Pets in estate planning

Estate Planning Issues For People With Pets

MAY 27, 2013 VOLUME 20 NUMBER 21
Does anyone else remember reading “Rhubarb,” a 1946 novel by H. Allen Smith? The basic story: an eccentric millionaire leaves his entire fortune to a stray cat (the eponymous Rhubarb). Among the assets in the cat’s inheritance is a baseball team (the fictional New York Loons). Hilarity ensues. The novel was even made into a movie in 1951 (starring Ray Milland as the cat’s financial manager).

Why does this all-but-forgotten novel (and the movie, which may actually be better than the book) come to mind now? Because of the growing popularity of “pet trusts,” and as an opportunity to discuss how one might plan for taking care of the pets who survive the owner’s death. We are NOT planning on a discussion about what it might mean if “Rhubarb” was the only child-appropriate book on a grandmother’s bookshelf in, say, the late 1950s.

So you have two cats (Max and Chloe) and a dog (Molly), and you feel very strongly about them. You want to make sure that they are taken care of after your death — even though you recognize that you will likely outlive them. In any case, you would almost certainly have other pets, and you know that they will be very important to you when you are looking at the proverbial endgame. What can you do to provide for Max, Chloe and Molly, and what should you do?

There are a number of mechanisms our clients consider for dealing with their pets. In roughly increasing order of complexity, they include:

Identifying who will take custody of the pets. Probably the most common arrangement we see is something like this: “I direct that any pets I may own at the time of my death should be given to my brother Dave, who has promised that he will care for them.” Please make sure Dave knows he is identified in this way, and you probably should have a backup choice (just like you do for guardianship of your minor children, and for identifying your trustee).

Involving a pet-oriented non-profit. Some organizations offer placement programs for pets after the owner’s death. You might want to make specific reference to a program you are familiar with, and include a donation to allow the organization to effectively make a placement for an elderly, ill or special-needs pet (remember that your pet’s condition is likely to decline between now and your death).

Providing for a stipend. We frequently see one of two variations here. Either “I leave the sum of $x,000 to my sister Diana, on condition that she takes custody of all of my pets and agrees to care for them” or “I leave the sum of $x,000 to my veterinarian Dr. Whisperer, who has agreed to use some or all of those funds to help arrange for placement of my beloved Max, Chloe and Molly (and any other pets I may own at the time of my death) in suitable homes.” Again, make sure your intended recipient is aware of the arrangement and willing to take it on, and plan for a backup (Dr. W is planning on selling his veterinary practice within the next five years, you know).

Making more elaborate arrangements for pets. Occasionally we have clients who have given a lot of thought to what their pets’ lives will look like after the client’s death. We have drafted a number of specific arrangements, from giving directions about the kind of care (food, grooming, living arrangements) to providing a home for the person who keeps the pets. These arrangements do not quite rise to the next level of complexity, since they are not formal “pet trusts” — but they can be as tailor-made and as complicated as the client’s needs and imagination.

Pet trusts. This is a topic of considerable interest in recent years, though it has been (in our experience) much more talked about than implemented. Pet trusts have actually been around for centuries (look for the legal term “honorary trusts”), but local laws have often made them unenforceable. In the last two decades or so, many jurisdictions have formally approved the idea: Rhubarb would be proud.

But a pet trust is a much more complicated and expensive thing to create — and administer — than the other, less formal arrangements. For that reason most of our clients, though they may be intrigued by the idea, opt instead to use one of the more casual approaches described above. That said, if you feel strongly that care of your pet is one of the most important items your estate plan needs to consider, you should be thinking about a pet trust.

Will a pet trust work in Arizona? Yes (here’s the Arizona statute allowing pet trusts). If you don’t live in Arizona, ask your local attorney about the concept. And be advised: pet trusts are subject to some oversight that is different from other trusts. For instance: the amount you leave to a pet trust can be reduced if a court thinks it’s excessive (that’s what happened with Trouble, Leona Helmsley’s dog).

Can you get a pet trust on the internet? After all, your situation can not be unique — millions of people with beloved pets must be thinking about the same thing. Our answer: yes, you can get a straightforward pet trust from the internet, and it will probably be legal in Arizona. But it will not be integrated into your estate plan, and might in fact directly conflict. It may affect the other distributions you intend to make. If your pet is going to be your sole beneficiary it might work better — but then there are the problems of trust administration, and your pet’s trustee will probably end up paying more in legal fees than if you developed a relationship with a lawyer during your life (and customized your pet’s trust to the terms you really want to cover).

What about the possibility that Molly, Max and Chloe might not survive you? Whatever arrangements you make for pets should probably be generic — rather than providing for those three pets by name, you probably want to include any pets you might have at death. And don’t forget: your pet desert tortoise and parrot might very well outlive you — and they therefore might require more careful planning.

Is there anything else you should do? Yes, at least one thing. Let the person who will be taking care of the pets know about their job, and let the person who will be handling the rest of your estate know, too. Immediate care of your pets is one of the most important things your family will need to deal with upon your death or incapacity.

Where can you get more information? We quite liked this common-sense analysis from the Humane Society of the United States.

We hope this helps. Please give our regards to Molly, Max and Chloe.

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