If you are concerned about predeceasing your pet, you are probably wondering how you can include your pet in your estate plan. There are a couple of different ways that you can set aside resources for the care of your pet when you are planning your estate.
Direct Bequest to Caretaker
You could ask someone to agree to take care of the pet after you pass away. If you create a last will to direct the transfer of your monetary assets, you could leave this person a direct bequest that is earmarked for the care of the pet.
There are some potential drawbacks with this course of action. Clearly, you are going to choose a caretaker that you trust, but the caretaker is not legally compelled to do any particular thing with the inheritance. This is something to take into consideration.
Another thing to consider is the longevity of the caretaker. Will the caretaker outlive the pet?
Thirdly, it can be hard to know exactly how much to leave to the caretaker. What if the pet passes away a couple of months after you do? The caretaker would simply go forward with the funds that were set aside for the care of the pet.
Another option that you could consider if you want to provide for your pet in your estate plan would be a pet trust. At this point many of the states in the union do allow pet trusts. Our firm practices law the state of Indiana. In our state, pet trusts are in fact legal.
With a pet trust you do not have any of the drawbacks that we touched upon in the previous section. You name a trustee to administer the trust when you are creating your estate plan. This trustee is legally bound to follow the terms of the trust. You create these terms when you create the trust agreement, and they can be quite specific. The trustee would be required to make sure that the pet is cared for in accordance with your wishes.
You could name a successor trustee to replace the trustee if he or she was to pass away. You could also use a professional fiduciary entity such as a trust company to act as trustee. The trustee does not have to be the caretaker. The trustee could engage a caretaker utilizing assets that have been conveyed into the trust.
When you create the trust, you can name a successor beneficiary or beneficiaries. After the death of the pet, the successor beneficiary would assume ownership of anything that remains in the trust.
Free Report on Pet Trusts
A pet trust can be a valuable part of your estate plan. To obtain more detailed information about pet trusts, download our free report on the subject. You can access the report through this link: Pet Trust Report.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.