Care for your pet after you're gone with a Pet Trust.

Questions and Answers     (Q & A) about Pet Trusts 

 

Can I provide for my pet in my estate plan?
Yes. However, even though you consider your pet as a companion and devoted friend, legally, your pet is ‘personal property' - and is not given the status of a person. That makes it critical to choose the right planning method. You could provide for your pet in your last will and testament or by creating a trust.

 

Isn't my Will the easiest place to plan for the care of my pet? 
Even though it may seem ‘easy' to include a bequest for your pet within your Will, it may not be the best approach. Why? Because your will must go through probate before it takes effect. This can be time consuming and uncertain, and your pet will need immediate attention. Your pet is not like your spouse, adult children or your siblings - they can take care of themselves until the probate process is complete.  It often takes several weeks or longer before a probate process is started in court.  Meanwhile, your pet needs immediate attention.  Who has the authority, or the inclination, to take care of your pet? cat with green eyescat with green eyes

Since your pet needs food, water, shelter, and love every day, leaving a bequest in your Will may not be the best way to provide for your pet. During probate, your pet's care, or even ownership, can be in jeopardy. So, while you may want to include provisions in your will your pet, first consider other methods. Many people are now using a ‘trust' to provide funds and direction for the care of their pet.

 

How does setting up a trust help me provide for my pet?
Unlike a will that is subject to the probate process, a trust becomes effective immediately upon the terms outlined in your trust - usually death or disability. Your trust specifies the details concerning the care and control of your pet, as well as making funds available. Your trust can also give specific directions about the daily care, medical attention, physical control, and even burial of your pet.  If you wish, you provide in your Will that certain assets or a sum of money go to the pet trust.  This would supplement whatever funds are already in the trust.

 

What is a trust and how does it work to provide for the care of my pet?
A trust is a special set of instructions for a trustee to follow.  The trustee is required to follow your lawful instructions.  It is set up to accomplish a particular purpose, using funds or assets you contribute to the trust.  The trustee manages the assets for the beneficiary of the trust.   You and your attorney will outline the specifics that detail when and under what circumstances the trust will take effect. webassets/Woman_3_dogs_in_lap.jpgThis includes how the trust will be funded, who will be the trustee, successor trustee, beneficiary, and caretaker, and how the trustee or caretaker will manage your pet and the funds for your pet.

You want your loving pet to be fed, cared for, and to receive appropriate veterinarian  attention. You may also want to designate funds for pet insurance, or even to enforce the trust.

 

What types of trusts are available to provide care for my pet?
In Washington a person can establish a trust for the care of one or more animals.  The animals must be readily identified.  Ordinarily the trust would terminate when no animal that is designated as a beneficiary of the trust remains living.  However, the trust can provide that it will continue for other purposes after the last remaining animal is no longer living. 

 

How much should I leave for the care of my pet?
You and your attorney will work together to evaluate the factors that influence this decision. You need to consider your finances, your pet, and the amount of care that will likely be involved for the pet's anticipated lifespan. Obviously, providing for the care of some pets will be more expensive than for others. If your pet is an older dog, you will not need to designate as much as you would for a young horse.

Although life-spans vary greatly by breed, the average large dog can be expected to live twelve years, and an average small dog will live eighteen years.

Cats, if they are kept indoors, live an average of twenty years.

Many birds can live for 100 years or more.

The average horse will live to twenty-five years of age.

 

Do all pets qualify for a pet trust?
In the state of Washington, the only limitation is that the animal must be a vertebrate.  So, dogs, cats, birds, fish, monkeys, horses, snakes, hamsters, and geckos all qualify, as do other animals with vertebrae.  Obviously tarantulas and starfish do not qualify - they have no backbone.

What could go wrong?
If the plan for your pet is not properly drafted it can cause all sorts of problems.  One example is the woman who left substantial sums in her Will to "care for all of the cats and their progeny, if any, in my home when I die."   It was several days after she died before anyone noticed her basement window was open - and many neighborhood strays had gained entry to her home.  She had not been specific enough in her description of her pets.  

Another example is the Will that said, "I leave $100,000 to my grandson Lawrence to use to take care of my beloved German Shepard, Champ.  Upon Champ's death my grandson shall have the rest of the money."   Unscrupulous Lawrence took care of Champ - all the way to the animal clinic the next day to have the dog put down.

Are there tax issues involved with pet trusts?  - As benign as pet trusts may seem, the person drafting the trust should beware of the tax implications.  The IRS has long maintained that an estate will fail to qualify for a charitable deduction if a portion of the trust's fund is used to care for an animal, even if the remainder beneficiary is a qualified charity.[1]   An attorney familiar with pet trusts and estate tax planning should be consulted.

The funds held by a modest-sized pet trust can quickly be consumed by income taxes and related administrative fees.  A trust benefiting an animal is not entitled to a deduction for distributions even if state law allows an animal to be a beneficiary.[2]  Further, any trust with taxable income of $100 is required to file a tax return and face steep tax rates.  Thus, taxes and administrative costs may quickly consume the trust's funds.  

Careful drafting of the trust instrument for the investment choices by the trustee can help defeat these costs and maintain the core funds needed to support a person's faithful animal companion.  Again, an attorney familiar with pet trusts and the tax rules should be consulted.



[1] See Rev. Rul. 78-105.

[2] See Rev. Rul. 76-486.

Click here to see the Washington Pet Trust statute.


At Van Nuys Law Office PLLC, we can tailor your estate plan to take care of your pets as well as your other needs.  Our office is conveniently located in the heart of Ballard, Seattle.  Please contact us if you would like to make an appointment.