Pet trusts

Most people consider pets to be members of their family. In my 17 years of practicing in the area of Estate Planning I have found that people often assume that when they die someone will care for their pets. However, unfortunately, this is not always the case. Caring for a pet takes time, plus when you consider food, vet bills, and grooming, it can be very expensive. It is a sad but true fact that when people become incapacitated or die, their pets often end up at an animal shelter.

When Leona Helmsley died in 2007, her Will left a $12 million bequest to her Maltese, appropriately named Trouble. While the subsequent litigation of her estate generated a great deal of media attention, and was fodder for many late-night TV jokes, more than anything it illustrated the fact that estate planning to provide for the care of a pet is a legal minefield. The reason is that in most states, including until recently California, trusts for pets are known as honorary trusts, meaning they cannot be legally enforced.

Fortunately, California updated its Pet Trust statute, so that as of January 1, 2009, Californians now have the right to establish a trust for their pets that is legal and fully enforceable. With a Pet Trust you can designate a sum of money to be set aside from your estate to be held by a trustee of your choosing, to be used exclusively for the care for your pet. Then, upon the death of your pet, the remaining trust funds will pass to a beneficiary which you designate. This final beneficiary can be people, charities, or a combination of both. A Pet Trust, also called a Companion Animal Trust, can include a number of desirable features:

  • You name the Trustee who will manage and disburse the funds.
  • You can name a Caregiver for your pet who can, if you direct, be paid for his or her time.
  • You can give specific instructions regarding the care and maintenance of your pet. This can include detailed instructions regarding diet, grooming, socialization, veterinary care, environment, burial (or cremation), etc.
  • You can designate a specific veterinarian for your pet.
  • You can ensure that your pets will be cared for in the manner you direct in the event you are incapacitated. This is extremely valuable if you would want your companion animal to remain with you even if you become sick or incapacitated.
  • A Pet Trust can be established as part of a Living Trust or as a stand alone legal document.