Most pet owners want to provide for a pet’s care in case the owner dies. But few owners actually look into the practical steps to ensure that care. You can do it, but you need planning and proper legal advice. Here are the basics:
First, cleanse your mind of stories about eccentric millionaires who have left fortunes to their dogs and cats, much as you would leave money to your children. In fact, provisions like those are likely to be invalidated. Instead, the sensible pet owner should consider establishing a trust for their pet’s care.
What Is a Trust?
A trust is a legal entity into which you place money that is to be used for specific purposes. A trust is administered by a trustee, who is responsible for safeguarding the money and using it as you have directed. Here, the goal is to continue giving your pet the quality of care that you desire.
In creating a trust, you might find it useful to consider the following facts. Review them carefully so that you will have a good command of the issues in discussing them with a lawyer. If, in meeting with a lawyer, he seems to be at a loss with respect to trusts for pets or treats your intention to create a trust lightheartedly, decline to retain him and find a lawyer who is competent and sensitive to your love for your pet. The lawyer should also be ready to give you a written retainer agreement for a fixed, moderate fee because the work is not complex.
Choosing a Trustee
One of the most crucial aspects of establishing a trust is the selection of a trustee. This can be a person or organization, but it is imperative that you choose someone who is ready and willing to take on the responsibility of caring for your pet. You should discuss the issues fully with him. It is not a good idea to name a trustee who has not agreed to do the job. Few people enjoy having the care of another’s pet thrust upon them without their prior consent and may either decline to do so or may do the job poorly. The trust should also name someone to take over in the event that your trustee dies or is incapacitated. In any case, a court may appoint a successor caretaker if the trust does not provide for one.
How Much Money Will You Need?
The money you place in the trust is called the principal of the trust. The trustee will invest it and use the income for the care of your pet. In determining the amount to place in the trust, estimate the number of pets involved, the life expectancy of each, and the annual cost of food, grooming and veterinary care. Your veterinarian should be able to give you those estimates. You will thus learn the amount of income that the trust requires for those purposes, and you will be able to compute the amount of principal required to produce that income. Should the income later prove insufficient, the trustee should be authorized to draw upon the principal of the trust to meet those expenses. At the same time, though, take care to avoid transferring an excessive amount of property to the trust. If you place too much money in the trust, a court will have the power to direct that the excess be used for other purposes under your will.
As much as you might like to, do not name your pet in the trust. Simply state that the trust is applicable to all animals that you may own or for whom you are caring at the time of your death. This will allow you to avoid executing a new trust or will whenever you get a new pet. The duration of the trust may be the life of your pet, or should there be more than one, the life of the pet last to die, or 21 years, whichever first occurs.
Proceeding With Care
Your trust should provide for what happens to the money if any remains after the death of your pet. Whoever is to get the money when the trust ends is called the “remainderman” and should be chosen with the same care you use in selecting a trustee. It is vital that you know and trust both of them if you want to be sure that your pet’s interests remain paramount.
Keep in mind, for example, that the remainderman is the person most likely to apply to a court claiming that the amount of the trust is excessive and therefore the excess should be paid to him. To inhibit that move, provide that the care and comfort of your pet is superior to the interest of the remainderman.
On the other hand, your trustee is generally entitled to be compensated for his work. If the remainder goes to a third party, the trustee may decide that your suffering, incurable pet should live in pain as long as possible while the trustee continues to pocket payments for his services. In one case, a quick-footed trustee substituted look-alike animals as the original pets died to keep his fees flowing.
Finally, if you name the same person as both trustee and the remainderman you run the risk that your pet may suffer a premature death when your trustee abdicates his responsibility to your pet to get his hands on your money.