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The Forgotten Family Member

As of 2023, 66 percent of US households own a pet.[1] A Forbes Advisor survey of more than 5,000 dog owners found that 41 percent of them spend between $500 and $1,999 a year on their dogs and 8 percent spend more than $2,000 annually.[2] In addition to the annual cost of care, there is always the potential for emergency veterinary care, which can be costly. However, what happens should something happen to you? Who will take care of your beloved furbaby?


Several options are available to ensure that funds are available so your beloved furry family members continue to receive the same level of care and support they have always received. Pet owners should evaluate the weekly, monthly, and annual costs associated with their pet’s needs and create a budget. This budget can help determine a specific amount of money to be put aside to cover the pet’s anticipated lifetime expenses. There are a few options available to structure the money set aside for the care of a client’s pets.

Lump Sum to the Caregiver

One option to financially provide for a pet is for you to give a lump sum to the person you choose to care for your pet at their death. This option is the easiest to carry out and does not involve any ongoing oversight or administration costs. However, because the money goes directly to the caregiver, no one will monitor the use of the funds. You must trust that the funds will be used for the pet’s benefit and must be okay with simply trusting their chosen caregiver.

Pet Trust With the Caretaker as the Trustee 

This approach to planning for a pet is a little more complicated than just handing money to the caregiver. In this scenario, money would be set aside in a trust specifically to care for the pet. There may be administrative requirements that the caretaker, as trustee, must do, such as submitting an accounting of the trust’s income and expenses to a specified person under the trust. Despite these requirements, this approach does have some flexibility because the caregiver and the trustee are the same person, meaning that a third party does not need to be consulted before expenses are paid or the caregiver is reimbursed for out-of-pocket costs. It is important to note that with one person serving in both roles, there is still a risk that funds may not be spent appropriately on the pet without oversight by a third party.

Pet Trust With Separate Parties Serving as Caretaker and Trustee

The final option provides the maximum protection for the money set aside for the pet. The pet trust will contain funds to care for the pet, but the caretaker will need to work with a separate trustee to gain access to the funds in the trust. The trustee can ensure that the money is being used for the pet. This may be a wise option for people who have animals that cost a lot to care for such as horses or exotic animals, because the amount necessary to care for them could be more than the owner feels comfortable handing over to someone without any oversight.

Keep the Plan Up-to-Date

By proactively planning for their pets, pet owners can ensure that their pet is cared for and supported if they are unable to do so themselves due to incapacity or death. If you already have an estate plan that provides for your pets, an annual review may be needed to address any changes in circumstances, such as additional pets, increasing pet needs, the designated caregiver’s situation, or your finances.

As an experienced estate planning attorney, I can help you create the appropriate legal documents for the care of your pet within the applicable laws and regulations of California. Pet owners deserve peace of mind knowing that their pets will transition to a new caregiver smoothly, with as little disruption in care as possible. Taking care of a loved one’s future, including pets, is priceless. If you would like to discuss pet planning further, give us a call.

 

Create a Pet Budget

 

Pets sometimes outlive their owners. An accident or illness can leave your pet without a caregiver, which, without proper planning, can result in the pet being sent to an animal rescue or shelter. Compiling a list of common expenses is the first step in protecting your beloved pet’s future. Pet owners should consider the following types of expenses:

Nutrition 

This is a primary expense for any pet, but larger animals will incur higher food costs. Include the following when calculating how much to budget for:

●        Regular pet food purchases

●        Treats

●        Recommended supplements or vitamins


Veterinary Care 

Healthcare keeps pets feeling their best and able to provide joy, entertainment, and companionship. Routine care can help prevent medical emergencies, but you should still budget for the unexpected, including the following:

●        Routine check-ups and vaccinations

●        Preventive medications (flea, tick, heartworm)

●        Emergency vet visits

●        Dental cleanings and care

●        Spaying or neutering


Medications 

Medication is sometimes necessary for illnesses, injuries, and aging. Some animals and breeds of animals are known for having certain health conditions during their lifetime. Most medications are based on weight, so larger pets may also have higher medication expenses. Common medications or preventative treatments include:

●        Prescription medications for chronic conditions or illnesses

●        Flea, tick, and worming treatments

●        Pain relief or anti-inflammatory drugs


Grooming and Hygiene 

Some animals only need occasional grooming to supplement self-grooming techniques, while others require extensive care to maintain their coat, teeth, or nails. It may be a matter of preference and appearance. If you have a show animal that is regularly entered in events or contests, the costs can be significant:

●        Shampoo, conditioner, grooming tools

●        Nail trimming and filing

●        Haircuts or professional grooming services


Pet Insurance 

Insurance helps make certain medical visits affordable when a pet suffers from an unexpected illness or injury. Depending on the type of pet and risks for injury, the cost of insurance can be a few dollars to a few hundred a month for most small animals. Large animals such as horses can have much higher premiums:

●        Monthly or annual premiums for pet insurance coverage

●        Deductibles and copayments for medical expenses


Pet Supplies

Every type of pet needs certain supplies to provide them with a comfortable environment. Again, the size of the pet usually dictates the initial cost of these items, and many items need replacement over time:

●        Bedding or crate

●        Leashes, collars, harnesses

●        Litter, litter boxes, waste bags

●        Toys and enrichment items


Boarding

Due to work schedules and vacations, a pet may need to be boarded, cared for by a petsitter, or attend daycare, for which the following costs must be considered:

●        Boarding fees at a kennel or other boarding facility for vacations or trips

●        Petsitting services in the home

●        Daycare for socialization and exercise during the workday


Travel and Transportation

If you travel a lot, smaller pets can travel with you in cars or planes; larger pets require hauling in trucks and trailers:

●        Travel crates or carriers

●        Transportation fees (public transportation services)


Identification

To comply with local laws and ensure you can track and identify your animal, different types of identification can be purchased or may be required:

●        Microchipping

●        Pet tags and collars

●        Licensing fees


After a budget is created, you will have a detailed list of expenses to share with potential pet caregivers and an estimate of how much future pet-related expenses may be. This estimate can act as the basis to determine how much money should be set aside for your pet’s care and where that amount will come from in the event of your death.


Next Step

Once you have a budget in place, the next step is to meet with your planning team (financial advisor, insurance agent, tax preparer, and estate planning attorney) to put a plan in place that protects their pet and provides the funds necessary to care for them in the event of an emergency. If you are interested in learning more about pet planning and the role you can play, please give us a call 818-788-7881.

 

 

 


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