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Life insurance for pets

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Recently I mentioned the fact that I had selected godparents for my Pekingese, Matilda, and that I had made provisions so that if something happened to me, her godparents wouldn’t be obligated financially to care for her in addition to having to take on the big role of taking care of her in general. It didn’t take long for someone to ask me if I really had a “trust fund” set up for my dog and how one actually does that. It’s actually quite simple to do, and without a doubt, I suppose I can say this honestly: 

My dog is a trust fund baby.

That may sound absurd, but it’s true. Well, perhaps trust fund puppy or trust fund doggy is more accurate. Nonetheless, I calculated what I believed it would take to care for Matilda the rest of her life and have ensured her godparents would receive money if they had to care for her. Just to ease the minds of anyone who thinks I’m robbing my children of any extra financial support, let me clear the air — I’m not married, and I don’t have children. Right now, there is only one living, breathing being (aside from myself) that I’m obligated to care for and keep alive, and that’s Matilda. When that changes, I’ll make the necessary provisions.

For those who aren’t animal lovers or those who don’t have pets, it perhaps seems as extreme as people taking dogs to puppy massage parlors or who share ice cream cones with Fido without second thoughts. But similarly to the way my mother tells me I’ll never understand the love a parent has for their child until I am one, it’s understandable to think something like pet trust funds and/or pet wills are absurd if you don’t have pets and know that you need to care for them.

What are pet wills?

Pet wills are as legally binding as any other will, and ensure a good future for pets after the owner’s death. The will ensures there’s someone who will look after the pet and continue providing the care the owner did.

According to Joyce Tischler, the founder and general counsel for the Animal Legal Defense Fund (ALDF), being able to name pets as beneficiaries and creating pet wills is still a relatively new idea that really didn’t pick up until 2000. Additionally, she said states have started to adopt policies that allow pets to be named as beneficiaries. Since pets are living longer and healthier lives, wills and trusts make perfect sense, she said.

Here’s how it works: The owner provides a specific sum of money through a bank or trusted person, choosing sufficient amounts for Fido’s care. Be economical though — if you think it’s a little crazy to even set up a pet will and trust, consider what real estate baroness Leona Helmsley did for her nine-year-old Maltese. Helmsley named her dog as a trustee on her will, leaving $12 million to the dog. It was later reduced to $2 million, and she also left around $8 billion to go towards caring and helping the welfare of dogs.

So if you don’t have millions (or billions), how much do you leave your pet?

Tischler said the first thing to do is calculate the necessary amount of pet insurance by doing the math, and to think about things such as the kind of food and how much food your pet will need the rest of its life, and how much future medical expenses the pet will likely need covered. Remember to figure out how much longer your pet is likely to be around too, as well as inflation costs when factoring in things like food, vet bills, and other supplies.

Types of trusts for pets

In the world of insurance, there are three types of trusts applicable to pets. 

Traditional trust

Traditional pet wills or trusts work in a very detailed manner. The pet owner gives money to the tasked caregiver or beneficiary that will take care of the pet after your death and provides specific instructions for the pet. Most pet owners opt for traditional trusts because they usually allow particular requests for whoever will look after their pets in the future. Moreover, owners can state the possible expenses for taking care of the pet, the specific needs of the pet, and what to do if the beneficiary is no longer fit to care for the animal.

Statutory pet trusts

Many states allow you to set up a statutory pet trust. This type of trust is more generalized, so you don’t have to get into the specifics of your preferred pet care. You may leave a sum of money in the form of life insurance for pets and it’s up to the discretion of the person named as the caretaker to use it on behalf of the pet. 

Pet protection agreement

A Pet Protection Agreement lets you name who will take care of your pets and how. They can also be used while you’re alive if you’re incapacitated or hospitalized so the person you appointed as guardian can watch over your furry (or feathered) friends. If the PPA sounds like a traditional trust, it’s important to know there are key differences. 

You’ll need a lawyer to help you put a trust together, but a PPA can be completed by downloading a sample template and filling it out. If you’re leaving a large amount of money or you worry family members may dispute what you left for your pets, a trust is typically managed to make sure the money lasts and can’t be challenged as easily.  

When to get pet trusts

Deciding on when to get a pet trust is fairly simple. You may want one if:

  • Your pet care expenses are significant enough that insurance would help.
  • You’ve set aside a sizable amount of money for the care of your pet(s).
  • You’re worried about outliving your fur baby.
  • You have a serious medical intervention coming up and may need extended rehabilitation and someone to care for your pets.
  • You’d like to start planning for those you love after you’re gone.
  • The person you’d like to care for your pets is not a family member.

If you’re wondering what the best way to set up your pet trust is, you have a couple of options to plan for their wellbeing. Decide which option may be best for you:

  • Inter vivos trust: You fund the trust while you’re alive instead of waiting to move any death benefits or assets into your trust after you die. Essentially, you’re not funding your pet trust with money that will only be released and available when you die, like life insurance. However, there are additional fees in terms of start-up, which can be a hassle in having this trust.
  • Testamentary trust: Part of your last will and testament, this type of trust is only applicable if the owner dies, so if you’re disabled or can’t care for the pet, you won’t have legal recourse about what you’ve designated for Fido. This trust is cheaper than inter vivos, but there’s a risk of not having enough funds in the trust after your death during the waiting period for the probate court.

As for actually creating the documents, Tischler recommends using a DIY document for pet trusts and wills that you can find on NoloPress.com, where the documents are up to date with all laws and are legally binding forms.

“It’s important to make language general,” said Tischler. “If you’re suddenly hospitalized, who will take care of your pet? Pets aren’t like toasters. They need to be fed and walked and cared for right away.”

She said it’s imperative to choose a “godparent,” which is helpful too if you were injured or ill and in a hospital for an extended period of time.

Another reason for slightly generic language is because your beloved pet could pass over before you. By keeping language more general, you’ll be ensured that any pet you have will be covered after your death.

“You’ll want your will to cover whatever companion animal or animals that are living with you,” she explained.

Ways to fund pet trusts

There are many ways for owners to fund trusts, including opting for a direct transfer of funds to the trustee. This applies to trusts made while the owner is living. Another way is through life insurance. The payee or the owner simply allots some policy funds for his pet. Lastly, the owner may have a death account, retirement plan or other savings in the bank intended for his pet. He may make any formal arrangements with the bank authorizing the trustee to receive the funds in the bank for your pet.

Mistakes to avoid

  • Trying to set up a trust yourself. Trusts are complicated and it’s best to work with an attorney or at least get professional legal advice.
  • Choosing a pet protection agreement if you think you may need long term care. Your wishes may not be legally enforced by a long term care facility if you don’t have a pet trust.
  • Leaving more money as pet death insurance than your pet could ever use — family members may feel alienated and try to dispute the trust.
  • Not having a backup guardian for your pets, just in case something happens to the primary.
  • Creating an overly detailed plan that makes it difficult for the caregiver to execute. 

The takeaway

  • There are three ways to provide care and funding for your pets after you’re gone — a traditional pet trust, statutory pet trust and pet protection agreement. 
  • A pet protection agreement is the simplest and least expensive to create, but not the best one if you plan on leaving a large sum of money for your pets’ care.
  • It is recommended to have a lawyer to help you set up a pet trust.
  • You can choose to fund your pet’s trust while you’re alive or with the money your estate receives after you die.

As for those scoffing at the idea of having pet wills or trusts, Tischler believes it means something wonderful. “Our society is caring more about the health and safety of our animals,” she said.

The bottom line — your pet is a life counting on you for everything. If something happens to you prematurely, your pet still needs care, and making sure your pet will have that is one of the most selfless and loving things you could ever do to reciprocate the unconditional, unique love pets give us.

Cynthia Paez Bowman


Cynthia splits her time between Los Angeles, CA and San Sebastian, Spain. She travels to Africa and the Middle East regularly to consult with women’s NGOs about small business development.

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