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August 1 2017

Planning for Your Four-Legged Friends as Part of Your Estate

By: Neil P. Jansen

They listen to our stories and complaints when no one else is around.  They encourage us to get up off the couch and be active when we are feeling lazy.  They comfort us, provide a sense of security, and never judge us.  But what happens to our beloved pet or companion animal when we are no longer able to look after them?  Increasingly, people are turning to pet trusts to answer that question.

A pet trust can be a stand-alone document that you create solely for the purposes of caring for your pet when you are no longer able to do so yourself, or can be a series of provisions included in a general trust that addresses how your pet should be cared for and provides funding for that care after you are gone.  Such a trust, which is enforceable under Michigan law as well as in most other states, can create a framework for caring for the pet that does not rely solely on the kindness of friends and family, but can assure that the pet or pets will be properly cared for through the end of their lives.  Such trusts are no longer simply an eccentric creation of the rich, but are accepted tools for animal lovers of all economic levels to assure that their four-legged friend is not euthanized or placed in a shelter when they are gone.

Not only does a pet trust benefit the person who owns the animal, but it can also benefit the survivors who, while well-intentioned, may not have the means or ability to properly care for the animal, be it a cat, dog, parrot, horse, or more exotic pet.

A pet trust, or pet trust provisions, can address the following needs of your pet:

  • Identify the caregiver and possible successors to the caregiver.
  • Identify the person who will oversee the funds set aside for the pet’s care and make sure the caregiver is providing good care.
  • Provide the necessary funds to support the pet and the caregiver.
  • Provide instructions for the care of the pet, including their particular needs or idiosyncrasies, and, if appropriate.
  • Provide compensation for the caregiver.

Most estate planning attorneys are also becoming more aware of the need for providing these tools for their clients and can assist you in structuring a trust to cover these terms.  If your estate planning attorney is unfamiliar with the provisions of a pet trust, they can collaborate with an estate planning attorney at Mika Meyers who is familiar so that your complete estate plan will care for all your loved ones, both two-legged and four-legged.

A good pet trust should provide for the following:

1.  Caregiver. Your trust should identify who you would like to care for your animal or animals.  You may wish to discuss this “honor” with the chosen individual in advance to make sure they would be willing to accept the role.  You should identify a succession of caregivers so that if your first choice is unable or unwilling to do so, or your pet should live beyond their means of providing the care, there are additional people who are available to provide the care.

The chosen caregiver could be different depending on the pet you have.  While there may be a variety of individuals who could care for your cat or dog, the number of individuals who could provide proper care for a horse or goat may be much smaller.  Indeed, you may have a large or exotic animal that no one in your circle of contacts is equipped to care for.  In that case, you may choose to identify an animal rescue organization that is in the practice of providing long-term care for the type of animal you are planning for.

2.  Trustee.  The trustee is the person who is responsible for managing the funds that you set aside for the caregiver of your pet, as well as overseeing the activities of the caregiver.  It would be best not to appoint the same person as trustee and caregiver, so that there is some oversight.  A trustee would be charged with periodically confirming that the pet is being properly cared for and, if the pet is not being properly cared for, choosing a new caregiver, either from the list of people you have nominated in your trust, or persons who would otherwise be appropriate.  The trustee would manage the funds to cover the expenses for your pet and any other payments that you authorize under the trust.

3.  Funding. The trust will also hold funds that you set aside to care for your pet.  These funds can be transferred to the trust during your lifetime, or can pass to your trust after you die, through a pour-over will, beneficiary designations on a bank account or investment account, a life insurance policy, or otherwise.  Sufficient funds should be provided to cover the needs of the animal, including food, shelter, veterinary care, grooming, etc.  These expenses will differ depending on the type of animal you have.  The care and feeding of a goldfish certainly differ from the care and feeding of a beloved Clydesdale.  Thus, you should take the time to look at your own budget of animal care expenses to determine how much money to set aside. 

The other concern is the anticipated life of your pet.  Dogs and cats could live up to 20 years.  Horses could live in excess of 25 years.  A parrot could live 50 to 70 years.  Thus, for your trust to be successful, you should provide funding for the pet sufficient to cover its needs during its expected life.  You should also take into consideration the fact that just as with us, our pets’ needs increase with age.  You should be cautious, however, not to overfund the trust.  Overfunding a trust can incentivize family members to attack the trust, seek to set it aside, or to alter the amount set aside for the pet.

4.  Remaining Funds.  Remaining Funds.  It is likely, even if you have fully thought through the needs of your pet and properly funded the trust, that there may be funds left over after the pet passes away.  The trust should provide, therefore, for a recipient of the leftover funds.  This could be other family members, other individuals, or a charity.  It is usually recommended to name a charity, instead of an individual, because a charity usually will not have the same incentives to look for the pet’s early demise.  It is recommended that you not identify the caregiver as the person to receive the remaining funds, as this might be a disincentive for them to provide proper care for the pet.

5.  Instructions for the Caregiver.  Your chosen caregiver may be very familiar with your animal and its special needs and likes and dislikes, however, that caregiver may not be the only one to care for your pet.  Thus, your trust should provide instructions on what care you expect the pet to receive.  This can be very simple or very detailed.  Things to consider would include identifying the veterinarian who is familiar with your animal, any particular health needs that you are aware of at the time, any dietary needs and your practice in feeding the pet, their exercise needs, particular likes and dislikes of the pet, his daily routine, his accustomed sleeping arrangements, the type of grooming he should receive, etc.

6.  Pet Identification.  The trust should also specifically identify the pet, if possible, by description, age, etc.  It may well be that you prepare a pet trust that outlives your current pet, however, and that you will have different pets at the time the pet trust is needed.  Thus, the pet trust should also provide that it would cover any pets that you own at the time of your passing.

7.  Multiple Pets.  Pet trusts should provide instructions as to whether the pets should be cared for together or separate.  Pets often develop strong bonds to other animals in the home and you may wish to respect those bonds after you are gone.  In other circumstances, you may have animals that do not get along and should be divided among caregivers.

8.  Caregiver Compensation.  It may be that your chosen caregiver is willing to care for the pets without compensation.  Alternatively, you could provide some compensation for your caregiver.  It should be fair compensation, but not in an amount that would incentivize the caregiver to inappropriately attempt to extend the life of the pet beyond a point where the pet is comfortable in order to maintain a stream of income.

9.  Final Disposition.  Your trust should also provide for the final disposition of your pet.  If you have made arrangements for the pet’s remains to be taken care of, that information should be provided in the trust.  Even if you have not made arrangements, but have particular wishes, those should be expressed in the trust so the caregiver and the trustee both know how you would like the pet’s remains taken care of.

A comprehensive, well-drafted pet trust or trust provision for a pet does not need to be an expensive undertaking.  While it may add some cost to your estate planning, it will provide the pet lover in you the added piece of mind knowing that your trusted companion will be properly cared for after you are gone.

If you have any questions regarding pet trusts, please contact Neil Jansen or another Mika Meyers’ estate planning attorney.

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