BY: DAVID RUSSELL, CFP®, CSA®
Vice President & Trust Officer | (615) 385-2345
We’ve all heard the term Trust Baby, a somewhat derogatory label given to heirs of family wealth who never really have to work. But did you know there is also a legal trust specifically set up for the care of pets?
Human beings are extremely sentimental about their pets. Gerry Beyer, Professor of Law at Texas Tech Univ. School of Law and creator of the Wills, Trusts & Estates Prof Blog, has co-authored a book with Barry Seltzer titled Fat Cats & Lucky Dogs—How to Leave (Some of) Your Estate to Your Pets. According to the authors,
- • 75% of American dog owners view their animals as family members and more than 50% of cat owners feel the same.
- • About 20% of pet owners have actually changed romantic relationships because of disputes over pets.
- • Nearly 40% of pet owners carry pet pictures in their wallets and more than 30% have taken time off work because of sick pets.
- • A majority of pet dogs and cats sleep indoors, most on their owner’s bed or on a blanket or pet bed.
- • A recent survey revealed that more pet owners would rather be stranded on a desert island with their pets than their spouse.
Rachel Hirschfeld, Esq., attorney, author, and creator of the website www.pettrustlawyer.com, specializes in pet trusts and other pet care legal agreements. She writes that pet owners need to consider three legal documents for pet protection:
1. Wills – legally, pets are property and the purpose of a will is to distribute property. However, the belief that pets can be adequately protected if they are mentioned in a will is a myth. Consider the following pitfalls of a will:
- • Instructions in a will are not enforceable. Wills disburse property: Jane gets the house and cat. Wills cannot enforce demands that every year Jane paint the house she now owns. Nor must Jane care for the cat.
- • Wills are not enacted immediately. There will be a waiting period before the will is read and the property changes hands. Ask yourself who owns and cares for the pet before the will is probated?
- • Wills do not allow disbursement over a pet’s lifetime. In a will, the owner cannot distribute funds over time, which can be achieved with a free-standing traditional pet trust or pet protection agreement.
- • Changes to the will are in the court’s discretion. Who do you want deciding the fate of your pets: you or a judge?
- • A will cannot address the possibility that the pet may need to be cared for during the owner’s lifetime.
- • Pet provisions in a will may be “honorary.” The person who receives the funds decides whether or not to use them for the pet’s care. There is nothing to prohibit the “trustee” from dumping the pet at the pound and using the money to go to Paris.
2. Pet trusts. Unlike a simple directive in a will, a pet trust provides a host of additional protections and advantages:
- • Pet trusts are valid during the pet owner’s life and after his death.
- • Pet trusts can help preempt problems with substantial and involved estates. Pet trusts are particularly useful if the client expects a contest to the estate—for example, if the amount left for the pet’s care is enough that someone will contest the client’s capacity, or if there is a litigious family member whom the pet owner believes may dispute the final documents.
- • Pet trusts and pet protection agreements control the disbursement of funds.
- • Pet trusts allow for an investment trustee. A trust protector (separate from the pet guardian or trustee) can be appointed to invest funds with a view toward growth of the principal and future use on behalf of the pet, heirs, and charitable recipients.
- • Pet trusts and pet protection agreements allow provisions for incapacity. Pet trusts and pet protection agreements can ensure that the owner and pets will remain together in the event that the owner moves to a nursing home or other long-term care facility.
3. Pet protection agreements. The pet protection agreement is a laypersons’ document that Hirschfeld created to establish continuing care for companion animals when owners are unable to care for them. It is a unique product that affords pet owners the opportunity to easily dictate care for all their pets—without the need for large legal bills.
- • The pet protection agreement can be completed with or without a lawyer’s help. Any trusted advisor (such as an accountant, trustee, insurance representative, investment advisor, lawyer, or paralegal) can help a client complete this document.
- • Like the pet trust, the pet protection agreement is valid during the owner’s lifetime as well as after the pet owner’s death.
- • Unlike a pet trust, however, a pet protection agreement cannot ensure that owner and pets will remain together in a long-term care facility.
No one likes to see a pet consigned to a place not of the owner’s choice, and no one wants the court to decide a pet’s fate when its owner is no longer able to care for it. As painful as it is to think of leaving beloved pets behind, there is no greater sense of security for pet owners than knowing that all their companion animals are provided for.
David W. Russell, CFP®, CSA® is Vice President and Trust Officer with Argent Trust in Nashville, TN. He is founder and editor of Wealth and Honor, an educational website offering community and resources to families in age transitions. His book, What You Need to Know: The Adult Child’s Guide to Becoming an Effective Financial Caregiver is available on Amazon.