As discussed previously on this blog, more Americans have pets than ever before. We love our pets like children, so it’s only natural that we want to ensure they’re provided for if we’re unable to. In addition to creating a will and powers of attorney, you can ensure your pet is cared for by creating a pet trust.
Like many states, Texas law provides a way for you to create legally binding documents that will ensure your pet will be taken care of in the manner of your choosing. Texas Property Code § 112.037 specifically allows the creation of a trust benefitting a pet. Put simply, funds may be set aside for the pet’s care so long as the pet was alive and cared for during your lifetime. The trust will then automatically terminate upon the death of the last animal covered by the trust.
Trusts have their own legal language, but it’s easy to understand. The Settlor of the trust is the person creating it. The Trustee is the person who has authority to hold the assets and maintain it. The Beneficiary is who benefits from the assets held by the trustee, in this case, your pet. Your trustee should be someone who is competent with money handling. While they don’t have to be a financial guru, someone who has a poor track record with money management shouldn’t be your first choice. Further, it’s important to note that the trustee need not be your pet’s caregiver. You might want to appoint different persons serve as caregiver and trustee to create accountability, but can still have your pet’s caregiver serve as trustee if you feel that’s the best decision.
When creating the trust, you’ll want to consider numerous factors to determine how much money should be put in and what reasonable costs of care will be. For instance, you’ll want to look at your pet’s current standard of living and the level of care you want them to receive upon your incapacitation. You should also decide how often the caregiver should report on the pet’s status to the trustee, so that there is a degree of accountability for the pet’s care. Additionally, you’ll want to determine the life expectancy of your pet and the likelihood of your pet developing any serious health-issues, as this will weigh heavily in your decision on how much money to put into the trust. Finally, you’ll want to decide what happens if there’s any money left in the trust once your pet passes away. You could have it revert back to your estate, or donate it as a gift.
Like many aspects of estate planning, pet trusts allow a great degree of flexibility. Every pet is different, so each trust should be tailored to the needs of the animal in question. For example, you wouldn’t want a pet trust drawn up for a cat to be applied to your baby cockatoo, that might live to be 80! Just the same, a St. Bernard will have different health concerns and life expectancy from a Chihuahua. The flexibility and room for customization make pet trusts invaluable tools in estate planning.
If you’re considering a will, be sure to consider your furry, feathered, or scaly friends too. They’ll thank you later.