21st Jul 2016
Nobel Prize winner, Anatole France once said “Until one has loved an animal, a part of one’s soul remains unawakened.” Pets hold a special place in our hearts and in our souls. They not only act as companions, they become an integral part of our lives. For some people, animals are their only friends, companions or family. Therefore, when you begin the estate planning process, it is necessary to include your pets.
Your estate plan includes your tangible and intangible possessions as well as your real property including your home, rentals, property or land. Legally, pets are considered property. However, if you have ever owned an animal, you know they mean much more than a piece of property. By including your animal in your estate plan, you have the ability to plan for their care after you pass away.
While many people love their animals, they are unaware of the importance to include them in their estate plan. Unfortunately, without proper planning, a considerable number of pets are sent to shelters or condemned to imprisonment because their owners were unaware and not advised to make arrangements for them. The only way to secure the future you want for your pet is to legally state your wishes in an estate plan.
Legal Documents for Pets
When you begin the estate planning process for your pet, you’ll need to consider two legal documents: will or pet trust. The purpose of the will is to distribute value; therefore, it becomes valid after death. The pet trust is a free-standing, traditional document that names a trustee to carry out the trust. The trustee is responsible for distributing funds to the new person caring for the pet as well as ensuring your instructions and wishes are being followed.
While pet owners often have good intentions when including pets in their will, pets cannot be adequately protected with a will alone because instructions within wills are not enforceable. Wills disburse property but do not enforce demands. This means that just because you leave your dog to your son, your son does not legally have to keep or care for the dog.
Another issue with wills is they are not enacted immediately. There is often a legal waiting period before the will is read and the property, or in this case the animal, is distributed to its’ new owner. Therefore, this leaves a gap in time when someone needs to be responsible and care for your pet.
In addition to this, wills do not distribute funds over the course of your pets’ life like a trust. This is not to say that wills should never be used; rather, it is to say that wills should be supplemented by a pet trust.
A pet trust provides the directive of a will, but with several additional protections. Pet trusts are valid during your life and after you pass away. Pet trusts also allow you to make provisions if you were to become incapacitated and unable to care for the pet.
In 2008, California adopted a revised pet trust statute, which is found in California Probate Code Section 15212. This law allows for you to include in your estate plan a provision that upon your death, a certain sum of money will be held by a trustee (that you appoint) in a trust for the benefit of your pet. You also nominate a caretaker to take care of the pet. The trustee and the caregiver may be the same person, or two different persons.
The nominated caregiver takes physical possession of the pet when you die, and the trustee provides funds to the caregiver as needed for the costs of the pet’s food, supplies and veterinary care.
A pet trust is considered a lawful trust, but is considered non-charitable; and “animal” is broadly defined in the law to include any domestic or pet animal. The pet trust ends when the animal dies, and any funds left over are distributed to “remainder beneficiaries” which you name in the trust.
There are some requirements for accounting for large trusts, or if the trust document requires accountings, or if a court so orders an accounting. Essentially, the pet trust is conducted in much the same way as a standard Trust Administration.
How to Proceed
If you have a pet and you would like to include them in your estate plan, start today.
In order to get started with a pet trust, you’ll need to select a trustee, a successor trustee, a caregiver and a successor caregiver and provide their information including name, address, phone number, etc. You will then need to do the following:
- Identify your pets through photos, microchips, DNA samples, etc. By adequately identifying your pets, you are able to prevent fraud.
- Provide a detailed description of how you would like your pet to be cared for as well as their standard of living.
- Determine the amount of money needed to cover the expenses for your pet’s care including food, veterinary visits, living expenses, etc.
- Determine the amount of money needed to properly cover the expense of administering the pet trust.
- Name a beneficiary in the event there are funds remaining after the pet passes away.
- Provide instructions for the arrangements for your animal after he or she passes away (burial, cremation, etc.)
Start Planning Now
The early stages of planning are critical. By establishing a pet trust now, you have the flexibility to make adjustments as needed and the peace of mind knowing your pet will be taken care of. I know how important animals are and I would love to help you ensure the future for your pet.
Call me directly at 1-714-385-0044 to schedule a consultation or email me.