What Happens to My Pet When I Die?
How many of you out there have pets you love? Ever wonder what happens to my pet when I die? If so, then this blog is for you. In this blog I will help you understand how you can protect your pet when you die.
Before we get in to this the topic of planning for your pets, let’s talk about pet ownership in America. Did you know that 7.1 million households own at least one pet? That’s 63% of all households! Approximately 74.8 million pets are dogs; 88.3 million are cats; 16 million are birds; 24.33 million are small animals; 13.4 million are reptiles and 13.8 million are horses. Twenty four percent of dog owners have two or more dogs and fifty one percent of cat owners have two or more cats. So you can kind of see based on these statistics that why pet ownership is becoming more prevalent. And all the more reason to have a plan for someone to take care of your pets when you die.
A recent survey found that fifty seven percent of people would want their pet as their sole companion if stranded on a desert island. To be honest here, I’m probably one of those fifty five percent who consider themselves as mom or dad to their pets. My dog, Bailey, is my fur baby. And eighty percent of pet owners said that companionship was a major reason for owning a pet. I’ve even had some clients tell me that they like their pets better than their family members.
A recent survey found that the average household spends approximately $360 per pet every year. Pet expenditures exceed $12 billion dollars annually. I was shocked by that. Now keep in mind that doesn’t include the billions that we spend on grooming, food, toys, etc. And if you’re like me, and have your dog enrolled in daycare, you’re spending even more money. So there can be a great expense in owning a pet. And that’s why you want to make sure your pet will be cared for properly when you die. Enter the idea of planning for your pets when doing your own estate planning.
Through pet estate planning, you make sure your pet will be kept to the same standard that he or she was used to while living with you while you were alive. You choose the caregiver for your pet. You choose how your caretaker will care for your pet.
Pets are becoming more and more like members of our family. You’ve probably heard the term “furbaby” tossed around these days. Many petowners refer to themselves as mom or dad of their pets and their parents or the grandparents of the of your pet. Our pets are becoming more and more like family members. Therefore, we want to make sure our pets are taken care of when we die. We don’t want our pets going to the pound.
Somewhere between twelve percent – twenty seven percent of pet owners include pets in their estate planning. Why is that you might ask? Well, again, as we mentioned, pets are quickly becoming members of the family. After all the pet is the one giving you unconditional love. I mean my dog is always happy to see me. Doesn’t matter how long I have been gone. All your pet wants to do is love you, be with you and spend time with you. So why not reward your pet’s devotion in your estate plan?
One aspect of estate planning for pets is a pet trust. Pet trusts are becoming more and more popular in estate planning. Two types of pet trusts exist: Traditional Pet Trusts and Statutory Pet Trusts.
Traditional Pet Trusts
The first type is a Traditional pet trust. This Trust is effective in all states. A Traditional Pet Trust holds a monetary amount you determine for the care of your pet. Within the Traditional Pet Trust you name a Caregiver and a Trustee. These roles can be held by the same person or two different person.
The Caregiver takes care of your pet. He or she houses your pet. The Caregiver feeds your pet, takes your pet to the vet and provides you pet with love.
The Trustee provide funds to the Caregiver to care for your pet. You can direct your trustee to pay a yearly sum to the Caregiver. Or, you can simply have the Trustee reimburse the Caregiver for expenses as they occur.
Lastly, you determine who receives the leftover money when your pet dies. You can name a charity or an individual to be the beneficiary of the pet trust.
Statutory Pet Trusts
The second type of trust is called a statutory pet trust. Most states authorize this type of pet trust. In fact, approximately forty four states in the United States, including North Carolina, have a statutory pet trust in effect. Essentially these states have created a statute regarding pet trusts.
Unlike a Traditional Pet Trust, a Statutory Pet Trust, does not require the pet owner to make as many decisions regarding the terms of the trust. A lot of times you can simply state: I leave $1,000 in trust for the care of my dog, Rover. Such a statement is a valid Statutory Pet Trust. However, you probably should be more specific. After all, this is your pet we are talking about here.
Who is going to be the caregiver? Is it going to be an individual? Or is it going to be an organization?
What do you want the caregiver to do for your pet? You may want to consider writing a letter to be given to the caregiver. In your letter, you can state what your pet’s daily life is like. You can include such things as when does your pet eat and how often. What type of food does your pet eat? Does your pet go to doggie daycare? How does your pet interact with other pets? Does your dog need to be groomed? Is your pet taking any medication? You should list anything you think is important regarding your pet’s care.
Are you leaving money for the care of your pet? If so, how much money? If you are leaving money, who will be your Trustee? These are important decisions to be made when including your pet in your estate planning.
What is a Trustee? The Trustee is in charge of paying out money from the trust for your pet’s care. He or she will follow your directions as to how the money should be distributed. You can even give him or her the discretion to pay bonuses to your caregiver. You also will instruct the Trustee how to pay the caregiver: a yearly sum or reimbursement for expenses.