Klitzman Law Group, PLLC

Estate Planning can Include Pets as Well as ‘Regular’ People

Who could forget the headlines when billionaire Lenora Helmsley was found to have set aside $12 million for her dog, aptly named Trouble, after she passed? You don’t have to be a billionaire to want to protect your animal companion, says a recent article from The Wall Street Journal, “Putting Pets in Your Will Is No Longer Just for Eccentric Billionaires.”

One family created their will with instructions for caring for their two young children, naming a guardian and a plan for distributing their assets, a basic part of an estate plan. They’ve also planned for their two dogs, naming a sister as their caretaker.

No matter how much you love your dog, cat, horse, or mouse, they are legally considered personal property. If there are no directions in the will for who will take care of your pets when you die, they will go to whoever inherits your property, with no guarantee of what will happen to them. Worse, if you die without a will, the laws of your state will determine what happens to them.

Many pets whose owners die end up at shelters, and not every city has no-kill shelters. This situation is not great for older pets or those with medical conditions who aren’t as adaptable as puppies or kittens. Large birds, like parrots, can live as long as humans, making plans for their future especially important. Other animals end up abandoned, living on the streets.

In other words, don’t assume your family members love your pet as much as you do. You need to make a plan for their future.

Some shelters have programs helping people include pets in their wills, often tied to making a bequest to be made to the shelter to fund the pet’s care.

When parents pass, and a guardian has been named to care for children, there is usually a certain degree of court supervision. However, the same isn’t true for pets. If you choose to name a pet’s caretaker in the will and provide assets for the pet’s care, there’s no one watching to be sure your beloved animal companion is being cared for with the money you provided.

An enforceable alternative is the creation of a pet trust. The caretaker and the trustee should be different people. A trustee’s fiduciary duty is to ensure that the assets in the trust are being used for their intended purpose. The caretaker is responsible for the pet's overall quality of life.

Your estate planning attorney will be able to create a trust to care for your beloved animal companions, so they will be safe and well cared for. You don’t have to be a billionaire to make this happen.

Reference: The Wall Street Journal (Aug. 10, 2024) “Putting Pets in Your Will Is No Longer Just for Eccentric Billionaires”

Caregiving and Estate Planning Provides Peace of Mind for All Generations

If your goal is to keep the farm, ranch, or small business in the family, planning, including estate planning and caregiving, is the number one strategy to making it happen. Families may dissolve the farm or business without advance planning to pay for long-term care expenses. A recent article from AgWeek, “Caregiving plans can provide peace of mind for farming and ranching families,” explains what needs to be done.

Part of the issue is that most ranchers and business owners won’t qualify for Medicaid because they own a significant asset. Having to sell off something they’ve worked their entire lives to build is often a result of no planning.

If you have a long-term care insurance policy, it needs to be carefully reviewed to determine what conditions need to be met for benefits to be paid. For example, most policies have a “waiting period,” so you’ll need to plan how to pay for caregiving during the months before the policy kicks in.

There’s also confusion about the difference between Medicare and Medicaid. Medicare is health insurance for medical expenses, while Medicaid is usually used for long-term care and caregiving needs. However, Medicaid is a needs-based program. An estate planning attorney can help the family determine what needs to happen in advance, whether the goal is to protect the farm, ranch, or small business while helping the aging parent become eligible for Medicaid.

Estate planning includes planning for incapacity, which can occur at any time but is more likely as we age. Suppose the individual hasn’t completed a power of attorney, healthcare power of attorney, and other medical directives. In that case, the family will need to go to court to obtain conservatorship or guardianship to take over the person’s financial matters and make healthcare decisions on their behalf. An estate planning attorney can help the family prepare the documents and create a plan.

Having an estate plan in place is also another means of protecting the family’s assets from elder abuse. Everything needs to be documented, and records need to be well-organized so every family member knows where documents are, where assets are and the plan for the inevitable events of aging.

Meeting with an estate planning attorney to create the last will and testament, power of attorney and all other planning documents can minimize the stress and costs involved. Without planning, everything becomes far more complicated, costly and stressful for all concerned.

Reference: AgWeek (May 14, 2024) “Caregiving plans can provide peace of mind for farming and ranching families”

Should My Pet Be in My Will?

Most of us love our pets like family, yet chances are you haven’t made a plan for your pets if you become incapacitated or die before they do. This is mainly because it’s unpleasant to consider, according to a recent article from The Washington Post, “What would happen to your pets if you weren’t here?”

In generations past, pets lived in the barn or mostly outside. They ate table scraps and whatever they could catch. Pets now have their own beds, go on family vacation, and are often seen at restaurants, hotels and airports. Americans spent an estimated $143.6 billion this year on pet care.

Contemplating your own death is unpleasant, as is considering your death and distribution of all your assets. However, having a conversation about your pets can give you the peace of mind of knowing your beloved animal companions will be cared for after you have passed or if you cannot care for them.

The problem is, if no plans have been made for the pet, they could end up in a shelter and, worse, be euthanized. This particularly concerns older pets, who are far less likely to be adopted than younger animals.

The first step is deciding who you would want to care for your pets. Who would take your dog or cat? This changes over time, as people in their 40s might think their parents will take their pets. However, ten or twenty years later, their parents will probably not be able to take on caregiving.

Next, have a detailed conversation with the person or people you want to take care of your pets. Is their lifestyle and living situation pet-friendly, and would it suit your pet? Talk with them about your pet’s health history, daily routines, like, and dislikes.

You’ll need a budget for your pet’s care. Add up their basic monthly costs, like food, treats, flea and tick prevention medications, then add in vet check-ups and shots, licensing fees and boarding costs. Build in increasing veterinary expenses, which increase as pets age, just like people. The total will be vital to calculating how much money you’ll need to set aside for your pet’s future care.

Under the law, pets are considered property, so you can’t leave them assets in your will. However, you can establish a trust for your pet, an enforceable legal arrangement for them in the event of your death or incapacity. The pet trust is a stand-alone document. However, estate planning attorneys recommend including a clause about it in your last will and testament to ensure that the people involved know about it and that your estate will adequately fund it.

Wills can take months or years to wind through the probate process, leaving your pet in limbo during this time. A trust is effective as soon as a death certificate is ready.

Your estate planning attorney can help create a pet trust. Then, you’ll need two roles: a trustee to manage and distribute funds and a custodian to receive the funds and use them to house and care for your pet. One person could fill both roles, or you could name a person to handle each of the two roles.

Pet trusts are typically set up as inter vivos trusts, also known as revocable or living trusts. They become effective upon your death or if you become seriously ill or injured. Trusts are set up like any other trust, except the beneficiary is an animal. All fifty states recognize some form of a pet trust.

Because your pets’ needs and the people you’ve assigned as trustees and guardians may change over time, reviewing the pet trust regularly is a good idea. The same is true of your overall estate plan.

Reference: The Washington Post (Dec. 5, 2023) “What would happen to your pets if you weren’t here?”