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Estate Planning: Don’t Forget Your Pet!

Posted on: June 1st, 2019

If you are part of the 68 percent of U.S. households that own a pet,[1] you probably think of it as a true member of the family—one you love and cherish. But what would happen to that cherished family member if you were to die suddenly?

Have you taken any steps to ensure your dog, cat, horse or other animal will be well taken care of if it outlives you?

If not, it’s probably time to think about how to make your treasured pet part of your estate plan. Even if you do have a plan, it might make sense to review and revisit it to ensure it’s still on track.

Here are some key steps to take and resources that can help.

[1] Insurance Information Institute, Facts + Statistics: Pet Statistics.

Getting started

To get the ball rolling, begin with these steps.

  1. Determine your wishes and intentions. Decide how you would want someone else to take care of your pet. Do you have certain expectations or wishes around the care of your pet—types of food you want (and don’t want) the pet to eat, preferred vets and medical care, etc.? You’ll need to be clear about your wishes in order to communicate them to a chosen caregiver.
  1. Identify a caregiver. Who will take responsibility for your pet after you’re gone? A good pet guardian is someone you believe will be as good to your pet as you have been. Be sure the candidate is willing and able to be the pet guardian and take on the duties you expect him or her to take on. Discuss with any candidate your expectations for care and whether that person is on board with your needs (or whether you’re willing to compromise in certain areas). It’s probably best, if possible, to identify a few candidates so you have backups in case your first choice bows out or circumstances change. If there is no person in your life who can help, consider a humane organization that can look after your pet.
  1. Consider the financial aspects of pet care. Make sure you and the future pet guardian understand, as best as possible, the likely costs of pet care (more on that later). Does your cat eat special food that costs significantly more than grocery store options? Does your horse have physical health issues that need attention, medication or professional care? Is your dog a type of breed that is known for encountering health problems later in life, and how much might it cost to treat such problems? Answering questions like these now can help ensure that everyone involved in caring for your pet is clear about what may be required.

Creating a formal plan

Don’t just rely on verbal agreements with a chosen guardian. Instead, make a formal, written plan that spells out all the key aspects—from who will be involved to what the care expectations are to how to pay for the care (and caregiver). The reason: Formal plans can be enforceable.

Important: Under the law, animals are property—like a car or dining room table—so you cannot leave money directly to your pet. That leaves you with three main options for safeguarding the care of your pets (see Exhibit 1).

1. A pet care agreement

A pet care agreement is a contract you make with another person who has agreed to care for your pet in case of your death. This type of formal agreement will be enforceable. It should spell out the specific care you want for your pet, as well as how any money you have arranged for that care is to be handled (including what happens if there are excess funds after the pet dies).

2. A pet trust

A pet trust is also a legally enforceable arrangement that helps ensure your pet care wishes are honored. As with the pet care agreement, you will need to identify a willing and able pet guardian. But you will also need someone to administer the trust—a trustee. That person may or may not be the pet guardian. A separate trustee can add a layer of protection because he or she can check in on the well-being of your pet and ensure that the money allocated to pet care is being used properly.

You can establish a pet trust now, or upon your death. Either way, you need to fund the trust for the care of your pet. This often entails coming up with some number to ensure a certain standard of living for your pet. Be sure to consider the costs of possible or likely medical care for your pet, as it can be expensive (especially later in your pet’s life).

The trust will detail the types and level of care, as well as how money is to be dispersed from the trust (for your pet and possibly for the pet guardian’s compensation for his or her efforts).

Warning: Your pet trust must comply with your state laws, and a description of each state law is available from the ASPCA at www.aspca.org/pet-care/pet-planning/pet-trust-laws.

3. A will bequest

Your will determines how your assets will be divided and allocated after you die. Because a pet is considered property, as noted above, your will can stipulate who becomes its guardian and the amount of money that will be set aside for its care. Here again, you will need to identify a guardian and provide instructions for care, and spell out the monetary arrangements. You can direct your executor about providing money for the care of your pet. Also, you may want to provide funds for the guardian directly or (in the case of an organization) a donation can be given. (It is also possible to set up a pet trust at your death.)

And as with a pet trust, make sure the pet provisions in your will work in your state. In some states pet provisions are deemed “honorary.” The court will not necessarily enforce the provisions.

Financing your pet’s care

It is often worthwhile—and sometimes essential—to provide the funding for the care of your pet after you’re gone. Thus, you need to calculate the amount needed for the care of your pet in the manner you prefer. Some considerations include:

  • The cost of caring for your pet and the pet’s life expectancy. Some pets such as macaws and cockatoos can live more than 50 years.
  • Medical costs as the pet ages.
  • Boarding facility costs (if you have a horse, for example).
  • The cost of any pet health insurance you may choose to have.
  • Compensation (if any) for the caregiver for his or her efforts.

Important: If the pet dies and there’s money remaining—in the pet trust, for example—you’ll want to specify where those funds go. Often we see trusts set up to pass the assets to the guardian or to an animal welfare organization or other animal-focused charity. 

Plan now

You don’t have to be extremely wealthy to do some basic (or even advanced) estate planning that involves your pet. Anyone who sees his or her dog, cat or other animal as a beloved family member should consider taking steps to ensure it will continue to get the love and attention (and treats) it’s become so accustomed to. The alternatives—a shelter or worse—are highly unappealing to pet lovers.

Next step: Contact your legal or financial professional to explore this topic further.

This report was prepared by, and is reprinted with permission from, VFO Inner Circle.  AES Nation, LLC is the creator and publisher of VFO Inner Circle reports.

Disclosure: The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS.

Fusion Wealth Management is not affiliated with Kestra IS or Kestra AS. https://www.kestrafinancial.com/disclosures

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