We Are Family: Pet Trusts

For many, pets are part of the family, making it important to remember that they can outlive us. While friends and neighbors may have the best intentions, unexpected costs and busy lives may make “leaning in” a heavy burden during a crisis. A “pet trust” ensures the future of our animal companions isn’t left to chance or charity. By setting aside dedicated funds and legally binding instructions, you can provide a guaranteed safety net for the continued care of your furry, feathery or scaly pals, no matter what happens to you.

A Guaranteed Future: Pet Trusts Explained

Pets are wonderful life companions—but their care cannot be paid for with love alone. Time and money are involved. Establishing a trust is a solid way to ensure that a reliable person is prepared to take responsibility for a beloved pet—and has the funds to do so—in the event you experience a capacity decline during your lifetime, and upon your death. At Chewy, Monica Weymouth explains the basics of a pet trust: 

• A pet trust is a legally enforceable arrangement that provides for the care of one or more animals should the owner die or become disabled. In addition to providing monetary funds for the lifelong care of the pet, a trust can also stipulate how the pet is cared for on a day-to-day basis.
• The pet parent—known as the “grantor”—creates the trust, which includes funds for animal care and instructions on how the funds should be distributed. (For example, you may specify that your pet requires regular teeth cleanings, or twice-yearly wellness visits.)
• When the grantor dies or becomes incapacitated, the appointed trustee becomes responsible for making payments to the designated caregiver—known as the human beneficiary—over the course of the pet’s life.
• After the pet has died, the pet trust distributes any remaining funds to designated beneficiaries. Many people choose to direct these leftover funds to animal shelters or welfare organizations.

When you work with an attorney to create a trust, it’s wise to include as much detail as possible in the “trust agreement” about how funds are to be used to take care of your pet when you are no longer able to do so yourself. Ideally, you’ll also have plenty of time to review your intentions and plans with the trustee you designate to administer the trust. It may even be a good idea to name a “successor trustee” who can step in should the named trustee ultimately be unable to take on the responsibilities. Attention to detail in preparing a pet trust is encouraged by the The ASPCA, which shares these additional pointers: 

• Describe in detail your pet’s standard of living and care.
• Require regular inspections of your pet(s) by the trustee, if desired.
• Determine the amount of funds needed to adequately cover the expenses for your pet’s care (generally, this amount cannot exceed what may reasonably be required given your pet’s standard of living) and specify how the funds should be distributed to the caregiver.
• Determine the amount of funds needed to adequately cover the expenses of administering the pet trust.
• Designate a remainder beneficiary in the event the funds in the pet trust are not exhausted.
• Provide instructions for the final disposition of your pet (for example, burial or cremation.)

It’s good to know that a trustee is not merely doing a favor for you or your pet. Trustees are bound to exceptionally high legal standards. In fact, attorneys remind us that trustees have fiduciary obligations, “the most important of which are the duties of loyalty and care, and the duty to act in accordance with the terms of the trust agreement.”  

Given the seriousness of the trustee role, trustee bonds can be required. Essentially, a trustee bond is a specific type of fiduciary bond that protects the interests of the trust and its beneficiaries in accordance with applicable state law. As a leading national provider of many types of fiduciary bonds, Colonial Surety Company makes it easy and efficient to obtain trustee bonds: Just get a quote online, fill out the information, and enter a payment method. Then, simply print or e-file the bond from anywhere. 

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Using A Will Instead of A Trust To Provide For Pets?

As much as we may feel our pets are “just like family members,” that’s not exactly how the law recognizes them. While “in most states an animal can be the beneficiary of a trust created to care for the animal,” money cannot be directly gifted to an animal via a will, as the New York City Bar Association explains:

Under the laws of all 50 states, a pet owner cannot leave any part of his or her estate outright to an animal. However, the owner may leave a sum of money to the person designated to care for the pet, along with a request (not a direction) that the money be used for the pet’s care. It is important for the pet owner to select a caretaker he/she trusts and who will be devoted to the pet, because the caretaker has no legal obligation under the above provision to use the money for the purpose specified.

When considering the differences between using a will or trust to designate funds for the care of pets, keep in mind that a will only becomes effective after death, whereas a trust provision can ensure that should you experience a capacity decline, the trustee is prepared to step in. The New York Bar Association provides examples of both trust agreements and will provisions for pets (and farm animals too), and cautions:

The owner should leave only a reasonable amount of money for the care of any pet. A large sum of money may prompt relatives to challenge the Will and the court may invalidate the bequest for pet care. The attorney may want to include an “in terrorem” clause in the pet owner’s Will to reduce the chance of a challenge to the Will. This clause provides that if a person unsuccessfully challenges a provision in the Will, he or she cannot then receive property under any provision of the Will.

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