Many of us consider our pets to be part of our family. So it’s only natural that we want to make sure that they are taken care of after we pass away. In addition to providing for our human beneficiaries, an estate plan can include provisions to protect the well-being of our beloved companion animals, says The Balance in the article “Estate Planning for Fido: How to Set Up a Pet Trust.”
Texas now has a law governing the creation and use of pet trusts. Knowing how these trusts work and what they can and cannot do will be helpful, if you are considering having a pet trust included in your estate plan.
When you set up a trust, you have the authority as creator of the trust to direct how you want the assets in the trust to be managed for yourself and any beneficiaries of the trust. The same principal holds true for pet trusts. You set up the trust and name a trustee. The trustee oversees the money and any other assets placed in the trust. Because under Texas law a pet cannot be considered a beneficiary of the trust, you would name a “caretaker” as beneficiary. The caretaker would be charged with the responsibilty of using the funds in the trust for the pet’s care and related expenses. These expenses can include:
- Regular care by a veterinarian,
- Emergency veterinarian care,
- Grooming, and
- Feeding and boarding costs.
A pet trust can also include directions for end of life care and treatment for pets, as well as burial or cremation arrangements for your pet.
Creating a pet trust is like creating any other type of trust. An estate planning attorney can help with drafting the documents and advise you on selecting a trustee and caretaker.
Here are some things to consider when setting up your pet’s trust:
- What’s your pet’s current standard of living and care?
- What kind of care do you expect the pet’s new caregiver to offer?
- Who do you want to be the pet’s caregiver, and who should be the successor caregivers?
- How often should the caregiver report on the pet’s status to the trustee?
- How long do you expect the pet to live?
- How likely your pet is to develop a serious illness?
- How much money do you think your pet’s caregiver will need to cover all pet-related expenses?
- What should happen to the money, if any remains in the pet trust, after the pet passes away?
The last item is important if you want to avoid a conflict of interest which might occur if the funds in the pet trust go to the trustee or caretaker after the pet passes away. For that reason many people choose a charity, often a charity that relates to animals, as the beneficiary of any assets left in the trust at the pet’s death. Another option is to direct the trustee to divide the funds remaining in the trust among the human beneficiaries named in your will.
Another point: think about when you want the pet trust to go into effect. You may not expect to become incapacitated, but these things do happen. Your pet trust can be designed to become effective, if you become incapacitated.
Make sure the trust clearly identifies your pet so no one can abuse its terms and access trust funds fraudulently. One way to do this is to have your pet microchipped and record the chip number in the pet document.
You can also leave specific instructions regarding the care of your pet. If there are certain types of foods that you use, list them. If there are regular routines that your pet is comfortable with and that you’d like the caregiver to continue, then detail them. The more information you can provide, the more likely it will be that your pet will continue to live the same way as when you were caring for your pet.
Finally, it’s always a good idea to let the caretaker and the trustee know that you are trusting them with the responsibility of caring for your pet after you are gone. That way you’ll know if they have any reservations about taking on this role and you can make other arrangements, if necessary.
Reference: The Balance (March 27, 2019) “Estate Planning for Fido: How to Set Up a Pet Trust”
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