Most retirees have a will or living trust in place to ensure that loved ones are provided for when the time comes. But have you included your pet in your estate plan?
According to the 2021-2022 National Pet Owners Survey, 70% of U.S. households own a pet. Yet less than 10% of pet owners have made formal arrangements for their pet’s care after they pass. Most pet owners would do literally anything for their beloved fur babies, so it’s only natural to make sure they’re taken care of if you pass away or become incapacitated.
Keys to Securing Your Pet’s Future
Between food, veterinary care, and other needs, expenses for animals can add up quickly. Legally, pets can’t inherit money directly, so providing for them requires some financial planning. Here are some options when it comes to providing for your pet after you’re gone.
Include Provisions for Pets in Your Will
It’s possible (and relatively simple) to name a caretaker in your will and leave them money intended for your pet’s care:
- Open a specific IRA, savings account, or life insurance policy with the caretaker as the beneficiary
- Include a note in your will with your wishes and information about the IRA or bank account
One major caveat here - your pet would become the named caretaker’s legal property, but there is no legal obligation for them to use the money as you intended. Technically, that person could use the money on whatever they want and ignore your wishes for pet care, with no legal recourse. If you go with this option, choose someone you really trust.
Create a Pet Trust
A pet trust is the most comprehensive way to provide for your pet’s future. If you have an existing trust, you can make this a part of it. Or, set up a new one. Either way, the document will provide a thorough and legally binding plan for your pet’s ongoing care.
A pet trust covers a range of details, but there are two key components to consider before setting one up:
- Funds - Determine how much money to allocate to your pet’s care. This should cover everything from food and treats to routine vet visits to serious medical care. The trust will also disburse funds to specific providers if you desire.
- Caretaker(s) - One of the biggest benefits of a pet trust is the ability to name successive caretakers. If your preferred caretaker is unable or unwilling to take care of your pet, your trustee will transfer the pet to another caretaker that you designate. It might seem overly cautious, but selecting multiple successive caretakers ensures your pet’s care even through life’s inevitable twists and turns.
Establish Durable Power of Attorney for Pet Care
A durable power of attorney for pet care authorizes someone to seek medical attention for a pet on your behalf, including specifics about the extent to which the authorized party can make decisions. Setting up a durable power of attorney for your pet doesn't take long, and you’ll rest easy knowing that your pet will receive proper care if you aren't available to make decisions.
Another benefit is, durable power of attorney doesn't just apply if you're incapacitated. A pet caretaker can also use it while you're traveling, which is convenient if your retirement lifestyle often takes you away from home.
Provide Care Instructions for Your Pet
We know you want your pets to maintain the best quality of life, even after you’re gone. The durable power of attorney covers medical issues, but you might want to include a separate document in your trust with instructions for your pet’s ongoing care, including:
- Food requirements such as brands, servings, and feeding schedule
- Any medications or other special needs
- Walking schedule for dogs
- Preferred types of treats, toys, and games
- Behavioral traits and quirks
- How they get along with children and other animals
And anything else you would want a caretaker to know. It’s also important to keep this updated as your pet ages to make sure the information matches your pet’s current needs and preferences.
Covering All of Your Estate Planning Needs
People often overlook pets when dealing with estate planning, but they’re not the only forgotten detail. It’s important to work with both an attorney and your trusted fiduciary advisor to make sure you’ve covered all of the critical topics:
- A will detailing the disbursement of your assets
- A complete list of your retirement accounts to make sure you don’t have any missing or orphaned accounts
- Instructions for burial/cremation and funds to pay for funeral services
- Strategies to minimize the tax burden for your heirs
- Durable power of attorney for your health care and any other ongoing needs
Estate planning might not be fun, but it will ensure that your loved ones - including your pets - are cared for, no matter what happens.
As with estate planning, preparing for retirement requires having a solid game plan. Download our 2021 Essential Retirement Guide for a complete roadmap to financial planning in retirement.