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A Fiduciary for Fido? Estate Planning for our Four-Legged Family Members

 

For many of us pet owners, our furry friends are treated like equal members of the family.

However, while your pet-child and your human-child may both have their own bed, toys, wardrobe of clothing + accessories, and a favourite hair salon, they are not treated equally under your Will. This is because, in the eyes of the law, domesticated animals are considered personal property, not entities with legal rights and obligations[1], and therefore they cannot receive inheritance.

So while you can structure your estate to leave specific bequests or residue behind for your spouse or child or nephew you cannot provide similarly for your beloved labradoodle or parakeet or Siamese cat.

But not all hope is lost for Fido. Just because one cannot legally gift money or property to a pet, there are other ways to make estate plans for your loyal companions.

Appointing a New Caretaker

Your Will cannot provide a gift directly to your pet, however your Will can “gift” your pet to another individual whom the Will appoints as your pet’s new caregiver upon your passing. Estate funds can then be earmarked in your Will and provided to the new caretaker (on the condition that they accept the pet) with testamentary instructions on how those funds are to be used for your pet.

The downside here is that such an arrangement cannot be legally enforced (the individual you’ve selected may not wish to take on the responsibility of caretaker, or they may not use the funds you have set aside as intended by the Will), so it is important that you select a caretaker for your pet who you trust and who is able to assume the responsibilities of a pet-owner. It’s also a good idea to nominate a backup caretaker (another animal-loving individual or an animal welfare organization) in case your first choice is unwilling or unable to take-on your pup.

A Trust for your Mutt

Another estate planning tool that can be used to ensure your pet is looked after when you die is settling a formal Pet Trust for the benefit of your furry friend. In this scenario, your pet trustee would be directed to hold funds in trust and use them for the benefit of your pet as directed in the trust instrument during the pet’s life. Now, while I am sure your pet is very smart, they will not be able to enforce the terms of the Pet Trust themselves if the trustee strays from their obligations (duh), so the terms of the trust could also provide for the appointment of a human ‘protector’ of the trust, who supervises the trustee and makes sure that the funds you have set aside for Fido are being used as intended.

The trust instrument should also designate a residuary beneficiary of the trust who receives any remaining cash when the pet dies; ideally this person will be a different individual from the pet trustee, to ensure that funds are used generously on your pet during their life.

In today’s society, pet owners care deeply for their “fur babies”. It is becoming increasingly common for these animal lovers to provide for their furry friends in their estate plan.

The recent high-profile instances of Karl Lagerfeld (the German fashion icon who left a sizable chunk of his $300 million estate to his cat, “Choupette”) or Leona Helmsley (the American businesswoman who left a $12 million trust for her dog, “Trouble”, which amount was successfully challenged and reduced in court) are just a couple examples of the lengths pet-owners are going to provide for their four-legged family members.

Do you have pets? Have you provided for them in your estate plan? If so, how?

Copied below is an excerpt of a term from an actual (redacted) Will that provides for the care of the testatrix’ dogs:

 

“CARE FOR PET DOGS

  1. b) To give any dogs that I may own at the time of my death to [REDACTED]. A fund for the lifetime care of my dogs is to be set up as follows: ONE THOUSAND ($1,000.00) DOLLARS per dog per year for a reasonable remaining life expectancy of each dog, for their care and maintenance for the remainder of their natural lives, plus a contingency fund of TEN THOUSAND ($10,000.00) DOLLARS for their collective medical emergencies, treatments or surgeries and medications, plus an additional FIVE HUNDRED ($500.00) DOLLARS per dog towards the one time expenditure of their end of life care including humane euthanasia and disposal of their remains.

At the time of publishing this Will, my dogs are [REDACTED] and [REDACTED]. 

I authorize my Trustee to hold this fund in a non-interest bearing account for the care of my dogs should the anticipated costs of administration outweigh the benefits of potential income which may be earned. Upon the death of my last dog, if there is any money remaining in the fund, such unused portion of the fund shall fall into and form part of the residue of my estate.

In the event that [REDACTED] cannot take custody and care of my dogs and they have to be rehomed, I direct my Trustee to surrender my dogs to the [REDACTED] with the non-binding request that the organization be directed to make efforts to adopt them out as a bonded group…with the assistance of the [REDACTED] I direct my Trustee to pay and transfer additional gifts in the amount of TWO THOUSAND DOLLARS ($2,000.00) per dog surrendered to be gifted to their new owners after a minimum period of three months ownership has taken place. The [REDACTED] is hereby directed not to advertise or disclose that such gift will be forthcoming to potential adopters as this gift is intended to be a reward for adopting my dogs and is a gift toward their future care and is not intended to be an incentive to adopt.”

[1] Baker v. Harmina, 2018 NLCA 15

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