I am Al Young financial author. I produced the Free E-book "Pet Financial Plan". I also produced the music video. Donations are accepted at: https://www.gofundme.com/f/petfinancialplan
Al Young
(520) 338-1004
Email: al@alyoung.net
Tucson, Arizona
PET FINANCIAL PLAN
Our pets are so close to our hearts that it’s difficult to think about the day when they’ll no longer be with us. But what if something happens to us first, and we’re not around to take care of them? That's where financial planning for pets comes in. Can you include a pet in your will or trust? How can you ensure your pet is well taken care of?
Arrange for caregivers for your pet. You’ll want to choose both emergency and permanent caregivers for your pet if something happens to you. Here are some tips:
Talk about your wishes and the needs of your pet with your potential caregivers. If you have multiple pets, decide whether they should stay together or be placed with different caregivers.
Ask a few trusted friends or family members to act as emergency caregivers. Arrange for more than one caregiver, just in case someone isn’t available. Give them feeding and care instructions for your pet, contact information for your veterinarian, and a key to your house.
Let the rest of your family, friends, and loved ones know how many pets you have and that contact information for your emergency caregivers is available. Keep this contact information in your wallet and somewhere in your home where it’s easy to find.
To ensure long-term care for your pet, you’ll need to name a permanent caregiver. Be sure to choose someone you know will be able to provide your pet with a good home and give your pet the kind of attention and care they’re used to. When designating a permanent caregiver, you should also include a backup option.
If you don’t have someone in mind as a permanent caregiver, give detailed instructions to your emergency caregivers regarding how to find a new home for your pet. If you adopted a pet from an organization, be sure to check your adoption agreement for clauses requiring your pet to be returned to its care.
Keep in touch with your caregivers so that you can make other arrangements if their circumstances change and they are no longer available to serve in that capacity.
Although it might seem like a good idea, avoid naming an organization as your permanent caregiver (unless otherwise stipulated in your adoption agreement). While some animal welfare organizations might have temporary space available, they generally can’t offer the kind of long-term care your animals will need. Your pets are your companions, and they’re used to living in your home. Think about placing them where they would be the most comfortable.
Bring Love Home
Remember, it’s important to set up emergency care as well as permanent care for your pets. Long-term arrangements can take some time to implement, and your pets will need immediate attention in the event that something happens to you.
While preparing your pet estate planning trust, you’ll want to include authorization for the use of funds from your estate for your pets. This money can be used for their care and any other costs that arise, such as the cost of transportation to their new home. Consider setting up a trustee, which can add an additional layer of oversight and care for your animals.
Planning provisions for your pets requires some important decision-making. If you have any questions, consult a legal expert who can assist you with deciding what to include in your will. That person can also help you figure out what kind of estate planning for pets will be most effective. And don’t forget to leave copies of your will or trust with your executor and chosen caregivers.
HOW TO SET UP A PET BUDGET
List all the things you'll need to buy, pet grooming fees, supplies, adoption fees, vet fees, etc..
Monthly expenses. Create a list of what you'll need to buy each month, such as food, treats, and toys. You can set up recurring deliveries to help you budget.
Emergency savings. Set aside money for emergencies and unexpected costs.
Pet insurance. Consider pet insurance to help cover routine care, medications, and vaccinations.
Preventative care. Invest in preventative care to reduce more expensive costs later. For example, you can get your dog's teeth cleaned regularly to prevent extractions.
Budgeting vs. cash flow. Review your current budget and cash flow to see if you can afford to divert some money to your pet.
Fixed vs. variable expenses. Some pet expenses are fixed while others change from month to month.
Including pets in a Pet Trust
You can help to ensure that everything goes smoothly by incorporating your wishes for emergency and long-term care for your pets in a Pet Trust. Formal pet trust and estate planning will bring you peace of mind and reassurance that your animals will be properly looked after.
A pet trust is not a will, but it can be used to supplement a will to ensure your pet's care:
- When it takes effect. A pet trust can take effect immediately if you become incapacitated.
- Legal obligation. A pet trust creates a legal obligation to care for your pet, while a will does not.
- Accountability. A pet trust holds your caregiver accountable for following your instructions.
- Flexibility. A pet trust can disperse funds in installments to ensure they last the duration of your pet's life.
- Specificity. A pet trust allows you to leave detailed instructions about how you want your pet cared for, including the type of food, exercise, and veterinary care.
- Legally binding. A pet trust makes your directives legally binding, so you can sue your caregiver if they don't follow your wishes.
- State laws. All 50 states and the District of Columbia have pet trust laws.
You can use other assets, like retirement plans, annuities, etc., to fund your pet trust. You should consult with an attorney about the best way to do this.
WHAT IS A PET TRUST?
Only an attorney can prepare a Pet Trust.
A pet trust is a trust that provides money and care for your pets when you can no longer do so. The trust can operate either during your lifetime or after. While usually people create a pet trust as part of their estate planning, in some cases a pet trust can be useful if you’re incapacitated or otherwise unable to care for your pet.
Like all trusts, a pet trust is a legal entity that owns property, money and other assets. You fund the trust by contributing assets to it during your lifetime and by leaving assets to the trust in your will. Your pet is the beneficiary of this trust. Once the trust activates, the trustee in charge will use its funds to pay for your pet’s food, housing and other care. In most cases this means that someone has taken possession of your pet and the trust is reimbursing their costs.
If you want to make sure that your pet is well cared for in your estate planning, many attorneys consider a pet trust better than a will. Pet trusts are more specific than just leaving your pet and some money to an heir. With a pet trust your trustee makes sure that this money really is spent on your pet’s well-being. They can also find a new home for your pet if your heir changes their mind and chooses not to inherit the animal.
Pet trusts can also get very detailed.
A pet trust does two main things. First, it provides the resources to care for your pets and other animals once you no longer can. Second, it provides the instructions to make sure those pets are cared for the right way. When you create a pet trust you can include instructions for how the trustee should care for your pet. This can range from medical treatment and food to specific housing requirements, daily routines and even preferred toys.
Pet trusts are similar, and often identical, to other forms of property trusts. For example you will often see families create a trust to care for a shared home, in which case the trust’s assets are used to pay for maintenance, upkeep and oversight of the house. A pet trust works the same way, except the trust’s assets pay for the care, housing and feeding of your pet.
THE 3 TYPES OF PET TRUSTS
Pet trust
Every state recognizes some form of pet trust, although the specific laws will differ in each jurisdiction. Broadly, there are three types of pet trusts that you can use:
Honorary
With an honorary pet trust you leave an amount of money to whoever will care for your pet after you die. This becomes a conditional bequest, meaning that the person only receives funds from this trust while they’re caring for your pet according to the trust’s instructions.
Traditional
With a traditional pet trust you leave your pet to someone in your will, just like with an honorary pet trust. However, there are no conditional bequests involved. Instead the trust has a trustee who regularly dispenses funds as necessary to care for the pet and meet the trust’s instructions. This is preferred to an honorary trust as it involves no ambiguity regarding the trust’s funds, although it can create problems if your named heir can’t or won’t accept possession of your pet when you die.
Statutory
With a statutory pet trust you leave your pet to the trust itself. The trustee arranges for the pet’s caretaker and dispenses funds as necessary to care for the pet and meet the trust’s instructions. This is preferred to traditional pet trusts, as it avoids any inheritance issues. Although you may name a specific caretaker in your trust’s instructions, the trustee can find an alternative home if that person can’t or won’t take possession of your pet.
How Do You Create a Pet Trust?
Structurally, you can create a pet trust the same way as any other ordinary trust. As noted above, it’s common for people to create this trust as part of their estate and fund it through their will. When doing so, there are a few details that you will want to make sure you address.
Named Animals
When you create your pet trust, be clear regarding which animals the trust will care for. Any animal not specifically named in the trust documents will not be included and will instead pass to your family through ordinary probate.
Funds
Funding a pet trust can be a problem for many families. If you leave too little money in the trust, it will run out during your pet’s lifetime. If that happens the trust will wind up and state law will govern what happens to your pet. If you leave too much money, your family may challenge the trust.
Trustee/Caretaker
Do not simply assume that someone will assume the role of trustee. Nor should you assume that someone will want to take possession of your pet. Make sure to ask the people you intend to name for those positions. If someone you trust wants to take your pet after you die, you can name them as both caretaker and trustee. Otherwise, you may want to name a professional trustee such as a lawyer or banker to oversee the trust. If you do name a professional trustee, make sure to contribute enough money to cover their costs, as they will bill the trust for their time.
Specific Instructions
If your pet has any specific needs, make sure to name them in the trust. Usually this will involve medical issues or important details for your pet’s comfort. Be careful not to get too specific here, though. If you get unnecessarily precise, people may disregard your instructions altogether which can create numerous issues.
Longevity
The main difference between a pet trust and an ordinary property trust is longevity. You cannot create an indefinite pet trust. Once the animal or animals named in the trust die, the trust will wind up. The trust cannot pass to the offspring of your pet, nor to any new animals other than the ones originally named when you created the trust. It’s a good idea to specify how you want the trust to wind up once your pet dies, and what you want the trust to do with any remaining money. This will prevent the state from distributing this money and will also help the trust survive potential challenges from your heirs.
The Bottom Line
A pet trust is a trust that you establish to pay for the care and housing of animals. It holds assets that you put into the trust, and may legally own the animal as well depending on the nature of the trust that you establish.