German-born fashion designer Karl Lagerfeld said before his death in February that he was leaving his Birman cat, Choupette, a fortune, which has made some pet owners stop to think.
The will or estate plan takes care of the kids, the grandkids and maybe even some miscellaneous friends, but what about the pets? If you are a pet owner who loves Fido and Snowball and even Trigger almost as much as you loved the children, you will want to make sure they are taken care of after you die.
Putting pets in a will or trust agreement is becoming more common, and when wealthy celebrities do it, it garners attention, said Jason Smolen, an estate attorney at SmolenPlevy in Vienna, Va.
“Setting up trusts for pets, or putting their care in the will, is becoming more popular as people become more aware that it is possible,” Smolen said.
“It is definitely something a pet owner wants to think about and you want to ask your clients about it,” he said. “It is more about passion than economy: about how much a person cares about the pet, rather than the economic status of the person making the will.”
Some states, including Maryland and Virginia and Washington, D.C., have laws setting out how pet trusts should be set up. They work like other trusts in that a certain amount of money is set aside and a trustee carries out the instructions, Smolen said.
“A lot of people with pets do not need a trust or will for the pets because family members or friends know what the owners want," he said. “But if there is no plan in place, it is not something a pet owner wants to overlook. If there are several pets, it might be too much responsibility to put on one person,” so plans and money should be set up ahead of time.
With a pet trust, the owner can outline how he or she would like the pet taken care of, how often it should be groomed, how the pet trust money should be spent, and any other special needs the pet might have, Smolen said.
Pet owners should also meet with assigned caretakers and trustees to eliminate any confusion and ensure they are all aware and onboard with the plan. Pet owners should update their pet trust and will whenever they get new pets or lose one. The amount of money should be based on the cost of caring for the pet. A specific caretaker should be named and the plan should detail care instructions and financial arrangements. Without a will or trust, pets in most states are treated like property, Smolen said.
Pet trust laws in some states allow a trust to be set up for the lifespan of an animal, but others cap the trust at 21 years. A lifetime limit is useful in the case of an animal with a long lifespan, like a parrot.