Estate Planning with Pets
There are approximately 78.2 million dogs and 86.4 million cats owned in the United States. Americans certainly love their pets. Pet owners who consider their animals a part of the family should consider planning for their care upon their death or disability. Considerations include whom to designate as caretaker as well as the financial aspect of pet care. The best way to protect your pet is with a combination of a pet trust and a pet power of attorney.
Pet Power of Attorney
Pet power of attorney is simply a document that authorizes someone on your behalf to take care of your pet should you become disabled. Power of attorney should name an individual or individuals, as well as successors, to care for the pet during your disability and make it clear that your money can be utilized for the pet’s care. You also need to provide for the health care and end-of-life decisions for your pet while you are disabled. Simply combine general power of attorney and health care power of attorney into a single document.
A pet trust is designed to take effect at your death and will dictate who is to care for your pet after you are deceased. A pet trust will also segregate funds from your estate to provide for your pets. The funds in the pet trust can generally remain available for a pet’s life or up to 21 years. More and more states are passing legislation to specifically allow for pet trusts. However, just because a state has not specifically provided legislative authority for a pet trust does not mean that you cannot create one. In such states, however, there may be some restrictions.
A pet trust can be set up as a stand-alone trust, which means its sole use and purpose is for the benefit of a pet. Such a trust can also be established as a sub-trust within other trust planning. If you are already setting up a living trust, family protection trust or other trust for your family, you can incorporate a pet trust into those documents. You can also set up a pet trust under a Last Will and Testament. The concern there, however, is that if there is no specific legislation dealing with a pet trust in your state, there will likely be some issues about the required reporting and administrative responsibilities in local probate court. However, if a pet trust is set up as a separate trust or a sub-trust under another trust, the probate court will not have any jurisdiction over the trust, which will make its administration much smoother.
Pet Health Insurance
If you have pet health insurance, the funds that need to be segregated from the trust for your pet’s care are much more easily calculated than if you do not have such insurance. Plan to purchase pet health insurance now, even if it is a bare bones policy. Many companies will allow such policy to be upgraded later without any insurability issues. If you instead provide in your pet trust that such a policy be only purchased at the time of your death, the pet may not qualify if it is sick or has significant health issues at that time.
Excerpt from End of Lawyers: Thank Goodness