I’m sure you’ve heard the stories or have seen the headlines about the eccentric multi-millionaire that left their $13M fortune to their beloved cat Tommaso or the three Texas pups set to inherit $75M. You may be asking, is this for real? I assure you that, yes, this is real, and yes, leaving money for a pet is not as unusual as you may think – just not on the extreme levels as in the examples I cited.
There are two ways people leave money to their pets: (1) in a pet trust, or (2) through a specific gift to the pet in their personal living trust. A pet trust is exactly what it sounds like – it is a trust established for an animal, and covers the terms of how the animal is to be cared for. The pet trust can be funded during the lifetime of the person that created it, or upon their death. The more common option is where a specific gift of money is called out as a gift to be made through a trust document.
The purpose is to provide for the care of a pet upon the death of the animal’s owners. These trusts and gifts are actually fairly common in situations where a person does not have family or does not know of anyone that could care for his or her pets upon death. The alternative, if no one can be found to take the furry friend upon the owner’s passing, is that the once beloved pet ends up at a shelter for abandoned animals; and if the animal is a bit older or has health problems, it can be a long time before it finds a home again.
Some people choose to be proactive in providing for the pet and they write them into their estate plan. One such pampered pooch, Bella Mia, is “only” going to receive $1M of the family fortune, along with some jewelry and a vacation home (to put it in perspective, the family has much more wealth and the rest will be distributed amongst the family, with Bella Mia receiving a considerably smaller share). The purpose is so that Bella Mia’s owners can rest assured knowing that she will be well cared for when they die – they think of her as a member of their family.
Most people choose to leave a specific gift in trust for the benefit of their pet, with instructions for who will take care of their pet. Often times these gifts are a few thousand dollars, which is enough to cover food and veterinarian costs for the expected lifetime of the pet. The trust can also state who will physically take care of the animal as well as name a separate person who would manage the money (in the cases where the gift is sizable or if a pet trust is established).
While it may sound crazy to leave your four legged friend millions of dollars, it’s not so crazy to think about your furry companion’s care once you are gone. Many local estate planning attorneys can help you determine the best option for you and yours.