What is a Pet Trust?
Mittens the cat and Peanut the dog can be members of the family, but what happens to Mittens or Peanut after you are gone? How can you ensure your pets will be cared for? One option is to create a pet trust. While you can give directions in your will or trust to leave your pet to a caretaker, there is no guarantee that the caretaker will continue to care for your pet. The person you designate may not have the financial means to care for your pet. Vet bills, medicine, toys, and food costs can be additional costs your designated caretaker may not want to incur. Additionally, leaving a specific gift of funds directly to the designated caretaker does not ensure the funds would be used for your pet. If a specific gift is given, the caretaker is not legally obligated to use those funds for the care of your pet.
Providing for your Pet when you are gone
A pet trust can provide a little more security for the pet because a third party—the Trustee—is obligated to ensure the pet is cared for. A trust is a legal arrangement through which one person (or an institution such as a bank), called a Trustee, holds legal title to property for another person, call a Beneficiary. With a pet trust, the Trustee makes payments for your pet’s needs as they come up. The federal tax code does not recognize a pet as a beneficiary of a trust. However, 37 states including Florida have laws allowing pet trusts. The following are some elements the trust should include:
Caretaker
The trust will need to name a caretaker who will be willing and able to care for your pet. The caretaker should be someone who is comfortable with your animal.
Care Instructions
The trust should indicate specific instructions on all aspects of the pet’s care, including the brand of food, activities the pet enjoys, and the preferred veterinarian.
Funds
The amount of money necessary to fund the trust depends on the individual animal. Typically, you can leave the money to the trust in your will or revocable trust.
Payment provisions
To ensure payments made from the Trust are being used for your pet’s care, trust provisions can require that the Trustee pay third parties directly.
Including a pet trust in your estate plan can offer a pet owner peace of mind and ensure your loyal companion is taken care of for the rest of their lives.
