If You Have Never Considered Adding Your Pet to Your Estate Plan You May Be Wondering How Complicated It Is to Include Your Pet
HOW TO INCLUDE YOUR FAMILY PET IN YOUR ESTATE PLAN
RICHARD B. SCHNEIDER OREGON ESTATE PLANNING ATTORNEY
In America we sure do love our pets. In fact, per capita we own more pets than any other country â€“ by far â€“ in the world. If you have a Fido, Fluffy, or even a reptilian friend that you consider part of the family you undoubtedly want to protect your pet in the event that something happens to you at some point in the future. The best way to accomplish this is to include your pet in your comprehensive estate plan. If you have never considered adding your pet to your estate plan you may be wondering how complicated it is to include your pet. Although each situation is unique, incorporating pet planning in to most estate plans is actually rather simple.
PET OWNERSHIP IN AMERICA In the United States, pets are truly treated as part of the family in most
homes. Products that cater to dogs and cats fly off the shelves with new ways to pamper your pet being introduced on a regular basis. If you don’t own some type of pet you are actually in the minority in America. Consider the following facts: In 2012, 62 percent of all American household owned at least one pet Americans own about 83 million dogs and 95 million cats Americans own approximately 140 million freshwater fish and 10 million saltwater fish Americans own 16 million birds, 11 million reptiles, and another 18 million small pets We own an average of 1.47 dogs and 2.11 cats per household in America One in five dog owners takes the dog along when traveling Five percent of cat owners and ten percent of dog owners host birthday parties for their pet Dog and cat owners spend an average of between $200-$250 each year for routine veterinary visits
WHAT HAPPENS WITHOUT A PLAN FOR YOUR PET Assuming that you consider your pet to be part of your family, have you considered what will happen to your pet should something unexpected
happen to you? Your existing estate plan should provide protection and financial support for your loved ones in the event of your sudden incapacity or death; however, if your pet is not included in your plan the consequences could be dire. Each year over half a million animals are abandoned because of the death or incapacity of the petâ€™s owner. Often, this occurs when the owner is elderly and has no one to step in and take care of the pet when the owner becomes unable to do so. Even a pet owned by a young family can suddenly be forgotten if tragedy strikes the family. Much like you would do for a minor child, specific plans must be created to ensure that your pet isnâ€™t left without a caretaker and the funds to provide that care.
INFORMAL PLANNING People often make the mistake of relying on an informal plan for their pet. This could include nothing more than a verbal agreement or mentioning the pet in a Letter of Instruction. There are a number of reasons why informal arrangements like this are not sufficient to ensure your petâ€™s continued care and well-being should you become incapacitated or die. Consider the following reasons why informal planning often fails:
Not legally binding –a conversation you had with a family member or friend does not create a legally binding agreement that can be enforced in court if necessary. Even a Letter of Instruction isn’t legally binding; although it may be enough for a court to award your chosen caretaker legal ownership of your pet should you die. Incapacity isn’t covered –a Letter of Instruction isn’t read until you die, meaning that it will not help determine your pet’s fate should you become incapacitated. No funding source – informal arrangements do not provide a funding source for your pet’s care and maintenance. Unless your intended caretaker is willing to pay out of his or her pocket to care for your pet your pet could end up in a shelter for lack of funds. Caretaker unavailable/unwilling –the individual with whom you made the agreement, or whom you mention in your Letter of Instructions, may have predeceased you, moved away, or simply be unwilling to step in and care for your pet when the time comes. Likelihood of confusion –in the absence of a legal document stating what is to happen to your pet should you become unable to provide care yourself confusion may reign supreme. Well-meaning loved ones may have no idea what to do with your pet unless the intended caregiver is notified and step forward.
GIFTING YOUR PET IN YOUR LAST WILL AND TESTAMENT The law considers your pet to be your legal property. If you own an animal
you would likely argue that your animal actually owns you, not the other way around; however, in the eyes of the law your pet is your property just as your vehicle or your clothes are your property. Because Fido or Fluffy are property you may bequeath him or her to someone in your Last Will and Testament. The advantage to doing this instead of using an informal arrangement is that it legally transfers ownership of your pet to the intended caretaker. You also have the option to gift assets to the caretaker to use for your pet’s care in the future. Gifting your pet in your Will is certainly preferable to relying on an informal arrangement; however, there are still a number of disadvantages, such as:
Does not cover incapacity Caregiver may be unavailable No continuing control over assets once gifted No continuing control over pet’s care once gifted
THE BEST OF ALL WORLDS -- CREATING A PET TRUST To ensure that your pet is well cared for under any circumstances that could arise down the road a pet trust provides the best of all worlds. Trusts have become almost commonplace in estate planning over the past few
decades because of their flexibility and ease of creation. Pet trusts, in particular, are rapidly gaining in popularity, due in large part to the assurance they provide a pet owner regarding their pet. A pet trust is created the same way as any other trust except that the beneficiary is an animal instead of a human or a business. A trustee must be named to oversee the trust itself and to manage the trust assets. You have the option to name your intended caretaker as the trustee or to name a neutral third party. Consider some of the many benefits a pet trust provides: Continued control –a trust allows you to exert control over both your assets and your pet long after your incapacity or death. By creating specific trust terms you can control as much, or as little, of your pet’s life as you wish. The trust terms, along with the trustee you choose, will also allow continued control over the assets transferred into the trust. Legally binding – a trust is a separate legal entity once it takes effect. The terms of a trust are enforceable in a court of law should it become necessary to do so. Contemplates incapacity –a pet trust is the only option that contemplates your incapacity. Your trust terms can cause the trust to take effect upon your incapacity as well as your death. Covers contingencies –you have the ability to name both successor trustees and successor caretakers should something happen to one or the other.
Only your estate planning attorney can provide you with specific advice regarding the inclusion of your pet into your estate plan. The important thing is to start discussing the matter to ensure that your pet doesnâ€™t become another statistics should something happen to you.
The Humane Society of the United States, Pets by the Numbers ASPCA, Pet Care American Bar Association, Estate Planning Issues Involving Pets AVMA, Pet Trusts: Caring for a Pet That Outlives Its Owner
About the Author Richard B. Schneider Before devoting his professional efforts primarily to estate planning, Mr. Schneider spent over fifteen years working on Wall Street for major law firms and investment banks. After graduating from law school, he practiced general civil law in New York City for five years, specializing in business transactions, financings and corporate matters. He also represented major investment banking firms in mortgage trading and real estate-related matters. Among his clients were international shipping companies, commercial and investment banks and institutional lenders, including General Electric Capital Corporation, Salomon Brothers and Merrill Lynch. For the next ten years Mr. Schneider served as Senior Vice President at the investment banking firm of Kidder, Peabody, where he managed outside legal counsel for a variety of large financial transactions between major institutions. He played a central role in the creation of Kidder, Peabodyâ€™s mortgage trading subsidiary and advised and executed transactions with insurance companies, pension funds and government agencies, including the Resolution Trust Company. In 1996 Mr. Schneider established a residence in Portland, Oregon and began his law practice there in 1997. He has made a long-term commitment to providing first-class estate planning legal services to families and individuals within the Portland metropolitan area and the surrounding SW Washington region. His motivations for moving to the Northwest were several: the natural scenic beauty of the Northwest landscape, the clean air and streets, the healthy, diversified economy and the overall high quality of life. Mr. Schneider is very grateful for the warm reception he has received from Portland/Vancouver and is pleased to have become a respected member of the Portland/Vancouver legal and business community. Mr. Schneider is a member of the American Academy of Estate Planning Attorneys, the National Academy of Elder Law Attorneys, the Estate Planning Council of Portland and is on the board of directors of the the Rental Housing Association of Greater Portland. He is admitted to practice in Oregon, Washington and New York. Law Offices of Richard B Schneider, LLC www.rbsllc.com 2455 NW Marshall St, Suite 11 Portland, OR 97210 Phone: (503) 241-1215