Pet Trusts: Ensuring Your Pet’s Future in Estate Planning

Did you know that you can include pet trusts in your estate plan? Pets often become cherished members of a family and many pet owners worry about what might happen to their pets should they pass away or become incapable of taking care of them. For this reason, pet trusts have become an important part of estate planning, and we’ll cover all the bases of pet trusts in this comprehensive guide.

Are you new to estate planning? We offer free estate planning seminars to learn how to get started and get your questions answered by the expert estate planners at Craig Associates, PC, or request an initial case evaluation by calling (828) 258-2888.  

What are Pet Trusts? 

Pet trusts are legal documents to ensure that a pet(s) will be taken care of once their owner has passed away or becomes incapacitated. In most jurisdictions, pets are considered personal property and cannot legally own property or funds, hence the need for pet trusts. 

Setting Up Pet Trusts

There are a few components to consider when setting up pet trusts, including:

• Choosing the right type of pet trusts. There are two main types of pet trusts: Statutory Pet Trusts and Traditional Pet Trusts. A professional estate planner can help you choose based on you and your pet’s specific needs, state laws, and financial considerations.
• Determining the amount of funds in pet trusts. This depends on the type, size, age, and life expectancy of the pet, the standard of living the pet owner wants to maintain for the pet, and any special medical care.
• Deciding on the duration of pet trusts. Most pet trusts are established to last for the lifetime of the pet. If your pet outlives a specified time frame, the “rule against perpetuities,” may apply. Check with an estate planner in your state to see if this rule applies to your situation.  
• Picking a trustee in pet trusts. The appointed trustee will handle the financial aspects of the trust, including making payments for the pet’s care. You’ll need to select someone reliable, trustworthy, and willing to take on this role.
• Naming a successor trustee in pet trusts. The person is a backup in case the first-choice trustee dies or can no longer fulfill the role.
• Selecting a pet caregiver in pet trusts. This is who will be responsible for the day-to-day care of the pet—ideally someone who is compassionate about animals and can commit to the task long-term.
• Providing detailed care instructions in pet trusts. Here you can give specific instructions about the pet’s diet, behavioral tendencies, and medical needs for seamless care. 

Maintaining Pet Trusts

Regular review and updating of pet trusts is important to ensure their relevance and effectiveness. Pet owners should regularly assess their trust documents to ensure they are in line with their personal circumstances, needs of their pets, or changes in law. It is essential to keep the information about the pet up-to-date, like their health considerations, daily routine, dietary requirements, and behavioral traits, to help the caregiver provide proper care. 

You may also need to modify the trustee or caregiver designations in pet trusts if their ability or willingness to assume their roles changes. 

Pet Trusts in Estate Planning

If not planned for, a pet’s future can be uncertain, and in worst-case scenarios, this can lead to the pet being abandoned or ending up in a shelter. Pet trusts can guarantee that your wishes for your pet are carried out, that they stay in a loving home, and receive the care they need. This can be particularly useful in preventing potential conflicts of interest among surviving family members regarding who will care for the pet.

Coordinating Pet Trusts with Other Estate Planning Tools

A comprehensive estate plan considers all aspects of an individual’s life, pets included. Coordinating pet trusts with other estate planning tools can ensure the smooth execution of the trust and minimize potential legal hurdles. 

A Revocable Living Trust may include pet trusts, and offer the advantage of immediate transfer of responsibility and care for the pet upon the owner’s passing, without requiring court approval.

Impact of Pet Trusts on the Estate

Pet trusts in an estate plan may impact heirs and beneficiaries in a few ways, such as:

• Money allocated to pet trusts reduces the amount of inheritance for the heir or beneficiary. This might cause conflict, so clear communication with all parties during the estate planning process can mitigate such issues.
• If the pet’s caretaker is a family member or a beneficiary, they will have additional responsibilities. You’ll need to ensure that the designated caregiver is willing and capable to take on the responsibility of caring for the pet.

Well-laid-out pet trusts can help keep the peace among beneficiaries and provide clear guidance on the caretaking and financial provisions for your pet!

FAQs about Pet Trusts

Can any type of domestic animal be included in pet trusts?

Yes, any type of domestic animal, including dogs, cats, horses, birds, etc., can be included in a pet trust as long as they are legally owned by the trust settlor.

How are funds distributed from pet trusts?

Funds are distributed according to the trust agreement to caregivers and may include daily pet care costs, veterinary fees, and eventual cremation or burial costs.

What happens to funds in pet trusts when the animals pass away?

Once the pet crosses the rainbow bridge, any remaining funds in the pet trust are dispersed according to stipulations in the trust document—usually to a named beneficiary or sometimes a charity.  

Secure Your Pet’s Well-Being with Pet Trusts 

The expert estate planners at Craig Associates, PC, have helped families in Asheville and the surrounding areas secure their financial future and ensure the loved ones they leave behind are taken care of, including their beloved pets. Let us help you design an estate plan to fit your unique needs by calling (828) 258-2888, using the contact form below, or registering for one of our free estate planning seminars today!