Planning for Pets
For many pet owners, pets are members of the family. These individuals sometimes say that if something happens to them, they are more concerned with what will happen to their pets than to other members of their family.
This article examines the issues surrounding caring for pets after the disability or death of the pet’s owner. Given the feelings of many individuals towards their pets, and the costs of care and longevity of some types of pets, planning in this area can be of critical importance. This is particularly true given our mobile society and that the laws of a different county or state may impact you and your pets or the pets of parents and other loved ones.
What Will Happen to the Pets When the Owner Becomes Disabled or Passes Away?
Most of us don’t want our pets killed if something should happen to us. However, without proper planning, the death of the pet is almost certain in some areas. For example, in some counties, if the owner does not provide for a pet by way of a trust, when the owner passes, Animal Control must take the pet to the local kill shelter if there is not a family member present who is willing to care for the pet. Some kill shelters euthanize animals 72 hours after they arrive at the facility, making it virtually impossible for anyone to adopt the pet. Thus, it is critically important that pet owners know how their state and county laws may impact their pets.
Planning Tip: A good resource for pet owners is the factsheet Providing for Your Pet’s Future Without You by the Humane Society of the United States (available via download at http://www.humanesociety.org/assets/pdfs/pets/pets_in_wills_factsheet.pdf). It includes a detailed listing of the issues you should consider in planning for your pets.
Providing for Pets Upon the Owner’s Death
The law treats pets as property, and thus you cannot leave money outright to a pet as property cannot own other property. You may leave an outright gift of money to a caretaker with the request that the caretaker care for the individual’s pet for the rest of the pet’s life. However, because the caretaker received the gift outright, and not in trust, no one is responsible for ascertaining whether the pet is receiving the care you requested.
Once the caretaker receives the gift and the pet’s owner is gone or disabled, there is nothing to stop the caretaker from having the pet euthanized, throwing it out on the street, taking it to a local kill shelter, or using the assets in ways unrelated to the care of the pet. In addition, once in the caregiver’s hands, the assets are exposed to the caregiver’s creditors, including being available to a former spouse on the caregiver’s divorce.
Statutory Pet Trusts
Most states, including California, have recently enacted statutes that allow virtually any third party designated by the terms of the trust to use the trust funds for the benefit of pets. The California statute, authorized by Probate Code Section 15212, expressly requires your trustee to honor all the terms of trust, while giving third parties the right to initiate court proceedings to further the interests of the trust, if necessary. Furthermore, it gives the court the authority to appoint a new trustee and further empowers it to “. . . make all other orders and determinations as it shall deem advisable to carry out the intent of the settlor . . . .” In short, the law in California is designed to ensure that your pets are cared for as you desire.
The pet’s current standard of care determines the endowment amount required to provide care for the pet. Factors include: the cost of daily care (food, treats, and daycare), veterinary care (yearly teeth cleaning, shots, nail trimming, and emergency care), grooming, boarding, travel expenses, and pet insurance. Additional factors may apply in particular cases. For example, horses are expensive to maintain and require exercise, training, and a large tract of land; some birds and reptiles have very long life expectancies; and care of some pets will require construction of a special habitat on the caregiver’s property.
Planning Tip: Will-based planning is inadequate for pets because Wills do not address disability and because of the time lapse between the pet owner’s death and the Will being admitted to probate.
Funding Pet Care
If you are concerned about leaving sufficient funds to properly care for your pets after your disability or passing, consider life insurance that names a pet trust as beneficiary for some or all of the life insurance proceeds. If you are concerned that funding of a pet trust will reduce the inheritance of children or other beneficiaries, consider life insurance that names both (1) the pet trust and (2) a trust for the benefit of the other beneficiaries. These assets can be invested like any other assets during your lifetime, and those who currently manage the assets can continue to do so for the pet’s lifetime.
Here are several issues for pet owners’ consideration:
• Creating a pet panel to offer guidance to the trustee and caregiver/beneficiary, and to remove and replace the trustee and caregiver/beneficiary, if necessary. Consider naming a veterinarian to make the final decision regarding euthanization for medical reasons, to ensure that the pet is not euthanized prematurely by the caregiver/beneficiary.
• Paying the caregiver/beneficiary a monthly fee for caring for the pet or allowing the caregiver/beneficiary to live in the pet owner’s home, rent free.
• Determining how the trustee is to distribute the remaining trust funds after the last pet dies.
If the pet owner decides against creation of a pet panel to determine who will be a successor caregiver/beneficiary, the trust should name multiple successor caregivers/beneficiaries (three or more) in case a caregiver/beneficiary is unwilling or unable to serve. As a final back-up, the pet owner should consider requiring the trustee to give the pet to a no-kill animal sanctuary if there are no caregivers/beneficiaries available.
An alternative to naming individual caregivers is for the pet owner to name a local charitable organization that will ensure care in exchange for a contribution upon the owner’s disability or death. A listing of such organizations nationally, including numerous organizations in California, is available online at http://www.professorbeyer.com/Articles/Animals_More_Information.html .
If you are concerned the caregiver/beneficiary might replace a pet that dies in order to continue receiving trust benefits, consider specifying how the trustee can identify the pet. Micro-chipping the pet or having DNA samples preserved are two methods commonly used for verification.
Some pet owners express concern that “no one can care for my pets as well as I do.” However, since many courts have invalidated pet euthanasia provisions, these owners should consider no-kill organizations that have the pet’s best interest in mind and will find the next best home for the pets. Alternatively, consider one of the organizations linked above that will care for the pet throughout the pet’s lifetime.
Most pet owners are unaware of the issues surrounding the care of their pets after their disability or death. By discussing these issues with their advisor team, pet owners can ensure that all of their loved ones are cared for, even when the owner is unable to care for them directly. If you are concerned about what will happen to your pets if something happens to you, call us at (714) 384-6500 to discuss how we can modify your estate plan to incorporate planning for your pet(s).