Losing a beloved pet can be one of the more difficult experiences a person goes through in their lives, but it can be just as hard for the pet to lose their beloved human companion. We are the caretakers of our pets, and caretakers need to create contingency plans for what will happen if they are not present to care for them.
Trust services allow for the uninterrupted usage of assets by the beneficiaries and are used as a contingency plan for incapacity and other caretaking responsibilities, such as children or adults with special needs. Wouldn’t they be perfect for pets too?
All 50 states say they should at least be allowed, with New Jersey allowing the creation of pet trusts since 2001. However, as with other usages for trust services, whether or not a trust is the best answer is not a clear-cut yes or no, and depends on each individual’s situation.
Before getting into the details of financial arrangements, we encourage all pet owners to ask themselves these questions first:
Who will become the caregiver of the pet should I die, or become incapacitated?
Most people do not see their own pets as a burden (financial or otherwise), so they can’t imagine that the pet would be a burden for someone else. However, they may not be considering that their designated new caretaker (a family member or otherwise) lives in an apartment that has a “no pets policy”, or doesn’t have the time to walk the dog daily, or has month-long international travel that would prevent continuous care of the pet.
Does your pet have special needs beyond basic pet care?
The new caregiver will appreciate knowing more than just what medication the pet needs (if any). The documentation regarding the medical records of the pet will help them know when to get that next vet checkup. Also, the pet’s eating habits, favorite treats, and other behaviors such as when they like to be let out, or if the radio helps calm them down in a storm can make it easier for the new caregiver.
Have I discussed these plans with both potential caregivers and beneficiaries?
The best course of action is to discuss a plan with potential caregivers, and to try to have multiple potential caregivers so that if one’s situation changes there would still be caregivers available. Let your assumptions be known, and challenged while they can still be changed. Sometimes, one child or grandchild feels a much stronger attachment to a pet than another, and would volunteer or feel slighted if they weren’t consulted on the continuing care of the pet.
What about using a will?
Publishing care instructions and provisions in a will can be helpful, and studies show that between 12% and 27% of pet owners include their pets in their wills. A possible issue can arise if the estate gets caught up in probate though, so it may be better to make arrangement earlier on if possible, plus you may be able to avoid the New Jersey Inheritance Tax on the funds for the caretaker to use if the funds aren’t passing through the estate at death.
Transferring the pet to another caretaker the pet is familiar with can often be the best option, and since the care of a pet is not as costly (financially, or time-commitment) an endeavor as the care of a person, a direct transfer of funds may be sufficient to provide care for the lifetime and burial costs of the pet compared to employing trust services.
At Garden State Trust Company, our professionals are familiar with all sorts of pitfalls that accompany estate planning, and we’re always pleased to share our expertise. Let us know if you’d like to learn more!
