1. What is a “pet trust”?
A pet trust is legal technique you may use to be sure your pet receives proper care after you die or in the event of your disability.
2. How does a pet trust work?
You (the “settlor”) give your pet and enough money or other property to a trusted person or bank (the “trustee”) who is under a duty to make arrangements for the proper care of your pet according to your instructions. The trustee will deliver the pet to your designated caregiver (the “beneficiary”) and then use the property you transferred to the trust to pay for your pet’s expenses.
3. What are the main types of pet trusts?
There are two main types of pet trusts.
The first type, called a “traditional pet trust,” is effective in all states. You tell the trustee to help the person who is providing care to your pet after you die (the beneficiary) by paying for the pet’s expenses according to your directions as long as the beneficiary takes proper care of your pet.
The second type of pet trust, called a “statutory pet trust,” is authorized in over 40 states. A statutory pet trust is a basic plan and does not require the pet owner to make as many decisions regarding the terms of the trust. The state law “fills in the gaps” and thus a simple provision in a will such as, “I leave $1,000 in trust for the care of my dog, Rover” may be effective.
4. Which type of pet trust is “better”?
Many pet owners will prefer the traditional pet trust because it provides the pet owner with the ability to have tremendous control over the pet’s care. For example, you may specify who manages the property (the trustee), the pet’s caregiver (the beneficiary), what type of expenses relating to the pet the trustee will pay, the type of care the animal will receive, what happens if the beneficiary can no longer care for the animal, and the disposition of the pet after the pet dies.
5. What if my state does not have a special law authorizing pet trusts?
You may still create a traditional pet trust even if your state does not have a pet trust statute.
6. When is a pet trust created?
You may create a pet trust either (1) while you are still alive (an “inter vivos” or “living” trust) or (2) when you die by including the trust provisions in your will (a “testamentary” trust).
7. Which is better – an inter vivos or testamentary pet trust?
Both options have their advantages and disadvantages.
An inter vivos trust takes effect immediately and thus will be functioning when you die or become disabled. This avoids delay between your death and the property being available for the pet’s care. However, an inter vivos trust often has additional start-up costs and administration fees.
A testamentary trust is the less expensive option because the trust does not take effect until you die and your will is declared valid by a court (“probating the will”). However, there may not be funds available to care for the pet during the gap between when you die and your will is probated. In addition, a testamentary trust does not protect your pet if you become disabled and unable to care for your pet.
8. What does it mean to “fund” your pet trust?
Funding means to transfer money or other property into your trust for the care of your pet. Without funding, the trustee will not be able to provide your pet with care if you become disabled and after you die.
9. How much property do I need to fund my pet trust?
You need to consider many factors in deciding how much money or other property to transfer to your pet trust. These factors include the type of animal, the animal’s life expectancy (especially important in case of long-lived animals), the standard of living you wish to provide for the animal, the need for potentially expensive medical treatment, and whether the trustee is to be paid for his or her services. Adequate funds should also be included to provide the animal with proper care, be it an animal-sitter or a professional boarding business, when the caregiver is on vacation, out-of-town on business, receiving care in a hospital, or is otherwise temporarily unable personally to provide for the animal.
The size of your estate must also be considered. If your estate is relatively large, you could transfer sufficient property so the trustee could make payments primarily from the income and use the principal only for emergencies. On the other hand, if your estate is small, you may wish to transfer a lesser amount and anticipate that the trustee will supplement trust income with principal invasions as necessary . . .
10. When do I fund my pet trust?
If you create an inter vivos pet trust, that is, a trust which takes effect while you are alive, you need to fund the trust at the time it is created. You may also add additional funds to the trust at a later time or use the techniques discussed below.
If you create a testamentary pet trust, that is, the trust is contained in your will and does not take effect until you die, then you need to fund the trust by a provision in your will or by using one of the techniques discussed below.
11. How do I fund my pet trust?
Direct transfers: If you create your trust while you are alive, you need to transfer money or other property to the trustee. You need to be certain to document the transfer and follow the appropriate steps based on the type of property. For example, if you are transferring money, write a check which shows the payee as, “[name of trustee], trustee of the [name of pet trust], in trust” and then indicate on the memo line that the money is for “contribution to [name of pet trust].” If you are transferring land, your attorney should prepare a deed naming the grantee with language such as “[name of trustee], in trust, under the terms of the [name of pet trust].”
If you create the trust in your will, you should include a provision in the property distribution section of your will which transfers both your pet and the assets to care for your pet to the trust. For example, “I leave [description of pet] and [amount of money and/or description of property] to the trustee, in trust, under the terms of the [name of pet trust] created under Article [number] of this will.”
Pour over will provision: If you create your pet trust while you are alive, you may add property (a “pour over”) from your estate to the trust. . .
12. How do I decide on the individual to name as my pet’s caregiver?
The selection of the caregiver for your pet is extremely important. Here are some of the key considerations:
· Willingness to assume the responsibilities associated with caring for your pet.
· Ability to provide a stable home for your pet.
· Harmonious relationship between the caregiver’s family members and your pet.
13. Should I name alternate caregivers?
Yes. You should name at least one, preferably two or three, alternate caregivers in case your first choice is unable or unwilling to serve as your pet’s caregiver. To avoid having your pet end up without a home, consider naming a sanctuary or no-kill shelter as your last choice.
14. What types of instructions should I include in my pet trust regarding the care of my pet?
Here are some examples of the types of concerns about which you may wish to provide instructions:
· Food and diet.
· Daily routines.
· Toys.
· Cages.
· Grooming.
· Socialization.
· Medical care, including preferred veterinarian.
· Compensation, if any, for the caregiver.
· Method the caregiver must use to document expenditures for reimbursement.
· Whether the trust will pay for liability insurance in case the animal bites or otherwise injures someone.
· How the trustee is to monitor caregiver’s services.
· How to identify the animal.
· Disposition of the pet’s remains, e.g., burial, cremation, memorial, etc.
FAQs revised on Thursday, November 17, 2011.