Pet Trusts

More than half of the American population currently own pets or grew up with one or more pets. Pets are a good way to teach children responsibility. Pets also act as a companion for older persons. Seniors enjoy caring for and interacting with their pets. But pet ownership requires a backup plan in case of a vacation or an emergency. In many cases, there are family members, friends, or neighbors who are willing to care for the pet if the owner has a specific need such as weekend care or holiday vacation. This arrangement works well because the caregiver is compensated for his or her efforts, and the owner can go away for short periods of time knowing that the pet’s circumstances are unaltered and its needs are met.

OWNER’S INCAPACITY OR DEATH

There are, however, circumstances under which the pet’s circumstances are dramatically altered, such as when the owner becomes incapacitated or dies. In such cases, it is no longer a matter of providing food, water, and some exercise on a limited basis, rather, the pet needs a caregiver who will provide for the pet for the remainder of the pet’s life. At this point, the informal arrangements are not suitable and a more formal arrangement should be established.

Because many pets have a relatively short life span compared with humans, it is easy to assume that the person will outlive the pet, but often that is not the case. When the pet has a long life span, the need to care for the pet beyond the owner’s life becomes even more important. Without a specific provision in a person’s Will or Trust, the beloved pet may end up in a shelter, or be otherwise discarded after the incapacity or death of the owner.

CREATION OF PET TRUSTS

Formal arrangements can be made either in a person’s Will or Trust Agreement. Specific bequests in these documents usually provide cash to the caregiver in exchange for the caregiver’s implicit promise to “adopt” the pet and care for it as the owner would have done. Current California law provides: “a trust for the care of a designated domestic or pet animal may be performed by the Trustee for the life of the animal…” The operative word here is “may”. Nothing in the current law provides for oversight to ensure that the caregiver who receives money in exchange for an agreement to provide pet care actually carries out the owner’s intent for the pet. The revised code section strengthens the law by stating that the instructions set forth in a pet trust are not to be considered merely a request, and brings the pet trust in line with the general laws of trusts.

The revised law also provides that the intended use of the principal or income from the pet trust may be enforced by a person designated for that purpose, or even by the court, where no enforcer is named in the trust instrument.   So now the money in a pet trust must be used solely for the care of the designated pet. The trustee of the pet trust can be a different person from the caregiver to enforce this provision and the caregiver can be removed if he or she does not provide the care of the pet as set forth in the terms of the pet trust.

INFORMATION FOR THE CAREGIVER

The person who is designated by the owner to care for the pet if the owner is incapacitated or dies is someone who has already agreed to take on the responsibility for doing so. The owner should designate a primary caregiver and at least one backup caregiver in case circumstances prevent the primary caregiver from taking the pet.

The owner should give the caregiver information about the pet’s current habits and circumstances so that when the caregiver begins to care for the pet there will be the least disruption of routine as possible. Information that would be useful for the caregiver includes: (1) a description of each pet owned, its markings or special coloration to identify the specific pet, if there is more than one; (2) the specific brand of food the pet eats, how much it is fed daily and when; (3) the medical history and the name, address, and telephone number of the pet’s veterinarian; (4) special needs of the pet, including medication and exercise requirements; (5) unique behavioral habits such as sleeping preferences (for indoor pets), toy preferences, particular regular interactions with the owner, (6) pet insurance information, if any; and (7) desires re burial or cremation of the pet upon the pet’s demise.

CALCULATING SIZE OF PET’S NEED

In order to estimate the amount of pet care funds that may be necessary, the owner should consider the current costs of taking care of their pet, including such expenses as the cost of food, medication, grooming, veterinary services, boarding during vacations, toys, recreation, and entertainment of their pet.

The current costs could be multiplied by the number of years the pet is expected to live. For example, if the estimated annual expenditure for a pet cat is $500 and the cat is five years old currently, with an expected life span of twenty years, the trust should be funded with $7,500 ($500 per year times 15 years remaining). Additional money should be included in case of an unforeseen health problem, such as diabetes.

That amount is relatively modest, but what if the person has a horse? The annual expenses for a horse are tens of thousands of dollars times the twenty or thirty years life expectancy. To care for a horse after the owner dies could require $250,000 or more.