As a law school student 13 years ago, Rachel Hirschfeld was surprised to learn that although she could make bequests in her will to her children, grandchildren and charities, her shelter dog Soupbone couldn’t inherit money for his care because the law considered him property.
That prompted Hirschfeld to bone up on estate planning strategies to help protect dogs, cats and other pets and comfort their owners. Today, the New York City attorney is one of the country’s leading advocates for including pets in estate plans. “My mission is to make sure a pet doesn’t become homeless if its owner becomes disabled or dies,” Hirschfeld says.
If you have a pet, you’ll want to follow the estate-planning advice from Hirschfeld and other experts to ensure that your companion will be in good hands after you’re gone.
(MORE: 9 Ways to Make Things Easier for Your Survivors)
Not Just for Tycoon Pet Owners
Although many people associate leaving money for pets with billionaire Leona Helmsley’s $12 million bequest to Trouble, her beloved Maltese (the amount was knocked down to $2 million by a judge), you needn’t be a tycoon to take these steps. And if you do include Fido or Fluffy in your estate plans, you’ll prevent your darling from going unattended once you’re not around.
Peggy Hoyt, an estate planning attorney in Oviedo, Fla., and author of All My Children Wear Fur Coats: How to Leave a Legacy for Your Pet advises all her pet-owning clients to have legal legacies in place for them.
The Error to Avoid
“People make the mistake of assuming their children will take care of their pet if they become disabled or die,” she says. “But that often doesn’t happen. It’s not uncommon for me to get a call from family members asking where they should bring their late mom’s cat or dog. I know of one case where someone just a let deceased owner’s pet out the back door.”
To help avoid a similar scenario, Hoyt advises pet owners to designate a permanent caregiver — a guardian — as well as a backup if the first choice becomes unavailable.
(MORE: Longing for a Dog)
If you don’t know anyone who’d accept this responsibility, veterinary schools and other animal organizations can provide care for your pet until a permanent home is found, as long as you give them a donation during your lifetime or through your will.
Some schools will also provide medical care for the life of your pet after your death. One example: Kansas State University’s College of Veterinary Medicine’s Perpetual Pet Care Program. Its minimum financial requirement is $25,000.
For a bequest of $10,000 or more, the Arizona Animal Welfare League Paws to Remember program will care for a dog or cat either in a foster home or its Phoenix no-kill shelter until the animal is permanently adopted.
Some no-kill shelters will take back animals adopted from their facilities at no cost.
3 Estate Planning Tools for Pet Owners
In addition to appointing a caregiver for your pet, you’ll want to make use of one or more estate planning tools: simple directives in a will, a pet trust set up by an attorney and a low-cost pet planning agreement that’s available online.
Include a Pet in Your Will Like any treasured possession, you can leave your pet to a trusted friend, relative or organization in a will.
Your companion can’t inherit money directly, as Hirschfeld learned, but you can designate someone in your will to receive a specific amount of money from your estate to be used exclusively for your pet’s care.
If you don’t name someone, your pet will automatically end up going to the “residuary beneficiary” — the person in your will who you say will inherit everything of yours that you don’t specifically mention.
Although writing your pet into your will is better than doing nothing at all, it does have some drawbacks.
The probate process — the court’s system for determining if a will is authentic — can take weeks or even months, leaving your pet’s care in limbo.
And a will takes effect only after you die, so it won’t be of use if you become disabled and need someone to be your pet’s caregiver.
(MORE: Make Your Wishes Known Through End-of-Life Planning)
That’s why Hoyt recommends pet owners set up a durable financial power of attorney in addition to a will. This legal document will name someone to act on your behalf to watch over your pet if you become incapacitated and can include instructions regarding disbursement of your money to care for him or her.
Set Up a Pet Trust Working with a lawyer to draft a pet trust, in addition to your will and a durable power of attorney, provides you with additional protections and greater flexibility.
Unlike wills, trusts are valid during the pet owner’s lifetime as well as after death.
You’ll appoint a trustee in charge of ensuring that your instructions are heeded concerning your pet’s medical care, food and supplies. In the trust, you can direct the trustee to distribute money from your estate over your pet’s lifetime, rather than in one lump sum.
A pet trust is particularly worthwhile for substantial estates where your inheritors might contest the amount of money you’ve left for a pet’s care.
Pet trusts can be costly, though. At Hirschfeld’s firm, the cost to set one up starts at around $2,500.
Create a Pet Protection Agreement This document, available at legalzoom.com for $39, is a low-cost alternative to a pet trust — and you can complete it without an attorney. Legalzoom's Pet Protection Agreement incorporates the elements of a will and a pet trust.
Essentially, you appoint a guardian and provide instructions and money for the care of your pet, as well as appoint a shelter of last resort if the guardian can’t carry out the responsibilities.
This agreement also includes a limited power of attorney, authorizing the guardian to act on your behalf to care for your pet.
If you’d prefer to work with an expert or intend to provide tens of thousands of dollars for your companion, you’ll probably want to hire an attorney to draw up a trust – so you can sleep like a kitten.
Marla Brill writes about personal finance and investing for media outlets including Next Avenue and Reuters Money. She is a contributing editor at Financial Advisor magazine.