experts say that notifying beneficiaries of an estate or trust is extremely important. Although people might think that it is best to take care of the paperwork and avoid having a difficult discussion with a loved one before they die, it often complicates matters. When a person’s family starts to go through the details of their estate, there can be a lot of opportunities for conflict.
Making everything clear from the beginning can prevent a lot of stress or confusion. Pet owners should start by contacting their first choice of caregiver to ask if this person is willing to accept the responsibility, along with a certain amount of financial support. If the person is unwilling or unable to accept, pet owners should select an alternative and contact them.
Get Agreements in Writing
Having a verbal agreement is nice, but it may not be sufficient to meet the terms of a trust. In most cases, if people want to designate funds to go to the person who will serve as a caregiver for a pet, they will need to have the details in writing. It is a good idea to include this plan in the overall estate planning and ensure that the executor is aware of it. This aspect is particularly important for pets that may carry a high value, such as purebred show dogs or horses. That way, it is plain from the beginning what the pet owner’s wishes are, despite any competing requests or claims.
Revisit the Agreement Occasionally
Many people start to plan their estates decades in advance of the time that they might pass. A lot of things can change within a five or 10-year period. Pets with a longer lifespan may die unexpectedly. People often get additional pets, as companions for themselves or for their other pets. Sometimes the designated caregiver moves away or becomes unable to care for the pets as they originally planned.
These changes serve as timely opportunities to revisit the caregiver plan. At least every few years, pet owners may want to look at the details of the plan and determine if any aspects have changed, such as:
- Designated caregiver
- Pets covered by the trust
- Anticipated expenses
- Financial support
Ensuring that the plan remains current will minimize problems and help to provide for a smoother transfer of ownership of the pets.
Tips to Simplify the Transition
The ultimate goal of estate planning for pets is to ensure that pets receive loving care after an owner passes. Of course, there are many factors related to the transition that can be done in advance. Even if people aren’t anticipating a change anytime soon, they can still help to make it easier on their pets. These tips can help.
Introduce Pets to the Caregiver
Most pets are creatures of routine. They have specific daily routines that they like to follow, which includes spending time with a small group of people. If the caregiver is not a member of the household, pet owners may want to take opportunities to allow the designated caregiver to interact with the pets. Spending time together in a low stress, high-rewarding environment can help to develop trust that will make it easier for the pets to transition to a new life.
Notify Vet Clinic About the Caregiver
Once pet owners have designated a caregiver, they may want to notify their veterinarian about this decision. Caregivers often take ownership of pets with little information about the care needs or medical history. Knowing who to go to for vet services can make it easier for caregivers to get this information. In addition, notifying the clinic about any possible changes will make it easier for them to transfer files or update information.
Stay Current on Pet Health
It may be difficult for pet owners to stay current on their pets’ health care needs, especially if they are approaching the end of their lives. However, scheduling annual checkups and updating vaccinations is an important part of maintaining pet health for the long term. If pet owners realize that they are struggling to complete this task, they should consider asking a friend or relative to help. Transitioning to a new pet owner can be stressful for pets. They are more likely to handle it better if they are in otherwise good health.
Consider Pet Insurance
For many pet owners, providing for a pet’s future care is the expensive elephant in the room. After all, some pets can cost tens of thousands of dollars in maintenance and health care over a lifespan. If possible, pet owners may want to consider buying pet insurance policies. These policies provide a certain amount of coverage for accidents, injuries or illnesses. The amount of coverage usually depends on the premium, as well as the type of pet and their age. An existing insurance policy could make it easier for people to create a smaller, more affordable trust.
No one wants to leave pets behind when they die, but many people do not have the choice. By creating an estate plan for the pets, pet owners provide a guarantee for their care. A good choice in caregiver and the funds needed to pay for food, exercise and health care are paramount. By investing some time and money into the process, pet owners can relieve stress and know that their pets will be loved and attended after they are gone.
