Leaving Money for Pets? What Youngsters Should Know About Pet Estate Planning

Remember the bizarre case of Leona Helmsley, a wealthy hotel owner leaving a $12 million estate to her little Maltese dog? Pretty odd, isn’t it? Back in the day, most people probably assumed that this was a unique circumstance that usually occurred once in a blue moon – or perhaps once in a million years? While the notorious “Queen of Mean” was known for her eccentric personality and an unusual way of doing things, younger people are increasingly interested in taking exceptional care of their pets and ensuring their well-being. Talk about the rise of pet parenthood!

By the way, evidence shows that younger generations view their pets more than just animals – in most cases they become cherished family members. It makes perfect sense, doesn’t it? This new attitude towards pets “has been driving a notable increase in estate planning provisions for animals.” (Kiplinger).

Here is the crucial point: As stated on a well-respected legal website, you can’t leave money or any other kind of property to your pet. Why? Simply because animals are property and one piece of property cannot own another piece of property. That said, we do have some great news for those who are fully devoted to their furry friends and would do anything they can to protect them. Luckily, there are steps you can take to ensure pets have a good life, in case something happens to their owner.

So if your clients have pets they adore, you can mention some legal mechanisms for pet care – something they will be very grateful for. There are pet trusts, pet wills and powers of attorney, giving responsible and loving pet owners an opportunity to achieve peace of mind.

Let’s take a quick look at the pointers below. We hope they will come in handy during your upcoming conversations with younger clients.

Pet Trust: A pet trust is a “legally binding arrangement that allocates funds for the care of a pet upon the owner’s death or incapacity” (Kiplinger). Interestingly, all U.S states have laws permitting some form of pet trust, according to Nolo.com. There are several types of pet trusts, which vary depending on the owner’s preferences. The pet owner can establish a trust to designate a caretaker, earmark funds and stipulate how the pet trust should be enforced. While trusts are a bit more complicated than wills, they ensure that the money your clients set aside for their pets are actually used for the care of the pet.

Pet Will: Another option is a will. Simply put, pet owners can designate a guardian for their pet and leave instructions and financial resources for the care of their animals. While a will is certainly a valuable tool, young people should be aware that pet guardians are not legally obligated to accept or maintain their pets. In other words, once the guardians get the money, they can do anything they want with it. Make sure your clients understand it.

Powers of Attorney: Another important mechanism to keep in mind is Powers of Attorney granting a designated individual the authority to make decisions regarding a pet’s care (Twosprucelaw.com). This document specifies the scope and duration of the authority granted.

When you discuss pet care with your young clients (or the older ones, for that matter), don’t forget to remind them upfront that the financial commitment to pet care is substantial. One survey reveals that last year, over 23% of pet owners went into debt over emergency vet expenses. Besides, Gen Z and Millennials are facing higher vet bills. Therefore, younger people who are “obsessed” with their pets (and many youngsters are), should proactively address their pets’ needs without potential financial drawbacks.

In other words, you do have a range of options – from making a basic non-legal arrangement to crafting a more complex and detailed trust. If you have a few pets, you should determine whether they should stay together or be placed with different caregivers (Pet Care Resources).

If you don’t have a reliable caregiver in mind, make sure you provide detailed instructions to emergency caregivers. They should be able to find a new home for a pet. If you adopted a pet from an organization, it is important to check your adoption agreement for clauses requiring your pet to be returned to its care (Pet Care Resources).

It goes without saying that each case is different. When trying to protect their pets, Millennials and Gen Z should consider the following questions:

• Do any of your pets have unique care requirements or health concerns?
• Where do you want your furry babies to live?
• What financial resources will you provide to ensure your pets are adequately taken care of?
• And who will be responsible for the administration of the assets left for your pets?

Final Thoughts:

Let’s face it: There is an increasing trend of pet ownership among young people. As Millennials and Gen Z see their pets as family members, estate planning for animals is becoming an integral part of responsible pet ownership. Life is unpredictable, and anything can happen – whether you are young, old or middle-aged. By tapping into crucial legal tools such as pet trusts, pet wills or powers of attorney, younger people are ensuring that their furry family members receive the best care possible, even in their absence. In other words, if you clients want to be pet owners or already are, they’d better be responsible ones!

Frequently Asked Questions:

1. Can my clients leave money directly to their pets in their wills?
No, pets are legally considered property, so they can’t inherit money directly. Advising clients to set up pet trusts or appoint guardians with funds is key to ensuring their pets are properly cared for.

2. What’s the advantage of recommending a pet trust to clients?
A pet trust legally earmarks funds specifically for pet care and appoints a caretaker. Compared to a will, it offers stronger protection, helping clients make sure their pets’ needs are being properly addressed.

3. Why should financial advisors bring up pet estate planning with Millennial and Gen Z clients?
Younger clients often view pets as family and are eager to protect them. Focusing on pet estate planning helps financial advisors address a growing client concern. In fact, it demonstrates thoughtful, highly personalized service.