Estate planning for pets becomes serious business.

Have you added Fifi or Fido to your client's estate plan checklist? Animal lovers are howling to find out.

"A lot of people don't plan for it, and their pets are put to sleep," warns Brett Marley, a trust and estate attorney with Holland & Knight, Fort Lauderdale, Fla.

Many people treat their pets better than they do other people.

So while the idea of a pet trust might sound foolish and frivolous, it is serious business.

Marley, for example, recently arranged for a client to put nearly $1 million into a foundation-preserved for her pet's life. When the pet dies, the remainder goes to charity. Florida is believed to be the 18th state to legalize pet trusts via a new law slated to take effect January 1, 2003.

Marley is preparing client wills to accommodate the law, with trusts to be established when the law takes affect. So far, he says, $100,000 is a fairly common amount that clients are setting aside for pet trusts.

Pet trust laws already exist in Alaska, Arizona, California, Colorado, Iowa, Michigan, Missouri, Montana, New Mexico, New Jersey, New York, North Carolina, Oregon, Tennessee, Washington, Wisconsin and Utah. However, state laws differ.

There are 58 million households in the United States that care for pets. Without a pet trust, all your client may do is designate a caretaker for his or her pet.

"In states that don't specifically have pet trust laws, it's considered an honorary kind of thing," explains Nina P. Berkheimer, director of estate planning at the SPCA of Pinellas County in Largo, Fla. This means you have to find a person, and give that person the pet and the money to take care of it. "If they throw the pet out on the street, there's nothing to stop them. The pet trust law gives the opportunity to actually make this enforceable by a court of law."

Pet estates can add up to some pretty big bucks. Tobacco heiress Doris Duke left $100,000 in trust for pets. Betty White, Dusty Springfield and Oprah Winfrey are among the celebrity pet owners reported to have included pets in their wills and estates.

However, even if your state does not have a pet trust law, your clients still can provide nicely for their pets. Gerry W. Beyer, professor of law at St. Mary's University School of Law in San Antonio, Tex., suggests that you can set up an even better arrangement without a pet trust law. He advocates a "conditional gift in trust," created under standard trust law.

Under his system, you're leaving the gift in trust for a person-not the animal, he says. Your client would make a conditional gift to the pet's caretaker. The condition under which the caretaker gets benefits is that he or she takes care of the pet. Meanwhile, the trustee is different from the person receiving the benefits. The trustee ensures that the caretaker is taking proper care of the money. "I even recommend that the trustee arrange for surprise visits," he says. The remainder beneficiary is different from the person taking care of the animal.

Such a system, while more costly than a standard pet trust agreement, he says, imposes checks and balances. No one person is apt to abscond with your client's trust money. Plus, it can provide great detail for the animal's care.

"That could work," says Lawrence Waggoner, professor of law at University of Michigan in Ann Arbor, of Beyer's concept. In 1990, Waggoner helped draft the uniform probate code of the National Conference of Commissioners of Uniform State Laws. The code provided the initial model for pet trust laws nationally.

However, Waggoner says he is unaware of any case law that supports Beyer's concept. With a pet trust law, he says, "because you've got a statute that tells you exactly what you have to do and what you can do, there can be no question about validity." Regardless of whether your client sets up some type of trust to care for an animal, an increasing array of programs nationwide offer to provide for pets after their owners are gone.

Charlotte Alexander, president of the North County Humane Society in Atascadero, Calif., says her group just followed an example set by other animal organizations. If her humane society is left some amount of money in a will, it will provide temporary shelter for the animal after its owner dies.

"You have to enroll in the program," explains Alexander, co-author of the book, "When Your Pet Outlives You; Protecting Animal Companions After You Die (NewSage Press)." "We get a lot of information: What kinds of medications is the pet on? What kind of situation does it like to live in? Does a cat get along with dogs? We take in the animals until a good home can be found."

Humane societies and nonprofit animal organizations often aren't geared to take animals for life. However, there are pet retirement homes, life care centers and sanctuaries. "Some are for-profit," Alexander says. "You can leave your animals, and they will take care of them for life."

Beyer says that the best such facilities are university veterinary schools. Top of the line, he says, is the Stevenson Companion Animal Life-Care Center at Texas A&M University's College of Veterinary Medicine, College Station, Texas. The program requires an endowment and, in some cases, an enrollment fee.

"Most veterinary schools are set up where the students will take care of animals as part of a scholarship or tuition," Alexander said. "Mostly, they are very expensive."

If your client is looking for a life care facility for a pet, he or she needs to:

Check with regulatory authorities to make sure no major complaints or actions have been filed against it.

Evaluate how long the facility has been in business.

Get references.

Visit it.

"Be very cautious," Alexander warns. "Almost all pet retirement homes and sanctuaries haven't been around very long. You also want to ask what happens if the retirement home or sanctuary goes out of business."

If you decide on a pet trust for a client, consider the tax consequences. Current federal tax policy considers pet trusts to be void because a beneficiary must be a person, says Rep. Earl Blumenauer (D-Ore.). Blumenauer has introduced legislation aimed at allowing charitable trusts for pets when the remainder interest passes to a qualified charity.

Beyer says that when setting up a pet-related trust, the client needs to consider these issues:

Name a caretaker-somebody who is going to take good care of the animal. Check with the person ahead of time.

Name a trustee who is financially capable of handling money.

Consider the animal's life expectancy and size of the person's estate in determining how much money will be transferred. "Be careful not to transfer too big of a sum because it is likely to cause a contest," Beyer said. "Some states will cut down the gift if you leave more than $1 million to take care of a pet."

Determine if and how any trustee or caretaker will be paid.

Consider whether you will need to leave money for higher insurance premiums the caretaker is likely to experience for taking care of a dog.

Describe exactly how you want a pet to be taken care of.

Indicate who gets money left in a trust after the animal dies. "It can't be the same as the beneficiary or caretaker," Beyer stresses. "Otherwise, there is no incentive to keep the animal alive."

Be sure to clearly identify the animal. There have been cases where the caretaker finds a replacement animal to keep the money coming in.

Require random inspections by the trustee.

Determine burial or cremation arrangements.

Also, define circumstances under which the animal should be put to sleep, animal advocates suggest.