According to Forbes, more than 65% of all U.S. households have a pet. More and more, people want to make sure their pets are taken care of after they pass away. Whether it’s a cat, dog, horse, or any other beloved pet, it is important to provide instructions – and possibly money – for their care after death.
One option is a pet trust. A pet trust is a legal agreement to provide for the care of one or more pets in the event that the pet owner dies or becomes unable to care for them. The trust names a caretaker for the pet and sets aside funds to provide for the pet. As of 2022, all 50 U.S. states have a statute or law covering pet trusts after the owner passes.
So how do they work? Pet trusts allow the pet owner to decide whether they want to provide money for their pet, who should take care of the pet after the owner is gone, even what kind of food or health care the pet should receive. The trust typically terminates when the animal beneficiary or beneficiaries of the trust are no longer alive. After that, any remaining funds will be distributed per the wishes of the creator of the Trust. However, each state’s law differs on what exactly is covered, and the time period allotted before termination.
When preparing such a trust there are some important questions you should consider. These include, but are certainly not limited to:
Who will be named as the Caretaker for your pet(s)?
Who will be named as Trustee to distribute funds to the Caretaker?
How much money will you initially put in trust?
How often will the payments be made and in what amounts?
What are the Caretaker’s responsibilities and instructions regarding housing, food, veterinary care and whatever else is needed throughout the pet’s lifetime?
If you have multiple pets, should they stay together?
As you can imagine, there are potential problems with pet trusts. One issue is that they have been the subject of fraud. This happens because the beneficiaries – the pets – cannot complain about any mistreatment or wrongdoing from their appointed caretakers and cannot take them to court. There also have been issues of pets being replaced with other pets that look similar upon their death so funds will continue to be distributed to the caretaker. The latter issue can be resolved through microchipping pets to make sure the original pet is not replaced.
Though there are potential problems, it is still worth considering providing for your pet once you pass away. Even if you do not want to leave money for the care of your pet, at least name someone you can trust to take care of them after you’re gone – or at least someone who is going to find them a loving home. Pet trusts are becoming more popular, so consider including some provisions in your estate plan today.