Estate Planning Considerations For Our Pets (Full Version)
November 15, 2013
In the past, most Americans kept their pets as solely or primarily outdoor companions that were only peripherally part of the family. However, nowadays pets frequently enjoy full indoor privileges, including sleeping on the bed, and are often more pampered than the family’s children. Nevertheless, even though Americans have evolved regarding the emotional attachment and comforts they provide their pets, the American legislative and legal system, with the exception of criminal cruelty laws, still generally regards pets as chattel. Thus, the privileges and stipulations provided pets in the law are often limited in consideration, tantamount to the privileges and stipulations provided non-real property, such as furniture, bank accounts, old photographs, or other inanimate possessions. Yet, with proper planning, in the area of probate law, our pets can receive the treatment they deserve as sentient beings, rather than remain treated in a manner equivalent to our furniture.
The average lifespan for a domestic dog generally ranges between 10 – 16 years, depending on the breed, and the average lifespan for a domestic cat maintained indoors ranges between 12 to 17 years. In contrast, the average human lifespan in the United States is 73.6 years for males, 79.4 years for females, and approximately 77 years overall. Moreover, since the preceding statistics take into account infant mortality and early death, the average life expectancy for a person who already has reached adulthood is much higher. For instance, actuarial tables show that a 40-year old is likely to live to the age of 79 and a 66-year old is likely to live to the age of 84. Therefore, the vast majority of CPT clients will outlive their pets.
Nevertheless, not everyone will experience a long, healthy lifespan. Unfortunately, regardless of their stage of life, some CPT clients will suffer accidents, unexpected illness, or debilitating physical conditions that will cause premature death or disable their physical or mental capacity to properly care for their beloved pet(s). Consequently, expressing true love and care for our pets should extend beyond regular feeding, playtime, health maintenance, or even CPT training. We also should author an estate plan that strategizes and pre-arranges the care of our animals should unfortunate contingencies occur that cause death, permanent or temporary disability, or emergencies that suddenly take us away from home for extended periods, whereby we are unable to properly care for our pets.
Estate Planning Options:
Below we list the strengths, weaknesses, and suitability of various estate planning options. Some of the options are simple enough that you can probably complete the action without the assistance of an attorney. However, other options are more complex and may require the assistance of an attorney specializing in estate planning.
Section I- Estate Planning Options to Provide Care for Your Pet Post Your Death
1. Doing Nothing
If you die intestate in the state of Georgia, statutory law determines the distribution of your property. If you have a spouse and no children, everything you own, including your dog or cat, will go to your spouse. If you have a spouse and at least one child, your spouse and children share your estate equally, with the spouse receiving a minimum of one-third of the estate. If you have children and no spouse, the children share your estate equally. If you have parents and no spouse or children, your parents receive your estate. If you have no parents, spouse, or children, your estate goes to your siblings and if no siblings to the next of kin.
Regardless, statutory law determines the division of property value, but not the specific allocation of property. Therefore, if you die intestate, you have no control to predetermine which heir will inherit your dog or cat or the disposition of your pet if the heirs refuse acceptance. Moreover, the property allocation process is slow, arduous, and handled by a probate judge who most likely has never and will never meet your pet. Consequently, the judge’s final decision may not concur with what would have been your wishes and in the interim, until the probate process is completed, there is no formal procedure to address your pet’s care and well-being.
Even though dying intestate may work if you are married and your spouse equally enjoys your pet, you need to prepare for what happens to your pet when your spouse dies, becomes disabled, or is not fond of your pet. Furthermore, if you are unmarried, are you certain that your children, siblings, or next of kin are willing to properly assume the responsibility of caring for your pet(s) upon your death? In summary, although dying intestate is inexpensive and requires no preparation time, it provides insufficient control and certainty regarding your pet’s care, even if you are presently married.
2. Gifts to the Pet
Even though we have read newspaper stories of celebrities bequeathing large sums of money directly to their pets, historically, state courts have invalidated outright probate gifts to pets. Probate law typically requires that a donor deliver or bequest a gift to a human designee or a legal entity or trust possessing a competent human manager or trustee. In contrast, a dog or cat is considered property and by law property is not deemed competent to hold title to or manage other property, including cash or alternative financial instruments.
Only in cartoons and children’s books can dogs or cats manage money. Moreover, they usually irresponsibly spend the money on treats and disregard other necessities, such as veterinary care. Therefore, for the legal and humorous reasons expressed above, an outright gift to the pet is not a viable option.
3. Gifting the Animal to a Third Party
Gifting the pet to a relative, neighbor, friend, animal rescue organization, or animal retirement home is a viable option. The preceding action can be expeditiously accomplished via a bequest inserted into a simple will. The strengths are that you have a specific plan for the care of your pet post your death and that your pet may likely remain with someone with whom your pet is familiar. However, on the weaknesses side, the recipient is not legally obligated to accept or maintain the gift. Consequently, estate planning attorneys highly recommend speaking with prospective recipients ahead of time, obtaining their acceptance, and informing them of your intentions once the will is prepared. In addition, because situations and decisions may change, your will should also name an alternate caregiver(s).
Furthermore, to better ensure that your pet will be maintained in a manner you find suitable, you may leave specific instructions regarding care in a codicil and in your will bequest a specific sum of cash to the caregiver. Additionally, to protect against contingencies where a prospective recipient declines caregiving responsibilities or where the pet predeceases you, consider inserting provisions that the cash gift is conditional upon the acceptance of caregiving responsibilities of the specific pet(s) and that designated monies must be used specifically for the care of the pet.
Nevertheless, once the gift of either the pet or cash is received, the recipient is not legally bound to follow your wishes. Although there may be a moral obligation, there is no legal protection in a simple will obviating the recipient from depositing the dog or cat at a shelter and spending the money in Las Vegas. Therefore, when gifting your pet and/or cash in a simple will, carefully evaluate the integrity, emotional stability, and financial stability of prospective caregivers.
If you cannot find a trustworthy recipient who desires to care for your pet upon your death, consider gifting your pet to an animal rescue organization or a pet retirement home. Research the organization’s experience, reputation, mission statement, policies, procedures, and facilities prior to completing your will. Speak to a responsible representative to determine how they will care for your pet and any conditions required for them to accept the donation. In many cases, an animal rescue organization will work harder to find a foster home for your pet if the gift of the pet is accompanied by a substantial cash donation. Similarly, many pet retirement homes require a minimum cash bequest before they accept caregiving responsibilities.
In 1990, the Uniform Probate Code was amended to include a trust for the care of pet animals. Similarly, the Uniform Trust Code, completed in the year 2000, includes a trust for the care of animals. Presently, 46 states and the District of Columbia have enacted trust statutes that abide by the UPC version, the UTC version, or unique state law. As of July 2012, all states with the exception of Kentucky, Louisiana, Minnesota, and Mississippi have enacted laws that allow enforceable pet trusts.
In 2007, Georgia legislators drafted O.C.G.A. 53-12-18, which revised many of Georgia’s trust laws in accordance with the UPC. The proposed statute included the creation of a legally valid trust for animals. However, the legislation was tabled in committee due to unresolved debate about issues unrelated to the establishment of a pet trust. A revised version of O.C.G.A. 53-12-18 reached the Georgia General Assembly during the 2009 legislative session. In July 2010, the Georgia State Legislature passed O.C.G.A. 53-12-28, which establishes that “a trust may be created to provide for the care of an animal that is alive during the settlor’s lifetime.”
Prior to the adoption of O.C.G.A 53-12-28, pets could not be named the beneficiary of a legally valid trust in the state of Georgia. In accordance with common trust law, unless an exception is allowed by statute, animals lack the legal ability to own title to a trust, own assets or property contained by the trust, or to enforce the provisions or duties of a trust or the trustee. Passage of O.C.G.A. 53-12-28 allowed the preceding exceptions and provided pet owners far more control and certainty regarding the care and well-being of their pets upon the misfortune of the owner’s death.
The following discussion will consider available trust options for the application of Georgia’s animal trust statute. Regardless, legal trust creation is often quite complicated and should involve the services of an attorney specializing in estate planning. In addition, even though a trust will provide superior control post-mortem regarding the long-term care of the pet, as well as the conditional usage of monies allocated for the care of the animal, one must also weigh the up front cost of creating the trust, the continuous cost of implementing trust instructions, and the continuous cost of administrating the trust in accordance with government mandates.
4a. Inter vivos Trusts
An inter vivos trust is a revocable or irrevocable trust created to hold property for the benefit of a prescribed beneficiary where the trust is funded while the grantor is alive. The revocable version is also called a “living trust.”
Inter vivos trusts provide the advantages of immediately funding care of the animal, since the proceeds of the trust and the trust itself do not go through probate. The absence of probate reduces costs, since probate courts often assess an administrative fee; expedites time; and maintains privacy, since probate proceedings become a matter of public record. An inter vivos trust, unlike a testamentary trust, also may include the advantages of utility when the grantor is incapacitated or disabled, provided the grantor names a third-party trustee or a co-trustee to serve during the grantor’s lifetime. If funding prior to death is insufficient to care for the animal’s expected lifespan, the will may also instruct that nonprobate assets, such as bank accounts or life insurance, add supplementary funding upon the settlor’s death.
However, an intervivos pet trust also has disadvantages. The trust does not insulate beneficiaries from federal or state inheritance taxes. Moreover, there is an up front cost for establishing the trust that the grantor must pay during his/her lifetime, as well as continued administrative costs payable to the trustee upon the death of the grantor. Usually there are no trustee costs during the life of the grantor, since during the trust creation process the grantor usually selects himself/herself as the trustee prior to his/her death and concurrently selects a successor trustee to assume responsibilities once death occurs. Furthermore, although trust income is taxable to the grantor during the grantor’s lifetime, the trust assumes a new tax identification number upon the death of the grantor and must file an annual federal tax return, provided trust income exceeds $100.
4b. Testamentary Trusts
A testamentary trust is created upon the death of the testator. The specific terms of the trust are usually contained within the person’s will and perhaps within a codicil or a letter of wishes. The executor of the estate and the probate court would then abide by the wishes of the deceased in seeing that the trust properly comes to fruition.
A testamentary trust provides the advantages of greater control regarding oversight of the caregiver. Since the trustee must make an annual report to the probate court, the testamentary trust gives the greatest probability that the grantor’s wishes are carried forth in accordance with the terms of the trust.
However, the testamentary trust has the disadvantages of delaying funding for care of the animal, since the trust’s creation and funding must be approved by the probate judge; greater costs, since the probate court is involved at inception and on an annual basis and will likely assess an administrative fee each time an attorney or trustee appears before the court; possible exposure of information regarding the trust to the general public, since probate proceedings are a matter of public record; and greater complexity, due to the reporting requirements, which might require the services of an institutional trustee.
4c. Other Trust Considerations
When contemplating an inter vivos or testamentary pet trust, carefully select fiduciaries who will responsibly carry out their duties. The first fiduciary to consider is the caregiver. The caregiver is responsible for providing residence and daily care for your pet(s). The caregiver is also responsible for ensuring that the trustee releases funds in accordance with the provisions of the trust. Although the pet is the ultimate beneficiary of the trust, the caregiver becomes the legal beneficiary. Do your best to select a person who will love and care for your pet as you do and who has the moral rectitude to responsibly implement your wishes. Moreover, since a caregiver may predecease you, decline duties, or fail to abide by your wishes, estate planning attorneys recommend selecting alternate caregivers within your will or trust document. You may also wish to provide compensation for the caregiver.
The second fiduciary to consider is the trustee. The trustee is responsible for investing trust funds, distributing monies to the caregiver, periodically inspecting whether the caregiver is properly performing his/her duties, completing required tax forms, and annually reporting to the probate court (if the trust is a testamentary trust). If you can not find a relative or friend to fulfill the trustee duties, consider naming a corporate trustee, such as a bank, trust company, or law firm. In addition, since an individual trustee may pass away, decline duties, or fail to fulfill obligations and a corporate trustee may incur bankruptcy, liquidation, or dissolution of the business, also name a successor and/or alternate trustee in your will or trust document. Individual trustees may agree to perform duties free of charge. However, corporate trustees typically require annual compensation ranging between 1 to 1.5% of the trust’s assets.
In the case of both primary and alternate fiduciaries, be they caregivers or trustees, obtain consent prior to naming them in your will or trust document. Furthermore, before naming a corporate trustee ensure that the institution is financially solvent, has appropriate corporate policies, provides excellent customer service, and that the funding for the trust will exceed corporate minimum account sizes.
4.c.2 Trust Terms:
The trust’s terms, which can be communicated within the will, a codicil, a letter of wishes or, in the case of a living pet trust, within the trust document itself, describe the specific conditions and wishes you have regarding the care of your pet and perhaps the operation of the trustee. Trust terms may include preferences regarding feeding, daily walks, exercise, treats, crating or lack thereof, toys, grooming, play requirements with animals and/or people, and veterinary care. In the case of a competition animal, you may also request that the caregiver continue training and/or showing your pet. The trust terms may provide general information that assists the caregiver in properly maintaining your pet’s physical and psychological health and overall quality of life. Trust terms may also include instructions regarding how to care for your pet in the case of severe illness or injury or how to handle remains upon the death of the pet. Nevertheless, the caregiver is not legally bound to adhere to the trust terms. Therefore, selecting an outstanding caregiver and trustee is essential to maximizing the probability that your pet will be cared for in accordance with your wishes should you die, become disabled, or otherwise become unable to care for your pet.
The trust terms may include instructions for the trustee regarding how the trustee should identify the pet(s), monitor the duties of the caregiver, and distribute monies to the caregiver. Flexibility should also be provided to the trustee should a statutory change or change in circumstance of the caregiver prevent the implementation of care from perfectly matching your wishes.
For identification purposes, estate planning attorneys recommend including a description of your pet, a tattoo number, or a microchip number within the trust documents. However, since you will likely outlive your present pets and may not update your estate planning documents in a timely manner, estate planning attorneys recommend that you also include verbiage to cover any unnamed pets that you may own in the future. Monies may be distributed to the caregiver in a one-time lump sum, an annual, quarterly, or monthly fixed sum, or on an as-needed basis formulated upon actual or expected expenses. Further instructions to the trustee may include directions should the allocations substantially exceed or fall beneath the actual amount of money required for the caregiver to meet the pet’s intended quality of life. The trust terms may also include specific lump sum or periodic compensation for the benefit of the caregiver, which would be taxable to the caregiver and deductible as expenses to the trust.
The trust terms may include provisions regarding the specific usage of monies allotted by the trustee to the caregiver. The terms may include essential expenses, such as an annual veterinary visit. The terms may also include limitations, such as “funds may not be used for euthanasia unless the animal has been diagnosed with a terminal illness by a licensed veterinarian and the veterinarian believes the animal can no longer maintain a high quality of life.” The terms may also limit the magnitude of certain expenditures. For instance, you may want your Miniature Pinscher to wear dog clothing in the winter months, but wish to protect the trust funds from depletion by an ostentatious caregiver who might purchase a $5,000 custom Versace fashion for your beloved Min Pin.
If the animal has exhibited aggressive episodes or otherwise may pose an undue potential for liability that exceeds the coverage provided in the caregiver’s homeowner’s policy, the trust terms may include provisions for payment of premiums for umbrella liability coverage to further protect the caregiver from potential financial losses.
If you own a substantial property and a large number of animals, you may wish to include your real property within the pet trust. Then, your animals can continue living in a less disrupted manner and the caregiver may begin residing at your home. Also, in addition to cash assets and real property, you may wish to supply the trust with tangible assets beneficial to your pet’s well-being, such as a specific dog bed or specified toys. Lastly, consider the duration of the trust, especially if your pet is an animal with a lengthy lifespan, such as a parrot, so that the trust does not exceed the statutory guidelines related to perpetuities.
4.c.3 Selecting a Remainder Beneficiary:
The remainder beneficiary receives the trust funds still present upon the death of the pet(s) whose care is the responsibility of the trust. Although the remainder beneficiary should be grateful for the eventual gift of monies, a poorly selected remainder beneficiary can create problems. The remainder beneficiary will have the legal ability to protest and bring action should he/she wish to dispute the amount of monies distributed for the care of your pet. Therefore, estate planning attorneys recommend properly funding the trust, as an overfunded trust is more likely to catch the attention of a greedy or contentious remainder beneficiary. To further reduce the likelihood of conflict, in lieu of selecting an individual, many estate planning attorneys recommend selecting a charity as the remainder beneficiary. Due to a salient conflict of interest when electing to spend money for the welfare of the pet, most estate planning attorneys frown upon selecting the caregiver as the remainder beneficiary. Regardless of the selection of the remainder beneficiary, to reduce the likelihood of legal contest by the remainder beneficiary, estate planning attorneys recommend including language in the trust documents specifying that “the intent of the trust is primarily to provide for the well-being of the pet” and that “all trust funds may be used for the care of the animal,” which supersedes the needs of the remainder beneficiary.
4.c.4 Funding the Trust
There are two primary alternatives for deciding upon the quantity of funds placed within a pet trust. The first alternative is where the grantor funds the trust with substantial principal, so that the trust income is sufficient to cover the anticipated expenses. The second alternative funds the trust with less money, so that both the income and corpus of the trust will be used to provide for the care of the pet and associated trust expenses. To avoid overfunding, the second alternative is more common.
Funding should consider anticipated and potential expenses for food, supplies, treats, training, boarding, and veterinary care, including unexpected major illness or injury, in accordance with present value, expected investment income, and the life expectancy of your pet, plus two to four years. Monies should also be included to handle the remains of your pet upon his/her death. You may also wish to consult an accountant or an actuary, who for a fee will perform computations calculating the amount of monies for properly funding a pet trust. In addition, in the event that the computations are in error and the trust is underfunded, select a sympathetic and financially stable caregiver who will continue to properly care for your pet. The preceding is especially relevant if you know that financial limitations provide you insufficient funds for a caregiver to properly address your pet’s needs for the rest of his/her expected life. Pet trusts are usually funded by bank assets or life insurance, with an inter vivos trust funded prior to your death and a testamentary trust funded after your death.
Section II- Estate Planning Options to Provide Care for Your Pet If You are Disabled, Incapacitated or Otherwise Unable to Provide Care
1. Living Trust
As explained in Section I, an inter vivos trust, in addition to providing plans for your pet’s care upon your death, can also be authored in a manner whereby the trust will name a caregiver and release monies should you become disabled, temporarily incapacitated, or otherwise become unable to provide care for your pet(s). To plan for such a contingency, the trust needs to name a co-trustee while you are alive and provide language in the trust terms directing the co-trustee how and when to act should such an event arise.
2. Durable Medical Power of Attorney
A power of attorney is a verbal agreement or written document authorizing an agent or attorney-in-fact to act on behalf of a principal or grantor. Although a verbal agreement will suffice in many circumstances, some institutions, such as banks, hospitals, and the IRS, will require proof of a written agreement before allowing the agent to make decisions or act on the principal’s behalf. In addition, to meet the conditions of the equal dignity rule of law, statutes may require that the power of attorney agreement be in writing when the agent is negotiating or signing a contract required to be in writing in accordance with the statute of frauds, such as a contract for real property.
A power of attorney may be general or limited. A limited power of attorney limits the role of the agent to certain functions or limits the role of the agent by time. A general power of attorney will include any function requiring an agent to serve on the principal’s behalf or any function where the principal may desire an agent to act on his/her behalf.
A power of attorney may also be durable or non-durable. A non-durable power of attorney ends when the principal dies or becomes incompetent due to physical injury, mental illness, or dementia or at the completion of a specific event. A non-durable power of attorney is usually executed for one-time occasions, such as handling the sale of a residence or addressing financial matters when the principal is traveling for an extended period. In contrast, a durable power of attorney continues when the grantor becomes mentally incapacitated and is usually intended to apply until the death of the grantor. Both types of powers of attorney end upon the death of the principal.
A power of attorney may be springing or non-springing. A non-springing power of attorney is continuously active. In contrast, a springing power of attorney empowers the agent in the future and only upon specified circumstances, such as while the principal is unconscious or after the principal is mentally incapacitated due to injury, mental illness, or dementia.
A durable medical power of attorney, also called a health care power of attorney or health care proxy, entitles an agent to act on your behalf should you become hospitalized or otherwise incapacitated. The document should be in writing in accordance with statutory guidelines for your state of residence, with the agent agreeing beforehand to carry out the defined responsibilities should a relevant event occur. The document is also generally revocable. Thus, should your relationship change with the agent, you may replace the agent with a new agent, provided you update the document. When you become hospitalized or incapacitated, a durable medical power of attorney grants the agent your legal proxy to make health care decisions, including removing life support treatment.
A living will may also coincide with the durable medical power of attorney. A living will is a separate, often legally binding document providing instructions for the agent when acting on your behalf in making medical decisions. A living will may include advance instructions regarding your wishes should you desire to maintain or remove life support upon specified circumstances or in regards to other specified medical decisions.
The durable medical power of attorney and living will enable you to determine in advance who will make pertinent health care decisions and what decisions can be made, rather than deferring those decisions to a court or a court appointed guardian (e.g., Terry Schiavo). Since the exact verbiage and form used may determine the enforceability of the document, we recommend consulting an estate planning attorney when drafting a durable medical power of attorney. Within your durable medical power of attorney, you may include language authorizing the agent to temporarily relocate your pet to a specified or unspecified caregiver or alternate residence. After the medical issue is resolved and you return home, your pet can return home, provided you are mentally and physically able to provide for your pet’s care.
3. Financial Power of Attorney
Although a financial power of attorney document is separate from the durable medical power of attorney, the foundation constructs of a financial power of attorney are similar to those of a durable medical power of attorney. The document optimally should be in writing (and if in writing may need to have a notarized signature), can be general or limited, can be durable or non-durable, and can be springing or non-springing. In addition, since enforceability may be an issue, as well as financial risk, we recommend consulting an estate planning attorney when drafting a financial power of attorney document.
You can use a durable, non-durable or springing financial power of attorney to empower an agent to negotiate and complete real estate transactions, conduct banking activities, make investment decisions, commence litigation, address tax issues, make gifts, and pay expenses on your behalf immediately and continuously, for one event only, or upon the springing of certain circumstances. The agent is a fiduciary who should possess high integrity, as he/she will have the ability to cause great financial damage if he/she acts fraudulently or irresponsibly. Therefore, especially since there is no trustee or court oversight of agent activity, even if the agent you choose is a highly trusted friend or relative, insist on detailed financial record keeping in the POA document.
Since an agent is legally obligated to act in the best interests of the principal and is disallowed from commingling funds or property, should a caregiver be needed while you are alive, ideally, the financial agent and caregiver should not be the same person. Nevertheless, should a medical emergency, a long-term situation, or other contingency require the services of a caregiver for your pet(s), the financial agent will be the person responsible for providing funds to the caregiver. To assist the financial agent, advance instructions regarding your pet’s needs, including food, veterinary care, grooming, day care, and boarding, will help him/her in properly fulfilling duties.
4. Written Emergency Plan
In addition to the above, you should have a written emergency plan that provides for immediate care of your pet in the case of death, disability, or sudden inconveniences, such as a late night at work, car trouble, or the unexpected illness of a family member. Selected caregivers appointed in a will or trust or recommended in a power of attorney may not be able to act with sufficient celerity. Moreover, the preceding documents are not relevant if you have to do an all-nighter at work, your car breaks down, or you have to travel suddenly to tend to a sick relative.
Consequently, you should have a written emergency plan that details the requirements of your pet’s daily care. You should provide the plan to one to three trustworthy neighbors, friends, or relatives that do not travel frequently and that live close to your home, have a relationship with your pet(s), and agree to serve as temporary caregivers in the event of an emergency. To expedite your pet’s care in such a circumstance, provide the emergency caregivers with keys to your home, alarm codes, contact information for attorneys, agents, and pertinent relatives, and contact information for a veterinarian and/or boarding kennel of preference.
Although you will probably outlive your pets, there remains the possibility of premature death, disability- or sudden emergencies that prevent you from properly caring for your animals. Moreover, without adequate planning your beloved pets may be treated in an unacceptable or undignified manner, in a manner outside of your wishes, or remain ignored for a long period of time, which might cause them great physical or psychological discomfort or even jeopardize their health. A judicious estate plan considers the aforementioned contingencies and prepares for your pets’ continued comfort and well-being should an unfortunate or unexpected circumstance occur.
Estate plans may include directly gifting your pet to a caregiver via your will or gifting your pet along with a sum of money to the caregiver. However, the chosen caregiver is not legally obligated to accept the gift of your pet or to use allotted monies in the manner that you prefer. Consequently, you should carefully select caregivers to ensure that they will assume duties and act responsibly.
More control of your pet’s care is provided via a pet trust. However, a pet trust is not legally valid unless authorized by statute. Presently, 46 states have enacted statutes validating a trust for animals. Kentucky, Louisiana, Minnesota, and Mississippi remain the only states without legally valid pet trusts.
Through the oversight of a trustee and perhaps the probate court, a trust provides greater assurance that the caregiver will act per your wishes, although there is a greater financial cost than when undertaking outright gifting. A living trust is the least expensive, most expeditious, and most flexible of the trust options. However, a testamentary trust provides additional checks and balances via the requirement that the trustee report annually to the probate court. When creating a pet trust, carefully select fiduciaries (caregivers and trustees), author detailed trust terms, and perform accurate actuarial calculations to minimize the likelihood of underfunding or overfunding.
Furthermore, you should have a durable medical power of attorney, a financial power of attorney, and an emergency plan. The powers of attorney allow an agent(s) to commence action to provide for the temporary or long-term care of your pet should you become disabled, incapacitated, or need to travel for an extended period. In addition, you should have an emergency plan, so that a proximal neighbor, friend, or relative can quickly attend to your pets’ needs should any emergency arise.
The preceding article is informational only and is not written to provide legal advice. CPT highly recommends that readers consult the services of an estate planning attorney when pondering any estate issue, including considerations regarding the care of one’s pet. CPT has been extremely impressed with the services of estate planning attorneys Jeffrey M. Zitron, J.D (Menden, Freiman & Zitron, Two Ravinia Drive, Suite 1200, Atlanta, GA 30346, 770-379-1450) and Laura K. Schilling, J.D., CPA, CSA, CFP, (Financial Innovations, 5555 Glenridge Connector, Suite 200, Atlanta, GA 30342, 404-459-2828) and highly encourages readers to involve their services when completing any estate planning matter.
© Mark Spivak and Comprehensive Pet Therapy, Inc., August 2008, Revised February 2014. All rights reserved.