Estate Planning for Your Pets (article)

Estate Planning for Your Pets

November 2008 • Updated September 2011

Does your estate plan include instructions regarding who will care for your pets after you die or if you become disabled or seriously ill?

When you become incapacitated or pass away, the strategic planning that you put in place to provide for your loved ones goes to work. The important things will be taken care of. Your bills continue to get paid, your investments continue to grow for future generations, and any minor children are cared for by loving guardians.

It seems like you thought of everything – but what about your very dependant four-legged family members?

What Happens to Fluffy and Spot?

Some pet owners never consider who will care for their furry companions. Many assume that a relative or good friend will step up to the task. That's an unwise assumption.

According to the Humane Society of the United States, in a typical year 400,000 pets need to find new homes because their owners died. Once cared for and loved, these animals have no home. Many will likely be put down.

Here's one vivid example that illustrates the need to make better plans:

One day a group of seven pedigreed dogs were dropped off at a Humane Society facility: two Whippets, two Irish Setters, two Toy Fox Terriers and a Chihuahua. They came with AKC papers, receipts from when they were purchased, complete family trees and a thick file of medical records.

It was obvious that their owner loved and treasured them, but when she was diagnosed with cancer, she did not make plans for their care after her death. There was no chance that all of these dogs, that were raised together, would be adopted to the same home.

A little planning today can help your client's pets avoid a similar fate.

Making Better Plans for Pets

Here's a checklist to help clients plan for their pets:

Identify and designate someone (and at least one alternate) to assume ownership for the pets.
Keep in touch with them to ensure that they are still willing, especially if a pet has special needs.
Leave behind a list of instructions about how you would like your pet to be cared for in terms of food and routine, grooming and veterinary care.
Carry a "pet alert" wallet card listing names and phone numbers of the pet's emergency caregivers.
Authorize payments to provide food, veterinary care, grooming, exercise, socialization, etc.
In any documents, use language that refers to "pets" rather than names. This will ensure that no newly added pets will be left out and that there is no need to update documents.
Name a "trust protector" to oversee a pet's new owner and any funds set aside for the pet's care.
Ask an attorney how to include estate planning document language that will protect the pet.
There are additional planning decision to be made, including the criteria to be used to determine when it's time to euthanize a sick pet, who will make that difficult decision, and how that pet's remains should be disposed.

Pet Trust

Beyond following these practical tips, some pet owners create a formal trust to ensure proper care for their pets. Such a trust would provide a reasonable amount of money to cover the pets' veterinary care, grooming, food and housing needs over their expected lifetime. If you choose this route, be specific in providing for your pets; don't make the mistake of leaving a lump sum to your trust's human beneficiaries to help offset the costs they incur in caring for your pets. That strategy relies on beneficiaries' willingness to honor your wishes, even though they don't share your love for your pets.

Believe it or not, there are multiple types of pet trusts that can be tailored to your situation, and your pets'.

A traditional trust requires that you designate a trustee who pays money to the beneficiary who cares for the pet.
A statutory trust is a simpler plan in which the laws of your state dictate the details of how your pet trust is executed (in Arizona, A.R.S. § 14-2907 governs trusts for pets).

In general, a pet trust can be a living trust, which takes effect immediately and protects your pet in case you become disabled or otherwise unable to care for your pet, or a testamentary trust, which kicks in upon your death.

Finally, whether you create a trust or make less formal arrangements, be sure that whoever you leave in charge of your pets is willing to fulfill those responsibilities and will care for your pets as you desire.

Adapted from the Daily Plan-It newsletter.

Hoopes, Adams & Alexander, PLC, is a Chandler, Arizona, law firm offering services to Phoenix-area clients in the areas of estate planning, entity formation, commercial and real estate transactions, and civil litigation.