Avoid these Common Mistakes with Pet Trusts
Whether it is your precious poodle, a thoroughbred horse or an iguana, it is important to consider how your loving pet will be cared for in the event you pass away, become incapacitated or simply can no longer provide sufficient care. We often advise clients to create a pet trust which is a legal document that offers instructions for the continuing care of your pet(s). The pet trust can be incorporated into a will or living trust or be a separate document.
There are three common mistakes when it comes to planning for your pet’s future without you in it:
1. Invalid DIY forms. Search online and you will discover many do-it-yourself forms for pet trusts, some of them are even available at no cost. The problem with DIY estate planning forms is that they often fail to measure up to state specific legal requirements. Each state takes a different approach to pet trust requirements and if a North Carolina resident chooses a DIY form not in accordance with North Carolina's laws, that may render all or a portion of the pet trust form invalid. This can lead to intended consequences regarding your pet’s care.
2. Relying on a Will. While pets are considered personal property and your will designates how personal property is distributed, the clauses contained in most wills do not address the specifics of the care needed for your pet. These clauses also fail to address how the care for your pet will be funded. Pet trusts are much more specific as to who should be providing the on-going care, successor caregivers, type of care and amount of funding for that care. Relying on a will also creates a problem for your pet because it is only triggered in the event of your death. A will does not address how your pet will be provided for in the event of incapacity.
3. Failing to Properly Fund a Pet Trust. The third common mistake with pet trusts is failing to properly fund it. It may be difficult to predict the life expectancy and on-going expenses accurately. It is best to overestimate the expenses, allocate proper funds for the pet’s care and then name a remainderman beneficiary to receive any unused portions of the funds after the pet dies. The remainderman beneficiary can be any person or charity you desire. We use an easy funding process to ensure your trustee can access the funds immediately when needed.
To ensure your pet is properly cared for if you pass away or become unable to provide care contact an estate planning attorney at NC Pet Trust to set up a pet trust in accordance with North Carolina state laws.
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