The Humane Society of the Unites States estimates that 200,000 people die each year with one or more pets and no plan in place to care for them. And 2ndchance4pets.org reports that 500,000 pets end up in shelters each year because of their owner’s disability or death.
Just like a lamp is a piece of personal property, pets are considered personal property under state law. You can’t leave property to property. So how can you ensure that your pet is taken care of if you are disabled or die?
We recently had a discussion with a client about their loved family members, their dogs. They are married with no children and love their pets as much as they would as children. They have also served as foster parents to several dogs over the years. Part of their estate plan was to provide their pets with consistent care and security beyond their lives.
Olson Wealth Group provides a deep level of customized services to our clients. In order to do this, we continually seek strong partnerships to help our clients pursue their life vision. We reached out to Rebecca Bell, an attorney and principal at rb LEGAL, LLC, for some insight. Rebecca is an authority on wills, trusts and probate, including Pet Trusts. She also has a focus in equine law. A dog and horse lover, Rebecca sighed when she mentioned that Minnesota was the 50th state to adopt pet trust legislation in 2016.
There is a lot of confusion about three types of Pet Trusts on the internet.
- Statutory Pet Trusts are not recognized in Minnesota. It also doesn’t let you leave detailed instructions for the pet’s care.
- A Pet Protection Agreement written into your will can take weeks or months to execute while your pet needs immediate care. “And protection agreements are not legally enforceable,” Rebecca explains. “You can leave your sister with $10,000 for Fluffy’s care, and she can drop Fluffy off at the shelter and go to Vegas.” There is no safety net. The pet caretaker, generally without repercussion, could dispose of the pet and keep the money.
- A Traditional Pet Trust will give you the most control when you can’t be there to make decisions. They are legally enforceable. A properly formed pet trust can better withstand legal challenges from family members who are unhappy with your decisions. You may recall the story about Leona Helmsley, who left $12 million in trust for her dog, Trouble, while leaving nothing to two or her four grandchildren. The family was not pleased, but the trust held up and Trouble lived out his little life in luxury.
With a traditional pet trust, you provide instructions for the pet’s care, appoint a caregiver, and name a trustee to manage the money. You can even name an enforcer to make sure the animal is cared for according to the terms of the Trust document.
A Traditional Pet Trust considers these basics.
- Service animals are considered an eligible pet. This includes dogs and, interestingly, miniature horses. Livestock is not considered a pet. However, horses are classified as companion animals and livestock.
- A Pet Trust will cover whatever pet you own when you pass, not just the pets you own when you set up the trust.
- A Pet Trust will deal with animal care during the short-term or long-term disability of the pet owner.
- A Pet Trust will last until the last animal dies or 90 years – which is good because parrots can live 80-90 years. The Pet Trust can specify what happens to the leftover money. If the trust agreement is silent, funds will pass to the settlor’s “heirs-at-law” according to Minnesota’s intestacy laws. Alternatively, you can choose a pet-related charity to receive the left-over funds.
- You can control the timing of payments made on your pet’s behalf. And it is wise to have an alternate caregiver. If the guardian has a change of life issue, your pet may face an uncertain future.
- Multiple animals can be provided for under one Pet Trust. And you can have joint ownership of your pets as long as you provide proof of ownership like vet records.
- Pet care instructions can be very specific, including details such as the type of cat food that will be purchased, or how many times your dog needs to be walked or seen by a veterinarian.
In closing, a Traditional Pet Trust can offer pet owners a great deal of flexibility and confidence in knowing that your pet will be cared for. A pet trust involves just that – TRUST. Talk to potential caregivers for your pets. Find someone you trust to love your pet. Call us if you have questions about Trusts for your family…or your pets.
Olson Wealth Group is a full service wealth management firm. With wise counsel and clear strategies, our experienced specialists provide tailored approaches that strive to maximize wealth. For more information, please visit OlsonWealthGroup.com
The opinions voiced in this material are for general information only and are not intended to provide specific advice, legal advice or recommendation for any individual. Olson Wealth Group, rb Legal, LLC and LPL Financial are separate entities. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.