What would happen to your pets if you died tomorrow? Would a friend or relative take them? Are you sure?
If your pets feel like family members, as they do for so many of us, it makes sense to include instructions for their care in your estate plan.
The resources you have to make these plans may depend on the state in which you live, how much time and money you’re willing to spend and the method through which you outline the care of your animal. When it comes to estate planning, you may include your pet in your will or be able to set up a legal pet trust. Here’s what to know.
[Read: The Newbie’s Financial Guide to Adopting or Buying a Pet.]
Account for the pet in your will. You can use your will to leave your beloved pet and some money to a trusted caretaker. Providing for your pet in your will is more like disbursing furniture, artwork or jewelry after your death than, say, providing for your children, experts say. “You’d transfer the pet as an asset and say who gets the pet, and at that point, essentially there may be some kind of bequest of money to that individual,” says Jennifer Guimond-Quigley, an attorney in Chicago.
Note that while you can request that the pet’s caretaker use specific funds to feed and care for the pet, those requests are generally not enforceable. So if you give your cousin Pete $5,000 to care for your poodle after your death, he might spend all the money on his wedding instead.
Keep in mind, too, that there are rules in place preventing you from leaving your entire estate to your pet, Guimond-Quigley says. So no matter how much you love Fluffy, you’ll need to designate other beneficiaries.
[See: The True Costs of Owning a Pet — and How to Spend Less.]
Write a pet trust. A pet trust is a more complex and expensive document to write, but it will give you more control over the care of your pet. It allows you to set up a plan that more closely mirrors how you’d plan for the care of a son or daughter after your death instead of a piece of property, Guimond-Quigley says. Ask your attorney what the laws governing pet trusts are in your state.
The essential components of a pet trust include designating a primary caretaker or physical custodian who will care for your pet on a day-to-day basis, Guimond-Quigley says. The second part would include a trustee — who could be a different person from the caretaker — to make sure that the funds allocated to the trust are managed, invested and paid out appropriately.
Make sure the caretaker and trustee are on board. Unfortunately, you cannot force your cousin who lives in a one-bedroom apartment in Manhattan to take care of your 140-pound Great Dane if he doesn’t want to. You can’t obligate your son, who is allergic to cats, to live with Siamese kittens after you die.
“Just because it says it’s going to pass to them doesn’t mean they have to take care of the pet or do what you tell them to do, so it’s important to find a pet lover who has the capacity and is willing to do this,” says Roger Ma, certified financial planner and founder of lifelaidout in New York City.
Make sure to be upfront with your caretakers about the plans you’ve outlined for your pets, and designate a backup caretaker or organization in case the original custodian doesn’t outlive the pet or cannot care for it. Some states have “pet retirement homes” or “pet sanctuaries” that act as caregivers or adoption agencies, Guimond-Quigley says. Pet owners should contact and visit the facility before opting to use one as a substitute for an individual caretaker.
[Read: Why You Should Start Estate Planning in Your 20s.]
Consider how expensive your pet is. When determining how much money to allocate to the future care of your pet, consider that costs can vary. The cost to stable a horse at a nearby barn and pay for its routine specialized medical care is very different than the cost to care for your 12-year-old mutt who’s never even had a toothache.
When determining how much money to set aside for the care of your pet after you die, consider tracking several months of food, supplies (such as litter or toys) and medical expenses, Ma says. Consider the average life expectancy of your pet and the likelihood that the animal will develop expensive medical problems. Your veterinarian may be able to help you price out the average cost over the remaining life of your pet. When coming up with a budget in a pet trust, be as specific as possible about dietary and health care needs, Guimond-Quigley says, but leave some padding for unforeseen expenses.
With a pet trust, you might be able to select that any funds left over after the pet’s death go to, say, a local animal shelter or another charitable cause close to your heart.
Keep your documents up-to-date. Just as you would update your estate planning documents with the birth of a child, death of a beneficiary or the acquisition of an expensive asset, you’ll want to let your lawyer know when you’ve accumulated a new pet or when a beloved old pet dies. The same thing goes if the lifestyle of your designated caretakers change. If your primary caretaker marries a man with a terrible dog allergy, then update your plans to replace her with a willing caretaker.
Asking about any pet changes is a good thing for an attorney to discuss with clients during regular reviews of their estate planning documents. But if your attorney doesn’t bring it up, make sure you volunteer any tweaks in your plan and ensure that Fido, Fluffy and Mittens will be well cared for, even after you’re gone.
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How to Build an Estate Plan for Your Pets originally appeared on usnews.com
