It is increasingly common for pet owners to make provisions in their wills to provide ongoing care of their furry companions in the event they pass away or become unable to do so on their own. Moreover, all U.S. states and the District of Columbia allow their residents to establish pet trusts and set aside assets specifically for this purpose.
Planning for the perpetual financial and physical care of your pet can be simple, but it is a process best undertaken with the assistance of your professional advisors to ensure your pet’s unique needs and your explicit wishes. For example, you may specify in your will the person or organization you wish to take physical custody of your pet and the responsibility you expect them to follow to manage your pet’s day-to-day care. However, if you cannot identify a friend or family member to take on this responsibility, you may consider placing your pet with a private animal sanctuary or one of the many organizations dedicated to helping pets find forever homes.
To set up a trust for your four-legged friends, first consider who you can rely on to manage the trust assets and ensure distributions are made in a timely manner for your pet’s benefit. The person you name as trustee may be a friend or family member, a professional advisor or a trust company with experience in these matters. You may include in the terms of the trust document specific instructions you expect your pet’s designated caregivers to follow, including the brand of food to feed the pet, the toys they should purchase and your explicit directions for keeping the pet properly groomed. Additionally, you may assign the trustee the responsibility to ensure that named caregivers use trust distributions from precise purposes you intended.
When funding the trust, it is important to consider not just the current expenses required to care for your pets, but also the impact of rising inflation and the additional medical care they may require as they advance in age. Additional consideration should be given to the administrative fees the trust will pay to the trustee on an annual basis in return for carrying out the terms of the trust. As you plan to leave assets behind for the care of pet, you should also consider what happens to those assets when your pet passes away. You may name family members as beneficiaries of your pets’ trusts, or you may choose to leave any remaining trust assets to charitable organizations, including those whose mission is to rescue and care for neglected and abandoned animals.
While you may not be able to leave your pet with a multi-million trust fund, it is important you consider how your four-legged family members will be cared for, and by whom, when you are no longer able to do so.
About the Author: Robert Mark Weiss, CFA, is a regional director and financial planner with Provenance Wealth Advisors, an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs, and a registered representative with Raymond James Financial Services. For more information, call (941) 308-1126 or email info@provweath.com.
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Posted on September 7, 2022