Planning for Pets

What to Do on the Owner’s Incapacity or Death?

BY MELISSA DONAVAN, CELA

If you are anything like me, your parents have come to accept your fur-babies as their four-legged grandchildren. Unfortunately, the way pet-lovers view their pets and the way the law treats them are not necessarily congruent with one another. In the eyes of the law, pets are tangible personal property—a “chattel.” But that doesn’t mean we want them to be treated like the furniture. These days, one of our clients’ biggest estate planning concerns is how their pets are going to be cared for if something happens to them.

First, what happens if the client becomes incapacitated? Without planning, the answer is, “Who knows?” Pets become another asset of the ward’s estate, and an expensive one at that. The guardian may need to dispose of the pet due to that expense or the impracticality of housing it. If there is a financial power of attorney, the agent can use the owner’s assets for pet care. If the owner had, instead, a revocable living trust, then specific provisions could be set out in the trust for the pet’s care, which could range from relying on friends and family for minimal cost, to utilizing available organizations such as Austin Pets Alive or the Austin Humane Society. Under Texas law, it is even possible to create a Pet Trust (see below) to ensure a more “Ritz-Carlton experience” for your pet.

Second, at the death, without a will, it will be vague as to who can legally care for the pet; a shelter may be the only practical option. With a will or living trust, the easiest option is to name family or friends as the new caretaker. With this method, they are simply relying on that person to keep the pet out of the kindness of their heart. However, if that person cannot continue to care for the pet, there is nothing preventing them from giving your pet away, dropping it off at a shelter, or euthanizing it. Your client may want to consider providing some financial assistance to help with pet expenses. Again, clients need to keep in mind that once the person has the money and the pet, there is no assurance that the pet will be cared for as the owner had hoped.

Another option is utilizing the services of organizations like Stevenson Animal Life-Care Center at Texas A&M. This and other groups, for a specified endowment, will care for the pet for its natural lifetime. For those who may not have individuals to care for their pets, these are good alternatives. This is something that can be accomplished either in an estate plan, or by contracting with the organization directly. Most times, it is best to do both.

Finally, more people are doing what we call Pet Trusts these days.

Finally, more people are doing what we call Pet Trusts these days. Texas Property Code Section 112.037 states, “A trust may be created to provide for the care of an animal … if the trust terminates on the death of the animal.” This provision gives the pet owner the most control over a pet’s care. Much like any other trust, the owner places assets into a trust, either during his or her lifetime or through a testamentary transfer, names a trustee, and directs how the money is used—only for the care of their pets as opposed to a person. Setting up a Pet Trust allows the grantor the ability to clearly set forth his or her wishes for who will have custody of the pet, including where the pet will go if the original caretaker becomes incapacitated or passes away. The grantor can dictate how the trust money is spent to provide for food, shelter, veterinary costs, grooming, boarding, and even burial or cremation arrangements. Finally, the grantor will direct where the remaining funds go when the pet, or pets, have passed away. If you are working with clients or you want to set up a Pet Trust yourself, keep in mind that you want to calculate the pet’s life expectancy as well as the cost to care for the pet annually, in order to make sure there are sufficient funds to provide the level of care the grantor desires.

Knowing how to advise clients on these options fulfills that desire. Maybe pets are just property, but they may be the most loved property your clients have. Help them make sure those fur-babies continue to be loved when your clients are either incapacitated or gone. AL

Melissa Donavan is a Certified Elder Law Attorney and Director of Elder Law and Special Needs Planning at The Wiewel Law Firm.