30 Nov Estate Planning: How to Set Up A Trust For Pets
At Phelps LaClair, we know the value and esteem that some folks have for their companion animals and pets. Many people ask us if pets can be included in a will. The answer is a resounding yes! In fact, for many pets of the rich and famous, their lavish lifestyle doesn’t have to end when their owners pass away. Michael Jackson left his pet chimpanzee $2 million when he died. A hen belonging to a publishing magnate inherited $15 million. But the biggest of all was a German Shepherd who inherited an estate worth $80 million! Should you incorporate a trust for pets in your estate plan? It’s not a bad idea since Arizona law considers pets personal property. Here are things to consider for the care of your pets that outlive you.
Like most pet owners, you probably have friends and family members who adore your pet as much as you do. If you feel they are responsible people, you might ask them if they would consider being caretakers. You will need to have an honest conversation with them to see if there are mitigating factors. Allergies, small children, and pet-friendly spaces are all things to consider. Hopefully, you will find someone who really wants your pet and is able to care for it as you would.
If you can’t find such a person, your next option is a charitable organization. Do your homework to find the right group in your area to help you find your pet a good home. They will have the experience to guide your decision. They may also require a signed agreement and a fee upfront, but it will be worth it for your peace of mind.
How much should you allot?
The answer to this question depends on several factors. What is the age of your pet versus its life expectancy? Is your pet’s medical history healthy? What is the size of your pet, and what are its needs for housing? For instance, horses live a lot longer than dogs, and they eat much more than cats! They also need space to graze and exercise.
Generally, when giving your pet to an individual, you should calculate how much you spend on your pet in a year and multiply that by your pet’s remaining life expectancy. Then you can give a lump sum to the successor owner.
If you want to guarantee that your pet will receive the same care and attention from the next owner that you gave it, then it’s time to create a pet trust.
Setting Up A Trust For Pets
When you include money in a will to be used for your pet, there is no guarantee that it will be spent as you wish. With a pet trust as part of your estate plan, however, you can set aside money and stipulate exactly how it is to be spent. The executor/trustee of the trust will be responsible to see that all of your directives are carried out.
In a pet trust, it is usually wise to name a caretaker in addition to a trustee. The trustee can give oversight without being burdened with the daily care of the animal. If there are problems with the caretaker, it is much easier to find a new one.
The services of the caretaker are worthy of remuneration, so allow for that in the trust. Also, you need to stipulate what happens to any funds that remain after the pet dies. It is typical to donate those funds to charity.
A Trust for Your Pet in Arizona
Pets are a part of the family. And they deserve to be well taken care of in the event they need to find another home after you pass. At Phelps LaClair, a trust for pets is not an unorthodox consideration. We design all kinds of trusts for our clients to ensure that their estate is passed on to the next generation with the best tax advantages, bulletproof asset protection, and the utmost flexibility to meet each individual client’s needs. For more information, call us today for a free, no-obligation consultation. For you and for your family, we design peace of mind.