With a pet trust, you can leave money to be used for the care of your dog or other animal. You put someone in charge of managing and spending it, following a written set of instructions that you provide.
Until relatively recently, most states didn't allow trusts for animals. Now, every state allows pet trusts, with no human beneficiary.
Most trusts for pets are written so that they take effect when the owner dies. In the document that creates the trust, there are several issues to address.
Which animals are covered. In most states, you can create a trust to provide for the care of one or more animals that are alive during your lifetime. The trust ends when the last surviving animal dies. You can’t set up a pet trust to continue indefinitely—for example, for offspring of your current pet or others that the caretaker might acquire.
Someone to take care of the animal. Whether or not you use a trust, choosing a caretaker is always the most important decision you have to make. This is the person who will have custody of your pet and will responsible for day-to-day care. Don’t assume the person you want to name—even if it’s your spouse or best friend—is willing to take on this responsibility. Always ask. Name an alternate as well, in case your first choice can’t take the pet when the time comes.
An amount of money to be used for the animal’s care. Do the best you can to estimate how much the caretaker will need to take care of your dog. The appropriate amount varies widely depending on the pet’s age and condition. Be aware that if you set aside an amount that’s unreasonably high, family members could challenge it in court, and a judge will likely reduce it. For example, a Pennsylvania woman set up a trust that in 1974 made $40,000 to $50,000 a year available for the care of four horses and six dogs. The court ruled that as long as the animals were well taken care of, the trustee was free to give the surplus money to the alternate beneficiaries named in the will. (Lyon Estate, 67 Pa. D. & C.2d 474 (1974).) And we all heard about Leona Helmsley’s dog Trouble, who had a $12 million trust fund. In 2008, a judge reduced it to $2 million and ruled that the rest should go to Helmsley’s charitable foundation.
Caretaking instructions. Pet trusts tend to be very detailed when it comes to instructions for the caregiver. It makes sense, given that animals can’t tell the caregiver what they need or like. Owners often specify everything from favorite food and toys to sleeping arrangements.
Someone to go to court and enforce the terms of the trust if necessary. This is the person who makes sure the trust money is being spent appropriately on the animal, and not for any other reason.
What should be done with any money that’s left over when the animal dies. If you leave more money than is necessary, where do you want the rest to go? It could go to family, a charity—it’s your choice.
What happens if you can’t take care of your pet before your death. One feature of a pet trust is that it can take effect before your death, if you were to become incapacitated and unable to care for your dog. The caregiver you named could immediately take custody and control of your pets if necessary. The provisions in a will, by contrast, don't have any legal effect until your death.
It's very uncommon for a trust to be challenged in court. But as mentioned above, relatives who are angry at being disinherited sometimes do challenge the terms of a pet trust, especially if the amount left for the pets seems much more than will be neeed for the animals' care. There are other reasons for legal challenges as well. For example, the nephews of a New York woman challenged her trust, which left $100,000 for the care of her cat Kissie Meouw. They claimed that their aunt had been unduly influenced by her friend and caregiver, but the court ruled that all the evidence indicated that she had been "very intelligent, private and strong-willed" and was quite clear about how she wanted to leave her money. (Estate of Stafford, N.Y. Sup. Ct., App. Div., No. 516429, 2013.) For more about this issue, see Undue Influence in Estate Planning.