When planning for distribution of assets after your passing, make sure you don’t forget about your pets.
Some San Diego California pet owners assume that their final wishes will be honored when it comes to who takes over caring for their pets. However, that isn’t always the case.
The best way to ensure the care of your pets is with a pet trust. Plus, a pet trust ensures your pets won’t be separated in case something happens to you.
For example, the bond between two dogs from one household is extremely strong. Without one another, the dogs could become depressed and struggle to adjust to their new homes.
As you start thinking about how you’d like your pets cared for in case of your passing, here are some considerations for your pet trust.
What is a trust?
A trust is a financial tactic that allows you to dictate what will happen to your assets after your passing. It’s often used to limit the estate taxes that your beneficiaries must pay when transferring wealth.
It’s also a way to avoid probate court for distributing your assets after your death.
Trustees oversee a trust and ensure that the assets get transferred to the beneficiary as you designated. You can set specific rules for your trust agreement based on your preferences.
What is a pet trust?
You cannot simply add your pet to your will and expect that your final wishes will be honored. It’s much safer to establish a separate pet trust.
A pet trust works much like any other form of a trust. It sets aside money to care for your pet in case of your passing and sets clear expectations of care.
Assets in a pet trust can only be used in the care of your pets. Additionally, your trust will outline the following instructions for your pet’s future caregiver:
- Designating the person who will become your pet’s new caregiver or the adoption agency you’d like to use for finding your pet a new home. (You should consider naming a back-up caregiver in case your first choice is not available.)
- Money allocation for your pet’s care to ensure your pet receives the same standard of care that it is used to.
- Naming the third-party trustee who will handle distributions to the pet’s caregiver.
- Care instructions, including food restrictions, preferences, medical information, habits, likes and dislikes, favorite activities, emergency contacts (such as a vet), any additional information you think is relevant. This part of your pet trust will be ever-changing as your pet’s needs adapt.
How to calculate your pet’s trust needs
Before you can establish a pet trust, you need to calculate how much your pet’s caregiver will need to care for your pet according to your wishes.
This calculation is not all that complicated, but it will be easier if you have a line item in your monthly budget designated for pet care.
If you do, you can review these charges from the last few years to gather an estimate of how much your pet will need annually. Then just multiply that times your pet’s expected lifespan.
If you don’t have a line item in your monthly budget where you track your pet’s expenses, here are the expenses you’ll want to consider as you build your pet’s trust.
- Entertainment, such as new toys
- Medical care
- Misc supplies
- Travel expenses (if necessary)
You might want to add a little extra to your pet’s trust in case of unexpected expenses or illnesses. Plus – while you probably don’t want to think about this – your pet might need end-of-life care that could be costly.
As part of your trust, you should also outline what you’d like the new owner to do with leftover money if there is any after your pet’s passing. You could have this money go to your local animal shelter or humane society in your pet’s name.
How to create your pet trust
Setting up a pet trust takes five important steps. You’ll want to work with an attorney to make sure that your pet’s trust is set up correctly and the new caregiver doesn’t face challenges in accessing the funds.
Here are the steps you need to take to set up your pet’s trust:
- Choose a beneficiary: decide who will become your pet’s caregiver when you pass. Make sure to discuss this important role with this person before officially designating them. You don’t want them to be surprised about this role or try to decline it.
- Select a trustee: your trustee can check in on your pet’s welfare to make sure the caregiver is meeting your rules and requirements for their care. Additionally, a bank or trust company can fulfill this role if you don’t know of a good trustee for your pet.
- Detail your pet’s care and preferences: this section is important. It’s the area of your trust that will ensure your pet receives the same level of care with their new caregiver as they do currently. Be as specific and detailed as you want in this section.
- Outline medical care and end-of-life information: this part of your pet’s trust might be difficult for you, but just work through it slowly. Detail the kind of medical care you want your pet to receive and the end-of-life measures you’d like your pet to have.
- Set aside adequate funds: earmark appropriate funds to pay for your pet’s care after your passing.
Let San Diego Attorney Jennifer Reardon help you set up your pet trust
At Reardon Law Firm, we know the importance of pets. We’re pet owners, too, and will be sure to remind you of considerations you might not have thought about.
For a caring team to help prepare your pet trust, contact us.