In 2022, the United Kingdom’s Queen Elizabeth passed away at 96 years old, leaving behind four beloved dogs, Candy, Lissy, Sandy and Muick. The Queen, famous for being a dog lover, worried about the fate of her pets and planned ahead for her children and staff to adopt them after her death. Ultimately, it was a happy outcome for the royal pooches.
Many of us can relate to pets feeling like full-fledged family members. In fact, according to the American Veterinary Medical Association, in the United States, 85% of dog owners and 76% of cat owners consider their pets to be a member of the family. Those numbers are huge since, according to the American Pet Products Association, as of 2023, 66% of U.S. households have at least one pet. Still, the overwhelming majority of pet owners neglect to plan for their animals in their estate plans (Everplans reports that only 9% of people with wills include provisions for their cats, dogs, or exotic birds).
More and more Whittier Trust clients have questions about how best to provide for their fur babies and feathered friends. Whittier Trust Senior Vice President and Director of Philanthropic Services Pegine Grayson sat down with Christine Chacon, a partner at Best Best & Krieger LLP. Chacon has extensive estate planning experience in the areas of trusts for individuals and pets, wills, powers of attorney and healthcare directives.
Pegine Grayson: Why do you believe it’s important for people of means to engage in advance planning for their pets?
Christine Chacon: Our pets are like family members. And despite their shorter life expectancy, it’s actually very common for pets to outlive their owners. Most of us can’t imagine a scenario in which our beloved animals are just dropped off at the nearest shelter with no idea how they would fare. Even if you have a family caregiver in mind, pets are expensive and most of us don’t expect others to have to shoulder the costs of caring for our pets into the future.
Pegine Grayson: That makes sense. What can we do to ensure the best outcome for our pets after we’re gone?
Christine Chacon: I usually begin by asking my clients whether or not they have a successor caregiver—a family member, friend or a neighbor—in mind. Their options will be different depending on how they answer.
Pegine Grayson: Then let’s take those one at a time. What are the options for people who do have a specific caregiver in mind for their pets?
Christine Chacon: First, make sure they know of your intention and agree to serve in this capacity. Consider naming a second person in case something happens to the first one or they become unable or unwilling to serve. The next step is to craft a letter with instructions to guide them (the pet’s medical history, medical conditions, vet contact, special dietary restrictions, habits, etc.). In short, these are tips for success. Finally, ensure your chosen caregiver will have enough resources to care for your pet in the way that you would want them to. This can be accomplished as a simple, outright bequest to the caregiver for this purpose or by arranging a pet trust. The best option depends on the pet owner’s assets, other chosen beneficiaries and circumstances.
Pegine Grayson: Let’s discuss the bequest first. That sounds easier than establishing a trust. Why not just opt for this solution?
Christine Chacon: It’s a simpler option, but it may not provide sufficient protection under some circumstances. For example, what if your chosen caregiver falls ill or passes before your pet does? What if he or she turns out to be less financially responsible than you had assumed and squanders the money you leave them on a new car? I always advise my clients to hope for the best outcome but plan for the worst one.
Pegine Grayson: So it sounds like a trust structure would be safer, but is that possible for pets?
Christine Chacon: Absolutely! Many states have provisions in their Probate Codes for this type of structure. For example, in California, it is found in Section 15212. You’ll want to engage an attorney who is experienced in setting up these special trusts. Typically, people name the same personal or professional trustee that they have in place for their other trusts and specify that distributions can be made for all expenses reasonably necessary for the pet’s care. The trustee would be obligated to invest the funds prudently, so they may grow over time. The trust would stay in place even if the caregiver ends up changing over time. Finally, you’ll need to decide what happens to any fund balance remaining upon the pet’s death. Most people designate a trusted animal shelter to receive the residue.
Pegine Grayson: How does one determine the right amount of money to put into the trust?
Christine Chacon: I suggest you make a list of your typical monthly expenses (food, grooming, vet bills, walking, toys, medications, etc.) as well as the annual ones (dental cleanings, boarding for vacations, even plane tickets) and come up with an average annual amount. We can specify varying amounts to be transferred to the trust upon the owner’s death, depending on the age of the animal at the time of the owner’s death.
Pegine Grayson: OK, you’ve been talking about the situations where the pet owner has a specific caregiver in mind. What if they don’t have anyone willing or able to step in and take the pet?
Christine Chacon: In that case, most of my clients still opt to establish a trust with a professional trustee and name a trusted animal shelter or other appropriate nonprofit as the beneficiary. For dogs and cats, a local shelter is typical. For horses, they’ll need to find a ranch or stables willing to board them for the remainder of the animal’s life. It’s important to reach out to the organizational beneficiary in advance and get their consent to the arrangement. It would be tragic to make plans that you thought were iron-clad only to have the organization say that they’re not willing to take the animal in. The trust instrument will provide that if the pet is adopted, the organization may retain the funds as a charitable contribution.
Pegine Grayson: Can you share a story of a pet trust you established and how it worked out?
Christine Chacon: I counseled a Trustee through the administration of a pet trust which just ended a few years ago. The decedent left a large portion of her estate in trust for the benefit of her dog. Her dog was young when she died, so the trust lasted for the dog’s lifetime. A friend cared for the dog, and a professional licensed fiduciary managed the trust account. The dog was very well cared for, from grooming to boarding, supplies, food, equipment and anything else you can imagine. When the dog died of old age, the balance of the trust fund was given to a local pet organization. It was a lovely arrangement, because the dog’s life continued as her owner would have liked, and a charity was benefited as well.
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