Don’t Forget to Include Your Pet in Your Estate Plan

estate planning for pets

This is Lucy, you may see her around the office one of these days…

I’ve talked a lot about what would happen to your kids if something happened and you didn’t make it home one night. But have you thought about what would happen to your pets? Estate planning for pets is one area of your planning that you cannot overlook if you have one (or many) furry members of your household.

If you failed to plan, and you have children, then your kids would be taken into foster care. I realize this is not what you wanted, but at least they would be “safe”. But in the case of your animals, the chances are, unless you had a friend step forward to take custody of your pets, they would be taken to your local shelter. At some point, they would either be placed for adoption or euthanized.

Personally, we have 5 cats and a dog. I recognize this sounds a little crazy, but we love them all…

Here’s how we ended up with one of those cats.

How We “Inherited” Gabby

I’ve talked openly about my Mother’s death earlier this year. One of the issues that came up when she died was her cat. She loved her cat more than anything, but “Gabby” had health issues (her skin was falling out because of a nasty rash that caused scabs all over her body) and refused to use the litter box. Needless to say, my Mom did not mention Gabby in her estate plan.

When my Mom, who lived in Ohio, first passed away, my sister and her family took custody of Gabby. However, they have a busy household, a couple other cats and a dog of their own, so they quickly made it clear that theirs was only a temporary home for Gabby.

About a month after my Mom passed away, while I was in Ohio cleaning out my Mom’s condo, my brother-in-law explained to me that either I take Gabby back to North Carolina or she was getting euthanized that week.

Awesome.

A cat that my Mom loved dearly was now in danger of being put to sleep because nobody wanted to take on her, her expensive health issues, and her quirky and erratic litter box behavior.

A Happy Ending for Gabby

What could I do? I wasn’t going to let my brother-in-law put down a cat that my mother desperately loved, even with her multiple (and potentially expensive) issues.

So we brought Gabby back to North Carolina, locked her in our guest bathroom for a week (forcing her to re-learn the ways of the litter box), and worked with our vet to find a cost-effective treatment option for her skin issues.

Fast forward 10 months and Gabby is happily acclimated to our household. She is using the litter box and her fur has all grown back and her rash is gone.

But what if my Wife and I hadn’t stepped forward? What could my Mom have done to prevent this problem in the first place?

Estate Planning for Pets in North Carolina

In North Carolina, you have two main options for making sure your pets are taken care of after you are gone. We’ll assume that you are not interested in doing what my Mom did, which is basically nothing.

The first option is to include your pets in your will. The second option is to have a pet trust prepared. Let’s take these one at a time.

1. Including Pets in Your Will

In North Carolina, as in many other states, pets are considered personal property. That means that you can “bequeath” them to your heirs in your will. Many people will not only designate who should take custody of their pets but will also leave additional money for the person that will care for their pet.

However, there can be problems with relying on your will to take care of your animals. Here are just a few issues that arise:

  1. There is no requirement that the money you give to the person taking your pet stay with the pet. In other words, if the person you entrusted with your pet puts the animal to sleep or gives it away, they keep the money that was meant to care for your pet.
  2. Many people do not update their will on a regular basis. So you may give away a dog that died many years ago without providing for your current pets.
  3. If you give money to someone who would be caring for your pet, there are no restrictions on how that money can be spent. The person you give the money to can use it any way they want.

Clearly, there are multiple issues with including your pets in your will. Here’s another option that is allowed by law in North Carolina, the pet trust.

2. Using a Pet Trust in North Carolina

North Carolina is one of several states that has enacted special statutes that allow for the creation of a pet trust to care for your pets after you die. A pet trust is a great option for families that want to ensure that their furry friends are properly cared for after they pass away.

Essentially, what a pet trust does is appoint someone to care for your pet while at the same time providing additional funds to cover the costs of pet food, vet bills, etc. Since your pet can’t legally own property, the pet trust will appoint someone (a trustee) to manage the money on behalf of your pet. This person does not necessarily have to be the same person that is appointed to care for your pet.

Let’s take a quick look at what my Mom could have done to plan for the care of her cat, Gabby. I don’t know whether pet trusts are allowed in Ohio, but assuming they were, here’s how it would have worked.

  1. My Mom could have set aside some money from her estate to care for Gabby.
  2. My Mom could have named a person (i.e. my sister) to care for Gabby.
  3. If the person didn’t want to care for Gabby, then the trust would provide a mechanism for someone else to step forward (i.e. me).
  4. My Mom could have said that whoever takes Gabby is also the trustee over the funds she has allocated to Gabby’s care.
  5. Since I ended up taking Gabby, and not my sister, then I would be appointed trustee over the funds allocated for Gabby’s medical bills. These funds could have also been used to make home improvements to repair any damage done by Gabby failing to use the litter box.

Important Considerations When Using Pet Trusts in North Carolina

If you decide that a pet trust is a smart option for you and your estate plan, then here are some additional considerations you need to think about.

  1. How long do you expect your pet to live? Life expectancy will affect your choice of guardian for your pet.
  2. Just like you would with the proposed guardians for your children, you want to talk to the person that you would like to take care of your pet for you. Make sure there are no allergies you don’t know about and that they would be willing to care for your pet.
  3. Review your pet trust at least annually. Circumstances with pets change quite frequently and you need to make sure your pet trust is flexible enough to deal with these changes or is updated as appropriate.
  4. Consider naming temporary and permanent caretakers for your pet. As with my Mother’s cat, my sister ended up being the temporary caretaker until I was able to drive Gabby back to North Carolina and become her permanent caretaker.
  5. Decide how much money you will need to set aside for the trust and be sure to properly fund it. The trust can be created through a provision in your will, or when it is established (helpful in the event of your disability).
  6. Plan for taxes. Believe it or not, pet trusts can create some complicated tax issues for the recipient of the funds. You may need to have a North Carolina Tax Lawyer advise you on how to properly manage the tax implications of a pet trust.

If you have additional questions or are interested in learning more about pet trusts, you may call us at (919) 460-5422 or fill out our contact form.