What Is a Pet Trust?

A pet trust is a legally enforceable arrangement providing for the care and maintenance of your companion animal. The law views pets as personal property — just like a piece of jewelry or your car. That said, fear not, animal lovers. Particular legal documents can provide specific instructions for the care of beloved pets following an owner's death

A pet trust may be the best solution to provide for the care of a pet after the owner's death. This article provides helpful information when deciding whether the pet trust should be a part of your estate plan.

Benefits of Pet Trusts

The law sees pets as personal property. Therefore, a last will and testament is not the best way to provide for the care of a pet once you die. Just as you cannot use a will to leave your jewelry to your car, you cannot leave other personal property (e.g., money) behind for your pet. The probate process does not recognize such transfers.

You can leave your pet to another person in your will, but that person is not obligated to be the pet's caretaker or to ensure that the pet's care continues. Once the administrator of your estate distributes your property according to your will, there's generally no ongoing supervision.

Thus, pet owners should consider specific estate planning for pets. Unlike a will, a pet trust solves these problems by creating a legal duty to carry out specific instructions you leave behind for the care of your pet. You can use the terms of the trust to ensure your pet continues to receive care similar to what you provided. The many benefits of a pet trust include the following:

• Family members unhappy with your estate planning decisions will have a harder time challenging a well-formed pet trust.
• Pet trusts allow you to leave very specific instructions on how to care for your pet. This may include the type of food to feed your pet or the number of times per day to walk them.
• Wills can take months to administer, but pet trusts are effective immediately upon death.
• Wills are only effective once you die, but pet trusts can come into play when you become incapacitated.
• A pet trust can require periodic inspections to ensure the caregiver follows the specific instructions concerning the care of a pet according to the terms of the trust.
• The money left behind in a pet trust can be dispersed in installments rather than in a lump sum. This better ensures the money is used for the pet's care and lasts the duration of your pet's life.

How a Pet Trust Works

A pet trust shares the same basic features as other types of trust documents, such as a living trust. A "trust" is a property interest held by a trustee at the request of a grantor for the benefit of a beneficiary. The grantor is also known as a trustor or settlor in some states. In a pet trust, a pet owner (the grantor) leaves assets for a trustworthy third party (the trustee) to manage on behalf of the pet. The trustee could be a loved one or a professional trustee.

Although the pet benefits from the trust, the pet is not analogous to a human beneficiary. An animal, even a beloved pet, lacks legal standing and the practical ability to enforce the terms of the trust.

Solutions to this issue vary among states. This enforcement gap is often filled by designating an “enforcer" or “protector." In this role, an enforcer or protector is responsible for ensuring the trustee follows your specific instructions and that the funds you leave go toward their intended use. The court may appoint an enforcer or protector if you do not appoint this person yourself.

Special Limitations on Pet Trusts

Every state has a pet trust statute describing formation requirements and limitations. In some states, the trust can continue for the life of your pet. However, some pet trust laws terminate trusts after 21 years. This should be fine for most pets, but some pets have life expectancies of well over 21 years. For example, some horses live upward of 30 years, and parrots can live for over 70!

A trust document can be very detailed. It can specify preferences such as a pet's food and how often the pet should visit the groomer. Typically, regular payments are made to a designated caregiver to fund the care.

However, instructions may come under fire, especially when the money put in the trust is wildly disproportionate to the pet's needs. The most representative case of judicial intervention for a pet trust involves the trust established for Leona Helmsley's pet. Leona Helmsley, a billionaire, left $12 million for her Maltese (known as Trouble) in a trust fund. A New York court later reduced the amount of money for the pet's care to $2 million. The court distributed the remaining funds among Helmsley's charity and her disinherited grandchildren.

How To Establish a Pet Trust

Before setting up a pet trust, you must think carefully and make important decisions. When you are ready, an estate planning attorney can help you draft the trust document according to the law in your state. Important considerations for establishing a pet trust include the following steps:

1. Select a Trustee

The trustee will be responsible for ensuring the trust property is well managed. As the name suggests, this person should be trustworthy. They should be responsible and have the skills to manage the trust property.

Generally, a trustee can be any adult of sound mind. They can also be an organization specializing in trust management. In some cases, even a law office can serve as a trustee.

Check with your state's laws for specific requirements. Also, consider the long-term cost of a professional trustee or other management service.

2. Select a Caregiver

The caregiver will be responsible for the daily care of your pet. This person should be someone you trust to care for your pet as well as you would. Chances are your first choice will be a loved one or a close friend, though they can also be an organization that specializes in providing this service.

It's best to select at least two caregivers in the event one cannot perform their role. Bear in mind that money is unlikely to motivate a caregiver unsuited for the position in the first place.

3. Select a Trust Enforcer

Your pet cannot sue on its behalf when your trust instructions are not followed. To address this issue, many states have created the role of a trust "enforcer" or "protector." You can also count on this person to check on your pet periodically, ensure the trustee carries out the trust terms, and spring into action when they are not.

4. Identify the Beneficiary

Again, pets are different from human beneficiaries. In many states, governing pet trust statutes provide that the beneficiary of a pet trust is "indefinite" or "unascertainable." Despite this technicality, your pet will benefit from the trust.

You must correctly identify your pet in the trust document and identify each pet if you create a trust to care for more than one pet. Some combination of names, descriptions, photos, and microchips should all get the job done.

5. Provide Care Instructions

You know your pet best. Your trust document should include detailed information about your pet's standard of care. It's helpful to have things like the frequency of visits to the vet and groomers, food preferences, sleeping arrangements, exercise, and any other arrangements to ensure the best care for your beloved pet. As best as possible, this document should plan for future developments as your pet ages.

6. Determine Financial Needs

Allocate appropriate funds for the care of your pet. Plan generously. But remember that amounts grossly disproportionate to the pet's needs may be challenged in court. You will also need to cover the cost of administering the trust, which includes determining how funds will be distributed to the caregiver. Lump sums invite misuse. Therefore, consider periodic distributions.

7. End-of-Pet-Life Instructions

Provide instructions on the medical care your pet should receive if your pet is diagnosed with a terminal illness or is critically injured. For example, you can provide general instructions in the trust document and then give the veterinarian, trustee, caregiver, and enforcer joint power to make more specific decisions down the road. However you decide to address this, make sure you specify how you would like your pet to be handled at your pet's death.

8. Select a Remainder Beneficiary

Finally, in case there are remaining funds in the trust after your pet dies, you should name a beneficiary to receive any remaining funds. The beneficiary can be a person or an organization, such as a charity.

An Attorney Can Help You Decide If a Pet Trust Is Right for You

Pet trusts can be an effective way of making sure your animal companion is well cared for if you die before them. Like any other legal document, a pet trust requires a solid understanding of the laws in your area. An improperly formed trust may have no legal effect. This situation will leave your pet in a vulnerable position. Your pet would be subject to distribution like any other piece of property when you die.

A consultation with an estate planning attorney should give you peace of mind that your pet trust is enforceable and will serve your pet's needs.