Estate Planning For Pets

Our pets are almost like children for most of us. So, when creating an estate plan, I always ask if my client has a pet and if yes, then whether the client has thought about what will happen with their pet or pets if something unexpected were to happen. Almost without exception, the answer is “I hadn’t really thought of that!” And when we do talk about it, the answers vary wildly. Sometimes I get a response like “Well, someone in our family will take the dog – I don’t really care who.” Other times the client is adamant that the pet be cared for in a certain way and by a certain person. I have had clients with a young child insist that the family dog and the child are a package deal – the guardian designated for the child must also agree to have the dog live in the household because the dog is very important to the child.

In some instances, a client will want to create a “pet trust”, whereby a special trust is created to hold money to provide for the pet’s care after the owner passes. So, the owner designates a person to act as a trustee to care for the pet, and the owner deposits a sufficient amount of money into the trust to ensure that the trustee has the funds to feed, bathe, groom, and provide veterinary care for the pet.

Having a pet can be expensive

For anyone who owns a dog, for example, you know that heartworm and flea & tick medications typically run $50 or more per month, dog food can easily run $60 per month, an annual checkup and shots at the veterinarian cost about $200. Pet health insurance is about $225 per year. Plus, if the caretaker of the dog goes on vacation, then the cost to kennel a dog is at least $25 per day. This means that caring for a dog is an annual expense of about $2,095 on the low side, and that doesn’t count if the dog gets sick or is injured and has a co-pay not covered by insurance.

Asking someone to care for your pet can be a big deal

So, asking someone to care for your pet is really a pretty big ask. If a client is concerned about this issue, then I recommend setting up a trust for the pet in the amount of approximately $10,000. Those funds don’t have to be placed in the trust immediately – they can come from the client’s estate after the client passes. And, if the funds aren’t all used up by the time the pet passes, then a beneficiary for the remainder of the trust balance is named and receives that leftover balance. The good news is that it isn’t difficult or expensive to establish a pet trust while we are preparing the other estate planning documents – it’s really just a part of the estate planning process.