For those of us who have pets that would be left behind after we die, there may be a desire to make arrangements for their well-being. Making provisions for pets in your will can only be done through the establishment of a trust. Pets are considered property and, as such, cannot be left money or property directly.
A trust is an entity that is established to receive and hold money and property for the benefit of designated beneficiaries which can be people, pets, organizations or other entities. There are two trust options for pet care.
With a traditional trust, you name a trustee to administer the money, and also appoint a caregiver for your pet. In your will, you designate money or property to be received by the trust. If life insurance proceeds are to be used, you would designate the trust as the beneficiary of the policy. Remember, you can divide up life insurance proceeds between multiple beneficiaries in the event you have other people or organizations you want to benefit.
A statutory trust can be specified within your will. It is a statement that indicates you are leaving money or property "in trust" to your pet. In this situation, however, the probate court is then responsible for appointing persons to serve as trustee and caregiver.
A pet protection agreement is a less formal option for providing for your pet. This is a simple agreement with another person to care for your pet after your passing. This could also be used in cases of incapacitation, just as you would execute a power of attorney for other affairs. This option makes sense if, for example, your pet's life expectancy was limited, and not much money is in consideration.
Trusts for pets can be easy to establish, but there are some things to consider, such as the following:
They make the most sense for animals with longer life spans such as horses and birds;
There is usually no need to leave an excessive amount of money;
Name a successor beneficiary for funds left after your pet dies, preferably not the caregiver;
Ensure the willingness of the trustee and caregiver to serve in those roles;
Name successors for the trustee and caregiver;
Do not make the trustee and caregiver the same person; and
Provide detailed instructions of your wishes for the care of your pet.