Financial Literacy

Pets and wills: How to make sure fido is taken care of when you die

By: Lisa Coxon on October 12, 2018

Late last year, Ally MacGregor quipped to her then-husband that if she were to die before him, he would be responsible for her two cats. “He told me, in no uncertain terms, that that wasn’t going to happen,” says MacGregor. A bit of a blow, to say the least.

“My cats are like my children,” says the 30-year-old. “I know that sounds crazy, but I love them so much. The thought of him maybe putting them in a shelter or letting them loose made me so upset.”

Any responsible pet owner wants to be certain that, should they leave this world first, their fur babies will be well-cared for. That’s where someone like Ambie Edgar-Chana comes in. A wills and estates lawyer, Edgar-Chana often helps people write their pets into their wills. “I would say about 50% of our clients want to deal with their animals in the will,” she says.

But you can’t just leave your pet a sum of money when you go. Adorable as it would be, your dog can’t exactly buy his own food from the grocery store. And, while she’s certainly narcissistic enough to think otherwise, your cat would have a hard time paying for (let alone booking) her own vet appointment. That leaves you, the pet owner, with some real decisions to make about how (or if) you’ll choose to include them in your will.

Option 1: Set up a pet trust

Perhaps the most legally sound way to guarantee money for your animals in your will is to set up a trust fund for them. In this scenario, you would designate a trustee to receive a sum of money, hold it, invest it, and use it for the care and maintenance of your pet. The trust will indicate what the trustee is to do with the investment income, the capital, and what to do when the pet dies, since there may be money left over.

Sounds rather Official, right? Well, it’s not cheap, either. Drafting a trust could add another $500 or more to your legal fees, not to mention the fees you’ll now owe either the trust company or appointed trustee to run it on your behalf. (Note: your trustee can decide not to collect a fee). “It’s a lot of work, and it’s expensive,” says Edgar-Chana. “And remember: that trust is a living, functioning, breathing taxpayer now. You have to file a tax return for it every year.”

This may perk up the ears of your bank and insurance companies, who Edgar-Chana says might be a little more stringent because they’re now being charged with the responsibility of holding this sum of money for the care and maintenance of the pet.

Without wrapping it around a trust, you’re just giving this person money. There’s no requirement for them to use that money for the care and maintenance of your pet

“When you get down to it, most people don’t want to do a pet trust,” says Edgar-Chana. A dog owner herself, she can sympathize. “The lawyer side of me says I like the trust option better, but practically, even I haven’t done a trust in my will for my animals.”

That said, it’s still the most legally secure option. “If there’s a breach of trust,” says Edgar-Chana, “your executors now have recourse at law.”

Option 2: Designate a pet caretaker and leave them money

Far less expensive than setting up a trust fund, this is the route Edgar-Chana says most people take. It’s simple, not very time-consuming, and still provides the pet owner some peace of mind. The flipside? There’s no guarantee the appointed person will use the inheritance for the care of your animal. In fact, there’s no legal obligation for them to do so.

“Without wrapping it around a trust,” says Edgar-Chana, “you’re just giving this person money. There’s no requirement for them to use that money for the care and maintenance of your pet. It’s possible the caretaker might keep the money, but then give your animal to the SPCA.”

That’s why Edgar-Chana recommends including a requirement in your will that the caretaker indicate, in writing, that he or she agrees to use the money to care for the animal. It doesn’t necessarily mean they’re legally obliged to follow through on that promise, but at least there’s a paper trail to refer back to. Of course, make sure that whoever you designate actually has the means and space to take care of the pet.

It’s possible, too, to make arrangements outside of a will, by executing what’s called a memorandum, which essentially acts as a letter of guidance. “It has no legal weight,” explains Edgar-Chana. “It just gives your executors instructions on what to do with your animal.” The advantage is it can be updated and changed with next to zero legal hassle.

The term “chattels” refers to personal items like jewelry, clothes, and furniture. If there aren’t specific arrangements in place for your pet, then they get lumped into this category

And if you decide to do none of the above, you should, at the very least, include a chattels clause in your will. The term “chattels” refers to personal items like jewelry, clothes, and furniture. If there aren’t specific arrangements in place for your pet, then they get lumped into this category, too. So, let’s say your will instructs your executors to sell all of your chattels. Well, your pet could be sold along with them, or sent to a shelter. Hopefully, your executor(s) would use their discretion in this sort of case, but it’s not guaranteed.

And then, the scenario that no pet owner wants to think about: what happens if your pet dies before you do? “Any instructions regarding the pet would simply fall away,” says Edgar-Chana. And the pet owner could update his or her will accordingly. If a pet trust exists, then it will depend on the terms within the trust. “Likely, it would indicate to only set aside the fund if the pet is still alive when their owner dies.”

As for MacGregor, she had to make other plans for her two Maine Coon/Tabbys, named Avicii and Alesso (yes, MacGregor likes to rave). Luckily, her good friend stepped up and promised to take care of the cats should the need arise. MacGregor hasn’t made a will just yet and doesn’t know exactly how much money she’d leave to her pets, but she feels confident, at least for the time being, that Avicii and Alesso will be in good hands.

“Even if I left my friend $5,000 and she spent it on a trip for herself, I’d be fine with that,” she says with a laugh, “provided she continue to take care of my cats. I know I can’t really have peace of mind, because, well, I’ll be dead, but I think that’s a small price to pay to make sure they’re taken care of.”