Help Your Clients Provide Financial Support for Their Pet in Uncertain Times
As of 2023, 66 percent of US households own a pet.1 A Forbes Advisor survey of more than
5,000 dog owners found that 41 percent of dog owners spend between $500 and $1,999 a year
on their dogs and 8 percent spend more than $2,000 annually.2 In addition to the annual cost of
care, there is always the potential for emergency veterinary care, which can be costly. Your
clients are likely concerned about what will happen to their pets if they die or are unable to make
decisions or care for their pets. Several options are available to your clients to ensure that funds
are available so their beloved furry family members continue to receive the same level of care
and support they have always received.
Pet owners should evaluate the weekly, monthly, and annual costs associated with their pet's
needs and create a budget. This budget can help clients determine a specific amount of money
to be put aside to cover the pet's anticipated lifetime expenses. There are a few options
available to structure the money set aside for the care of a client's pets.
Lump Sum to the Caregiver
One option to financially provide for a pet is for the client to give a lump sum to the person they
choose to care for the pet at their death. This option is the easiest to carry out and does not
involve any ongoing oversight or administration costs. However, because the money goes
directly to the caregiver, no one will monitor the use of the funds. The client must trust that the
funds will be used for the pet's benefit and must be okay with simply trusting their chosen
caregiver.
Pet Trust With the Caretaker as the Trustee
This approach to planning for a pet is a little more complicated than just handing money to the
caregiver. In this scenario, money would be set aside in a trust specifically to care for the pet.
There may be administrative requirements that the caretaker, as trustee, must do, such as
submitting an accounting of the trust's income and expenses to a specified person under the
trust. Despite these requirements, this approach does have some flexibility because the
caregiver and the trustee are the same person, meaning that a third party does not need to be
consulted before expenses are paid or the caregiver is reimbursed for out-of-pocket costs. It is
important to note that with one person serving in both roles, there is still a risk that funds may
not be spent appropriately on the pet without oversight by a third party.
Pet Trust With Separate Parties Serving as Caretaker and Trustee
The final option provides the maximum protection for the money set aside for the pet. The pet
trust will contain funds to care for the pet, but the caretaker will need to work with a separate
trustee to gain access to the funds in the trust. The trustee can ensure that the money is being
used for the pet. This may be a wise option for clients who have animals that cost a lot to care
for such as horses or exotic animals, because the amount necessary to care for them could be
more than the client feels comfortable handing over to someone without any oversight.
Keep the Plan Up-to-Date
By proactively planning for their pets, pet owners can ensure that their pet is cared for and
supported if they are unable to do so themselves due to incapacity or death. If clients already
have an estate plan that provides for their pets, encourage them to schedule an annual review
to address any changes in circumstances, such as additional pets, increasing pet needs, the
designated caregiver's situation, or the client's finances.
As an experienced estate planning attorney, we can help your clients create the appropriate
legal documents for the care of their pet within the applicable laws and regulations of their state.
Pet owners deserve peace of mind knowing that their pets will transition to a new caregiver
smoothly, with as little disruption in care as possible. Taking care of a loved one's future,
including pets, is priceless. If you are interested in collaborating on pet planning for your clients
or would like to discuss pet planning further, give us a call.
MEREDITH | PC
4325 Windsor Centre Trail
Suite 400
Flower Mound Texas 75028
214-513-1013
This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.
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