You’ve cleaned up more pee spots than you care to mention, and you’re not even going to talk about the Great Chicken Bone Incident of 2018.
You could send a child to college on what you’ve paid in vet bills.
That’s because your pet isn’t just a pet. They’re part of your family. And you want to make sure they’re well cared for if anything should ever happen to you.
In the past year, hundreds of pets have ended up in shelters after their owners died. Just the thought of that makes you shudder — we get it.
So what’s the best way to care for your dog or cat (or bunny or horse or parrot)? Should you create a pet trust or a pet will?
Including a pet in your will
Many states (including Georgia) allow you to provide for a pet in your will.
You can’t just include a provision saying you leave everything to Rufus, though. To leave assets to your pet, you must first name a pet guardian.
Then you can make bequests and leave instructions to the pet guardian on the care of your pet.
Here’s the catch, though: any bequests made to the pet guardian are considered a gift. That means the pet guardian can choose to spend the money however they’d like, even on something other than your pet.
So if you go with a will, choose your pet guardian carefully. Make sure they’re committed to following your wishes and taking the best care of your four-legged friend as possible.
And here’s another thing to be aware of: for a will to take effect, it must go through probate. That means whatever funds you’ve left for the care of your pet won’t become available until the will has completed the probate process. Unfortunately, probate can take anywhere from a few months to more than a year.
See: What a Will Won’t Do
Creating a pet trust
A trust is a legal entity that’s set up to carry out a specific goal. For estate planning purposes, that goal is usually to provide money and instructions for the care of someone. Often, that someone is a minor child, but trusts can also be used to provide for pets.
When you create a pet trust, you (the grantor) name a trustee that will manage the trust and a caregiver who will care for the pet (or pets — you can include multiple pets in one trust). You will also name a successor trustee and a successor caregiver to take over in the event that something happens to the original trustee and caregiver.
The trustee will hold money “in trust” for the benefit of the pet. They’ll make payments to the caregiver in accordance with the terms of the trust agreement. That could specify a lump sum or distributions made on a particular schedule. In Georgia, the trust continues for as long as the pet is alive. If there are multiple pets, it continues until the last pet dies.
See: Estate Planning Priorities for a Fresh Start
Pet trust or pet will?
So which one is right for you?
The biggest benefit to creating a provision for your pet in your will is that it’s easy to do. Drafting a will is a relatively simple and straightforward process. It can be done quickly and inexpensively. Once the will is signed and notarized, it’s off your plate. You don’t have to do anything to maintain it (besides updating it if circumstances change).
But, as we mentioned earlier, any money included in a pet provision in a will is considered a gift. That means the person who you leave in charge of your pet could refuse to care for your pet and still take the money.
Compare that to a trust.
The biggest benefit of a pet trust is that, unlike pet provisions in a will, it’s legally enforceable. If you leave money in a trust for the care of your horse, the money must be used for that purpose. If it’s not, the trustee can bring an action against the caregiver.
But a pet trust has other benefits as well.
You can get really specific in a trust. You can require that Fido only eat a particular brand of dog food. Likewise, you can set the number of times Mittens goes to the vet each year or how many times a day Sparkles should get walked.
And a pet trust, like any other trust, allows you to avoid probate for any assets that are in the trust. That means any funds and the authority to take over caring for the pet are transferred immediately — not after several months.
Plus, unlike a will, a trust can go into effect when you’re still alive.
Why would you want that?
Well, it’s not uncommon for a pet to be turned over to a shelter because their owner is in the hospital and can’t care for them. If you get into a car accident or become incapacitated for some reason, the trust can take effect. Your pet’s designated caretaker will receive the instructions and funds they need to care for your pet until you recover.
And there’s one more big benefit to using a trust instead of a will.
You can specify what happens to any money that remains once the trust has ended and your pet is no longer alive. For instance, the remainder could go to your favorite animal charity.
As you can tell, we think trusts are a superior mechanism for ensuring your pet is well cared for no matter what happens. But not everyone is in a position to create a trust. If that’s the case for you, a will is a great alternative as long as you choose your pet’s caregiver carefully.
The most important thing is that you create either a pet provision in your will or a pet trust to make sure you’re taking care of your furry (or feathery) family member. We love helping families include pets in their estate planning process. Give us a call or schedule a consultation online to find out how we can help.
