If you’re a pet owner, one of your estate planning priorities is likely making sure that your pet continues to get the best possible care even after you are gone. There are a few different ways to do this, but an increasing number of pet owners are opting to establish pet trusts. One concern clients often raise when we’re discussing pet trusts is how much they should set aside to fund the trust.
After all, you want to make sure there is enough money in the trust to provide for all of your pet’s needs for the rest of its life, but you don’t want to leave an excessive amount to your pet trust and risk inviting a family dispute or, worse, estate litigation.
So, how do you determine what qualifies as a reasonable amount of money to set aside?
- A good first step is to take a look at your pet’s current needs. How much does it cost you, on an annual basis, to feed, shelter, and groom your pet? What about vet bills and medications? Don’t forget to factor in boarding fees or the cost of traveling with your pet, if you expect a future caregiver to have these same expenses. Once you’ve determined an annual cost of care, you’ll want to multiply it by your pet’s remaining life expectancy.
- Next, you might want to pay a visit to your pet’s veterinarian and find out what future medical expenses your pet is likely to incur, given its life expectancy. You can add these expected costs onto the base figure you’ve already come up with.
- Will you pay your caregiver for his or her services? If so, factor in this fee, as well.
- What about the trustee of your pet trust? If the trustee will be paid a fee, don’t forget to include this in the amount to be funded into the trust.
These items are a good starting point for figuring out how much money should go into your pet trust. And don’t forget to use your estate planning attorney as a resource. He or she can help make sure your trust does exactly what you need it to do.