Protecting Your Pet Through Estate Planning

According to a 2021-2022 National Pet Owner Survey conducted by the American Pet Products Association, 70% of U.S. households own a pet [1]. That’s about 90.5 million families and is a number that has only been increasing as time has gone on. However, that raises the question of how one can provide for their pets if the pet outlives them. Below are 3 ways you can provide for that funny looking friend in your family through estate planning: using a trusted friend, a pet rescue organization or, the often asked about Pet Trust.

Our clients often ask how they can take care of their pets if something should happen to them. To that, we recommend one of three options, depending on their circumstances and family dynamics. Remember, under the law, pets are considered property and therefore must be accounted for when drawing up your estate plan.

The first option is to simply leave the pet and some money for their care to a trusted pet-loving friend or family member. If you know someone who loves animals, gets along with your pet or you know they will do the right thing, then a good option is to leave them your pet and provide some funds, so they aren't also suddenly bootstrapped with another mouth to feed.

Keep in mind, under this option, any money you leave to that person would be an irrevocable gift to them, with the understanding they are going to care for your pet. Once the money and the pet are with them, it is their responsibility to care for the pet and use the funds as they see fit. You can request they provide any remaining funds to, for example, a pet rescue organization of your choice, but they won't necessarily be bound by that request.

That does bring us to the next option, that of leaving your pet and funds for their care to a local or otherwise reputable pet rescue organization. For example, there is an organization near one of our offices, YAPS, and they are a no-kill, rescue facility for dogs and cats who will adopt out pets, but who depend on volunteers and donations to operate. An option like this is great because (i) you're leaving your beloved friend with individuals or an organization that will know how to care for them, (ii) your pet may be adopted into a new loving home, and (iii) you're supporting an organization with a great mission.

If you do choose a rescue organization, then I would highly recommend leaving funds as many, like YAPS for example, depend heavily on donations and volunteer time, meaning budgets and facilities can be stretched or limited.

Finally, while those are options that are great for the pets we typically have - dogs, cats, fish, or birds - we have had clients with either many animals or a large variety of animals that may require specialized care and a lot of space - like horses from a ranch. For those people, a pet trust would be their best option - and there are two ways to go about establishing a pet trust.

First is the informal way of doing so, and that is specifying in the distribution of your revocable living trust, who is to receive what animal and what funds they will have access to for that animal's care - which is similar to the first option I covered, but just provides greater detail.

The second is establishing a formal Pet Trust under your state's trust laws. In California, we can create a pet trust to hold money for the benefit of our pets but with conditions, safeguards, and protections. To start, you must specify, or name, your pets and they have to be alive at the time of establishing your trust. You cannot create a pet trust for future pets. Remember, pets are property under the law and for a trust to be valid, it needs property, assets, in it.

Next, you would name the person you want to care for your pets, specify how your pet should be cared for, and leave a set amount of money for their care.  Then you can designate what should happen to any money left over after the last pet in the trust passes away. For example, requiring the funds to go to an organization or allowing the caretaker to keep the funds.

However, this does raise one question - if under a typical living trust, the beneficiaries are the watchdog over the trustee and the parties with standing to bring a lawsuit if the trustee acts wrongly, who has that authority under a pet trust? A dog or horse can't bring a lawsuit on their own. Thus, you would also designate a person who can go to court and enforce the terms of the trust. In essence, you designate person A to take care of your animals but empower person B to make sure person A is providing adequate care and following the trust, and to take person A to court if need be.

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