But if the notion sounds ridiculous to you, that’s probably because you’ve never really bonded with a pet. Or maybe you’re quite young and reasonably sure you’ll be around far longer than any of your furry friends. Besides, the notion of listing a pet as a beneficiary may seem ludicrous to you, because how can you leave a ton of money to an animal?
Spoiler alert: You can’t. Nobody can leave a life insurance policy to a pet.
But you can do the next best thing — set up your life insurance policy so that the money provided, or some of it, is used to take care of your pet or pets after you’re gone. It’s a subtle difference in semantics and legalese but an important one.
And it isn’t quite as crazy as it sounds. After all, if you’re a pet parent and your animals are like kids, you may genuinely fear the idea of something bad happening to you — and envisioning your dogs or cats being shipped off to a shelter by your family and friends, who all might be too grief-stricken or financially strapped to do anything else. And not to put too fine a point on it, but you know what sometimes happens when pets go to shelters.
Or maybe you own an exotic bird, like a Macaw, which can live up to 60 years, or a Cockatoo, which has a lifespan of 40 to 60 years. That said, the Brookfield Zoo has Cookie, no longer in an exhibit, at the Brookfield Zoo in Brookfield, Illinois (near Chicago), and he is 80. He’ll be 81 if he makes it to June 30. He was born in 1933.
So, sure, some pets can easily outlast humans — and plenty can wind up in trouble if something would happen to their humans.
Not that I’m trying to scare anyone. Hopefully you have a good support system, and you intuitively know that your family and friends would rally and take care of your pets if the worst ever happened. I suspect that’s the case for most people.
But if you are concerned, Michael Eisenberg, a certified public accountant and personal financial planner, based out of Los Angeles, says that if you do want to set it up so that a life insurance policy protects your pets, you can set up a pet trust.
In fact, 45 states and Washington, D.C. allow it. Nolo.com lists all of the 45 states and D.C. I actually stared at the web page for about five or six minutes, trying to figure out what the heartless states are that don’t allow pet trusts, and gave up. But here’s Nolo’s web page, which lists all of the 45 states (and D.C.) where you can get a pet trust set up.
The key here is that you aren’t leaving the money to a dog, cat, Macaw or your pet ferret — you’re transferring ownership to someone else and leaving money for the new owner to take care of your pet.
“You need to make it very clear who you are leaving the money to, who is the beneficiary and what the money is to be used for,” Eisenberg says. “You should say it in your will as well. You can have an attorney draft the documentation.”
He adds that while you could go to a software web site that offers legal documents and fill everything out there, but he would recommend meeting with a human lawyer. “Whenever you have something out of the box, something slightly out of the norm, it makes sense to have someone draft up the proper language and legalese,” Eisenberg says.
Frequently, with a pet trust, the way they’re set up, you’re actually leaving money to the trustee, who will control the funds — and then the trustee will pay the caregiver. In other words, they aren’t always one and the same, and that way, if the caregiver isn’t doing a good job taking care of your pet, the trustee can sack him or her and find someone else.
Eisenberg adds that you should also definitely talk to the person you want to take ownership of your pet. Most of you reading this are nodding and thinking, “Of course, I would do that,” but it’s easy to imagine some people taking a relationship with someone for granted and just putting them down as the new owner.
“That person could be allergic, or just not be interested, so talk to the person upfront,” Eisenberg says.
He adds that whatever your policy covers, it covers more than food. “If you’re going to leave money for the well being of the pet, you need to think about the total cost of care for the pet,” Eisenberg says. “You have vet bills, whatever additional pet supplies the person might need to buy.”
There are also kennel costs — whoever gets your dog or cat may need to shelter them while on vacations –if your pet is destructive, you might want to add a little something extra, a little something-something, as the expression goes, for the sofa cushion you can envision Rusty chewing up, or the doors and walls you’re afraid Cuddles might claw up. You may want to include a healthy sum of money for end-of-life healthcare costs for your pet.
You might also want to include a little something for the owner, a gift of money to just say, hey, thanks for doing this for me and my pets.
In your will, of course, you should spell out any wishes you have for your pet — and make sure that whoever controls the trust for your pet or pets has information like the name of your pet’s veterinarian, and certain quirks. If your dog is an occasional biter or hates tall men wearing hats, you should mention that.
Granted, probably and hopefully none of this information will ever be read, because you intend to be around for a long time with a lot of pets in your future, but again, if you’re concerned, setting up a trust for your pet may not be as ridiculous as it sounds on the surface. In fact, half a million pets die in veterinary offices and shelters every year, after their owners die, according to a statistic in an almost decade-old The New York Times article.
But whatever you do, you can’t just take out a life insurance policy and fill in your pet’s name. Not that it’s likely to get past your insurance agent, but as Eisenberg warns, you could have a jealous or angry relative step in and contest it. “If you left $50,00 to a dog,” he says, “I don’t think it would fly in court.”
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