In 2007, Leona Helmsley, a real estate billionaire, famously left her dog, “Trouble,” $12 million dollars in trust. Trouble was placed in the care of the general manager of Helmsley's Sandcastle hotel in Sarasota and had full-time security to ensure the Maltese’s well-being after the death of Helmsley (apparently the dog was getting death threats). Interestingly enough, Trouble is far from the wealthiest animal on the planet - to date, that award goes to Gunther III, a German Shepherd, who was left $106 million by Countess Karlotta Liebenstein.

But you don’t need millions to have a pet trust…

Anywhere from 100,000 - 500,000 pets go to shelters each year after their owners die. For this reason, estate planning for pets has become a real concern. Massachusetts noticed and, in 2011, created a law centered around “pet trusts,” which allows an owner to create a trust for one or more pets. The trust lasts for the duration of the pets’ lives.

So what does a pet trust generally include?

Name of preferred caregiver

Specific instructions as to the pet’s care and preferences, and what should happen if the caregiver fails to follow such instructions
- For example, think about the name of the vet you prefer, if there is one that you would like your pet to keep seeing and leave records of all of your pets vaccines and other important information with it
A budget or cost estimate of how the money should be spent and managed - this should include additional costs for daycare and vet bills
Provide alternate caregivers in the event that your first choice doesn’t work out
- This may also include a list of daycares, pet-sitters, dog walkers, etc.
List of remainder beneficiaries (often charities) who will inherit the remaining assets after the pet’s death

You may be thinking: I love my pet, but I am not making a pet trust… What are my other options?

For those of you that think the trust may go a bit too far for your Labrador - there are simpler methods.

The most common being to name a person in your Will to care for your pet and gifting that person a lump sum amount intended to be used for the pet’s care and upkeep. Remember, discuss your wishes with the person you select to care for your pet to make sure they are comfortable with taking on that role.

The main difference between the Will approach and the Trust approach is that the Will approach won’t be monitored and therefore doesn’t have continuing obligations - it’s more like a one-time gift type of transaction. There’s no caregiver plan and when and how the money is actually spent is really up to the new owner of your pet.

In other words, there is no guarantee with a Will, it’s just a matter of giving your pet to a person and hoping they do the right thing. For additional information about the differences between a Trust and a Will, see What’s the difference between a Will and a Trust? Do I need Both?

Since pets are members of your family, you want to feel like you are doing the right thing for them to ensure their safety and wellbeing. If you don’t have the right person to name as the caregiver of your pet, then you can also check out professional caregiver organizations like the following:

Peace of Mind Program, School of Veterinary Medicine, Purdue University, 800-830-0104
Perpetual Pet Care Program, Kansas State University School of Veterinary Medicine, 785-532-4378
Stevenson Companion Animal Life-Care Center, College of Veterinary Medicine, Texas A&M University, 979-845-1188

Many of these programs require a large gift (somewhere between $10,000 to $25,000) to care for your pet for the remainder of their lives. For pets with longer lifespan or higher upkeep costs (e.g., horses or certain farm animals), you can expect to pay a lot more.

Some states, like Massachusetts, place certain limits on pet trusts.

For example, An Act Relative to Trusts for the Care of Animals states in section (b) that the court “may reduce the amount of property held by the trust if that amount substantially exceeds the amount required for the intended use and the court finds that there will be no substantial adverse impact in the care, maintenance, health, or appearance of the animal or animals.”

Meaning, if you leave $12 million to a dog, then don’t be surprised if the court decides to intervene in some way. In the case of Trouble, the court found the amount to be excessive and redirected millions to Helmsley’s heirs (primarily her two grandchildren that were previously cut out of her Will and her brother). On a side note: can you imagine being cut out of a Will and replaced by a pet?

This goes back to the point that you should clearly outline the expected financial costs of caring for a pet and fund the trust according to those realistic assumptions. While such a budget can vary drastically, the typical range is between $10,000 to $20,000 depending on the pet’s expected life expectancy and daily maintenance requirements.

While pet trusts may be a farfetched solution for many, it’s just another thing to keep in mind when planning your own estate. Even putting a simple plan in place for your pet, can help put your mind at ease (which is what estate planning is all about).