Q. What is a pet trust?

A. It is a legally enforceable document whose purpose is to insure that your pet receives the sort of care you would have provided had you not died or become disabled.

Q. Why a pet trust, why not just include my pet in my will?

A. Wills can take time to go through probate, sometimes a year or more, and money for your pet's ongoing care will not be available until then. Also, wills only deal with the care for your pet after you die, it does not take into account that you may be disabled and unable to care for your companion animal. A trust is in effect as soon as it is signed and takes no court involvement. A pet trust spells out EXACTLY the care you want your pet to receive and can immediately handle any medical emergencies your pet may have.

Q. How does a pet trust work?

A. You name one or more persons to act as a trustee, that is, the person who will use the money or property you put in the trust for your pet's benefit. A caregiver you have chosen will care for your pet and those expenses will be paid by the trustee. The trustee will check periodically on your pet to make sure it is receiving the level of care specified in the trust instrument.

Q. What are the main types of pet trusts?

A. There are two basic types of pet trusts.

The first is the testamentary trust which takes effect on your death. It is created during your lifetime with the assistance of an attorney or estate planner and is found in your Will. Like the statutory pet trust described below, it details your pet's likes, dislikes, routines, medical history and anything else you believe a caregiver must know to give your pet the same quality of life you provided. The trustee pays for your pet or pets' expenses and the caregiver you name continues in that capacity so long as he or she properly cares for your pet. The down side of this kind of trust, is that it can take a year or more for your will to go through probate, and funds for your pet will not be available.

The second type, a statutory pet trust, is also created during your lifetime. It is called a statutory pet trust because it is sanctioned by California Probate Code Section 15212. This code section was recently amended to require your trustee to honor all the terms of trust. It also gives third parties the right to initiate court proceedings to furthter the interests of the trust. Section 15212 gives the court the authority to appoint a new trustee and further empowers it to ". . . make all other orders and determinations as it shall deem advisable to carry out the intent of the settlor . . . ."

Q. Which type of trust is better?

A. Most pet owners are best served by choosing a statutory trust in which they act as the original trustees with others named as successors. The trust instrument can anticipate and deal with all the situations that may arise during their pet's life and, even more importantly, it will provide detailed information to insure that the likes, dislikes and routines of your pet are made known and respected. A carefully considered. well drafted trust allows the owner, in a sense, to always be with his or her pet.

Q. When can I create a trust?

A. You can create a trust any time during your lifetime. A statutory trust is effective once it is created while a "testamentary trust" goes into effect on your death. A statutory trust can be funded as needed and can be supplemented by a bequest in your Will. The major drawback to a testamentary trust is that it cannot be funded until your Will is probated, often a lengthy period during which your caregiver will have to bear all your pet's expenses.

Q. How do I fund the trust?

A. If a testamentary trust, through assets named in the trust and designated in your Will. In a statutory trust, the best approach is to open a bank account in the trust's name that you, as the original trustee, have control during your lifetime and which you can supplement as your financial circumstances allow. Either type of trust can be funded with virtually any asset you may own.

Some ways to fund your pet trust:

- Keep your cars, motorcycles, boats, etc., registered in the name of your pet trust
- Transfer real estate to the trust now or in your will
- Keep one of your savings or retirement accounts in the name of your pet trust
- Specify artwork or collections to be used
- Set up a simple life insurance policy with the pet trust as beneficiary
- Designate your retirement account beneficiary as your pet trust

REMEMBER:
YOU are the trustee of the pet trust, so, you will always have access to use any funds, etc., at anytime. The title or ownership goes into the trust so your designated trustee will have access to property or funds when they need to take care of your feathered, finned or furred loved ones.

Q. How much should I put in the trust?

A. That depends on many factors. Is the trust for the benefit of one or multiple pets? How old are the pet or pets and what are their anticipated medical needs? Will medical bills be paid through a comprehensive pet insurance policy or out of pocket? What sort of standard of living do you want for your pet(s)? Will the trustee and/or the the caregiver be paid and, if so, how much? Will the trust pay for sitters or other temporary caretakers if the caregiver is unavailable by vacation or emergency?

The ASPCA has great resource for estimating annual pet costs*. Using the ASPCA information, you can review your expenses and come up with your own annual expenditures. Add what you would like to compensate your trustee and caregiver, and you now have a realistic annual budget. Based on your pet's life expectancy, multiply the annual budget by the estimated number of years your pets may continue to live. * I think their "annual costs" are low (especially the food cost), but the "year total" comes out about right.

Q. What happens if I put too much money in the trust?

A. Leona Helmsley left $12 million for the care of her Maltese, Trouble, and the courts reduced the $12 million to a more "modest" $2 million. The court has no express power under Section 15212 to reduce the amount placed in the trust, however, if it is excessive, family members may try to fight your intentions. The best approach is to put in no more than twice the amount you believe will be needed.

Q. What happens to any money left in the trust on the death of the pet(s) it covered?

A. You should designate in the trust who (the persons or organizations) you want to receive any money or assets left in the trust. Many leave the remainder to relatives, friends or to organizations like local animal rescue groups. You should be very careful about leaving the surplus to the caregiver as that person may be tempted to put his or her financial interests ahead of the welfare of your pet.

Q. Who should I select to act as a trustee?

A. It should be someone who cares about your pet and who will devote the time necessary to handling the trust's finances and periodically monitor your pet's care*. Most importantly, it must be someone who has agreed to and can meet these responsibilities throughout your pet's lifetime. Because this is not always possible, it is important to name others as successor or replacement trustees. *Simpawtico Animal Hospice will continue to check in on our client's pet periodically. We can also recommend a local pet-loving CPA to handle finances and act as trustee.

Q. Who should I select to act as a caregiver?

A. Ideally, you want to select someone you believe will provide a good home for your pet and give them the same care you would. Relatives*, friends and neighbors are all good candidates but if none are available there are organizations that will take on this responsibility. Successor caregivers should be named to give the trustee the option to place your pet elsewhere should circumstances warrant a change.

* You may choose a relative or friend, but make sure they understand that your pet may have some behavioral issues during the transition. They may be well-meaning, but may be too overwhelmed in their own grief to be able to handle a dog that howls all night because it misses its special person.

Q. Should I check to see if the persons I select as trustees and caregivers will accept these posts?

A. Absolutely.

Q. What happens if the trust runs out of funds before my pet dies?

A. If this occurs you are dependent upon the good will and financial circumstances of your caregiver. It is for this reason that you should use great care in choosing this person and his or her successors. The trust instrument should contain a provision naming a person or organization you want your pet to go when all else fails. There are, for example, many breed specific and other rescue organizations that will try to place your pet in a permanent home or provide foster care for it.