Estate planning for pets

Pets are, it is widely accepted, a crucial component in family life. According to Matthew Metos1, vice president of Advanced Planning for Fidelity Investments and an estate planning for pets specialist: “A lot of people love their pets as much as they love their children.” Mr. Metos adds: “So it makes sense to consider taking the legal steps to provide for them in the event that they outlive you.”

In a recent edition of My Money, published by the National Association of Federal Retirees, a report entitled Planning for Pets2 written by Himani Ediriweera clarified the point further: “Many pet owners fail to account for their pets in their estate plans. In the best-case scenario, that omission can lead to confusion for heirs. In the worst case, animals may wind up in shelters or be euthanized or abandoned.”

Financial and legal complexities

Making adequate provision for the wellbeing of a pet or pets in the event of death is something many people consider but all too often fail to take action about. Partly this is due to inattention and negligence. But partly it is also due to a failure on the part of pet owners to understand the financial and legal nuances surrounding the matter.

Complicating the issue still further are the widely reported examples of personal eccentricity on the part of exceptionally wealthy individuals who have seen fit to endow their pets with formidably large inheritances. Such disproportionate acts of generosity, and the unwelcome publicity such generosity attracts, undermines what ought to be a carefully considered and sensitively managed process.

Two bizarre examples

To quote Planning for Pets again: “When reclusive billionaire hotel magnate Leona Helmsley died in 2007, her luxury-loving Maltese Terrier Trouble inherited $9 million, making him the richest dog in the world at that time.

But that’s a pittance compared to Gunther IV, the dog that had $90 million passed down to him from his German Shepherd father, Gunther III, the sole heir of German Countess Karlotta Liebenstein.”

Though disquieting, bizarre examples such as these tend to divert the attention of serious, responsible people from the more fundamental realities of pet estate planning. In the U.S. for example, 40 states have statutes that make pet trusts legal, but Canadian law has been slow to follow.

Pets as property

In Canada, pets are considered property. They may have unique emotions and quirky personalities. They may even sleep in the bed of their owner from time to time. But – and make no mistake about this – pets are property, the equivalent of a valuable heirloom or money. That is what makes pets an important element in the estate planning process.

Pet owners might see pets as part of the family but – in Canada at least – our legal system does not. An individual may entertain a deep love for animals. But it’s important to remember that not everyone in his or her circle of friends can be counted on to share that feeling. That is what makes the selection of a suitable caregiver so vitally important.

Identifying an eligible caregiver

The pet estate planning experts at Fidelity suggest the following: “If you have pets, consider meeting with your family or select close friends to decide on the best candidate for a caregiver.

Be up front about expectations, and beware of choosing someone who seems hesitant to do the job. Not everyone is up for the day-to-day responsibilities of taking care of an animal, so it’s important to make sure that the person chosen has given their clear consent.

Once a caregiver has been identified, a plan should be put in place that specifies what should happen to pets in the days immediately following the death of the owner. During this difficult time, there should be no confusion about where the pets will be staying, what food and medicine they need, and other basic questions.”

Ensuring a pet is cared for

In the event that an individual predeceases a pet there are two legally credible and financially sensible options in Canada to be considered:

1. Leaving a monetary legacy

Leaving a monetary legacy to a designated caregiver to offset the costs required to care for a pet is a widely adopted strategy. Typically those opting for this solution factor in the rising costs of pet ownership, such as food, treats and veterinary care.

As Ms. Ediriweera explains later in her commentary: “Make sure you leave enough assistance to provide a lifestyle similar to the one your pet had with you. Losing a loved one is very stressful for your pet, so make the transition as smooth as possible.”

2. Creating a pet trust

In this case a pet owner selects a caregiver for his or her pet with specific conditions for them to follow. It is important to note that, in Canada, the pet cannot be the beneficiary of such a trust.

If the pet owner is reluctant to furnish the selected caregiver with funds in advance, it is possible to designate an agent to make scheduled payments – again, factoring in the rising price of pet care – to cover all necessary on-going costs.

In conclusion – with a Québec twist

Mary G. Griffith is an expert in Wills, Trusts, Estates and Estate Planning with the Ottawa based law firm Maclaren Corlett. In a commentary posted recently on their website entitled Estate Planning – What happens to your pets when you’re gone?3 Ms. Griffith observed:

“Most importantly, no matter what option you choose, make sure that your lawyer is fully aware of your intentions and discuss with them the various options available for you to give effect to those intentions.”

Ms. Griffith went on to make an important point about the situation here in Québec. She notes “a Bill was introduced in Québec last fall that, if passed, would define animals as ‘sentient beings’ and not property.”

Apparently, legislation along the same lines has already been passed in some other countries and, as Ms. Griffiths concludes, “if the Bill is passed in Québec that may open the door to other provinces passing similar legislation.”

In the event that this happens, the issue of how to ensure that your estate plan addresses your pet’s care will likely take on even more importance – not just emotionally, but legally and financially as well.


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