When dealing with pets and estates, there are two main rules to keep in mind. First and foremost, and this may come as a shock to the more eccentric among us, pets can't inherit money. Animals are considered property in the eyes of the law, and one piece of property cannot legally own another. Unfortunately for Mr. Whiskers, he will not be the beneficiary of millions of dollars his relatives will bicker over for the rest of his nine lifetimes. You'll need a pet trust, which is similar to other types of property trusts.
To help you decide if a pet trust is right here's all you need to know about them.
What Are Pet Trusts?
A pet trust is a legal arrangement that allows you to provide for the care and upkeep of one or more pets if you pass away. The grantor is the one who establishes the pet trust, and the trustee is the entity in charge of the pet trust's administration. A pet trust can hold assets, typically cash, which the trustee can use to take care of the pets for which the trust was created.
How Do Pet Trusts Work?
Most pet trusts are set up to take effect only upon the pet owner's death. Several things need to be covered in the trust document, including:
- The animals covered by the trust: In most U.S. states, a trust can be set up to provide for the welfare of one or more animals. Once all of the animals have perished, the trust ends. A pet trust cannot be set up in perpetuity for the pet's children or any future pets the caregiver may purchase.
- The caregiver: Whether or not you utilize a pet trust, selecting a caregiver is the most crucial step. This person will handle your pet's daily care and upkeep. Don't think your spouse or best friend will agree to be your nominee just because you want them to. Ask them beforehand.
- The amount of money to be used for the pet's care: Try to be as accurate as possible when estimating the amount of money the caregiver will require to take care of your pet. The optimal amount is highly context-dependent, changing with factors such as the pet's age and health. If you set aside an unreasonably high sum, family members may challenge it in court, and there is a high possibility that the judge will reduce the amount.
- Caregiving instructions: Pet trusts typically include particular instructions for the caretaker. This makes perfect sense when you consider that animals can't communicate their wants and preferences to their caretakers.
- A person who will ensure the terms of the trust are being enforced: This individual is responsible for monitoring the money in the trust to ensure they are being used only for the animal's care.
Frequently Asked Questions about Pet Trusts
What happens if the pet dies and there's still money in the trust?
What do you want to happen to the excess funds if you leave more than necessary? You could give it to anybody, whether family, friends or a charitable organization.
What if you become incapacitated and unable to care for the pet before your demise?
A pet trust can take effect before your death if you become incapacitated and unable to provide for your pet. If something were to happen to you, the person you designated to care for your pets might have to step in and take control immediately.
Situations Where a Pet Trust Makes The Most Sense
Instances where a pet trust might make sense include:
- You want to ensure your pet(s) are taken care of if you pass away
- You worry about leaving your pets without care if you're incapacitated by an injury or illness
- Your pets need specialized treatment or care
- You don't want to put your loved ones in a financial bind by asking them to take care of your pets
Reach Out to Us for More Information
It seems sensible to establish a pet trust, given that 87% of Americans treat their pets as part of the family. After all, it's sad when a pet has to go to the shelter because its owner has passed away. Leaving loved ones behind is a heartbreaking prospect. But there's nothing like the peace of mind that comes from knowing you've provided for every family member, whether they have two or four legs.