Life Insurance For Pets?
Yes, the idea is crazy! But here’s our step-by-step guide if you are interested.
The 5-Step Process at a glance:
- Set up a Pet Trust
- Designate a Trustee and Caregiver for that Trust.
- Consider how much your pet will need?
- Design their care plan. What does this look like? Be specific as much as possible.
- Buy a life insurance policy with iBroker Insurance and set the Trust as the beneficiary.
Why a Pet Trust?
Because pets are considered property by the law, you can’t leave money for your pet. A pet trust can change this. A pet trust is a legal arrangement to provide care and maintenance for one or more companion animals in the event you pass away before them. The “grantor” is the person who creates the trust. The trustee is one who holds property (cash, for example). Once activated, the trustee will make payments to a designated caregiver(s) on a regular basis. Most trusts will continue for the life of the pet or 21 years (depending on the state), whichever occurs first. The process can cost up to $2,000 or more with an attorney, but if your pet means everything for you, then this is what you will do.
Set up rules for your pet trusty if your pet has special needs.
For example: Your cat Zeus only drinks 1 brand of bottled water, or your dog Bando only poops at one particular spot at a park.
You can also arrange rules so that the trustee will provide a sum of money to the caregiver so that they feed Zeus with that special brand of bottled water, and Bando will receive his daily walks at that park. If you want your pet to visit the groomer four times a year, this can also be provided. Maybe even having a social media expert to curate content for their social media account(s)!
Additional Considerations
- Have you thought about picking a contingent (backup) Trustee?
- Have a conversation with the caregiver to ensure that they are up for the job.
- Do you have a backup caregiver?
- How will you identify your pet? Consider photos, microchips, DNA samples.
- Describe very specific details about what you would like this trust to accomplish.
- Given your pet’s current standard of living, how much funding will your pet need in total? Consider life expectancy and possibly complications such as illness or hospitalization. Specify how the funds should be distributed to the caregiver;
- Determine amount required to cover the expenses of administering the pet trust;
- In case the funds outlives your pet’s life, make sure to designate a beneficiary to inherit the remaining amount;
- Provide instructions for your pet’s final expense. Consider the cost for this as well (for example, burial or cremation).
- LegalZoom or Rocket Lawyer may be able to help you set up the trust on a budget.
