Is Your Pet Part of Your Estate Plan?

Key Takeaways

• Define how you want your pet taken care of and choose a pet caregiver.
• Pet care agreements and trusts are two formal ways of ensuring your pet will be cared for.
• Add up the financial aspects of pet care and include them in your plan.

More U.S. households today own pets than ever before—a full 70%, up from 56% back in the late 1980s. And more than 23 million households (about one in five) adopted a pet during the pandemic.

If you’re a part of that large group—made up of roughly 90 million families—you probably consider your pet an important member of the family that you love deeply. Example: A study by Consumer Affairs surveyed 1,000 pet owners and found that 57% of participants age 27 to 42 love their furry friends more than their siblings.

But have you considered what could happen to that cherished family member if you were to die suddenly? And have you taken any steps to ensure your beloved dog, cat, horse or other animal will be well taken care of if you’re not around to do the job?

If not, don’t panic—it’s not an issue many of us think about. That said, it’s probably time to make your treasured pet part of your estate plan. Even if your pet is part of your existing plan, it might make sense to review and revisit that document to ensure it’s still aligned with your wishes.

Here are some key steps to take and resources that may help.

Initial steps

The process of pet estate planning generally isn’t arduous, and in many instances it should begin with a few basic steps.

1. Identify your wishes and intentions. Decide how you would want someone else to take care of your pet. Do you have certain expectations or wishes around the care of your pet—types of food you want (and don’t want) the pet to eat, preferred vets and medical care, etc.? You’ll need to be clear about your wishes in order to communicate them to a chosen caregiver.
2. Choose a caregiver. Who will take responsibility for your pet after you’re gone? A good pet guardian is someone you believe will be as good to your pet as you have been. Be sure the candidate is willing and able to be the pet guardian and take on the duties you expect him or her to take on. Discuss with any candidate your expectations for care and whether that person is on board with your needs (or whether you’re willing to compromise in certain areas). It’s probably best, if possible, to identify a few candidates so you have backups in case your first choice bows out or circumstances change. If there is no person in your life who can help, consider a humane organization that can look after your pet.

• Factor in the financial considerations. Make sure you and the future pet guardian understand, as best as possible, the likely costs of pet care (more on that later). Does your cat eat special food that costs significantly more than grocery store options? Does your horse have physical health issues that need attention, medication or professional care? Is your dog a type of breed that is known for encountering health problems later in life, and how much might it cost to treat such problems? Answering questions like these now can help ensure that everyone involved in caring for your pet is clear about what may be required.

Crafting a plan that works for you

Rather than rely on a simple verbal agreement with a chosen guardian, create a formal, written plan that spells out all the key aspects—from who will be involved to what the care expectations are to how to pay for the care (and caregiver). The reason: Formal plans can be enforced if necessary.

Important: You cannot leave money directly to your pet because animals are property—like a car or dining room table—in the eyes of the law. That leaves you with three main options for safeguarding the care of your pets (see Exhibit 1).

1. Pet care agreement

A pet care agreement is a contract you make with another person who has agreed to care for your pet in case of your death. This type of formal agreement will be enforceable. It should spell out the specific care you want for your pet as well as how any money you have arranged for that care is to be handled (including what happens if there are excess funds after the pet dies).

2. Pet trust

A pet trust is also a legally enforceable arrangement that helps ensure your pet care wishes are honored. As with the pet care agreement, you will need to identify a willing and able pet guardian. But you will also need someone to administer the trust—a trustee. That person may or may not be the pet guardian. A separate trustee can add a layer of protection because he or she can check on the well-being of your pet and ensure that the money allocated to pet care is being used properly.

You can establish a pet trust now or upon your death. Either way, you need to fund the trust for the care of your pet. This often entails coming up with some number to ensure a certain standard of living for your pet. Be sure to consider the costs of possible or likely medical care for your pet, as it can be expensive (especially later in your pet’s life).

The trust will detail the types and level of care as well as how money is to be dispersed from the trust (for your pet and possibly for the pet guardian’s compensation for his or her efforts).

Warning: Your pet trust must comply with your state’s laws. A description of each state law is available at www.aspca.org/pet-care/pet-planning/pet-trust-laws .

3. Will bequest

Your will determines how your assets will be divided and allocated after you die. Because a pet is considered property, as noted above, your will can stipulate who becomes its guardian and the amount of money that will be set aside for its care. Here again, you will need to identify a guardian, provide instructions for care and spell out the monetary arrangements. You can direct your executor about providing money for the care of your pet. Also, you may want to provide funds for the guardian directly. If the guardian is an organization, a donation can be given.

And, as with a pet trust, make sure the pet provisions in your will work in your state. In some states, pet provisions are deemed “honorary.” The court will not necessarily enforce the provisions.

The financial side of your pet’s care

It is often worthwhile—and sometimes essential—to provide the funding for the care of your pet after you’re gone. Thus, you need to calculate the amount needed for the care you prefer for your pet. Some considerations include:

• The cost of caring for your pet and the pet’s life expectancy. Some pets (such as macaws and cockatoos) can live more than 50 years.
• Medical costs as the pet ages.
• Boarding facility costs (if you have a horse, for example).
• The cost of any pet health insurance you may choose to have.
• Compensation (if any) for the caregiver for his or her efforts.

Important: If the pet dies and there’s money remaining—in the pet trust, for example—you’ll want to specify where those funds go. You might set up a trust so the assets pass to the guardian or to an animal welfare organization (or another animal-focused charity).

Make a plan—or review the one you have

You don’t have to be extremely wealthy to do some basic (or even advanced) estate planning that involves your pet. Anyone who sees his or her dog, cat or other animal as a beloved family member should consider taking steps to ensure it will continue to get the love and attention (and treats) it’s become so accustomed to. The alternatives—a shelter or worse—are usually highly unappealing to pet lovers.

Next steps: If you’re interested in making arrangements to have your pet taken care of after you’re gone, talk with your financial advisor about the best ways to accomplish that goal. Or if it’s been a few years since you last revisited your existing pet estate plan, give it a review to ensure it still meets your needs.

VFO Inner Circle Special Report

By John J. Bowen Jr.

? Copyright 2024 by AES Nation, LLC. All rights reserved.

No part of this publication may be reproduced or retransmitted in any form or by any means, including but not limited to electronic, mechanical, photocopying, recording or any information storage retrieval system, without the prior written permission of the publisher. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs and attorneys’ fees.

This publication should not be utilized as a substitute for professional advice in specific situations. If legal, medical, accounting, financial, consulting, coaching or other professional advice is required, the services of the appropriate professional should be sought. Neither the author nor the publisher may be held liable in any way for any interpretation or use of the information in this publication.

The author will make recommendations for solutions for you to explore that are not his own. Any recommendation is always based on the author’s research and experience. The information contained herein is accurate to the best of the publisher’s and author’s knowledge; however, the publisher and author can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof.

Unless otherwise noted, the source for all data cited regarding financial advisors in this report is CEG Worldwide, LLC. The source for all data cited regarding business owners and other professionals is AES Nation, LLC.

Securities offered through LPL Financial. Member FINRA / SIPC. Investment advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. NewEdge Advisors, LLC and Congruent Wealth, LLC are separate entities from LPL Financial.