Pet estate planning, don’t forget about Fido

Your Guide to State, Local, Federal, Estate + International Taxation

pet, pet estate planning, tax, inheritancePeople love their pets! They’re often our best friends, companions and family. When a person begins the estate planning process, it is important to consider their pets’ needs as well. The idea of legally enforceable documents that ensure pet protection and continuing care is a relatively new concept. The mainstream press often focuses only on the vast amount of funds left for pets and ignores the fact that the remainder beneficiaries are often animal charities.

A few of the most notable pet inheritance headlines include:

  • In 2017, Ellen Frey-Wouter left $300,000 of her $3 million estate to ensure that her cats, Tiger and Troy, would be properly cared for.
  • In 2015, Leslie Ann Mandel left $100,000 of her estate to her 32 cockatiels with detailed instructions on how she would like her them to live.
  • In 2007, Leona Helmsley left $12 million to her beloved Maltese, Trouble. Sadly she was ill-advised, and none of the instructions she left in her will were followed.
  • In 1991, German countess, Carlotta Liebenstein, left $80 million to her German shepherd, Gunther IV. This money has been passed down to a long line of German shepherds of the same name to the current heir whose net worth is estimated at more than $370 million.

Although not new, these large inheritances for pets are quite rare. Fortunately, these stories have raised awareness to the possibility of estate planning for pets. If you are in the estate planning process, there are three documents you will need to consider when planning for your pets:

  1. Wills – Wills are valid after death and their purpose is to distribute property. Technically, pets are considered property. Instructions in a will are written in invisible ink; that is, instructions in a will are generally not enforceable (but check with your attorney). Wills disburse property but they cannot enforce demands such as to take care of pets. However, you should still include a provision in your will for pets with the provision supplemented by a pet trust and/or protection agreement.
  2. Pet Trusts – This is the best protection for pets and a large inheritance. A pet trust falls under state trust law (see a summary of your state law at https://www.aspca.org/pet-care/pet-planning/pet-trust-laws). These trusts provide many additional protections and advantages not provided by a will including provisions for continuous care, protection agreements to control the disbursement of funds and an investment trustee to invest the funds.
  3. Pet Protection Agreements – The pet protection agreement is the layperson’s pet trust—an affordable, fill-in-the-blank, legally enforceable document. The pet protection agreement can be completed with or without a lawyer’s help. Any trusted advisor (such as an accountant, trustee, insurance representative, investment advisor, lawyer or paralegal) can help a client complete this document.

Again, double check your specific state law or consult with an attorney regarding all the above documents before executing.

Stacy Redmond