If you are a pet owner, you know that your beloved companion is more than a pet, they are family. Have you ever thought of what will happen to your pet if something were to happen to you?
What is a Pet Trust?
When you begin the estate planning process, you may want to consider a pet trust to secure your pet’s future. Luckily, many states recognize pet trusts, including North Carolina. A pet trust is a legally enforceable document that provides care for your pet and peace of mind for you. A pet trust is prepared so a portion of your estate will go towards the care of your pet upon your death or incapacitation.
The form of a pet trust identifies when the pet trust will take effect. There are two forms of pet trusts that can be established, a testamentary pet trust or an “inter vivos” pet trust. A testamentary pet trust is created under a Will and becomes enforceable upon your death. On the other hand, an inter vivos pet trust accounts for incapacity and may become enforceable while you are alive. The inter vivos pet trust is more advantageous for those individuals who may request to have their pet by their side once they are admitted into a nursing home or are unable to properly take care of their pet due to physical or mental disability.
After you decide what form of a pet trust suits your needs, you should consider the type of pet trust so that you can properly detail the care of your pet.
Is there more than one type of pet trust?
Yes. There are two popular types of pet trusts to consider.
First, a traditional pet trust allows you to make a detailed disposition so that your pet is properly taken care of upon your death by a caregiver, and a trustee is elected to handle the finances.
Second, a statutory pet trust is a basic disposition that does not require such detailed information like the traditional pet trust. For example, if a disposition in a Will states “I bequeath $8,000 in a trust for the care of my dog, Bentley,” the state law will fill in the gaps for the missing information such as who will take care of Bentley. Between these two trusts, a traditional pet trust is ideal because this type of trust allows a pet owner to have more discretion over the necessities, like obligatory belly rubs.
Why a Pet Trust?
Through a traditional pet trust, you can appoint an individual to function as a caregiver for your pet. This caregiver could be your spouse, a sister, an uncle, or a close family friend. Moreover, a pet trust allows you to describe the individual care for your pet; this is especially important if more than one pet is involved in a trust. For example, if your dog’s fur needs to be brushed on a daily basis to preserve his fluffy physique, this can be listed in the trust to assure your furry family member’s needs are well met.
In addition to a caregiver, you will appoint an individual to be the trustee of the trust. The trustee will be responsible for the pet trust’s assets by allocating specific sums of income to the caregiver and overseeing the caregiver’s care of the pet. The sum of money used to fund the pet trust can only be used for the benefit of the animal or animals named in that trust. A designated trustee cannot convert the principal or income for any use other than for the benefit of your pet. The pet trust will terminate upon the death of the last surviving animal named in the trust. Additionally, an owner can leave the remaining balance left in the trust to a charity of their choosing. If not, the leftover funds will go to the residuary of the estate, which is the remainder of assets that have not been disposed of by a Will.
What Should You Consider?
Here are a few considerations that may assist you in thoughtfully drafting a document that will provide proper and loving care for your pet:
1) A caregiver should be an individual that you can trust with your pet’s needs,
2) You should have a discussion with the potential caregiver before they are named in the trust,
3) You should elect a successor caregiver in the event the primary caregiver cannot serve,
4) You should elect an individual or corporation as a trustee that you can feel confident with to manage the pet trust,
5) Decide whether you want a traditional or a statutory pet trust,
6) Particular directions should be listed in the trust, such as: medical care, day-to-day necessities, food preference, grooming, etc., and
7) The animals named in the trust should be specifically identified by their adorable, distinct characteristics.
When considering a pet trust, it is imperative to contact a licensed attorney to counsel you on the details of pet trust laws. Contact Apex Legal today!
Drafted by Samantha Unmann, Intern 2016
