According to the American Veterinary Association, 76% of cat owners and 85% of dog owners consider pets to be members of the family. As we plan for life transitions, assuring the well-being of our companion animals can be as important as any other aspect of estate planning. However, caring for pets is more complicated than managing other assets or distributions. If you don’t have a plan for pet care in the event of your incapacitation or death, your pet could be placed with someone you haven’t chosen, or worse, relegated to a shelter.
Setting up a pet trust is the best way to secure long-term well-being and care for your furry loved ones. Understand more about what a pet trust is, how to establish one, and some common pitfalls to avoid.
What Are Pet Trusts?
Unlike the majority of pet owners, the legal system has not historically regarded pets as family members. Before 2005, Illinois only recognized companion animals as “property” and did not recognize pet trusts or other trust instruments established for the benefit of animals. The pet trust is a relatively recent innovation, allowing pet owners to provide for the care and welfare of their companion animals in the event of their incapacitation or death.
The Illinois Pet Trust Act, 760 ILCS 5/15.2 first took effect January 1, 2005 and recognized the legal validity of trusts established “for the care of one or more designated domestic or pet animals.” The pet trust can be either a living trust, meaning it takes effect during your lifetime, or a testamentary trust, which becomes effective upon your death. A living trust is particularly useful for pet care, as it can provide for the care of your companion animals in the event you become incapacitated, and it doesn’t need to go through the probate process, meaning there will be no gap in care for your animals.
Like other trusts, the pet trust requires you to designate a trustee, or individual responsible for managing the assets held in trust, and a beneficiary, who is the person or entity responsible for caring for the animals, and who receives the funds held in trust as outlined in your trust instrument.
Also like other trusts, the pet trust is flexible. You can designate backup trustees or beneficiaries, and you can place conditions on the trust. For example, you can stipulate that, in order to receive the funds, the beneficiary must continue to reside in your home, to avoid disruption to your pet’s life. You can also dictate how the funds will be used, including requiring that your detailed care instructions be followed.
The pet trust lasts throughout the life of the animal or animals identified in the trust instrument, after which the funds and assets held in the trust are distributed as dictated by the trust document. The creator of the trust can designate who will receive the funds, or they can pass to the general or residuary beneficiary who takes the remainder of the estate. If there is no other beneficiary, the residual property is passed according to the Illinois laws governing intestate succession.
What Questions Do I Need To Answer To Create My Pet Trust?
As with all estate planning, creating a pet trust is complicated, and a lot can go wrong. Ensuring that you’re speaking with an attorney who understands the many potential pitfalls of creating a pet trust is the best way to ensure that your furry family members are well cared for. Before you meet with your attorney, be sure you’ve thought about the following questions:
- Who will be the beneficiary — that is, the person or organization you want to care for your pet? If that person or organization cannot take on the responsibility, do you have a backup or two who can step in? If you don’t designate a backup beneficiary, your primary beneficiary will make the decision about what happens to your animal in the event of their own death or incapacity.
- What assets will you place in the trust to be used for the care and welfare of your animal or animals?
- Where do you want your animal to live? Would you like your beneficiary to remain in your home during the animal’s life?
- What care instructions will you pass on? Keep in mind that it is best to outline these care instructions on a separate document that is incorporated into the trust by reference, so if your pet’s needs change, you don’t need to rewrite the entire trust document.
- What will happen to any funds that remain in the trust after your pet’s death?
Considerations To Keep In Mind
When you’re creating your pet trust, it’s important to consider one big difference between pet trusts and other trusts. The Illinois Pet Trust Act explicitly states that “[t]he court may reduce the amount of the property transferred if it determines that the amount substantially exceeds the amount required for the intended use.” What this means in practice is that the trust is subject to challenge and reduction if a judge finds that you have provided too much money for the care of your animals. To avoid this challenge, be specific in your intentions for your animals, and in how the money should be used for their care. In addition, if you want the money remaining in your pet trust to go to your pet’s caregiver after your pet’s death, making this wish explicit may discourage challenges.
Particularly if you’re making an unorthodox request, it’s absolutely critical that you talk to the beneficiaries designated in your trust before you designate them. Just like you wouldn’t designate someone to care for your children without a long conversation, it’s important to communicate with anyone who will be caring for your animals so they know what to expect, and more importantly, are ready to act quickly in the event of your incapacity or sudden passing.
Have Any More Questions About Trusts and Estate Planning?
Interested in learning more about the role a living trust can play in your estate plan? Ready to start discussing all of your options with an experienced, knowledgeable, and compassionate legal professional? We are here for you.
Our dedicated team can help you understand what goes into the estate planning process, evaluate your assets, and prepare all necessary documents, including basic wills, trusts, powers of attorney, and advanced directives.
Founded in 2009 and offering more than 20 years of combined experience, the attorneys and staff at the Law Offices of J. Jeltes work together to provide skilled, efficient, and affordable legal representation to individuals and families going through major life transitions.
We know that every situation is unique, and our attorneys can provide you with a comprehensive one-on-one consultation to discuss your legal concerns and goals. Don’t hesitate to contact us to begin the conversation.