There was a time when it was considered eccentric to name your pets as beneficiaries in wills and trusts. Over the last 25 years, however, leaving funds for pets has become a more common practice, though it tended to be just the rich and famous who were naming their pets as beneficiaries. Wealthy and well-known people like Oprah Winfrey, Doris Duke, Leona Helmsley, Dusty Springfield, Miles Blackwell, Alexander McQueen, and Majel Roddenberry, the wife of Star Trek creator Gene Roddenberry, are all reported to have left their beloved pets hundreds of thousands to tens of millions of dollars in pet trusts.
Today, with The Humane Society of the United States (HSUS) estimating that close to 80 million U.S. households have pets, and nearly all of those pets are considered part of the family, it is no longer just the financial elite who are leaving funds for pets. Trust funds for pets and money set aside in bank accounts for pets are becoming more mainstream, and the legal system has gotten better about recognizing and enforcing them. That's not to say that creating a fund for your pets’ future care is as easy as naming your pets as beneficiaries in your will. There is a right way to go about it; to ensure your pets receive the money you set aside and intend to be used for their care. When done correctly, setting up a pet trust fund and leaving money for your pets’ future in a bank account may make certain that instead of becoming homeless or being euthanized if something happens to you, funds will be available so your pets will be cared for according to your wishes.
Pets as Beneficiary in Wills and Trusts
Though animals have come a long way from the wild into our homes and even into our beds, the law doesn't yet recognize them as anything more than property. That means, even though you think of your pets as members of your family, the law does not. Even worse, you are not allowed to name your pets as beneficiaries in a last will. You see, as far as the law is concerned, pets as property cannot receive money or other assets. On rare occasions, depending on the judge, leaving money for your pet in a last will might be interpreted as a form of pet trust, but there is no way to guarantee that result. If a disgruntled relative contests that portion of your last will, it's likely the court will rule in favor of the human members of your family, leaving your beloved pets out in the cold. Actually, the judge can even take it upon himself to reduce and/or redistribute the fund for your pets’ future care.
Traditional Pet Trust vs. Statutory Pet Trust
If you're interested in leaving money for your pet, a pet trust is the most reliable way to do it. Unlike a last will, a pet trust can go into effect while you're still alive. This is an important and useful feature because if you become ill, incapacitated, or have an emergency but are still living, the pet trust kicks in to give your pets legal rights and protection during the difficult time of emergency when you cannot take care of them. Plus, all 50 states have enacted pet trust laws, so trust funds for pets will be paid out just like any other trust.
When creating a trust fund to benefit your animals, you can set up a traditional pet trust or a statutory pet trust. Either can be established as standalone instruments separate from your last will and the funds set aside for your pets will be separate from the rest of your estate. The main difference between traditional pet trusts and statutory pet trusts is a traditional pet trust names a human beneficiary and likely doesn't include detailed instructions for your pet's care. Essentially, a traditional pet trust states you're leaving money to a person with the intention they use that money for your pets’ care. There’s no way to ensure the money you leave will actually be used to take care of your pets.
A statutory pet trust is also a fund or money for your pets’ future care, but it allows pet parents to be more detailed in the instructions they leave for the care of their pets, as well as itemizing how much of the pet trust is to go toward other pet trust expenses. This may include specific amounts for paying the trustee and caregiver as well as how much of the pet trust should be used to pay for veterinary bills, pet food, grooming, toys, and other expenses. As a result, you have more control over how you want your pet to be cared for in the future.
How to Fund a Pet Trust and Leave Money for Your Pets' Future Care
If you're providing for your pets’ future with a pet trust, it's important to understand how to fund a pet trust. As a legally recognized legal arrangement, a trust has two parts: money and/or property set aside to provide for your pets’ future care along with the instructions on how those funds are to be used. Funds for a pet trust are typically earmarked when creating a trust fund by establishing an account at a financial institution in the name of the pet trust. You can deposit cash or securities. You can continue to add to the trust account while you are living, but more assets can also be added to the fund for your pets’ future care should you pass on. For example, you can name your pet trust as the beneficiary of retirement plans, annuities, and other contracts or accounts that are set up to pay upon death, with instructions that the money be deposited into the pet trust fund for your pets’ future care.
Also, if you have a life insurance policy, you can name the pet trust as the beneficiary who will receive the life insurance proceeds. You can indicate that all or just a specific portion of the policy go to the pet trust. Some people even establish a separate policy for the sole purpose of funding their pet trust.
How Pet Trust Funds and Trust Bank Accounts Work
You can contact your bank or favorite financial institution to open a new account for your pet trust and get great rates and safe growth of your funds. Here are the steps to get you started to create a trust account for the benefit of your pets:
- Properly complete a pet trust agreement and take it to your local bank branch or financial institution.
- Complete a new account application to set up your new pet trust bank account or ask your financial representative to change the name on an existing account.
- Fund the trust by depositing cash or securities to the pet trust account or by naming the pet trust as a beneficiary of your life insurance, retirement plan, annuity or pay on death beneficiary.
The Best Pet Trust Fund for Your Pet's Future Care
The great thing about a statutory pet trust is it takes the uncertainty out of your pets’ future and makes leaving money for your pet easy. Consulting an attorney when creating a pet trust is advised to ensure everything is done properly according to state law and so there are no legal questions. Unfortunately, an attorney may charge anywhere from $500 to as high as $6,000 to help you create a pet trust.
As much as you love your pets, even the low-end cost of creating a pet trust can be a budget-breaker. That's where PetWill pet trusts come in. Created by renowned estate planning attorneys and animal law experts to comply with each state's pet trust laws, PetWill pet trusts are available to all pet parents for an extremely affordable one-time fee. Your pet will have its on online pet profile registration and be protected for life, without any hidden fees or monthly charges. You can edit your PetWill or add new pets anytime you want. A PetWill pet trust allows you to set up a fund for your pet's’ future care and outline specific care instructions along with directions for the administration of the money in the pet trust. Setting up a pet trust through PetWill is a comprehensive and practical solution that offers exceptional peace of mind when leaving money for your pet.