Virtually any domesticated animal can be covered in pet trust. Some of the most common pets that we have seen pet trusts created for are as follows:
When you set up a pet trust, you are the grantor, and you are able to place whatever assets you want into the trust. You will also need to decide what assets you want to place in that trust. You should include the following in a pet trust:
- Identification of your pet (photo, name, age, microchip, etc.)
- Pet’s standard of living and care you want upheld.
- Funds needed to cover the pet throughout the rest of their lifetime.
Funds to cover the fees of the trust through its entirety,
- Routine veterinary check-ups
- Emergency care
- Feeding costs
- End of life treatment plans
- Burial arrangements
- Remainder beneficiary in the event the funds are not finished upon the death of your pet.
- All expectations of the new caregiver.
If you are considering a pet trust, you have a few different options of the type of pet trust you can create.
In this trust, it is the same that you would do for a child. You can give instructions for a pet’s care, as well as who should be the caregiver and manage the final money in the event of their death. You can eventually have the trust have a beneficiary of your children or a charity.
Statutory Pet Trusts
These are essentially instructions within a will. You might state how much you leave to your pet. Then it will go to probate court upon your death and they will dictate the specifics. This is less specific and things may not go exactly as you want them to.
Pet Protection Agreement
If you only have a small portion of money you want to leave for your pet’s care then you can create a pet protection agreement. This will be signed by yourself and the soon-to-be pet guardian. It is legally binding and is essentially a junior version of a traditional trust.
Creating a pet trust can give you peace of mind knowing that your pet is protected and cared for while you no longer are capable. Here are 3 key advantages of creating a pet trust.
Pet is cared for after your death: This will help you ensure that your pet will be in good hands when you pass on, or if you are unable to take care of them.
Outline specific care instructions: Especially if your pet has specific needs or disabilities, you can ensure that they will be fully taken care of.
More capable of withstanding legal challenges than a will: Rather than a will that does not specifically favor animals. This is why you should create a pet trust to ensure that your wants are fulfilled.
Creating a pet trust is the best option to ensure that your pet is taken care of, but there are downsides as well. First off, the pet trust is not considered charitable. This means that it will be subject to income tax and inheritance tax.
Additionally, the administrative tasks and fees may not make it a good financial decision. If the trust was worth $100 million, then it might make sense, but most animals do not require millions of dollars for their care. Making a trust that is small may mean it is too small to justify the costs involved.
In general, a pet trust sounds like a great idea if you love your pet and want to ensure that the pet will legally be in good hands. Generally, most people leave their pets to someone they are close to, like a family or a friend. In this case, you can simply leave money to that person in order to cover those costs. If you do not trust them to do what you ask them to do, then you need to decide if the costs to set up a pet trust are worth the security upon your death or incapacity.