Which Estate Planning Document is Best to Protect My Pet's Future?

Broken Promises

You may have a friend or family member who has promised to care for your dog or cat after you die. However, when the time arrives, that person may not be able to keep their promise. Life is unpredictable, and things change. This is why it is vital that you choose the document that provides your pet with the best protection. Each document has its advantages and disadvantages. When it comes to your pet, both documents can directly impact your pet’s life and the care received.

Your Pet is Property Under the Law

When most people are estate planning, they usually prepare a Last Will and Testament. This document names your assets and who you would like to be the beneficiary of them. As part of your document, you can include the care of your pet. Since your pet is considered “property” under the law, your dog or cat cannot be a direct beneficiary of your assets. Instead, the proposed Caretaker is designated as the beneficiary. The assets distributed to the proposed Caretaker are supposed to be used to care for your pet.

Only When Death Do Us Part

Unfortunately, naming your pet in your Will does not guarantee the dog or cat will be cared for the way you intend. Too often, the Caretaker takes the money but surrenders the pet to a shelter, where it will most likely be euthanized. Sometimes, your money for the care of your pet is used by the Caretaker for large purchases for themselves, instead of for your pet.

A Testamentary Trust is another method associated with the Last Will and Testament. This Trust is a Revocable Trust, so it can be changed and/or updated at any time up until your death. The directions included in your Will are only valid upon your death. This means that if you become ill or disabled, there are no provisions for the care of your pet. A Testamentary Trust and Last Will and Testament will not enable your pet to be cared for, according to your wishes, until you die.

Testamentary Trusts do not distribute your assets until the completion of Probate. This could take weeks, months, or even years! During this time, a Caretaker for your pet who is willing to pay pet-related expenses must be found. Sometimes, the dog or cat is unknowingly neglected. They may be brought to a shelter for safe-keeping until Probate ends. There is a time limit, however, before the pet will be put up for adoption.

The Secret is Out

Because it is part of the Will, the contents of a Testamentary Trust become a matter of public record. This means that the amount of money in the Trust is available for anyone who wants to know. This transparency can lead to litigation. Other beneficiaries feel slighted that “their money” is going to an animal. In this instance, the courts have been known to decrease the assets of the Trust to what they think is fairer.

The Last Will and Testament and Testamentary Trusts have some advantages. They can be helpful as a part of overall wealth management. But, the fact that they are probate assets is not in the best interest of your pet and his/her well-being.

And the Winner is…

In contrast, a Stand-Alone Revocable Trust acts exactly as its name implies. It is a Trust that is not tied to any other document; it stands alone. It can be changed or amended at any time the Grantor chooses during their lifetime. A Revocable Trust is also referred to as a Living Trust (inter-vivos). It can be used multiple times while the Grantor/Pet Owner is alive, in episodes of illness, injury, disability, and incapacity. Then, upon the Grantor’s/Pet Owner’s death, the Trust can be used again.

You Don’t Have to be Rich

A major advantage of the Stand-Alone Trust is that it does not have to be fully funded when it is created. A small amount of money can support the Trust, and the remainder of the money can be added at a later time. You can fund the Trust with your financial investments, sale of real estate, or tangible (personal) items. Life Insurance can be purchased with the Trust as the beneficiary. We advise you to speak with an accountant, attorney, or financial advisor to guide you.

A Stand-Alone Pet Trust, also known as a “Contingent Trust,” is the best choice for caring for your pet and protecting its future. The Pet Trust goes into effect when the pet needs to be cared for by someone other than the pet owner. A Trust is a non-probate asset, so no waiting period is required for the Trust to go through Probate. The assets of the Trust can be used immediately, and the pet will be cared for by the intended Caretaker with no waiting period. A Trustee will also help ensure your money is spent only on pet-related expenses according to the guidelines of your Trust and the needs of your pet.

Instruction Manual is Included

The Inter-Vivos Stand-Alone Revocable Trust includes your instructions on how you want your dog or cat cared for. This type of Trust enables your pet to continue living the lifestyle you have always provided. Additionally, the Trust contains contingency plans and names successors to the Caretaker and Trustee. A Pet Trust, unlike a Will, is legally supported. If any designee does not fulfill their obligation to your pet as you stipulate in your Trust, the court can remove your pet from their care and appoint a new Caretaker. Your pet is never in danger of being surrendered to a shelter. As a result, your pet will not face being euthanized.

It is also possible to appoint a Trust Protector. This person can provide oversight to your designated Trustee and Caretaker and help ensure your pet is being cared for and loved according to the standards you have set.

Your Efforts Pay Off, But There are Disadvantages

This type of Trust is the strongest of the documents to withstand litigation due to the time and effort needed to create the document. Additionally, a Pet Trust prepared when your pet is young, strengthens its validity in potential litigation.

Revocable Trusts have disadvantages also. They are expensive to set up, but since you avoid probate, which is also expensive, it balances out. Even though you have a Revocable Trust, other estate planning documents are still needed. Most people also prepare a Will. Last, there are some assets that cannot be placed in a Revocable Trust. (ex: Retirement Accounts, Annuities, International Assets, Automobiles) Overall, however, a Pet Trust is the best way to protect your pet’s future, and possibly save his/her life. And, as a bonus, Pet Trusts have a positive impact on your local shelters by decreasing overcrowding and the associated problems, leading to fewer pets being euthanized.

We’ll Say it Again

Of course, there are additional details about estate planning documents than those mentioned here. Our focus, however, is how they pertain to your pets. We want to provide you with the information you need to make the best decision for you and your pet. Our goal is the same as yours. We want to make sure your pet is safe and well-cared for its entire life, even in your absence. A Stand-Alone Revocable Trust is the best way to accomplish this.