Ensuring TLC for your Companion Animals

Given the relatively shorter life spans of most companion animals we typically assume that they will predecease us.  Even though we face that prospect with anticipatory sadness and dread, we often don’t face the even more daunting question of what will happen to them if we should die first or if we otherwise become unavailable by physical or mental incapacity.  The following paragraphs describe the opportunities we have to ensure that our beloved and devoted animal friends are cared for if we can’t be there ourselves.

Animal Cards, Animal Documents and Dwelling Place Cards

At a minimum, each pet owner can take three steps to ensure your companion will receive proper care when you are not available:

  1. Carry an “animal card” in your wallet that contains information about the name and type of animal, the location where the animal is housed and an emergency contact number for a person who can care for the animal if you are injured or die unexpectedly while away from home.
  2. Prepare an “animal document” that contains the same information as the animal card but also contains additional details about the animal’s care (e.g., special health needs, feeding instructions and the degree to which the animal has been “spoiled” by its owner). This document should be kept in the same place as the owner’s estate planning documents.
  3. Prepare a “dwelling card” or other signage that will alert individuals entering the residence of the presence of animals there.

Long Term Planning for Care

While it is important to take the steps above to provide for the immediate care of our pets, we also need to consider their care on a long-term basis. The first step in planning for such long-term care is to identify a trusted relative or friend who is willing to assume responsibility.  It is also a good idea to identify at least one backup caretaker in case the first designated person is unable to serve.

Informal Arrangements

Some of us may feel comfortable in making this arrangement an entirely informal one.  For instance, the owner may have a verbal agreement with the proposed caretaker and may have complete faith and confidence that the agreement will be honored after his or her death.  In this case, it may be a good idea to give the caretaker a sum of money at the owner’s death or incapacity so that the caretaker will have financial resources needed to take care of the pet.  In the case of the owner’s death, this might be accomplished by use of a small life insurance policy naming the caretaker as a beneficiary or by a specific cash bequest in the owner’s Will.  In the event of incapacity, a durable financial power of attorney can contain provisions directing the attorney-in-fact to distribute funds to the caretaker – whether in a lump sum or on an “as needed” basis – to provide for the animal’s care.

A slightly more formal way to ensure that a beloved pet ends up with a designated caretaker is to bequeath the pet to the caretaker along with a sum of money under a Will or other testamentary instrument.

Neither of the informal methods mentioned above provides any means of supervision of the caretaker’s activities.  Thus, a failure to discharge responsibilities will be purely a matter of conscience for the caretaker.  Obviously, it is very important that the caretaker is selected with great care.

Pet Trusts

The most reliable way to ensure that your pet will be cared for after your death is to use a trust arrangement under a Will or inter vivos trust agreement  With proper planning and drafting the pet trust can be a very dependable strategy.

Optimally, a “pet trust” should be drafted so that the pet’s caretaker is the beneficiary of the trust and the independent trustee of the trust is directed to make distributions to the caretaker/beneficiary to provide for the proper care of the pet.  It is advisable to have the caretaker and trustee not be the same person and not to permit the trustee to have the authority to appoint himself or herself as the caretaker.  This approach permits oversight with respect to the trust assets, helps to ensure that the pet will receive the care it needs for its lifetime, and avoids adverse tax consequences to the trustee.

As mentioned earlier, the keystone of any long-term care solution is the nomination of a dependable and trustworthy caretaker and at least one alternate caretaker in case the first one cannot serve.  With a pet trust, it also is quite important to nominate a dependable trustee and to name an alternate backup trustee (or trustees).

Another important decision is to determine the appropriate amount of money or other property with which to fund it.  The pet trust also should describe the type of care that the caretaker is to give the animal and the expenses for which the beneficiary can expect to receive distributions from the trust.  Typical expenses may include food, housing, grooming, medical care and burial or cremation expenses.  The owner may want to include more detailed instructions as well such as those that would be included in the animal care document described above.   When creating details for the trustee to follow in making distributions to the caretaker, the owner needs to consider how distributions to the caretaker should be made.  On one hand, the caretaker can be reimbursed only for actual expenses incurred and to require the caretaker to provide receipts to the trustee for any such expenses.  On the other hand, liberal distributions may be made to the caretaker to compensate him or her for the additional burden of having the animal reside in the caretaker’s home.  There is no right or wrong answer in making these types of decisions – this is a matter of personal preference.  It is imperative, however, that the owner’s wishes are properly documented to prevent potential successful challenges by the owner’s human heirs.

It is very important to designate a remainder beneficiary who will take any property remaining in the pet trust after the pet’s death.  It may not be advisable to leave the remaining assets to the caretaker because this could create a financial incentive for an unscrupulous caretaker to hasten the pet’s death.  The pet owner may wish to instead name a charity as the remainder beneficiary.  An incidental advantage of this approach is that when a non-profit entity is named as a beneficiary of a trust, the Commonwealth attorney general can become involved if an investigation is required to determine if the trustee inappropriately applied trust funds.  In making such a determination, the trust creator’s stated wishes will be paramount – again underscoring the importance of proper drafting to ensure that the owner’s wishes are explicitly documented in the pet trust.

Other Options

There are a few organizations that specialize in long-term care of pets of deceased owners.  In return for a donation, these pet “sanctuaries” may agree to care for the pet until it dies or to find a new home for the pet.   Such an arrangement may be a good one if the owner has no other options, but pets who are accustomed to being companion animals may suffer from a long-term stay at such a facility when close, frequent contact with people is not available.  Before selecting such a facility, the owner needs to visit the organization to see how animals are cared for and to inquire about its policies and procedures.

A Final Thought

We’ve covered above the importance and methods of ensuring care for our companions in the event of our death or incapacity.  On the other side of the coin, we might also consider opening our homes and hearts to pets who have been orphaned. These animals are often well-socialized and easy to care for.  They have been devoted friends and companions and deserve more in their later years than relegation to a kennel or solitary euthanasia.  If you are in a position to be of assistance, from both a financial and housing standpoint, this is a great opportunity to bring happiness to a wonderful soul and experience the same for yourself.

Thanks to Kay Cross, Esq for her legal insights and contributions to this article.

Laurie Bonser CFP, CPA, Coach
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Laurie Bonser CFP, CPA, Coach

Laurie is a musician, teacher, intuitive reader, and shaman who also practices Reiki, MAP, plant spirit medicine, animal communication, and other healing resources.As a CPA, Certified Financial Planner™ professional, and coach, Laurie has extensive expertise and credibility in the area of comprehensive financial planning for individuals and business owners.She focuses on working with clients who value the integration of thoughtful financial stewardship with their own health, relationships, intentions, and envisioned futures.Laurie is the author of “Financial Stewardship:A Guide for Personal Financial Health and Wellness,” an Amazon bestseller for 2014.She lives in Ballston Spa, NY and may be reached through her web site at www.ChangingTimesPlanning.com.
Laurie Bonser CFP, CPA, Coach
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Laurie is a musician, teacher, intuitive reader, and shaman who also practices Reiki, MAP, plant spirit medicine, animal communication, and other healing resources. As a CPA, Certified Financial Planner™ professional, and coach, Laurie has extensive expertise and credibility in the area of comprehensive financial planning for individuals and business owners. She focuses on working with clients who value the integration of thoughtful financial stewardship with their own health, relationships, intentions, and envisioned futures. Laurie is the author of “Financial Stewardship: A Guide for Personal Financial Health and Wellness,” an Amazon bestseller for 2014. She lives in Ballston Spa, NY and may be reached through her web site at www.ChangingTimesPlanning.com.


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