Estate plans that include trust funds for the benefit of a testator’s pet are most frequently seen amid the rich and famous. Some examples include Leona Helmsley leaving a $12 million trust fund to her Maltese, or Oprah Winfrey’s dogs, who are rumoured to inherit $30 million. For those with a more modest estate, establishing testamentary trusts to fund a surviving pet’s care is less common. However, contemplating what will happen to your pet after your passing may serve as a reminder to carefully consider not only provisions for pets, but estate planning more generally.
Often, surviving friends or family members are relied upon to take care of the deceased’s pet. This may be a contributing factor as to why specific instructions are not always included within someone’s Last Will and Testament. However, absent specific instructions within a testamentary document, the care of your pet may remain a loose end to your estate plan. A pet can be a very important part of many peoples’ lives, often treated like a member of the family. Particularly for elderly people, who may otherwise spend much time alone, a pet, whether a dog, cat, fish, or reptile, is a companion, rather than a mere asset, for whom it is extremely important to make provision.
In Ontario, there is no specific legislation to address how to provide posthumously for your pet. Most frequently, it is done by creating a testamentary trust, which is to benefit the pet, pursuant to the terms of a will. This should be accompanied by a conversation about your wishes with family, close friends, and the person who will be appointed as your executor. A handwritten note may set out what the trust is to be used for, but openly discussing your intentions to avoid uncertainty later on is recommended. It is also possible to include a statement outlining wishes regarding care of a pet within a will. Such a statement is typically “precatory”, or non-binding. However, despite their non-binding nature in contrast to formal directions, which are included in a will, precatory statements tend to be effective in conveying your wishes and quite influential in how assets, including pets, will be managed after death.
There are, however, restrictions on using trusts for the benefit of pets. Courts will not allow trusts that contravene trust law, nor will they give effect to any clause that is inconsistent with public policy. A trust may also be determined to be void for uncertainty if its terms cannot clearly be interpreted.
The law with respect to pets and estate planning may be evolving. In the U.S., according to Time Magazine, every state, except for Minnesota, has now passed a “pet trust” law. This development provides that, if someone includes instructions within his or her will to explain who will take ownership of the pet and how much money will be provided for its care, probate court will appoint someone to enforce the provision. It is also possible to create a detailed pet trust, in which one can name the pet’s caretaker and the trustee of a pet trust, set aside money for particular purposes, and leave instructions with respect to the pet’s care.
A recent article from Forbes discusses some ways that Americans can claim tax deductions with respect to their pets. According to Forbes, the U.S. Internal Revenue Service has stated that pet owners can sometimes deduct the costs of moving their pet. There are also deductions available for the cost of animals used for business purposes, such as guard dogs, as long as they represent “ordinary and necessary” costs of doing business. The cost of acquiring or caring for a service animal, such as a guide dog, may be an eligible medical expense for tax purposes.
If you are one of the millions of Canadians who do not have a will, keep in mind that, as with the rest of your estate, your pet will pass according to the rules of intestate succession. In Ontario, intestacy rules are found within the Succession Law Reform Act, and they may not direct that your pet go to the person whom you would have chosen yourself. If you do have a will, consider including a provision dealing with your pet, to ensure that, after you are gone, they will be taken care of according to the standard you provided them during your lifetime.
Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.