Protecting Your Pet

If you take a minute to stop and think about why you have an estate plan in the first place, you will likely find that many of the reasons apply to your pet as well as to your human loved ones. If something happens to you, such as your death or incapacity, you want to make sure that your pet is financially secure and cared for in the same way that you care for them now. Unlike their human counterparts, pets are often overlooked, forgotten, or simply not wanted when something happens to their owner. Incorporating a pet planning component into your overall estate plan allows you to provide for your pet financially and ensure that there is a legally enforceable plan in place for the care of your pet if you are unable to provide that care yourself one day.

It may be difficult for you to think of your pet as “property” that you own, but that’s how the law views pets. As such, you can “gift” your pet to someone in your Last Will and Testament; however, a Will alone is insufficient to properly provide for and protect your pet in your estate plan. While you can gift money to the person who has agreed to care for your pet in your Will, that is a very poor mechanism to ensure that the money is actually spent on your pet’s care and maintenance. For that matter, such provides no way to ensure that your designated caregiver will even care for your pet. In short, the limitations presented by a Will make your Will insufficient as a pet planning tool.

If you have a friend or family member who has agreed to care for your pet, that is great. Just as with a Will, however, a verbal promise from someone may not be enough to guarantee that your pet will be properly cared for in your absence. A verbal promise carries little, if any, legal weight and enforcing one in this situation is virtually impossible. Moreover, do you want someone to be forced to care for your pet? Like your Will, a verbal promise also does not allow for any oversight regarding money you leave for your pet’s care and maintenance. Finally, your designated caregiver could predecease you, become incapacitated, move to another country, or simply change his/her mind about caring for your pet.

A pet trust is a legal agreement that allows the Settlor (you) to appoint a Trustee whose job is to protect trust assets and administer the trust using the terms found in the trust agreement – all with the aim of benefitting a pet as the beneficiary, also named by the Settlor. A pet trust is no different from any other trust except for the fact that an animal is the beneficiary of the trust. A trust can be a testamentary or a living trust with the former created using a provision in your Will and not activated until after your death while the latter is created and administered during your lifetime. For a pet trust to protect your pet in the event of your incapacity as well as your death, you need to create a living trust. Once the trust agreement has been drafted, you will transfer assets in the trust to fund the trust. You can use almost any type of assets and the amount of assets you use to fund the trust is up to you. Consider, however, the amount of money you spend on your pet in a typical year and your pet’s life expectancy when deciding on a dollar amount.

Using a pet trust within your pet planning component eliminates the problems that come with relying on a verbal agreement or a Will. First and foremost, a pet trust is a legally enforceable agreement, in the State of Maryland, providing you with invaluable peace of mind. Second, you appoint the Trustee who is responsible for overseeing the administration of the trust, managing the trust assets, and defending the trust in court should litigation be necessary. Finally, the terms of your pet trust can be used to dictate who handles the day-to-day care of your pet, what veterinarian treats your pet, what food he/she eats, and anything else important about your pet’s care.

Because you create the trust, you can appoint the same person to be the caregiver and the Trustee or appoint separate people to the roles. Keep in mind, however, that one of the primary benefits to using a pet trust is the ability to legally enforce the terms of the trust. The Trustee, however, is typically the one responsible for managing and distributing financial assets initiating litigation should enforcement be necessary. If the caregiver and the Trustee are the same person, there really is no one, practically speaking, in a position to make sure that the trust terms are being followed.