Sure, we can chuckle when someone leaves money for a pet. What will your pet do with the money? Nothing, but you want to make sure someone takes care of your pet. While you can’t directly leave money for them, you might set up a trust.
Forbes covers the serious issue of how you’ll make sure that someone takes care of your pet after you die. They cover two types of pet trusts:
With a pet trust, you set aside a specific amount of money to a trusted person who’s then responsible for making arrangements for proper care.
A traditional pet trust is effective anywhere. Here, the trustee you designate sees that your caregiver gets the money you allocated for the pet and provides care as you’ve instructed.
Most, but not all states, also recognize “statutory pet trusts,” which are often more general. It might say how much money you’re leaving in trust for your pet and leave it to the caregiver to decide how to use the cash.
You might choose to fund the pet trust by naming its trustee as the beneficiary of a life insurance policy — that could be a special policy bought just for this purpose or a portion of your existing policy.
If you’re young and healthy, this isn’t something you’ll worry about. You’ll probably outlive your pet. This tip is best for an older relative of if your health takes a turn for the worse. If you’re updating your estate plan though, might as well add some protection for Fluffy and Spike.
Photo David Beyer.