Estate Planning Binder with French Bulldog

April 12, 2021

April 11 is National Pet Day.  For some households, every day is “pet day.”  For those of you who buy better quality food for your pets than you do for yourselves, you know what I mean.  While we love them and treat them like members of our family, for many what will happen to their pets if they are no longer able to care for them is an afterthought.  However, with proper planning, your furry family need not fear, their quality of life does not have to change in the event of your death or incapacity. Let’s talk about pet trusts (below).

What many people do not know is that in California pets are treated like personal property and are a part of your estate.  If you do not specifically provide for them, they can be treated as part of the residue of your estate and be subject to distribution to your heirs (next of kin – if you don’t have an estate plan) or to the residual beneficiaries of your Trust or Will. If that person doesn’t want your beloved pet, they can end up being placed with a rescue or worse an animal shelter.  As an animal lover and pet parent, I can tell you this is not a good outcome for the pet, especially if it is a senior who is less likely to be adopted.  They are scared and lost without their pet parent and this fear and confusion is only compounded by being in unfamiliar surroundings.  Even the best rescues and pet advocates cannot provide a familiar face or environment for a pet displaced due to the absence of their human. 

If you are concerned about keeping your pet with you for as long as possible or providing quality care for them in the event you are not able to be with them, you should know that California law allows for individuals to provide for companion animals in their estate plans.   They are commonly referred to as Pet Trusts.  As the name implies, a Pet Trust is a trust that provides funds and formal instructions for the care of your pet for the rest of its life.  Like human estate plans, there are varying degrees of estate planning for our pets.  At the opposite end of the spectrum, you can opt for an informal plan for your pet and name a specific individual to have custody of your pet and provide a cash gift to help provide for your pet’s needs.  There are pros and cons to both options.

PET TRUSTS

If you decide to set up a Pet Trust, it can be incorporated in your existing estate plan and set up to function much like a trust for the benefit of a child or young adult with a trustee to manage the money needed to pay for medical expenses, food and other needs of your pet.   It can provide instructions for how to care for your pet if you are unable to manage your finances during your lifetime or on your death.  It can name the same individual to take physical custody of your pet on your death or name someone entirely different.

Pros of a Pet Trust

Some of the pros of a Pet Trust are that you can leave specific instructions as to how your pet should be cared for and how the funds you are leaving should be spent.  It can provide you great peace of mind knowing that if you become incapacitated you have left detailed instructions for the care and support of your beloved pet.  The person(s) you entrust with the financial responsibility over your pet and the physical custody of your pet are held to the same fiduciary standard that the trustee of your Trust is held to for purposes of carrying out your wishes. Should they fail to carry out your wishes, they can be subject to removal and/or personal liability.

Cons of a Pet Trust

Some of the cons of a Pet Trust are that they can last several years after your death and in that time, they have to be administered.  Depending on how much money is set aside for Fido or Fifi, this can come with the requirement to file annual tax returns, provide regular accountings and to pay attorneys, CPAs and/or the trustee to continue to perform services on behalf of the Trust.  This can get expensive, so additional resources must be allocated, beyond those necessary for the anticipated needs of Fido or Fifi to allow for those costs of administration. 

INFORMAL ESTATE PLANNING FOR YOUR PET

At the other end of the spectrum is the “informal plan for your pet.”  With this plan, you may leave your pet to a family member or a friend who adores your pet and provide enough cash in the form of a specific bequest to that individual or organization (like Best Friends Animal Sanctuary) so that the anticipated needs of your pet are met for the rest of its foreseeable life.  This option comes with its own pros and cons.

Pros of an Informal Pet Plan

In the “informal pet plan,” you do not have the expenses of ongoing costs of administration, because you are making a one-time gift to an individual or organization.  This allows a smaller gift for the benefit of your pet or for more of the funds you want to leave for them to be used for your pet rather than the ongoing administration of a trust for them.

Cons of an Informal Pet Plan

Since this type of plan provides a one-time gift, there is no real oversight to how the money you gift is spent.  It can be spent, as you hope, for the benefit of your pet to provide for him or her for the rest of their life.  In the alternative, your pet could end up in a shelter and your gift could fund an extended holiday, a new car or some other extravagance for the benefit of the recipient.  You must have confidence in the person you are entrusting with your pet’s financial and physical well-being. You may be better off with a pet trust.

An additional con of an informal plan is that they typically only go into effect upon your death as this is a gift being made when you die.  However, what happens if you are unable to care for your pet during your lifetime? 

While there are pros and cons to both ends of the pet planning spectrum, a skilled attorney can work with you and customize your estate plan to ensure that your pets will be properly cared for and their needs are met both during your lifetime and on your death.       

CANNON LEGAL FIRM CAN HELP

If you or your loved one need more information about pet trusts or alternatives to pet trusts, we can help. Contact Cannon Legal Firm for a free consultation.  

We proudly serve Seal Beach, Long Beach and the surrounding communities for all your Estate Planning, Trust & Estate Litigation, Trust Administration and Probate needs.   We are happy to provide a free consultation via telephone, virtual visit or socially distanced at our offices at 3020 Old Ranch Parkway, Suite 300, Seal Beach, California or at your home or office.

Contact us for a free consultation or schedule a Zoom or telephone appointment online.  Dana@CannonLegalFirm.com   –    562.543.4529 (Voice and Text)   –   www.CannonLegalFirm.com

About the author 

Dana Cannon

Dana M. Cannon has many years of experience with Probates, Conservatorships, Trusts and Estates. During that time she has advised clients on multi-million dollar trust administrations; handled complex litigation; performed estate planning; and represented clients in contested and uncontested conservatorship, guardianship, probate and trust matters. She has been a volunteer at the Los Angeles Superior Court Pro Bono Probate Settlement Program since it began.  She understands that these matters may not just involve money. They are often fueled by emotions and because of that this isn’t just business, it’s personal. She looks forward to assisting you with your legal needs.

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