Your Pet Is Secure Insurance After You’re Gone
Why a trust? A trust, a legal entity that holds property and money for beneficiaries, is a good option to care for a pet because you can’t leave property, cash or life insurance money directly to an animal. Pet trusts got a dubious reputation after hotel heiress Leona Helmsley left $12 million in trust for her white Maltese, Trouble, and nothing to two of her four grandchildren. A year after Helmsley died in 2007, a judge reduced the dog’s trust to $2 million.Trouble lived in the lap of luxury until she died at age 12 in 2011. Trouble’s original trust may have been excessive, but pet trusts make sense in some situations, and life insurance can be a good way to fund them, says Gerry Beyer, co-author with Barry Seltzer of “Fat Cats & Lucky Dogs: How to Leave (Some of) Your Estate to Your Pet.” [Life insurance quotes are available through NerdWallet’s Life Insurance Comparison Tool.] “If you care about your pet, you need to make proper arrangements and plan,” says Beyer, a professor at the Texas Tech University School of Law.
Too often, he adds, “family members do not want to be bothered, and the animal ends up at the pound.” Your pet may be part of the family, but the law considers animals property. That’s why you can’t leave money directly to your pet. “You might as well leave money to your desk or your car,” Beyer says.
Mistakes to avoid The pet trust that Helmsley set up for little Trouble was problematic from the start. A judge reduced it at the request of the estate’s trustees because it was so obviously excessive. It also ran into problems because the trust document directed Helmsley’s brother or her grandson to care for the dog. But neither wanted to, so the trustees had to find someone else to provide care.
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