Pet Trusts: Peace of Mind for Your Pet’s Future
Aug 31, 2011 10:09AM
● By Kimberly A. Colgate, Esq.
Most owners don’t think they need formal estate-planning documents for their pets because a friend, neighbor or relative has said that they will take care of the pet when the owner dies. Unfortunately, sometimes these folks may have good intentions, but when reality strikes, the hoped-for, unwritten arrangement may not be honored and the pet is euthanized.
Such sad occurrences, the result of unforeseen financial distress, broken promises or misunderstandings, can be prevented if the proper legal documents are in place to protect a beloved pet. The owner may provide for the pet either in a legally signed will or a trust specifically created for the named pet. So, which is better?
Limits of a Will
While a will cannot leave property directly to an animal, it can name a person that is charged with the responsibility of caring for the pet, as well as leave available funds to the individual for that purpose. However, problems can arise because many people don’t understand how a will works.
With a will, the instructions contained in it are not automatically carried out. A lengthy and formal process must be followed in each state to admit a will to the probate court and appoint an executor; until that happens, no one can access the property of the deceased. Initiating the process typically takes at least 30 days and it can be up to a year before money is distributed to beneficiaries. But where does the pet live in the meantime? Who is taking care of the pet and providing money for housing, food, exercise and health care?
Another problem is that even when money or property is given to the named person to care for a pet, it is difficult to ensure that they will actually spend the money on the pet, according to the will’s instructions. This is why creating a trust for the long-term care of a pet is the better solution.
Benefits of a Trust
More than 45 states now have laws making it possible to create a trust for a pet. This arrangement offers many advantages; a pet trust document usually:
- Names a physical caretaker for the pet
- Names a trustee that will hold the money for caring for the pet
- Instructs the trustee to distribute the money to the caretaker according to the instructions contained in the pet trust
- Provides the trustee with the authority to place the pet with a new caretaker if for any reason the person named cannot take care of the pet as intended
The first step in creating a pet trust is to write out a plan specifying who will care for the pet, how much money will be needed and how it should be spent, and the name of the person that has agreed to act as trustee. A plan for a pet can be general or detailed.
It’s not a good idea to make the pet caretaker the trustee, because the trustee is responsible for enforcing the plan and making certain that the caretaker is following the previous owner’s instructions. Otherwise, the trustee is charged with finding a new caretaker that will follow the instructions in the trust document and redirecting the funds to them.
A pet trust does not have to be funded until the owner has passed. The easiest way to fund a pet trust is to name the trustee as the recipient of a bank account, a certificate of deposit or an insurance policy. The funds then are immediately available for the care of a pet, according to the instructions contained in the trust document.
With written plan in hand, the next step is to meet with an attorney to develop it into a legally enforceable trust document. If the basic plan is already in writing, the lawyer should be able to state a reasonable price to draft the trust. Or, a pet owner may choose to purchase a guide on how to create a pet trust.
For more information, visit CreateAPetTrust.com and see The Pet Plan and Pet Trust Guide, by Kimberly A. Colgate. It explains, in detail, how to create a pet trust and includes a fill- in-the-blank pet trust document. Colgate is a practicing trust attorney in Sarasota, FL. Contact her at 941-927-2996 or [email protected].