| What You Need to Know About Pet Trusts

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“Here’s how you can use your life insurance policy to build a pet trust that ensures your pet(s) will be cared for when you’re no longer around.”

Have you ever pondered the thought of who would take care of your pet(s) after you were gone? Or, who would tend to your pet if you suddenly became disabled or riddled with a critical illness?

If you have a special furry friend in your life, chances are you have thought seriously about putting a plan in place for your pet to offset the fact you won’t live forever.

There are varying degrees of care plans. You may recall the extraordinary measures famed real estate tycoon, Leona Helmsley put in place for the well-being of her beloved Maltese, Trouble.

Helmsley’s $12 million plan resulted in total chaos among her family – especially those who were left out of the billionaire’s will. The court eventually reduced Trouble’s ‘care package’ to $2 million.

Most average pet lovers aren’t in the position to bequeath a $12 million sum (or even $2 million!) to their furry friend. No matter how much you plan to set aside, there’s a bigger issue: How do you make sure your wishes for your pet are adhered to?

You're not alone in your concern for your beloved pets in the event of your passing. So, read on to learn what safeguards exist to establish a solid plan for your pet.

senior couple hugs their dog at the beach


You may feel like your pet is part of your family, but the law says animals are property. And since they are unable to sign off on legal documents, insurance companies will NOT let you name an animal as a life insurance beneficiary.

Options do exist, however.

One option is to create a pet trust and fund it using your life insurance benefit. Then, you can name a trustee who will take care of your pet.

Establishing a trust requires some planning on your part. Fortunately, you can structure your own life insurance policy to make sure your pet is pampered for the rest of its life. Although, we do recommend seeking legal guidance from an attorney who specializes in estate planning to make sure your plan is sound.

When is it important to have a pet trust?

Pet trusts are most obviously important if you have a pet with a long life span. For example, horses who usually live about 25 years or African grey parrots who live 50 to 70 years.

Granted, the majority of Americans tend to have more traditional pets, such as cats and dogs, with lifespans in the range of 8-20 years. Even so, it's important to have safeguards in place if there's any chance your pet will outlive you.

We're all too familiar with the stories of pets left homeless or delivered to a shelter after their owner(s) die. The good news is a pet trust ensures that doesn't happen. And, as of 2015, every state (except Minnesota) has pet trust laws.

What can the funds in a pet trust be used for?

You can use a pet trust to specify that proceeds of the trust cover whatever expenses you find necessary. A few examples of pet expenses include:

  • Pet Insurance
  • Vet bills
  • Grooming
  • Pet food
  • Toys and accessories
  • Boarding/housing
  • Training

Some states have funding limits for pet trusts. Meaning, the court can decide the amount set forth in the trust is way more than what's needed for the intended use - like in Trouble's case. When that happens, the court will reduce and/or redirect the trust property.

sad dog lays on ground


You have several options when it comes to proper care of your furry or feathered friends. None of them require that you use funds from your life insurance policy, however doing so provides many benefits.

Traditional trust:

With a traditional trust, you can:

  • Appoint a caregiver
  • Name a trustee to manage the money
  • Provide instructions for the pet’s care before & after your death
  • Ensure your pet stays with you if you're put into a long-term care facility

A major benefit with traditional trusts is that you can fund them with life insurance and name the trustee as a beneficiary. The trustee will manage the money and you can appoint a separate caregiver.

First and foremost, it’s important that you have life insurance. Obviously, if you don’t have your own life insurance, setting up a pet trust will be tricky.

If you would like to learn more about your life insurance options. Visit our Term Life Insurance Guide or Whole Life Insurance Guide.

Statutory pet trusts:

Also known as a will provision, with a statutory pet trust, you can:

  • Leave money to an appointed caregiver

The ASPCA does not recommend this option because wills are not enacted immediately. Meaning, there's no say in where your pet will be held during the waiting period.

The American Bar Association provides several more drawbacks:

  • Instructions in a will are not enforceable, so you can't leave instructions for care
  • You can't request funds be dispersed over time
  • The court has discretion over any changes
  • There are no provisions for incapacity (i.e. debilitating illness)
  • Provisions are only honorary - not legally binding

Pet Protection Agreement:

This agreement allows you to:

  • Leave money to an appointed caregiver
  • Provide care instructions applicable before & after your death

This agreement is a do-it-yourself approach that doesn't require a lawyer yet is still legally binding. It requires signatures from both you and the pet guardian.

Pet Protection Agreements are available through LegalZoom and are relatively inexpensive with plans starting at $39.

dog paws with cash


Thinking about what would happen to your pets if something happened to you is part of being a responsible pet parent. Not planning in advance for your pets could result in them ending up in a shelter or homeless. To avoid such problems, follow these seven pet trust tips from NerdWallet:

  1. Speak in length to your intended caregivers about what's expected of them. Make sure they're ready for the obligation.
  2. Choose a trustee (the person managing the money) who is different from the pet caregiver. This provides a system of checks and balances.
  3. Name successors for the trustee and caregiver in case either is unable to perform the role.
  4. Speak with an estate attorney who has handled pet trusts before. Ask your local animal welfare organization for referrals.
  5. Be reasonable with the amount you set aside for your pet, so the trust doesn’t become a target for disgruntled relatives (like Helmsley's).
  6. Choose where the leftover money will go when the pet dies. Consider donating it to animal welfare organization.
  7. NerdWallet gives the following warning: "Don't designate the remaining money for the caregiver. That would give the caregiver reason to want the animal to die sooner and perhaps skimp on care."

    Instead, you can designate money to compensate the caregiver throughout the life of your pet.

  8. Provide very detailed instructions. Do not assume your caregiver or trustee will know how you would like your pet to be taken care of.

If you’re concerned about your pet’s welfare, it’s best to speak with an attorney and/or financial adviser about your wishes. While many options exist for establishing a detailed, well-thought-out plan, the guidance provided in this article should set you on a path to success for your pet’s future care.

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