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Q: What is a Pet Trust?
A: A pet trust is legal instrument that you can create to insure your pet receives proper care after you die or in the event of your disability. In Virginia, pet trusts are authorized by Virginia Code Section 55-544.08.
Q: How Do You Create a Pet Trust?
A: To create a pet trust, you (the “Settlor”) give your pet and enough money or other property to a trusted person (the “trustee”) who is under a duty to make arrangements for the proper care of your pet according to your instructions. In addition to naming a trustee, your pet trust will name a pet caretaker who will actually take possession of the pet and use the money you transferred to the trust to pay for your pet's expenses. The trustee and caretaker may be the same person. Ideally you should name at least one, preferably two or three, alternate caretakers in case your first choice is unable or unwilling to serve as your pet's caretaker. To avoid having your pet end up without a home, consider naming a sanctuary or no-kill shelter, such as your last choice. In my practice, we typically name Friends of Homeless Animals of Northern Virginia -- http://www.foha.org -- as the last in line, although for some client FOHA may be the first in line. Additionally, you may name a Trust Protector -- someone to enforce the terms of the trust. If you don't name a Trust Protector, one may be appointed by the court. In addition, any person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed. You may create a pet trust either (1) while you are still alive (i.e., a “living” trust) or (2) when you die by including the trust provisions in your will (i.e., a “testamentary” trust). If using a living trust, it can be either a stand-alone pet trust or provisions that you insert into a comprehensive living trust done as part of your estate planning. A living trust avoids delay between your death and the property being available for the pet's care. For more information on the benefits of living trusts, see www.virginiaestateplanning.com/revocable.html. If you create a testamentary pet trust upon your death, the trust does not take effect until you die and your will is declared valid by a court (“probating the will”). Additionally, there may not be funds available to care for the pet during the gap between when you die and your will is probated. In addition, a testamentary trust does not protect your pet if you become disabled and unable to care for your pet.
Q: How much money do I need to put into a pet trust?
A: You should consider many factors in deciding how much money to transfer to your pet trust. These factors include the type of animal, the animal's life expectancy, the standard of living you wish to provide for the animal, the need for potentially expensive medical treatment, and whether the trustee is to be paid for his or her services. Adequate funds should also be included to provide the animal with proper care, be it a pet-sitter or a professional boarding business, when the caretaker is on vacation, out-of-town on business, receiving care in a hospital, or is otherwise temporarily unable to provide personal care for the animal. You should avoid transferring an unreasonably large amount of money or other property to your pet trust because such a gift is likely to encourage your heirs and beneficiaries to contest the trust. If the amount of property left to the trust is unreasonably large, the court may reduce the amount to what it considers to be a reasonable amount.
Q: What types of instructions should I include in my pet trust regarding the care of my pet?
A: Some examples of the types of instructions you may wish to provide are:
Q: Who should be the trustee of my pet trust?
A: The trustee is typically either a trust company or a family member or other individual you trust to manage your property prudently and make sure the beneficiary is doing a good job taking care of your pet. A family member or friend may be willing to take on these responsibilities at little or no cost. However, it may be a better choice to select a professional trustee that has experience in managing trusts even though a trustee fee will need to be paid. If you do name an individual, you should name at least one, and preferably two or three, alternate trustees in case your first choice is unable or unwilling to serve as a trustee. You probably also want to check with the person before-hand to be sure the persons you name as your trustees will be willing to do the job when the time comes.
Q: What happens to the money remaining in the trust when my pet dies?
A: You should name a “remainder beneficiary” -- a person or organization to receive any remaining trust property after your pet dies. Note that it is not a good idea to name the caretaker or trustee because then the person has less of an incentive to keep your pet alive. Many pet owners elect to have any remaining property pass to a charitable organization that assists the same type of animal that was covered by the trust.
Q: What happens if the trust runs out of money before my pet dies?
A: If no money remains in the trust, the trustee will not be able to pay for your pet's care. Perhaps the caretaker will continue to do with his or her own funds. If the caretaker is unwilling or unable to do so, you should indicate in your trust the person or organization to whom you would like to donate your pet. In my practice, we typically name Friends of Homeless Animals of Northern Virginia -- http://www.foha.org -- as the caretaker of last resort.