What Is a Pet Trust? How Do They Work?

Why Create a Pet Trust?

Do you know who would take care of your beloved pure-bred German Shepherd Duchess or your sweet and snugly Siamese cat Stardust if you happen to become unable to care for them yourself or pass away before they do?

A pet trust — which pet owners should consider as an important element of their overall estate planning — is a more effective way to provide for the future care of pets than simply including instructions in your will. That’s because a pet trust is a more specific and secure legal instrument designed to establish pet guardianship and proper care of your furry family members.

Here are a few compelling reasons for you to create a pet trust rather than rely on pet care instructions in your will:

• A pet trust is a legally enforceable arrangement. Because it is a legal instrument, a pet trust assures you that your wishes and directives for your companion animals will be carried out.
• A pet trust can be extremely detailed and specific. If you want Duchess to receive only organic dog food and see the vet six times a year, you can specify these instructions in the pet trust agreement.
• A pet trust can operate both while you are alive and after you pass away. With a pet trust, you can rest assured knowing that your pets will be taken care of in the manner you intend whether you become incapacitated (resulting from an illness, accident, or disability) and can no longer care for them yourself or if you predecease them.
• A pet trust can communicate your knowledge from years of personal experience about what your animals like, want, and need. Because you know your pets’ likes and dislikes, personalities, and regular habits better than anyone else, you are the most qualified person to leave instructions on how best to care for them and select the person(s) you want as their caregiver.
• A pet trust can be flexible, with built-in opportunities for supervision and accountability. The trustee can be instructed to make regular visits to supervise your pets’ caregivers to hold them accountable for the care they are providing. And if a new caregiver needs to be chosen for whatever reason, the trustee can arrange and manage that change.

How Does a Pet Trust Work?

A pet trust is one of the many different types of trusts that exist in the legal world. With a basic understanding of trusts, you can quickly learn how a pet trust works and what distinguishes it from other trusts.

Because non-human animals are not legal persons and are defined as property themselves, pets cannot directly own property. However, pets can “inherit” money through a pet trust, which has designated funds that must be used for their ongoing care after their owner passes away.

As a legally sanctioned instrument, a pet trust provides for the ongoing care of one or more pet animals if the grantor or creator of the trust (also referred to as the settlor or trustor in some states) becomes incapacitated or dies. The grantor selects a trustee who is responsible for holding property (e.g., cash or investments) to be used for the care of the grantor’s pets. The trustee will dispense funds at regular intervals to a designated animal caregiver, who is also selected by the grantor. Additional responsibilities of the trustee include investing trust assets, filing the trust’s tax returns, and other administrative duties.

Generally, the trust remains in effect for the lifespan of the pet or 21 years, whichever happens first. The time limitation on the trust, if there is one, is determined by the pet trust laws in the state in which the trust is created.

If multiple pets are being cared for, the trust must terminate upon the death of the last surviving animal, at which point any remaining funds are distributed to the remainder beneficiaries, who are selected by the grantor. The remainder beneficiaries can be either individuals or organizations (e.g., charities, art museums, schools, etc.)

Steps to Establish a Pet Trust

The following steps outline the overall process of what you need to do to establish a pet trust for your beloved furry friends.

Choose a Trustee

Your selected trustee will be responsible for the overall management of the pet trust. The individual you choose as the trustee should be a trustworthy adult of sound mind who has the necessary skills to properly manage the trust. The trustee also may be an organization that specializes in trust management. A law firm may even in some cases serve as a trustee.

Choose a Caregiver

Your selected caregiver will be responsible for the ongoing day-to-day care of your pet. Again, this individual should be someone you trust will take excellent care of your animals. Typically, the caregiver will be a family member or close friend. You may also decide to appoint an organization that specializes in caring for pets whose owners have died or are no longer able to care for them. Be sure to choose at least two possible caregivers so you have an alternate caregiver in case one of them is unable to assume the role.

Choose a Trust Enforcer

Your selected trust enforcer (or protector) is responsible for making sure your trust instructions are being followed and taking action if they are not. This individual also will check in on your pet from time to time to assess their care as well as ensure that your trustee carries out the terms of the trust.

Name and Identify the Beneficiaries

Your named beneficiaries of the trust are all of the pet animals you identify for whom you want ongoing care. You will be required to correctly identify each pet in the trust document through names, descriptions, photos, microchips, and possibly DNA samples.

Provide Detailed Care Instructions

Your pet trust document should include formal care arrangements for your pet so your caregiver has explicit instructions and directives on what to do. Think about and include what your pets may need as they age, too.

Here is a list of things you may want to include in your care instructions:

• Favorite food and diet concerns
• Daily routines (including feeding, exercise, and play)
• Favorite toys
• Cages and pet carriers
• Grooming needs and providers
• Socialization with other animals and people
• Veterinary care notes, special medical needs, and the annual number of desired visits to your vet
• Possible compensation for your pet’s caregiver
• Method for your caregiver to document expenses for reimbursement
• Instructions regarding liability insurance in the event your pet bites or injures someone
• Trustee’s supervision of your caregiver’s services and regular inspections of your pets
• Animal identification (e.g., nametags, microchips, etc.)

Assess Your Pet’s Financial Needs

To the best of your ability, plan for the appropriate amount of funds to care for your pet for the rest of their life. Develop an annual budget for financial needs and a projected life expectancy for your pet. Remember you also need to cover the costs of trust administration, which will include periodic distributions of funds from your trustee to your caregiver.

Provide End-of-Life Instructions for Your Pet

If your pet is diagnosed with a terminal illness or is critically injured, what kind of medical care instructions do you want to provide? How do you want your veterinarian, trustee, caregiver, and enforcer to work together regarding specific decision-making about your pet in the future? You also want to include specific instructions about how you want your pet handled after their death (e.g., cremation or burial).

Choose Remainder Beneficiaries

If there are remaining funds in the pet trust after your pet dies, you should name the remainder beneficiaries — people or organizations from whom you would like to receive this surplus money.

Include Instructions If You Become Incapacitated

One unique feature of a pet trust is that it can operate while you are still alive if you somehow become incapacitated and are left unable to continue caring for your pets on your own. If you experience a future illness, accident, or disability, include specific instructions about how you want your pets cared for under these circumstances. You may even want to name a different caregiver in this situation — it’s up to you.

What States Have Pet Trusts?

All 50 states as well as the District of Columbia have enacted pet trust laws. Minnesota was the final U.S. state to enact a pet trust law, which went into effect in 2016.

Be aware that certain states have imposed funding limits on pet trusts. These limits allow the court to reduce and/or redirect trust assets/property if it is determined they exceed the intended use as outlined in the pet trust instrument.

The ASPCA (American Society for the Prevention of Cruelty to Animals) has helpful pet trust law summaries for all 50 states and the District of Columbia.¹ For further information, consult an attorney with expertise in pet trusts. You also may find it useful to review your specific state’s pet trust laws.²

What Are the Benefits of a Pet Trust?

A pet trust can offer you many important benefits:

• Protection Against Family Challenges: Dissatisfied and resentful relatives who take issue with your estate planning and are seeking an inheritance will have a more difficult time challenging a legally sound pet trust.
• Specific Care Instructions: A pet trust enables you to leave very detailed and precise instructions on how your caregiver should provide for your companion animal. These details might include the type of food, daily routines, number of vet visits per year, etc.
• Legal Immediacy: While a will can take a long time to administer — sometimes up to two years — pet trusts take effect immediately upon your death.
• Trust Operation During Your Lifetime: Wills become effective after your death, but a pet trust can operate while you are still alive in the event you become incapacitated and unable to care for your pets on your own.
• Ongoing Supervision: You can include in your pet trust terms a requirement for regular inspections to hold your caregiver accountable for the proper care of your companion animal, according to the detailed directives you include in the trust.
• Flexibility with Dispersion of Funds: Funds in a pet trust can be dispersed in installments rather than leaving one lump sum for a pet caregiver in a will. This kind of periodic dispersion of money ensures the funds are being used to care for your pet and will last for the whole duration of your pet’s life.

What Are the Drawbacks of a Pet Trust?

A pet trust is not without its drawbacks. Here are a few to consider:

• Pet Trust Costs: Pet trusts can be expensive endeavors. There are attorney’s and trustee fees, as well as administrative costs, involved — and possibly additional asset management fees and ongoing operational expenses to pay. Consequently, establishing a small-sized pet trust can equate to some high fixed costs.
• Leaving Too Little Money in the Trust: By not leaving enough funds in your pet trust, it will run out of money while your pet is still alive. If this happens, the trust will wind up, and your state’s pet trust law will determine what happens to your pet.
• Leaving Too Much Money in the Trust: Having excessive funds in your pet trust also can be a problem. If this happens, family members may challenge the trust and attempt to have a court reduce the amount and redistribute the money as inheritance.
• Potential Legal Challenges: While legal challenges to pet trusts are rare, they do occur. Unhappy relatives who feel betrayed or left out financially may bring various legal claims to challenge the legitimacy of a pet trust.
• Inheritance & Income Taxes: Because an animal care trust is not charitable, a pet trust is subject to inheritance and income taxes. Tax laws in some states subject pet trusts to their highest inheritance tax rates.
• Better Alternatives: You may have a better way to provide care for your pet after your passing. If you have a loved one or best friend whom you trust, you may be better off leaving your pet to this person, knowing they will be in good hands. By leaving funds directly to your chosen pet caregiver, you can offset the costs and avoid the trouble of setting up a pet trust.

How Much Does a Pet Trust Cost?

Creating, maintaining, and administrating a pet trust involves a variety of different costs, which may vary depending on the complexity of your estate, attorney’s fees, and legal jurisdiction. In general, you will want to consider the following financial components:

• Attorney’s Fees: Depending on the complexity of your estate assets and the number of pets or companion animals you own, legal fees could range anywhere from several hundred dollars to several thousand dollars or more. The more complicated the pet trust is, the higher your attorney’s fees could be.
• Trustee Fees: If you arrange to have a bank professional or attorney manage your animal care trust, annual management fees could be a percentage of the trust’s total assets, which could range from 0.5% to 2.0%.
• Administrative Costs: Administrative costs can include fees associated with filing the pet trust documents, preparing and filing annual tax returns, and accounting fees related to the management of pet trust finances.
• Asset Management Fees: If assets in the pet trust are actively managed, investment advisory fees will be incurred as well as property management fees if there is real estate held within the trust.
• Ongoing Operational Costs: Managing and executing income distributions may involve additional costs along with any documentation and record-keeping expenses from professional services.

It’s a good idea to gather detailed cost estimates from your attorneys, trustees, and other professionals involved in the creation and management of your pet trust so you know what kinds of fees you will incur.

Legal Considerations for a Pet Trust

While every U.S. state recognizes some form of pet trust, each state has its specific pet trust law, resulting in differences and variations depending on the jurisdiction. In general, however, there are three types of pet trusts: honorary trust, traditional trust, and statutory trust.

Honorary Pet Trusts

While this kind of pet trust is now antiquated and disfavored by the majority of court jurisdictions, an honorary pet trust involves leaving a set amount of money to your pet’s caregiver after you die. As a conditional bequest, this person will only receive funds from your pet trust while they are taking care of your animal(s), per the instructions in the trust.

Traditional Pet Trusts

Similar to an honorary pet trust, with a traditional pet trust you leave your animal(s) to someone identified in your will. Instead of a conditional bequest, however, a traditional pet trust involves a trustee who is responsible for regularly distributing money — as needed — for the care of your pet and to satisfy the instructions of the trust. A traditional pet trust is preferred to an honorary pet trust because it eliminates ambiguity about the trust’s funds. However, difficulty can arise if the person you have chosen as your pet’s caregiver refuses to take possession of your pet after you die.

Statutory Pet Trusts

A statutory pet trust involves leaving your pet to the trust instead of to a person. The trustee then is responsible for arranging the pet’s caregiver and dispensing money as needed for your pet’s ongoing care, by the trust’s instructions. A statutory pet trust is preferable over a traditional pet trust because it bypasses any issues of inheritance that could arise. While you may have named a caretaker for your pet in the trust’s instructions, the trustee has the power to arrange an alternative caregiver if your first choice is unable or unwilling to take ownership of your animal.

Legal Challenges to Pet Trusts

While it is fairly uncommon for a pet trust to be challenged in court, disgruntled relatives who have been disinherited can sometimes challenge the terms of a pet trust, particularly if the funds left to care for your pet seem to be excessive. Depending on the pet trust laws in your state, a court potentially could decide to decrease the amount of money designated in the trust for your pet’s care and award inheritance amounts to family members who originally received nothing. Such was the case with Leona Helmsley and her pet dog Trouble, as explained in the following section.

Family members may legally challenge a pet trust for other reasons as well. For example, it could be claimed that undue pressure or influence from a friend or another relative led you to establish a pet trust instead of leaving your assets to your closest living blood relatives.

Limitations on Pet Trusts

It is important to review the pet trust laws in your state of residence to understand pet trust formation requirements and limitations. Certain states allow a pet trust to continue for the entire lifetime of your pet, while other states have statutes that terminate pet trusts after 21 years.

This 21-year limitation on pet trusts is generally acceptable for the most common types of pets like cats and dogs. However, other animals — such as horses, turtles, and certain birds such as parrots, cockatoos, and macaws — have much longer life expectancies that can range from 25 to 30 years up to 60 to 70 years or more. If you have a pet with a long life expectancy, be sure to consult with a knowledgeable pet trust attorney who can guide your decision-making.

Case Studies: Pet Trusts in Action

The following case studies describe three real-life pet trusts in action, each of which highlights different challenges and lessons to be learned.³ Although these case studies feature very wealthy and well-known individuals, remember that pet trusts are not just for the rich and famous. Anyone who can afford to set up and fund a pet trust can establish one.

Leona Helmsley & Her Pet Dog Trouble

Nicknamed the “Queen of Mean”, wealthy American hotel owner Leona Helmsley died in 2007 after being convicted of tax evasion. In her will, she left her Maltese dog Trouble a trust fund for $12 million and two of her grandchildren with nothing.

The probate judge took issue with her intentions and adjusted Trouble’s inheritance to a meager $2 million, awarded her two grandchildren a total of $6 million, and gave the remaining amount of the trust to charity. Unfortunately, when Trouble died, she was supposed to be buried in the family mausoleum; however, the cemetery would not accept a dog, and Trouble was cremated instead.

Key Lessons to Remember

• Leaving an extraordinary sum of money in a trust fund for pets may be rejected in a lawsuit and create conflict among family members.
• As you consider your pet financial planning, it’s better to leave a reasonable — rather than excessive — amount of assets for future care of pets for the remainder of their lives.
• If you intend to specifically disinherit one or more family members, consult with your attorney to determine how to make the disinheritance legally sound.

Michael Jackson & His Pet Chimpanzee Bubbles

After famous pop music star Michael Jackson died in 2009, he reportedly left his pet chimpanzee Bubbles $2 million. Allegations then surfaced that Jackson had abused his pet while he was alive, and people began to wonder about Bubbles’ whereabouts.

Fortunately, Bubbles is still alive, living out his days at the Center for Great Apes animal sanctuary in Florida. However, if he was left $2 million by Jackson, he never received it, and now his ongoing care (costing about $30,000 a year) is supported through public donations.⁴

Key Lessons to Remember

• Take time to think about what you want for your pet after you die. Always be very clear and specific about your intentions for the future care of your pet.
• Work with your attorney to make sure your directives are explicitly outlined in the pet trust instrument and are by the pet trust laws of your state of residence.
• Make sure the animal care trust you establish prevents your pet from ending up in a shelter or animal sanctuary (if this is something you want to avoid).

Karlotta Liebenstein & Her Pet Dogs Gunther III & Gunther IV

When the German countess Karlotta Liebenstein died in 1992, she left her entire fortune — valued at about $65 million — to her German Shepherd named Gunther III, who tragically died a week later. Luckily, Gunther III’s dog inheritance was then passed on to his son, Gunther IV. In time, Gunther IV’s fortune grew in value to more than $373 million, making him the wealthiest pet in the world.

Key Lessons to Remember

• Be aware that it’s possible for pet trust benefits to be passed down from one animal generation to the next, depending on the pet inheritance law in your state.
• Be conscientious and deliberate in your pet estate planning and animal care trust development to document your actual wishes and intentions.

Establishing a pet trust is the best way to make sure your beloved pets receive the kind of love, care, and attention you desire for them after you’re gone. And remember you don’t have to be a multi-millionaire celebrity to create one. However, be sure your intentions and directives are clearly and specifically outlined in the pet trust instrument to avoid some of the pitfalls scenarios from these case studies.

Is a Pet Trust Right for You?

A pet trust is the most effective legal arrangement to ensure that your animal companions are taken care of in the manner you want in the event you die before them or experience an illness, accident, or disability that leaves you unable to care for them yourself.

Establishing a pet trust requires an expert understanding of the legal statutes where you live. An incorrectly constructed animal care trust may have no legal standing in court, which could put the future care of your pets in jeopardy. This kind of situation could place your animals in a vulnerable position where they would be distributed like any other property you own upon your death.

It’s important to develop a professional relationship with an experienced pet estate planning attorney whom you trust for legal advice — as well as your financial advisor — to determine if a pet trust is right for your life situation. Working with the right professionals can help give you greater peace of mind knowing your pet trust is a legally sound instrument that is enforceable in a court of law and will provide for the future care of your beloved pets according to your wishes.

Sources

1. ASPCA Pet Trust Laws. https://www.aspca.org/pet-care/pet-planning/pet-trust-laws.
2. Michigan State University College of Law – Animal Legal & Historical Center. https://www.animallaw.info/content/map-states-companion-animal-pet-trust-laws.
3. Rincker Law PLLC – 3 Famous Pet Trust Cases and the Lessons We Can Learn from Them. https://rinckerlaw.com/3-famous-pet-trust-cases-and-the-lessons-we-can-learn-from-them/.
4. Michael Jackson’s pet chimp Bubbles turned 40 with a party fit for pet royalty. https://nypost.com/2023/04/29/michael-jacksons-pet-chimp-bubbles-turned-40/.