Don’t Forget Fido: Estate Planning with Pets
When we sit down to discuss someone’s estate planning, the questions we ask are quite simple: What do you have? Where do you want it to go? Who do you want to manage your affairs after you’ve passed away?
As part of these discussions, we often talk about:
Assets – What assets comprise your estate and what are these assets worth? Is there real estate or a business involved? Are there estate tax concerns?
Children and other family members – Do you have minor children? Do you have adult children who might not be able to manage a large inheritance outright? Do you have other family members or people close to you for whom you want to provide or make a special gift?
Personal Representatives, Trustees, and Other Fiduciaries – Who is the best person to manage your affairs? Should it be a family member or a professional? What happens if the person you’ve named isn’t able to act in that capacity?
These conversations, however, often overlook an important member of the family: the family pet or other animals.
In May 2016, Minnesota passed a new law that allows pet or animal owners to establish a trust for any animal that is alive during the owner’s lifetime. Owners can provide for any number and type of animal, the only caveat being that the animal must be alive at the time of the animal owner’s death. A pet trust cannot provide for the offspring of current animals unless the offspring are born before the animal owner dies. Minnesota law allows pet owners to set aside any amount of money that is “reasonably required” for the animal’s care; the court may reduce the trust fund if it finds that an excessive amount has been put into trust. What is considered reasonable and what is excessive will depend on the animal and its specific needs and should be considered on an individual case-by-case basis.
When establishing a pet trust, the pet owner names a trustee to manage the assets and distribute funds for the animal’s care. The trustee can be someone who is willing to both manage the assets and care for the animal, or the owner could appoint a separate caretaker who is responsible only for the day-to-day care of the animal. The owner can also include instructions or special information about the animal that the trustee and/or caretaker should know. The owner may also want to consider naming an organization, such as a reputable rescue or no-kill shelter, in the event that the individual the owner selected as caretaker is unwilling or unable to care for the animal.
There are three primary means by which to provide for Fido’s care after you’re gone.
The first option is to include an additional provision in your will. While this is by far the simplest and least expensive option, owners should consider who will assume Fido’s care during the interim while the will is probated. Estate administration takes time and an animal’s care needs to continue uninterrupted.
The second and third options include either incorporating additional provisions in your revocable trust or creating a stand-alone pet trust. In both instances, the trust would legally own the animal after your death and the trustee would oversee any funds set aside for Fido’s care. Once Fido passes away, the trustee could then direct any remaining funds of the trust to a designated beneficiary. Both options result in essentially the same outcome, but a stand-alone pet trust is far more uncommon, and, in most cases, unnecessary.
According to a 2017-2018 National Pet Owners Survey conducted by the American Pet Products Association, 68% of U.S. households, or about 85 million families, own a pet. If yours is one of the many families who considers Fido a member of the family, consider including care provisions when discussing your estate plan.
Would you like to know more? Schedule an appointment with one of our attorneys by calling (507) 288-5567 or book online.
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