Info Feature: Pet Trusts

I’m going to start by saying that this doesn’t have to be as maudlin a topic as it might appear to be at first. Think of it this way: Many of you love your pets as your children, and it makes sense to think of preparations for their care, so let’s embark upon this subject in that spirit. Also, not only am I not a lawyer, I don’t even play one on TV, so for specific legal and financial information, consult an attorney and/or accountant. The information below is taken from an article written by Rachel Hirschfeld, Esq., the creator of The Hirschfeld Pet Protection Agreement.

Pet owners often don’t consider what will happen to their pets if they die or become disabled. The consequences of an owner’s failure to provide for a pet’s continuing care can be stark. Too often, the pet will end up in a shelter, where, at best, it will not receive the care the owner would prefer; at worst–and in most cases–the pet will be euthanized. Until recently, pet owners encountered many legal barriers when trying to provide care for their pets after the owner’s incapacitation. Fortunately, in most states those obstacles are gone. Pet owners can now create legally recognized and enforceable instruments that provide care for their pets in the event of their disability or death.

A pet trust allows the owner to provide detailed instructions for the pet’s care, and to direct the management and disbursement of trust funds throughout the pet’s life in varying amounts and stages. Here are a few quick factoids: Any funds transferred to the trust during the owner’s lifetime could stay in trust for the benefit of the pet at the owner’s death. The trustee (the overseer of the trust fund) has a legal obligation to carry out the terms of the trust. A further benefit of establishing a pet trust is that the trust funds will not be subject to probate. As a result, the funds in the pet trust will not be considered when determining probate fees; disbursement of funds for the pet’s care will not be delayed by the fact that the funds are under the control of the executor of the owner’s estate; and the terms of the trust will remain private.

Moreover, a pet trust can actually help to keep the pet owner and pet together, should the owner require in-home care, or move to an assisted living facility or nursing home. Of course, not every nursing home allows companion animals to live with their residents. In order to both encourage compliance with the pet owner’s wishes while the pet owner is alive and increase the likelihood that more and more facilities will begin (or continue) to allow pets to stay with their owners, pet owners should strongly consider leaving a portion of the sum that remains in the trust, and even for use during the pet’s life or after the pet’s death, pro rata to any facilities that keep the owner and pet together during the owner’s disability and until the owner’s death.

There are income, gift and estate tax rules applicable to pet trusts. Again, for specifics, consult your attorney or accountant.

A lot of decisions need to be made during this process. Who will be the trustee, in charge of overseeing the trust and its enforcement? Who will be the actual caretaker of my pet once I’m gone? How will the trust be funded? How should funds be distributed? How will I define the type of care I want for my pet? What guidelines do I want to set for decisions regarding euthanasia?

It all requires work on your part, but certainly it’s worth it all to be sure that your little loved ones are going to be cared for properly once you’re gone, and in a manner befitting your wishes.

-We dedicate this article to R. and her pal B

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