Pet Trusts: Providing for Long-Term Care

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New legislation reflects demand for pet estate planning.

Pet trusts are no longer strictly for the rich and famous, like Oprah Winfrey, Drew Barrymore and the late Leona Helmsley.

“It’s not just for people who are wealthy,” says Kara Holmquist, MSPCA-Angell’s director of advocacy. “It’s something people should think about as part of their planning.”

Until recently, pet owners had no legal way to leave behind money to care for their animals. Since 2000, however, U.S. laws have been changing, according to Adrian Hochstadt, a researcher with the American Veterinary Medical Association.

In April, when Massachusetts joins the growing list of U.S. states to enact pet trust laws, only a handful of holdout states (Kentucky, Louisiana, Minnesota, Mississippi, Vermont, and West Virginia) will remain where estate planners cannot include animals.

“Each year, a handful of states adopt this legislation,” he said. “It’s coming across the country slowly but surely.”

Holmquist said the MSPCA has asked lawmakers to enact pet trusts because too many animals are landing in shelters after the owners have died.

“On any given day,” she said, “there are animals in the MSPCA shelter whose owners have passed away or become incapacitated.” That’s unnecessary, especially if the owner had the means to provide for the pet’s care, she said, because it means the shelter space is not available for another homeless animal.

And unlike a will, which has to go though Probate Court, the trust takes effect immediately, Holmquist added.

That’s important, so the pet does not have to linger in a shelter while the courts cut through paperwork, she said.

The U.S. Census Bureau estimates 22 percent of the nation’s dogs and 25 percent of the cats live in a single-person household. But trusts are not for everybody, and money isn’t the sticking point.

“They’re very affordable,” Chicago attorney Linscott R. Hanson said. “I can’t imagine a pet trust would top $1,000” in legal fees, based on an hourly rate of $325.

But Hanson doesn’t plan to start a trust for his three cats, because he doesn’t need one, he says.

“I really love my pets,” he said. “I don’t have a dog because my last dog died. But I have three cats, and we pamper the hell out of them. They’re in Florida now; I’m in Chicago.”

He has decided to leave the pets to his children, he said. Pet trusts are really designed for people who cannot leave the animals with relatives or close friends.

Most pet owners still leave the pets to family or a close friend, said Elizabeth M. Connelly, a Boston attorney who helped shepherd the Bay State’s pet trust law through the state legislature.

She could not say how many pet trusts are up and running. Boston’s MSPCA-Angell cited an American Bar Association estimate, suggesting between 12 and 27 percent of the roughly 69 million U.S. pet owners have started pet trusts.

The main value of the pet trust, she said, is the fact it’s legally enforceable. If your designated caretaker does not live up to obligations, the courts can step in, she said.

The trust also helps people who have multiple pets with sizeable expenses, Connelly said. Asked for some typical pet trust clients, Connelly described an owner “who’s 80 or 85 and doesn’t have any children or friends to take the animals.”

Other typical clients, she said, are people who want to provide for their horses and don’t want them euthanized. And, of course, the pet owners with big veterinary bills also qualify.

Legal costs will depend on the number of animals, their life expectancy and the complexity of care, Connelly said. Many lawyers might charge in the $2,000 - $3,000 range to draft a pet trust, she said when asked for a ballpark estimate. Administering the trust would cost additional, she said.

The most famous trust may belong to Trouble Helmsley, the late Leona Helmsley’s Maltese and the dog that grabbed headlines when a judge slashed her trust fund from $12 million to $2 million.

Recent laws won’t prevent the judge from curbing the pet trusts’ dollar amounts, Holmquist said, if the amount seems “excessive.”

How to Get Started

1. Make sure you live in a state where the pet trusts are allowed.

2. Do the math and decide if the trust makes financial sense.

3. Make a list of trust and/or estate planning attorneys and compare hourly rates.

4. Name a caretaker and a trust administrator.

Would you consider setting up a trust for your pet? Let us know your thoughts below!