As we have discussed previously, our beloved pets are too often forgotten about when considering estate planning.
To be certain your pet will be looked after when you pass away, you must do the following:
Nominate a carer in your will
The simplest provision for a pet under a will is a gift to a family member or a friend. You can include a provision in your will to leave your pet to a friend or family member to care for after your death or an organisation as previously arranged. This is also the place to specify an amount of money to be used for the care of your pet. Technically there are two ways to achieve this, firstly by transferring the full amount of the cash to the carer and secondly using ongoing instalments with the latter option requiring the estate to continue on potentially for many years. While this nomination is not legally binding on the recipient, it is generally a simple and low cost approach. If you don’t provide for your pet in your will, it could be treated as “property” under the will. When you don’t have a will, your state’s intestacy laws could determine what happens with your property including your pet! No matter your emotional connection, the law considers pets to be tangible personal property, like a car, jewelry, or furniture so if not specifically provided for the residuary beneficiary can inherit the Pets together with the other assets.
Formally establishing a trust
The establishment of a formal trust for the benefit and maintenance of a pet can be inexpensive and easy to operate. To establish a trust you (the “settlor”) must create the trust, and name the caregiver (who agrees) to care for your pet. The caregiver is then referred to as the trustee who will have custody of the pets and make financial decisions. You will allocate funds for the purpose of meeting expenses generally for ongoing care and may include compensation provisions for the caregiver.
You may also wish to provide instructions or guidance about how you want your pet cared for as well as what happens to any leftover funds after the death of your pet. The unfortunate truth is that animals are classified as property and, therefore, Australian courts will not enforce the maintenance of a pet if the trustee is not prepared to carry out the terms of the trust.
As with any legal document, since a trust does not provide for the pet’s immediate needs upon one’s passing, preparing a Letter of Final Wishes (LFW) or a “pet care plan” that is attached to the will and readily accessible to family members specifying the person assuming immediate responsibility for caring for your pets (caregiver), even if only temporarily, as well as details on diet, meds, and contact information for their vet.
As with any trust it would be prudent to consider appointing a substitute carer in case the first one cannot or will not take on the role.
Other things to consider
Loss of capacity: Should you lose capacity the impact on your pet may be significant and as such it may be worth considering appointing an attorney via an enduring power of attorney and providing detailed instructions as to how to care for your pets.
Euthanasian: Sometimes you may wish for your pets to be euthanised upon your death. There may be several reasons to take this approach but it is an important consideration if the pet has “behavioural issues”. This should be discussed with your local vet before making a final decision. Importantly, your will should include provision for the cost of this service to be paid from your estate.
Pet legacy program: The RSPCA and Lort Smith offer programs which can ensure that your pet will be provided with a loving home and medical needs for the rest of their days. This can cost upwards of $5,000 for each pet registered.
When adding a pet to your will, make sure you visit a specialist estate planning accountant for information that will be specific to your situation. Paris Financial offers this advice and financial planning assistance, so give us a call today 03 8393 1000. Our estate planning team considers your individual circumstances and desires very seriously when preparing your will.