pet trusts What will Happen to Your Pets When You Become Incapacitated or Die?—Pet Trusts

Over 67% of U.S residents treat their pets like family members, but only 12% include their pets in their estate planning. Consequently, 500,000 pets per year are tragically euthanized when their owners become incapacitated or die.

Is a Will the Best Way to Provide for My Pets?

  • A Will takes effect only upon your death and does not provide for your pets in the event of your incapacity. This is when the owner most needs the pets’ companionship.
  • Upon your death, a Will has to be probated. It takes a long time to complete probate procedure and, if disputes arise, it can take years before the final settlement of your property is made. Therefore, it may take way too long before your pets’ care can be carried out.

Is Setting Up A Trust Better?

  • Yes. A Pet Trust ensures continuity of care. A Pet Trust can provide for your pets immediately when you become temporarily/permanently incapacitated. Of course, it can provide for your pets in the event of your death more quickly than a Will.
  • If you make an outright gift of money to a caregiver with an instruction on how to care for your pets, the money will be subject to the caregiver’s creditors, marital property disputes, and bankruptcy creditors. However, assets in a trust are free from such claims against a caregiver. They are fully protected!
  • Or the money might not be available for the care of your pets due to the caregiver’s spendthrift propensity. The beneficiary in your will can simply take the money and drop your pets at the animal shelter.
  • A Pet Trust ensures that the pets will be cared for in the manner directed by the owner.

Pet Trusts Framework

  1. Appoint Trustee and leave pets and assets to the trustee with the duty to ensure that your pets are cared for according to your instructions.
  2. Appoint a caregiver for your pets. You should also name at least 2-3 alternate caregivers. Also, consider naming a sanctuary or no-kill shelter as your last choice.
  3. Trustee delivers the pets to the caregiver and then uses the trust assets to pay for your pets’ expenses.
  4. Give instructions on:
      pet trusts

    • Food and diet
    • Daily routines
    • Toys
    • Grooming
    • Socialization
    • Medical care
    • Compensation for the caregiver
    • Accounting
    • Liability insurance
    • A mechanism to monitor caregiver’s services (trust protector or Pet Panel)
    • Profile of the pets
    • Disposition of the pets’ remains
    • Name a remainder beneficiary who will receive any remaining trust assets after your pets die. I do not recommend that you name the caregiver or trustee because they may lose an incentive to keep the pets alive. A charitable organization is a good candidate.
    • Specify compensation to pay the trustee or/and caregiver. Also, provide to reimburse the trustee/caregiver for reasonable costs incurred on behalf of the trust.
    • Require trustee, trust protector or a Pet Panel to inspect the pets on a regular basis to ensure that the caregiver is following the instructions specified in the Pet Trust. If the pets are in good health and mental conditions in the discretion of the trustee, trust protector or Pet Panel, allow certain bonus payment to the caregiver. If not, allow the trustee to remove the pets from the caregiver’s possession and deliver them to the alternate caregiver.
  5. In case that none of the named caregivers is available to care for your pets, (a) authorize the trustee to select a caregiver, or (b) authorize a Pet Panel comprised of veterinarians, family members and friends to select a proper caregiver. The trustee or Pet Panel should interview the possible caregivers and select the person it considers would provide the best care and environment for the pets.
  6. Provide the Trust Protector or Pet Panel the power to remove the trustee with/without cause and designate a new trustee. Trustee and trust protector should not be the same person for the purpose of maintaining ‘checks and balance’.

Our office can help you to establish the best possible estate plan for your pets as well as your human family members. Please contact the office for information or to make an appointment at 206 853 1541.

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category: Trusts, Wills

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