What Is a Pet Trust? Leaving Money to Your Animals Isn't as Crazy as You Think, Experts Say

By CAITLIN NOLAN
Copyright (c) 2018 CBS Studios Inc. All Rights Reserved.

 

Saying goodbye to a beloved pet is one of the hardest things an animal lover can do, but what happens when a furry, feathery or scaly member of the family outlives their owner?

Though a hard possibility to consider, experts say one of the best ways to ensure Fido’s care is safeguarded in the event that their owner passes away before them is to create a pet trust. 

“The pet trust makes the pet the beneficiary of the trust, so the trustee can appoint a caretaker and make sure that the pet lives the life that it had when the decedent was alive,” Alice Jakyung Choi, an associate attorney at the New York-based law firm Novick and Associates, PC, told InsideEdition.com. 

A pet trust allows a person to directly allocate resources to their animals, which authorities say is a significant step above simply issuing a directive in a will. 

Trusts are legally binding and require the appointing of a trustee, who will hold the property, cash or both, set aside for the care of those pets named. Rules can vary by state, though most trusts continue for up to 21 years, but end sooner should the pet die before then. 

Some may consider going to such lengths to care for an animal outrageous and associate taking such provisions with the headline-making instances where pets have been left fortunes to ensure they continue the lavish lives built by their affluent owners.

Gunther IV the German shepherd is believed to be the richest dog in the world, with a net worth reportedly estimated at more than $370 million. The lucky pooch inherited the fortune at birth, as its direct ancestor, the original Gunther, came into $80 million when its owner, German Countess Carlotta Liebenstein, died in 1991. The money has been passed down to each subsequent Gunther ever since.

Then there was Tomasso, a cat rescued from the streets of Rome by Italian property mogul Maria Assunta. Assunta apparently became very fond of her former stray, as she bequeathed $13 million to the 4-year-old feline when she died in 2011 at the age of 94. The fortune, which included properties in Rome, Milan and Calabria, was left to the cat via her unnamed nurse who cared for Assunta until she died. 

And of course, one could not forget Trouble Helmsley, a Maltese whose hotelier dog mom Leona Helmsley left her $12 million, while leaving out two of her human grandchildren from her will, when she died in 2007. Before Trouble died in 2010, she received dozens of kidnapping and death threats, and a judge ultimately determined she need only $2 million to get by. 

But experts say planning for the care of one’s pets need not be viewed as an outrageous act. Jakyung Choi has helped numerous clients establish trusts for their pets, and noted none had set aside the exorbitant amounts that typically make headlines. 

“Many people think that pet trusts is something for the Leona Helmsleys of the world because her case was so publicized … but most people who create pet trusts, don't really necessarily think of that grandiose scheme,” Jakyung Choi said. “It's just to really treat their dogs or cats, because they're like family, and they want to take care of them.”

Jakyung Choi’s client, Dr. Joshua Lachowicz, knew it was important to ensure his dog, a 13-year-old Papillion named Maurice, and cat, 15-year-old Stitch, were taken care of in the event that something were to happen to both him and his husband. 

“Even though I consider myself young still, you never know, and so it’s always smart to have estate planning in order,” Lachowicz, 42, told InsideEdition.com. “I don’t have children – my pets are my children – and I want to make sure that they are cared for in the way in which I care for them now, after I pass.”

Lachowicz first became aware of pet trusts when he himself was named trustee of an estate, and through that pet trust that he and his husband eventually welcomed Maurice into their own family.

“I had a very dear friend [who was] a client; we developed a strong relationship over our animals,” Lachowicz said. “She was an elderly lady  ... She always said, ‘I’m not a spring chicken, dear.’ So she asked me if I would take care of Maurice when she passed.”

Maurice’s previous owner had prepared her estate well in advance, and when she was no longer able to care for him, the plan she had spent so much time setting in stone became the blueprint Lachowicz followed. 

“She had the stipulations set aside for him, in terms of what type of home she wanted her pets to go to and also making sure that financially that there was money so the owners could be responsible and take care of them in the way she would want them to be cared for,” he said. 

So, he decided it was time that he, too, get his affairs in order. He and his husband appointed an executor for their estate, who would be responsible for finding the right home or homes — be it with that person or others — for Maurice and Stitch. 

“Therefore we have the pet trust set up for each individual pet so they have the stipulations, our requirements in terms of how we want our pets to be cared for and then the financial support to go along with that,” Lachowicz said. 

For example, Stitch gets along with dogs, but not other cats, so he would need to go to a home where he was the only feline. Maurice has cardiac disease and takes four different medications that are given twice a day. Due to his heart condition and his generally sensitive disposition, Lachowicz would want to see him go to a home where he was the only animal in the house. 

“They could go to the same home, or they could go to different homes; that would be up to the executor to make that decision,” he said. “If something happened and I knew that my lifespan was going to be cut short for any reason, I would start the process of looking for homes as well, so I could help with that decision along the way.”

Lachowicz and his husband took into consideration myriad factors when deciding how much money to set aside for their animals.

“I think when you're making these decisions and starting a trust for your pet or your pets if you have multiple, you have to think about a few things: It's gonna, one, depend on how many pets that you actually have. Two, the age and the health of your pets. And then three, geographically where you live and what is the cost of animal care and veterinary care in that area,” he said. 

As not only a veterinarian, but specifically a veterinary oncologist, Lachowicz noted his professional background made him uniquely qualified to understand the true cost of providing for a pet, especially in the direst of circumstances. 

“Essentially with cancer, almost 50 percent of animals over the age of 10 may develop malignancy of some type, so cancer is a very common disease and I'm not just saying that because that's what I see on a day to anything basis, but it's just a fact that it's a very prevalent condition that they can develop later in life,” he said. “But also things like diabetes, cardiac disease, kidney disease; all of these things are going to be not just the routine veterinary care, but a level in addition to that where they actually have to have additional financial resources, time and dedication to go into that.”

Taking all of those factors into account, the cost of providing for animals in a city like New York, as well as the conditions his animals are currently in, Lachowicz and his husband decided to err on the side of caution in allocating finances to the pet trusts they established. 

“Once you go through with your financial planner and obviously your estate attorney as well, you may calculate a number that could be in the range of $10,000 or $20,000 or even in a metropolitan area, $50,000, or if an animal has health conditions or special needs, also close to that $50,000 number,” he said. “For my pets, they are in that category, so that's where we actually set the benchmark for them.”

That money would not only go toward providing for the animals, but to ensure the person or persons taking care of them were equipped to do so, he said. 

“There are certain things that I want to make sure that whoever takes on that responsibility is the right person, they're also compensated for it as well and there's financial means set aside,” Lachowicz said. “It's great having an animal, but it's also a lot of responsibility and there's a lot of financial burden that comes along with it as well.

"So it's something that I wanted to make sure that not only is someone is gonna take on adopting one of my animals after I pass — one of my children — but they can also do it by the means by which I would want them to do, and I don't want them to have a burden because there would be nothing worse to me than having someone adopt that could not take care of my pet because of a financial limitation. I didn't want that to be an issue for them whatsoever.”

It’s in ensuring a plan covers the most unexpected of situations that Lachowicz finds comfort, as does Jakyung Choi, who has made sure her own four-legged child — a 7-year-old Pekingese named Subpoena — is also covered by a pet trust that allocates $10,000 to her well-being. 

“[People] laugh it off … they think it's too much, [it’s] over the top,” she said of some people’s reactions to the idea of creating such a provision. But the alternative is nothing to laugh at, she said. 

“If the will doesn't mention any directions for the pets, then the executor has 100% control over what happens to the pets,” Jakyung Choi said. “And we've seen time and again that, if there's no one who's willing to take care of the pets, they're given to the shelters or it's just up to their discretion, because it's not spelled out in the will.” 

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