If you are one of the 70 percent of the population that considers their pet a member of the family, you should review your estate planning documents. Otherwise, there is a good chance your pet will either end up in the pound, or worse.
This hits close to home for many of us. If my wife and I were to die, for example, who would take care of our chocolate Lab, Titus?
There are few people who we would trust to take care of him. Compounding the problem is the fact that he is 8 years old and suffers from arthritis. I discovered that simply putting some instructions in a will was neither legally binding nor particularly useful. Unless we do something different, Titus could be condemned to imprisonment and a life without love.
You must understand that legally a dog, cat, horse or any other kind of pet is not considered a human being. They are considered your property. As such, Titus is our "property" and the law states that you can't leave property to a piece of property.
Therefore (until recently and only in some states) your pet can't be a beneficiary in a will. Your instructions within a will are not enforceable. I might state that Bri (our dog whisperer) gets Titus in the event we pass, but a will cannot instruct Bri to care for the dog, take him to the vets, etc. Don't forget, too, that your will is not enacted immediately. All wills have a waiting period, sometimes months, even longer if it is contested. Who is going to care for your pet in the meantime?
It is also difficult in a will to disburse money to someone for your pet's care over a pet's lifetime since a will is a static (as opposed to an on-going) document. And changes to a will are at the court's discretion. Do you really want some judge, who may or may not be an animal lover, deciding your pet's fate?
You may recall the now-famous case of Leona Helmsley, who left $12 million in trust to Trouble, her white Maltese, while giving nothing to two of her four grandchildren. In 2007, a year after she died, a judge reduced the dog's wealth by $10 million. Still, $2 million was enough for Trouble to live a life of luxury, until she died at age 12 in 2011.
In some cases, pet provisions in your will may only be "honorary." Fortunately, 40 states and the District of Columbia recognize statutory pet trusts, so that pet owners who direct someone to take care of their pet and bequest funds for its care could work through such a legal document. In the states without statutory pet protections, however, these provisions are "honorary." That means the person who receives the funds decides whether or not to use them for your pet's care. There is nothing to prevent that person from dumping your pet and taking a vacation with your $5,000.
The person to whom you entrusted your pet to could be a loving, caring person, but what if the person is allergic to your pet, or already has pets of their own and conflict develops between them? The person may live or move to a rental apartment or community that excludes pets. As you now realize, there is a lot to consider here.
But there are avenues you can pursue to protect your pets. There are legally enforceable documents that can guarantee an animal's continuing care. Some statues such as the Massachusetts General Laws chapter 203E, Section 408 are relatively new. We will be discussing pet trusts in our next column with an expert attorney on the subject, Holly Rodgers.
Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
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Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.