Sunday, January 6, 2013

Animal Law 101 Part I: Estate Planning for Your Pet

Photo credit: Natalie Rowe. 
Though lots of us don't like contemplating our mortality, you need to do so at least once in your life (and preferably every ten years or so as your personal circumstances change) in order to draw up a will which will tell your executor and the world at large what you want done with your estate.

If you're an animal lover like me, there's a good chance that one of the pieces of property (legally there's no arguing with their "property" status) you will leave behind will be a pet of some sort. Maybe many pets. Regardless of whether it's a short-lived gerbil, or a long-lived parrot, you need to make advance arrangements for who will care for the pet, and how that pet will be materially supported once you're gone.

People always make arrangements for their children in their wills, but they often omit their pets. The thinking when drafting the will might be, "oh, I'll definitely outlast Fluffy" with no thought given to the fact that there may in the future be a Fluffy II, Fluffy III and Fluffy IV, or that death does occasionally visit the young(er) through accident and disease.

Alternatively, the testator (the person making the will) might erroneously believe that all of her beneficiaries will be fighting over the chance to give Fluffy - an ill-tempered beast at the best of times, who recently sent a grandchild to the ER after he got a little too lively during play-time - a luxurious home for life.

In contemplating your pets when drafting your will, you need to figure out three things:

1. what pets might you have when you pass on?

2. who might be best placed to care for all or some of them?

3. how might they be financially provided for?

Just like it's not a great idea to make your prized grandfather clock your only bequest in your will to your most beloved grandchild, because that clock may no longer be around when you pass due to downsizing when you moved into the nursing home (a less specific monetary gift, or percentage of your estate is a better choice), it's likewise not ideal to name all your pets in your will. They may have changed in name, shape or size by the time the will becomes active, and your tastes in pets may have also changed from fluffy kittens to not so fluffy pythons. Instead, think of numbers of pets and/or types, when you are thinking of who might be able to care for them, and how much such care would cost.

The who to care for them question can be quite tricky if some of the people you name in your will are no longer capable of caring for pets when that care is really needed. A good choice can be to name a specific person, an alternate to that person, and then give your executor a residual discretion to find someone. Often, just leaving it to your executor to choose appropriate homes may be the way to go, but offering some hints in a separate note as to who might be open to the idea of taking the pets could be a lot of help to the executor. It's usually not a good idea to will them to an animal shelter, as that shelter may have not ability to take them in at the needed time.

Financially providing for pets can be the most confusing area for people drafting wills. Some will try to leave money directly to the pets - and have the gift fail, because pets ARE property, they can't OWN property. Others will try to set up a trust for the pets, and likewise have that gift fail because (in Canada) pets cannot be the beneficiaries of trusts. Even in the U.S. where pet trusts are legal in many states, you need to think about just how much of your estate will be consumed in establishing and operating the trust - trusts aren't cheap.

The best option in providing for pets after death is often to specify that a sum of money be paid to the person or persons who permanently take the pets, to be used for the care, feeding and medical expenses of the pet. For instance, you could say: "To the person who takes permanent custody of my dogs, I leave a bequest of $5,000 per dog which that person takes." So if there are four dogs, and one person takes all four, then they would get $20,000. Take only two of the four dogs, and receive only $10,000. You could also name a number for cats or other pets, or not be species specific, but in case you recently picked up some goldfish just before your death, you might not want the person taking your three goldfish getting $15,000 and the person taking your dog only getting $5,000.

These kinds of monetary bequests are based on your or your executor's trust of the person taking the animal. Unlike a formal "trust" which is ultimately court supervised, simply leaving money in a will to accompany an animal to its new home does not guarantee the person receiving the money will only use the money to support the pet. But the technique is probably the best compromise available which both finds a suitable home and provides financial support.

Giving a percentage of the residue of your estate to a person taking a pet is also possible, rather than a fixed cash gift. The advantage of giving a percentage is that you don't need to worry if you die so poor that there won't be anything left for anyone else after the set sum of pet money is paid; the disadvantage of percentages is that a small percentage may generate a minute amount for pet care, whereas a large percentage could lead to the pet custodian receiving far more than is needed for the care of the animal. Plus most importantly, it's hard to know how much money you'll have when you die.

I generally prefer the fixed sum cash bequest route for pets, so long as you are relatively certain that your estate will be considerably larger than the sum of all the amounts you are leaving for your pets.

The overall estate planning philosophy I recommend when it comes to pets is keep it simple, but nonetheless remember them in your will.

1 comment:

  1. I'm really glad we've got things sorted out for our own pets in our will!!! Peace of mind.